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Getbig Main Boards => Gossip & Opinions => Topic started by: Palumboism on December 12, 2018, 11:08:01 PM
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This is the American Auto market by the numbers:
$1.2 trillion In Outstanding Auto Loan Debt. 110 million car loans outstanding.
31.1% of new vehicles are leased.
Average used vehicle transaction price $19,657, with an average payment of $378 per month.
Average new vehicle transaction price $35,742, with a monthly mayment of $523. The average loan term is 68 months.
Regarding the big three:
Average transaction price for new Chrysler vehicle $38,373.
Average transaction price for new Ford vehicle $40,442.
Average transaction price for new GM vehicle $40,516.
Pretty much every vehicle on the road has a large monthly payment. :-\
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Debt will most likely be the cause of the next major financial crises.
Countries, corporations, families, all up to their ears in debt......will be interesting to see what happens when rates go up....
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This is the American Auto market by the numbers:
$1.2 trillion In Outstanding Auto Loan Debt. 110 million car loans outstanding.
31.1% of new vehicles are leased.
Average used vehicle transaction price $19,657, with an average payment of $378 per month.
Average new vehicle transaction price $35,742, with a monthly mayment of $523. The average loan term is 68 months.
Regarding the big three:
Average transaction price for new Chrysler vehicle $38,373.
Average transaction price for new Ford vehicle $40,442.
Average transaction price for new GM vehicle $40,516.
This is why they don't have time to build cars.
Pretty much every vehicle on the road has a large monthly payment. :-\
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Debt will most likely be the cause of the next major financial crises.
Countries, corporations, families, all up to their ears in debt......will be interesting to see what happens when rates go up....
Things will be great for those who are debt free with a positive net worth.
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recessions are a natural part of debt cycles. It happens over and over. I just hope the next recession will not be as bad as 2008.
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The auto industry has always been cyclical.
Boom and bust.
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Not surprised. I see all these ghetto-nogs driving around in brand new cars. Lots of loan defaults coming. Unlike a house, it's pretty easy to repossess a car.
The economy is a slow motion train wreck. I've been saying that here for a while now. Lots of people I know are living check to check and have little/no cash savings. They're in debt up to their eyebrows.
Over the last couple years I've underestimated the ability of TPTB to keep kicking the can down the road. It's getting closer though. This recent stock market downturn is just the beginning. Retirement funds are going to get whacked. Housing prices are starting to fall and that will only accelerate. I believe 2019 will be a year for the history books, much worse than 2008. Prepare accordingly. Buy/stockpile ammo... all types. It will be worth more than gold someday.
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I don’t get that line either.
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Debt will most likely be the cause of the next major financial crises.
Countries, corporations, families, all up to their ears in debt......will be interesting to see what happens when rates go up....
^ This. Add in student loan debt (currently $1.5 TRILLION) and Kaboom!
https://studentloanhero.com/student-loan-debt-statistics/
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The average transaction price for a compact or mid sized car is $20-$25K. American car companies have an average transaction price of over $40K. That's why they don't want to waste their time will cheap cars.
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This is the American Auto market by the numbers:
$1.2 trillion In Outstanding Auto Loan Debt. 110 million car loans outstanding.
31.1% of new vehicles are leased.
Average used vehicle transaction price $19,657, with an average payment of $378 per month.
Average new vehicle transaction price $35,742, with a monthly mayment of $523. The average loan term is 68 months.
Regarding the big three:
Average transaction price for new Chrysler vehicle $38,373.
Average transaction price for new Ford vehicle $40,442.
Average transaction price for new GM vehicle $40,516.
Pretty much every vehicle on the road has a large monthly payment. :-\
Most people I know drive Korean or Japanese cars because of reliability. Hard to see how those makers wouldn't actally be the lion's share of cars on the road. And the ATP is so much lower than that Detroit crap.
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Many of those people deep in debt and driving new cars have no intention of ever paying the debt. They will just run up the credit cards until they can't get anymore credit and then file bankruptcy. Those with the big student loans will still have that debt though.
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Debt will most likely be the cause of the next major financial crises.
Countries, corporations, families, all up to their ears in debt......will be interesting to see what happens when rates go up....
Agree. So many nations' balance sheets have ballooned since the GFC to stimulate their economies. It's been around a decade and not much of that debt has been paid, meaning the capacity to cushion the next downturn will be that much harder.
Households are getting up there. FOMO idiots in Australia borrowing to the hilt for property. Household-income ratio ~200%. Property prices now contracting (never learnt the lesson from the US in 2007), have negative equity (mortgage worth more than the property) while banks have to raise interest rates because they get funding from o/s. All these morons with interest-only loans are getting stung because they have to move to interest and principal and can't afford it. Lose your job (wage growth is stagnant), you are done.
Never understood taking out an auto loan. If you have to get a loan to drive a car, you don't deserve that car. Buy second hand and save the pain.
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Stupid people make stupid decisions
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Many of those people deep in debt and driving new cars have no intention of ever paying the debt. They will just run up the credit cards until they can't get anymore credit and then file bankruptcy. Those with the big student loans will still have that debt though.
Yup, can't dismiss student loans with a BK. IMO, the government will eventually need to grant some type of relief for student loans that are in default. Not a debt jubilee, but a lowering of their interest rates, or possibly the interest owed will be forgiven. There is no way the majority of those college kids are going to be able to pay those loans. Most of the college grads I've worked with have $50K- 100K in student loan debt. The cost of college today is such a fucking scam.
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Agree. So many nations' balance sheets have ballooned since the GFC to stimulate their economies. It's been around a decade and not much of that debt has been paid, meaning the capacity to cushion the next downturn will be that much harder.
Households are getting up there. FOMO idiots in Australia borrowing to the hilt for property. Household-income ratio ~200%. Property prices now contracting (never learnt the lesson from the US in 2007), have negative equity (mortgage worth more than the property) while banks have to raise interest rates because they get funding from o/s. All these morons with interest-only loans are getting stung because they have to move to interest and principal and can't afford it. Lose your job (wage growth is stagnant), you are done.
Never understood taking out an auto loan. If you have to get a loan to drive a car, you don't deserve that car. Buy second hand and save the pain.
You are a little bit out of touch. Even second hand cars cost a lot. Depending on the model as well, and if it is SUV or car. And Toyotas and Honda’s tend to hold their value more.
Also, you must add in the fact that with today’s modern lifestyle—-people have to have the latest smartphone (or the maker will slowly phase them out), the latest fashions, cable/streaming service, wants to go out shopping or the movies, and wants a vehicle that has all the latest tech. You only really see hipsters driving Volvo 240s, Jeep Cherokees, and e30/e36/e46 3 Series, or e28/e34 5 series, old 4Runners.
Also, ever try buying cars on Craigslist? There is the “no low ballers, I know what I got”, yet they have a 2010 Toyota Camry with 170k on the clock, Hello Kitty bumper stickers peeling off the rear bumper, yet they want almost the full out the door price that they paid.
And let’s not start on after market warranties.
And the biggest thing, is that the second hand market is running out of cars.
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as a mortgage broker the #1 thing that destroys wealth are auto loans -
so common to see $500-$800 car payments all the time.
auto loans and leases will kill your wealth.
knock it off
also no one takes care of their cars - very few cars are waxed, oiled, air pressure checked and the brakes are are ruined/over used same with wear and tear on the tires
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You are a little bit out of touch. Even second hand cars cost a lot. Depending on the model as well, and if it is SUV or car. And Toyotas and Honda’s tend to hold their value more.
Also, you must add in the fact that with today’s modern lifestyle—-people have to have the latest smartphone (or the maker will slowly phase them out), the latest fashions, cable/streaming service, wants to go out shopping or the movies, and wants a vehicle that has all the latest tech. You only really see hipsters driving Volvo 240s, Jeep Cherokees, and e30/e36/e46 3 Series, or e28/e34 5 series, old 4Runners.
Also, ever try buying cars on Craigslist? There is the “no low ballers, I know what I got”, yet they have a 2010 Toyota Camry with 170k on the clock, Hello Kitty bumper stickers peeling off the rear bumper, yet they want almost the full out the door price that they paid.
And let’s not start on after market warranties.
And the biggest thing, is that the second hand market is running out of cars.
If you really need the latest gadget, then you are a sucker consumerist. Reason why iPhone sales are slumping? Harder to pack as many useless gadgets into their overpriced crap. I can understand if there is a marked improvement in tech to make people's lives easier, but I see no point in needing facial unlock, full screens, etc. Not to mention their rediculous mark-ups.
You buy a brand new car, expect the resale price to drop 5-10% as soon as you leave the showroom. Ex-demos, that's a better purchase. As for second-handers, never buy anything above 100ks on the clock. Get a mechanic to check over before buying.
If you have to buy new, as I said, better to have the cash than on a loan. Car finance generally have major balloon payments. Debt is overrated.
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If you really need the latest gadget, then you are a sucker consumerist. Reason why iPhone sales are slumping? Harder to pack as many useless gadgets into their overpriced crap. I can understand if there is a marked improvement in tech to make people's lives easier, but I see no point in needing facial unlock, full screens, etc. Not to mention their rediculous mark-ups.
You buy a brand new car, expect the resale price to drop 5-10% as soon as you leave the showroom. Ex-demos, that's a better purchase. As for second-handers, never buy anything above 100ks on the clock. Get a mechanic to check over before buying.
If you have to buy new, as I said, better to have the cash than on a loan. Car finance generally have major balloon payments. Debt is overrated.
This doesn't mean much. A mechanic can spot major, obvious issues but there are so many potential problems that can go undetected that it's always a risk when buying a car.
You're better off getting something that still has a warranty if you dont know what you're doing.
A bus pass is probably the best option.
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People just suck society dry. Ive always been afraid of debt.
House - paid off
4 Honda C-RV's - paid off ( 4 of us live here)
2 college tuition's - paid off w/ no loans
Credit card debt - ZERO
credit ranking - 833 (today)
401 K's - 800K
It just means Im old, always been resposible with money, and gee, no Libtarded w/ myhand out.
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People just suck society dry. Ive always been afraid of debt.
House - paid off
4 Honda C-RV's - paid off ( 4 of us live here)
2 college tuition's - paid off w/ no loans
Credit card debt - ZERO
credit ranking - 833 (today)
401 K's - 800K
It just means Im old, always been resposible with money, and gee, no Libtarded w/ myhand out.
Nice going.
Thank goodness everyone isn't like you or the economy would be belly up.
:D
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Yup, can't dismiss student loans with a BK. IMO, the government will eventually need to grant some type of relief for student loans that are in default. Not a debt jubilee, but a lowering of their interest rates, or possibly the interest owed will be forgiven. There is no way the majority of those college kids are going to be able to pay those loans. Most of the college grads I've worked with have $50K- 100K in student loan debt. The cost of college today is such a fucking scam.
Yes the cost of college is a scam but isn't addressed much by the media or the Democratic party because it is their indoctrination school. Professors have to be the most overpaid workforce in the country but they are churning out little leftists so they get a pass.
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I am leery of buying used vehicles. Not to say you can’t get a nice one, but it won’t be cheap. My wife and I got new vehicles four years ago and they’ll be paid off in February. If you manage your finances properly, debt isn’t all bad. BTW, I don’t carry any credit card debt, student loans were paid off within two years of graduating, but I’ll take a 1.9% auto loan rather than shelling out $120k of my own money.
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When buying a used car you can always get a lemon with no warranty to protect you.
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I'd buy a used fleet vehicle from a business or government agency that has a mechanic on staff and they turf the things out at an age or mileage limit. Private sale, not so much. Ain't hardly nobody look after their own car.
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People just suck society dry. Ive always been afraid of debt.
House - paid off
4 Honda C-RV's - paid off ( 4 of us live here)
2 college tuition's - paid off w/ no loans
Credit card debt - ZERO
credit ranking - 833 (today)
401 K's - 800K
It just means Im old, always been resposible with money, and gee, no Libtarded w/ myhand out.
Congrats... that is very rare. You must have/had a well paying career too.
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People just suck society dry. Ive always been afraid of debt.
House - paid off
4 Honda C-RV's - paid off ( 4 of us live here)
2 college tuition's - paid off w/ no loans
Credit card debt - ZERO
credit ranking - 833 (today)
401 K's - 800K
It just means Im old, always been resposible with money, and gee, no Libtarded w/ myhand out.
Debt, when properly maintained, is actually a wonderful financial tool. If you are in a low inflation period, interest rates are stable. You can lock in loans at very attractive rates, if you go fixed. When we enter a high inflation period, you are then paying back the loan with money that is worth less than when you borrowed it. That is a good thing.
The most important part of fiscal planning revolves around the time value of money and the inflation rate. Inflation strips your cash of value while you are just sitting there, unless you have an interest rate that corrects for it, plus the tax hit you take on savings. It is insane to keep large sums of money in cash these days unless you are getting well over 5%. Inflation will eat it alive.
When talking about cars, you have to consider that a car is always a wasting asset unless bought as a collectors item. A well built car has a low cost of ownership so that minimizes the loss rate on it. But it often times makes great sense to continuously lease if you can get a good rate. The cost of maintenance is practically zero for a short term (3-4 years) leased car. Not only is that a good thing, but you don't waste your time getting these things fixed. Time better spent doing something more productive.
I sold a company some years ago and wiped out all my debt instantly, including a house payment. That turned out to be the stupidest thing I could have done. Money is like air- you never own it and it is only good when it is moving.
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True. Most people I know who buy new cars end up trading it in for a brand new car before it is even paid so they would have been much better off leasing. With a lease you pay nothing for repairs plus you pay much less per month on the payment. If you are going to always have a payment anyway then lease.
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Can't Believe how much money people waste on cars. This just goes to prove most people are dumb ass sheeps that shouldn't have any business loaning for anything.
I own both my cars. Imo if you can't buy the car you want in full with cash you shouldn't buy it in the first place because it's just a huge liability. Economics 101
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I own my truck as well but did not buy it brand new. Few people have the money to purchase a new car cash.
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Debt, when properly maintained, is actually a wonderful financial tool. If you are in a low inflation period, interest rates are stable. You can lock in loans at very attractive rates, if you go fixed. When we enter a high inflation period, you are then paying back the loan with money that is worth less than when you borrowed it. That is a good thing.
The most important part of fiscal planning revolves around the time value of money and the inflation rate. Inflation strips your cash of value while you are just sitting there, unless you have an interest rate that corrects for it, plus the tax hit you take on savings. It is insane to keep large sums of money in cash these days unless you are getting well over 5%. Inflation will eat it alive.
Nobody has gotten 5% interest in a cash savings account since the 90's. I remember around 1980 or so my dad had a few CDs that yielded 15%. Good old Paul Volker... he actually did the correct thing. People are being robbed now. Today long term CDs pay less than 3%. To get the top rate some banks require a minimum of $5-10K. I'd rather have liquidity than tie up a large amount of cash in a 1-5 year, low interest paying CD. Over the long term, gold is a very good hedge against inflation. I started buying it in the early 2000's.
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I own my truck as well but did not buy it brand new. Few people have the money to purchase a new car cash.
bought mines used aswell ofcourse but I don't understand middle class/avg joe people that want to have 1/3 of their disposable income on their car. Then by the end of the month nothing on their savings account. I guess alot of people don't mind living check to check. Not for me I need to see light in the end of the tunnel and have money to invest.
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bought mines used aswell ofcourse but I don't understand middle class/avg joe people that want to have 1/3 of their disposable income on their car. Then by the end of the month nothing on their savings account. I guess alot of people don't mind living check to check. Not for me I need to see light in the end of the tunnel and have money to invest.
Years ago I worked at a company where we were all making the same salary and I was driving a beater while almost all of my coworkers had new cars. If there was ever a downturn in work (fewer hours) they were in a total panic. Every single dollar they made went for bills with no savings or investments whatsoever.
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fyi - you can get 144 month financing if you really need it. yes it is out there
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fyi - you can get 144 month financing if you really need it. yes it is out there
Ridiculous, but I'm not surprised. These car dealers and finance companies will do anything to make money. The people who sign up for these loans are normally low income and stupid. The only thing they care about is how much their monthly payment is... I'm sure that's how the car dealer pitches it to them too.
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Years ago I worked at a company where we were all making the same salary and I was driving a beater while almost all of my coworkers had new cars. If there was ever a downturn in work (fewer hours) they were in a total panic. Every single dollar they made went for bills with no savings or investments whatsoever.
The majority lives this way. People tend to spend most/all of what's in their pocket regardless of what their earnings are. I've saved and invested my whole adult life, even when I was in my teens and barely making it. I'm now in my early 50's and semi-retired. I also trade the futures market for additional income. I've never bought a new car and never will. Avoiding marriage and not having kids is a must if you don't want to work the rest of your life. Most people are wage/debt slaves for life... ugh.
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Ridiculous, but I'm not surprised. These car dealers and finance companies will do anything to make money. The people who sign up for these loans are normally low income and stupid. The only thing they care about is how much their monthly payment is... I'm sure that's how the car dealer pitches it to them too.
I sold cars years ago and we were trained to cover up the total cost of the vehicle on the contract and just had the buyer focus on the monthly payment. ;D
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Ridiculous, but I'm not surprised. These car dealers and finance companies will do anything to make money. The people who sign up for these loans are normally low income and stupid. The only thing they care about is how much their monthly payment is... I'm sure that's how the car dealer pitches it to them too.
144 month terms are financing rare and exotic cars - woodside credit will offer 144 month terms on a ferrari with 20% down.
longest normal loan ive seen is 84 months
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I lease and love throwing my money away on it and getting a shiny new car every three years. Bunch of poor penny pinchers here.
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The majority lives this way. People tend to spend most/all of what's in their pocket regardless of what their earnings are. I've saved and invested my whole adult life, even when I was in my teens and barely making it. I'm now in my early 50's and semi-retired. I also trade the futures market for additional income. I've never bought a new car and never will. Avoiding marriage and not having kids is a must if you don't want to work the rest of your life. Most people are wage/debt slaves for life... ugh.
No slave here. Younger than you, retired, new cars in the garage and financial future secured. Hope you enjoy your 87 Mazda. 🙂
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144 month terms are financing rare and exotic cars - woodside credit will offer 144 month terms on a ferrari with 20% down.
longest normal loan ive seen is 84 months
Sorry, did not mean to discriminate against low wage earners. :-*
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No slave here. Younger than you, retired, new cars in the garage and financial future secured. Hope you enjoy your 87 Mazda. 🙂
Inheritance?... Lottery winner?... Government job/pension?
I have/drive a 2007 Honda Accord - haven't washed it in 5 years. I have lots of gold though = real wealth.
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Inheritance?... Lottery winner?... Government job/pension?
I have/drive a 2007 Honda Accord - haven't washed it in 5 years. I have lots of gold though = real wealth.
Smart.
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Smart.
Definately not
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I lease and love throwing my money away on it and getting a shiny new car every three years. Bunch of poor penny pinchers here.
Just making more money is always an option opposed to being a penny pincher, true.