Interesting take on auto industry woes/falling new sales

[Boostedbus]

Okay, I see we probably are in agreement here. You're talking about the really old days.
Heck, I can do you one better. In the really old days you had to put new rings in your car by 50,000 miles because the compression was so low.

Yeah I had seen a special on the History Channel some years back on old cars of the past. I think it was 55 Chevy’s with their new 283 V8 where they had ring seating issues and Chevy’s TSB to dealers was pour Bonami scouring powder down the carb to help seat the rings. I watched it with my Chevy buddy and man he knew as soon as I heard that info he was gonna here about the junk he drove! Lol!! Ford/Chevy battle lives on!Lol!

 

[carymccarr]

What I'm saying is not everything has gone up and cost which inflation always lowers the buying power of money so in theory everything should go up in cost. There are a number of other factors that determine the overall price of an item so if these other factors have lowered production cost, distribution cost, advertising, Transportation Etc then they could easily offset the increase of inflation so the overall price could go down.

Perhaps. But most things have gone up. Especially the main factor, production costs in China.

 

[TobyU]

Perhaps. But most things have gone up. Especially the main factor, production costs in China.

But the things that used to made in other places that were higher started being made in China and costs and prices plummeted.
Some things don't have much to do with China though.
I buy oranges as cheaper or as cheaply as I did in 1989.
Now don't bother to look up the stats as it will show the AVERAGE price in the country and show it increasing.
I said I BUY not what they cost.
Oranges right now at Walmart are $.60 each! Total rip off.
Plus Walmart has terrible prices on them but many don't know that and still buy them.
I only buy them when they are cheap. $.25- .33 each.
Been doing this for decades.
Another one that is really regional is milk. I buy milk cheaper now than I did in 1993!
$.94 a gallon at Walmart for months. A few years ago it was as $.88 at Kroger.
I don't think China has much effect on these two items.

Yes, most things go up but to accept that for everything and allow it to justify a price increase when the costs of production may not have increased is absurd.

 

[carymccarr]

But the things that used to made in other places that were higher started being made in China and costs and prices plummeted.
Some things don't have much to do with China though.
I buy oranges as cheaper or as cheaply as I did in 1989.
Now don't bother to look up the stats as it will show the AVERAGE price in the country and show it increasing.
I said I BUY not what they cost.
Oranges right now at Walmart are $.60 each! Total rip off.
Plus Walmart has terrible prices on them but many don't know that and still buy them.
I only buy them when they are cheap. $.25- .33 each.
Been doing this for decades.
Another one that is really regional is milk. I buy milk cheaper now than I did in 1993!
$.94 a gallon at Walmart for months. A few years ago it was as $.88 at Kroger.
I don't think China has much effect on these two items.

Yes, most things go up but to accept that for everything and allow it to justify a price increase when the costs of production may not have increased is absurd.

What aspects of car manufacturing have plummeted over the last decade.

Specifics please.

 

[TobyU]

What aspects of car manufacturing have plummeted over the last decade.

Specifics please.

I never mentioned any car manufacturing costs nor was I referring to the basic parts of manufacturing automobile in any of my previous statements.
Just talking about overall prices in general which of course have gone up. It's just that some things have plummeted.

Most things are due to cheap Chinese production.

Fiskars scissors used to be 8 to 13 dollars to $13 anywhere you find them.
Now I can buy them at Walmart for under 5.

Televisions are a big one! I remember in the very early 2000s when the last glass picture tube TVs were available. They were almost given these things away.
Older people grew up on TVs that were a piece of furniture. You always had the TV fixed at least twice and its lifetime with the repairman coming to your house until you would finally throw in the towel and buy a new one because that's how expensive these things were.
It was not uncommon at all for a floor model Zenith with only 21 or 25 inch picture tube to cost between 900 and $1,300. This was in the 70s and 80s.

Then we had those super expensive plasmas come out but shortly thereafter everything went to flat screen and then after the initial hype of the people who wanted to have the latest and greatest cutting-edge technology... Prices plummeted. It is quite amazing what we get 42 inch and larger TVs for today.

They are actually one of the few great bargain still left in the world. An orange for a quarter, milk for under a 1.29 a gallon, run-of-the-mill current TVs, computer components if you build them yourself, cheap electronics and knockoffs on eBay, and all of the cell phone chargers and accessories.

From my very first cell phone in 1994 all the way until 2000 or 2001 oh, maybe longer, I had to pay $30 every time I buy a new phone to get a new cigarette lighter adapter to charge it in the car.
They were only available at the store by the brand that made the phone. Same with batteries! 40 50 and 60 bucks for a higher-capacity battery. Then with eBay and Chinese knockoffs... I can get any charger sent to me for under $6. All the cases, the old Nokia faceplates that the mall kiosks sold for 15 and twenty bucks I was getting shipped to my house for under $4.

About the only thing that's gone down in price in the auto world would be accessories and replacement parts. Nothing of course from the actual manufacturers. But you can buy some things maybe even vent shades but especially spoilers hood scoops aftermarket headlights taillights stick on trim and moldings
A lot cheaper than you could even in the late 80s.

 

[carymccarr]

I never mentioned any car manufacturing costs.

Oh ok.

We’re taking about car prices.

 

[TobyU]

Oh ok.

We’re taking about car prices.

But not exclusively. You also said earlier that most things go up in price and we're talking about inflation which is a general thing that has an effect on everything including the buying power of money.

I do generalize a lot but sometimes we have to be careful with things that are said or received on the listeners end as a blanket statement.

it is a cliche or common statement that in life, things always get more expensive....eventually.
However, there are always those outliers and odd things that don't fit the normal parameters.
If I could just find all of those and live off of and only on those, maybe I could get way ahead!
Lol

I say this jokingly, but I do this in some aspects of my life.

 

[TobyU]

When gas prices first shot up oh, I had hope that maybe we would get the legislators in the US to lower some standards for like turn signals and my power bumpers and all that stuff so we can get some cheap imported cars into this country. I see no reason why we don't have a $1,500 brand new 4 seater automobile that you can buy at Pep Boys like their little ATVs. Yes, it would be cheap Chinese or Indian junk and would be really hard to buy parts. When a wheel bearing failed you have to put a whole new axle in or just buy a new vehicle at least at first. But where we ended up in this country with safety requirements, there's simply no way to make a cheap automobile.

We had a major run on scooters which prompted states to enact new legislation for licensing requirements and fees and then people we're buying motorcycles especially the 250s at record levels.
I mean, come on, I have been riding motorcycles since I was turned 18 and my parents couldn't prevent me from getting one, but you have very little level of safety on a motorcycle. I would much rather be in some cheaply built small death trap car then to be on a motorcycle.

 

[carymccarr]

But not exclusively. You also said earlier that most things go up in price

I was referring to most things related to car manufacturing.

Not oranges.

 

[TobyU]

I was referring to most things related to car manufacturing.

Not oranges.

I see from our follow-up discussion that you were but those terms were quite general so I thought some of us in this group were talking about inflation raising prices and everything costing more than it used to. I'm just pointing out some, although few, examples of things that have stayed low, even dropped... And some that are awesome deals today.

 

[Machete]

Biggest driver of any bubble... including car pricing, is cheap easy credit.

See college tuition cost increase curve over last decade.

Cheap money, everybody can finance _______you fill in the blank.

 

[TobyU]

Yeah I had seen a special on the History Channel some years back on old cars of the past. I think it was 55 Chevy’s with their new 283 V8 where they had ring seating issues and Chevy’s TSB to dealers was pour Bonami scouring powder down the carb to help seat the rings. I watched it with my Chevy buddy and man he knew as soon as I heard that info he was gonna here about the junk he drove! Lol!! Ford/Chevy battle lives on!Lol!

Also used to put a tablespoon on Bon ami into the spark plug hole too.
They were better right around the 283 time though.
The old flathead fords like straight 8 and V8 flatheads needed rings by 40-50k.
Old 6v positive ground battery systems didn't have enough oomph to turn them over with fresh tight rings so you has to pull them with a chain and other car or push them and pop the clutch.

 

[JExpedition07]

Interesting, data just came out on average transactions and the average monthly payment on a new car is $580/month plus the average loan term is now 76 months. This is the highest recorded monthly payments coupled with the longest loan terms to date as an average. The key statistic here is average loan terms of 76 months....that’s concerning that consumers have to stretch that far to afford a new car. The car is getting old while still under a payment...not ideal. Does this indicate companies are asking too much money for new autos? That’s up for debate I suppose, there are those who don’t think they charge enough and those who think they charge too much.

 

[carymccarr]

Interesting, data just came out on average transactions and the average monthly payment on a car is $580/month plus the average loan term is now 70 months. This is the highest recorded monthly payments coupled with the longest loan terms to date as an average. The key statistic here is average loan terms of 70 months....that’s concerning that consumers have to stretch that far to afford a new car. The car is getting old while still under a payment...not ideal.

Adjusted for inflation?

Like anything else, we’re almost always going to be at an ‘all time high’.

As an example...home prices have gone from $18k in 1950 to $275k in 2020.

Rates are simply too low right now not to take advantage of them. I always pay cash for my vehicles but got 0% for 4 years. That’s free money. Can’t pass it up. But it doesn’t mean I’m ‘stretching’. I would have done 10 years at 0% if it were available.

Another example. A moderately equipped Ford Taurus in 1986 cost $11-12k. Today that would be $29k. You can now get a Ford Taurus starting at $27k. Virtually unchanged.

 

[JExpedition07]

Adjusted for inflation?

Like anything else, we’re almost always going to be at an ‘all time high’.

As an example...home prices have gone from $18k in 1950 to $275k in 2020.

Rates are simply too low right now not to take advantage of them. I always pay cash for my vehicles but got 0% for 4 years. That’s free money. Can’t pass it up. But it doesn’t mean I’m ‘stretching’. I would have done 10 years at 0% if it were available.

Another example. A moderately equipped Ford Taurus in 1986 cost $11-12k. Today that would be $29k. You can now get a Ford Taurus starting at $27k. Virtually unchanged.

Cars haven’t seen the same hikes in price as trucks it seems but it’s relative to overall cost anyway. I agree Malibu’s and Taurus’s have stayed close. Even then the Expedition doesn’t look too bad if you account for inflation. My window sticker for my fully loaded 2007 EL is about $50,000....if I price my trucks area of the lineup now it’s around $75,000 today which over 13 years isn’t too bad. Only a $25,000 increase and ALOT more technology. Plus you can get a lot of those options on mid grade or even lower trims now. Not sure where I stand like I said it’s always up for debate. The long loan terms were before the widespread 0% financing though so consumer are definitely stretching loans out more. But yes with inflation meh it’s not all that different.

 

[JExpedition07]

It is funny though, in a few years we will be paying $100,000 for run of the mill Tahoe’s and Expeditions and we will recall the “good old days” of $70,000 trucks. It’s just a cycle. Our grandparents complained and our parents did and so will we LOL.

 

[SomeENG]

I wish there was a solution for those of us who want a newer truck without ALOT of technology.

Disc brakes and FI are a great feature and I guess I don't mind ABS even though it adds parts to the engine bay.
Cruse control is my favorite luxury.

Power seats and windows are less reliable than manual, a/c equipment and windshield washer resivours take up valuable space in the engine bay!
Psi sensors in your tires aren't needed for trucks (unless you ruined it with large wheels/super thin tires) how difficult is it to glance at your tires before driving?

Power steering is different, I don't need it but old people/etc wouldn't be able to park without it.

It's disheartening to me that working on my girlfriends car with a transverse engine is easier than working on my own SUV with Rwd.

But that's just me, and I have never bought a new vehicle anyways.

 

[Trainmaster]

With the Fed inflating the dollar, prices will keep increasing. People want nice stuff they can't afford, so they're rolling the unpaid balance of their old cars' loans into the replacement car's financing. The government's backing the loans when they go bad, so the taxpayers are the ones on the hook.

Our financial system's in a real mess, and there's a rush to get stuff before the system collapses.

Keep your old things, and owe no one nothing you can't afford to pay for.

 

[carymccarr]

With the Fed inflating the dollar, prices will keep increasing. People want nice stuff they can't afford, so they're rolling the unpaid balance of their old cars' loans into the replacement car's financing. The government's backing the loans when they go bad, so the taxpayers are the ones on the hook.

Our financial system's in a real mess, and there's a rush to get stuff before the system collapses.

Keep your old things, and owe no one nothing you can't afford to pay for.

Meh. Doubtful.

Not to mention inflation is in check....historically speaking.




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[TobyU]

Inflation is certainly a real factor but not everything goes up.
It's a little comforting to see that some cars have stayed at same price adjusted for inflation....but has your salary kept up with inflation?

If salary keeps up with inflation and all expenses satay same adjusted for inflation then....IT IS A WASH.

You're just going through more money but no difference.

If this happens and you ADD things (expenses) to your life then....the new car hurts a little more.

We do have several things we pay for now that we didn't used to but we have probably eliminated or reduced others.