Interesting take on auto industry woes/falling new sales

[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.




Sent from my iPhone using Tapatalk

 

[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.