Barrons has an interesting article on an increase in bank auto repossession rates connected to defaults [see here]. Essentially, used car prices have surged significantly and the timeline seems to indicate the temporary covid-19 stimulus spending had a lot to do with the increase in demand.
According to data assembled by CoPilot, used cars are currently priced approximately 10,000 higher than they would be without any pandemic related influence, supply side or demand side. Banks and financial institutions loaned money into the climbing market price. However, the artificially inflated car prices now create a bubble where the liability on the books is significantly higher than the repossessed asset is worth.
A higher rate of auto loans are now defaulting for both sub-prime and prime borrowers (double for both), indicating the former buyers are under financial pressure and can no longer make their car payments. The loan to value ratio was as high as 140% when the banks made the loans, a more traditional or normal ratio is 80%.
The banks have a vested financial interest in limiting the number of repossessed vehicles they allow into the used car auction market in order to keep the book value of the cars as high as possible. Those banks and financial institutions have recently rented more storage space for the vehicles being repossessed.
Barrons – […] Lucky Lopez is a car dealer who has been in the business for about 20 years. In recent meetings with bankers, where he bids on repossessed vehicles before they go to auction, he has noticed some common characteristics of the defaulted loans. Most of the loans on recently repossessed cars originated during 2020 and 2021, whereas origination dates are normally scattered because people fall on hard times at different times; loan-to-value ratios, or the amount financed relative to the value of the vehicle, are around 140%, versus a more normal 80%; and many of the loans were extended to buyers who had temporary pops in income during the pandemic. Those monthly incomes fell—sometimes by half—as pandemic stimulus programs stopped, and now they look even worse on an inflation-adjusted basis and as the prices of basics in particular are climbing. (read more)
Somehow, I would hazzard a guess, if we are to follow recent precedent, that taxpayers are going to end up backstopping the financial institutions when the bubble in this asset class pops. However, that said… the scale of these loan defaults could also foretell a significant slipping in the housing market.
I follow Lucky Lopez on You Tube and he has great insight into the auto market.
Yep, I agree
If you follow Lucky for insight for used cars may I recommend Cramer for stocks. Both are charlatans….
If repos are up, why are prices up too?
I have cash to buy and looking for a deal. I do not want to finance or lease.
Wait if you can prices should fall faster then inflation
thx, waiting. I assume same should apply to real estate.
I cant believe Im looking at a hybrid to use for work. I can see bigger cars which use more gas coming down in price but not hybrid/electric cars due to demand and because of FJB and gas prices.
Im starting to think that all my neighbors, who are mostly asian, all work at Google and Facebook because they all driving Teslas now and appear to be doing very well while they obediently wear their face diapers.
I predict the Biden regime will Hide the Cars on the Ships keeping prices high across the board.
I don’t know about the States, but a close relative is a GM at a major import dealer.
One electric vehicle has a two year waiting list, Hybrids several months waiting lists.
Sales are down, but quality inventory is extremely low.
I “curb” the odd Honda or Toyota and they are fetching a premium.
Check out Honda Fits around 2009..Japanese made and terrific fuel economy and quite comfortable.
We own one..
Good Luck!
My mom has a Fit and told me they are stopping production.
My son has one. Great for midgets
Lol. I am 6’2” 175 lbs. The wife and I drove from Vancouver B.C. to Palm Springs in it.
Not too bad for comfort, and the gas bill was very good.
Cheers!
Are the manufacturers experiencing problems getting the chips to finish the cars? Does your friend know? I’ve read GM has 96K vehicles waiting.
Yep,
Chips are a huge issue, a brother is a ships pilot, and normally sees a number of car carriers come into B.C. waters.
They are now a rarity.
Cheers!
A silver 2010 Honda Fit?
I’ve got a 2011 Blue Honda Fit sport 208K mile. Thought about getting something newer, but its paid for, gets 35mpg, never had any problems except the clock and date are screwed up and Honda said that Garmin’s problem and a fix is do next month. My Ford F150 is collecting dust, it get about 15mpg.
Just wait until your neighbors find out that Tesla’s are not engineered and built to run on magical Unicorn Farts.
LOTFRMAO! (Lolling On The Frool Raughing My Ass Off!)
They wont find out. Same way they never found out face diapers are useless. Fake News Junkies
Exactly the way Big Tech likes em.
Many of them are fresh off the boat growing wealthy from their manufacturing operations overseas. This is where the slave labor and zero environmental laws create the imbalance of wealth and why all the fascist corporations are crapping on real Americans who have been relegated to serving the rich.
I don’t know why they didn’t know about the masks. It says right there on the side of every box of disposable masks: Not intended for medical use… or something to that effect. What a farce!
Its so bad over here. Hate to say it but If I were a sleezball globalist law maker, I would just make the mask mandate mandatory again over here because there are so many useful idiots who have already made masking up a part of their life indefinitely and are practically begging for it to be the law for everyone else.
The Media is the key to reverse the narrative.
You can get those fake made in china masks out of gumball machines now.
That gives me an idea.
I’ve visited my husband in a hospital ICU every day now for 27 days, and so far, nobody has said a word to me about wearing a mask, so I don’t. Even the nursing staff (who are required to wear them) pull them down to talk or sometimes don’t wear them at all. Life here in the Midwest is still pretty free.
Prayers.
Prayers, however masks and protocol for masks should be the least of your concerns. Healing vibes for your family!
Serious car accident. [Almost] Everything that could go wrong, has. Moved to ICU step down today—progress! Next step: vent removal, close off the trach. God is good!
Prayers for healing 🙏
Sad but true.
And quite the apropos comment given your forum handle.
Yep, Asian across the street.
Business Commercial Real Estate. ( Money laundering)
In the garage M8 BMW, and an electric Porsche SUV.
Asians next door, just evicted the last tenants that were paying $3000.00 for a 1960’s bungalow.
They were out this morning with a handsaw 😟 cutting down tree limbs.
Great neighbours, and great for property values, but sure peculiar.
It’s interesting living here, Punjabis ( Sikhs) build for Asians.
I am good friends with a couple of Sikh builders, and the stories they could tell.
Cheers!
Sounds like my neighborhood exactly minus the Sikhs so I assume its not Southern California?
My daughters friends father is wealthy doing business in import/export out of the port of Long Beach. Chinese.
He and a couple of his overseas friends recently purchased an island. It was being used as a resort and needs a some work. He was showing me pictures. No joke. Hes talking about leaving the USA now that hes squeezed his share of life out of it.
Ahh lucky man
Yep,
The money floating around at the top end is staggering.
Greater Vancouver B.C. has more luxury cars driving around than most places in North America a small part of Orange County has a similar story.
Johnny Rivers wrote a song about them back in the 60s … “Secret Asian Man”.
Test
Hybrids are in tight supply, due to price of gas…
Anyone still left wearing a mask is visibly not “doing well”. Like a book’s cover, one’s wallet doesn’t reflect the quality of one’s soul.
Give them time, their electric cars will become their expensive immobile handcuffs.
If you can find a 2017 Prius inspected and in good shape….
https://www.copilotsearch.com/posts/which-used-year-model-of-prius-is-best/
My 2005 prius (bought new) is still running with 192K miles (my brother in law bought it from me in 2018 and loves it).
I just can’t drive something so hideous.
And they frequently clog up the high speed lanes on the expressways.
My 2007 Prius was my favorite car. My daughter has it now. Running fine. Had a brake job a few months ago. Other than that, only gas, tires, oil, and a battery or two. Great car.
👍
Bumper sticker… cool Prius..nobody
I didn’t buy it for any “cool” factor. I outgrew that attitude by the time I was 50. I simply did the math and realized it was a big money saver over its expected lifetime. That turned out to be true in spades.
I bought vehicles to be reliable transportation at lowest possible “total cost of ownership.” I didn’t give a hoot what anyone else thought about them or me.
Rush Limbaugh mocked Priuses and their owners relentlessly on his show. Didn’t bother me at all. I still loved the man for his patriotism and truth.
He once said that after his episode with OxyContin, during rehab he learned to “never live your life to meet other peoples’ expectations.” Bingo. That includes what others may think is cool.
Thr Prius was “cool” for me. Cool for being unusually reliable and cool for bring unusually economical to operate. What was cool to me was all that counted.
Be true to your own cool; no one else’s.
That’s true of most Toyotas not just the Prius. I sold Toyota for years. Taken care of or abused, amazing products.
Yes I was aware of the brand’s track record at the time. I had previously owned an ’88 basic Toyota pickup that had been a gem to own (no service problems ever) and operate, although it wasn’t very miserly with gasoline (about 18-22 mpg). In 2005 I was buying a commuter car, so, was looking for maximum economy plus interior comfort. Corolla, Camry, and Honda Civic were my other selections, but Honda’s interior was cramped for me, and Prius beat out Corolla’s excellent fuel mileage by at least 12 mpg. on the stickers. No contest….. When gas spiked at about $3.50 a year or two afterwards, my coworkers “accused” me of having a crystal ball… Three of them bought Priuses.
My 04 Camry is still going strong at 228,000 miles. All power stuff still works, great a/c and heated leather seats, no rust. Love my pearl grey gal”Carmella”named after Tony Soprano ‘s wife.
I love mine, 2010, only 28,000 original miles, bought new. I wouldn’t give it up if I weren’t moving abroad. I would keep it for a lifetime. Love, love.
🙂👍
I’ll be selling my low-mileage Prius in FL in a few months. Are you close, and can you wait a bit?
Prices will fall but there are real advantages for banks to keep the repos and loan loss on the high side. As Sundance correctly states, the US government will backstop these losses to the banks at some point and the higher their book losses, the more bailout gov cash the banks will get.
Operation Hide The Cars On The Ships ?
Yep. Good old Dodd/Frank.
And to think just a few short years ago the Feds were buying and allegedly crushing cars… remember “cash for clunkers”.
cash for clunkers caused the demise of auto repair shops and suppliers.
The electronic wonder cars created a new group of “technicians” who are not mechanics. Mostly these are “parts re-placers”. These techs often fail to diagnose correctly and charge the car owner for their mistakes. Costs of repairs are sometimes greater than the value of the vehicle.
My work-around is to drive antique vehicles with no pollution or electronic junk. (got chips in my alternator, ignition module, and music radio). I also replaced the exhaust, intake manifold and carb. Works much better and I still don’t understand what all the govt required add-ons were for. Mine is a 1987 F-250.
It really screws the small business sector, because you can’t properly assess expense, customer base, startup costs, anything. The gov’t is always your competition.
This further retards the economy. Bastards.
Repo would lead, because it shows people who thought they were going to have plenty a little while ago, and now don’t. New car sales at least are still partly speculative on the part of the buyer. They won’t take long though, unless Taiwan and South Korea fall under the Yoke of their tyrannical Neighbors, although that is actually part of the plan.
I would suggest Carmax. We bought out 2015 Ford Fusion SE Hybrid from their Beaverton, Oregon location.
Great experience.
I was just on Carmax looking for a Hyundai Ioniq. So sad. Guess Ill have to start doing my own haircuts now too.
2017 Ioniq Hybrid Blue Hyundai
$22,998*46K miles
New Pair of Tires!! only two
We sold CarMax a 2015 Audi A2 for 21,000….Quite a price for a 7yo car…
Not really, a decent mile Subaru Outback limited that is a 2015 will sell for more than that.
I own a used car store that specializes in Subaru, so I know of what I speak.
Car prices have been ultra strong for 2 years or better now, wholesale and retail.
I have seen zero signs of softening ,inventory is tough to get… I cringe thinking the bottom will fall out and get left holding the bag..but you have to have them to sell them
My 2019 Subaru Outback is sitting at the dealers with a siezed engine..25000 miles..I just signed the lease purchase papers from Chase for 16,000 after the dealer offered me a new lease vehcle for 470 a month..
I never knew they had a A2 model.
Wow!
CARMAX is the bomb
OUCH!
The Hyundai Ioniq 5 SUV is the one with a 2 year wait list.
That is IMO too much for the Ioniq sedan.
Cheers!
Screw the hybrid – buy a 2011-2012 Toyota Avalon – big as a barge and gets 28 mpg highway 22 around town on 87 oct. Can’t beat the 3.5L/FWD Toyota drive train and often the Avalon sells cheaper than comparable Camry.
2008 Lexus RX350 is about like you describe. It’s a tank. 225K and rising.
I’ve been cutting my own hair since 1995.
More convenient, any time any day of the week, save on travel time and mileage too, and avoid the perfumy powder etc.
Wahl electric kit, pays for itself in a few cuts.
$200/year direct savings x 27 years = $5400 saved. 🙂
I have to tie my hair back; haven’t been to a barber shop in over a decade. It reaches down to my lower back. I do have a friend trim the ends off every now and then.
I drive a 2000 Saturn and a 2000 Ford Ranger. Both have around 118,000 miles on the odometer. I also have a bicycle if the gas pumps are out of service.
I’ve been eyeballing Triumph Bonneville T-100 motorcycles on their websites; 900ccs, they’re good on gas (60mpg) when they’re tuned up and they weigh about 500 pounds. And those things run like rockets on the highway.
Btw the car and truck were paid off years ago….
No Royal Enfield Continental GT or Interceptor 650s?
Nope. Only other bikes I looked at were the Harley-Davidson Road Kings. Their msrp is more than twice than Triumphs and are built more for long distance touring. Classy looking bikes though. Especially the ones that have the white sidewall tires.
I just want something that gets me around town and maybe do a fun ride through some of the rural areas where I live.
I have owned 5 HDs. They are expensive junk and about to go out of buisness, uncomfortable to ride long distance. loud and 90 to 103HP depending on model. BMW bike made in Germany. In line water cooled 6 cylinder. Quiet and efficient. 160HP, and puts HD to shame for the money. The prices are about the same. HD air cooled and are very hot in the summer sitting at the intersection. I should know.
I purchased a motorcycle a few months ago. 2021 BMW loaded 42MPG. The bike had 1600 miles and every factory option available. Purchased for 23K. Bike new 31K. I could not pass up that deal. Seller lost his job and could not afford to keep it. I own a 2018 Dodge Ram 1500. I bought the 8 speed. Truck gets 22 highway and 18 city. Not bad for a truck. 60K miles and has been paid off 3 years. I use the bike unless payload haul is required. Then when it gets real bad, I have a bike to ride. 5 acres to grow food, and all the canning implements. Been stock piling food for a few months now. I also have a well for water and am on septic. So I can still use my in door plumbing. Now I am going to build a machine to produce my own power to run my well pump.
Wahl’s are great. My hair is migrating like a strawberry patch, from front to back, so frequent scalpings are required.
My second car is a bicycle. The way things are going, I’m not sure if I really should instead have gotten a horse.
Methane😂
You know, back in the early 70’s, methane was supposed to be big replacement for “fossil” fuels.
I remember reading articles about farmers who were providing their farms with electricity using methane derived from cow/pig/chicken dung to power generators.
Funny how that source of energy just got swept under the rug.
Why not a motorcycle?
Electric bikes are also pretty cool.
Remember the chip shortage? All those autos sitting worthless?
We were told that the shortage of new vehicles raised the demand for used vehicles, driving the price up.
That story has a disconnect with this story. People who can afford new cars that lose value as you drive them off the lot can afford used cars.
It appears that the higher prices were a damper on people who would normally buy used cars. I would say that the lenders wanted to make more money and played games with loans to keep the less fortunate buying cars at prices they could not afford.
As we learned in the prior housing bubble, such loan games spread to all buyers. Very profitable for lenders to loan to people who couldn’t afford those houses and sell off the loans before the reckoning. I wonder how this game works?
Meanwhile, if you read between the lines, buyers were allowed to use stimulus money as income guarantees when getting loans. Otherwise, they should still be able to afford the loan terms they agreed upon. Wait till the recession drives higher unemployment.
Wonder if that includes all that extra unemployment money? “Sure, you’re unemployed. But you can use your unemployment money as guarantee. We trust that you will get a job in time to pay off the rest of your loan.”
Obama kicked off the mortgage melt down manufactured crisis before he weaseled his way into the WH by calling banks racist for not giving bad loans to people of a certain skin color. As you know he later bailed them all out as President. Obama is obviously the defacto President right now.
he also accelerated used car pricing with his failed “Cash for Clunkers” program which took many completely reliable used cars off the market for use AND spare parts
And parts
I dislike Obama just as much as the next treeper, but as I recall it, the meltdown was primed and ocured prior to Obama taking office and was initiated with subprime home loans for several years prior to his election….
Yes, it was an earlier (pre-Obama) revision to the so-called Community Reinvestment guidelines that punished banks if they were too cautious about lending standards (like uh requiring proof the loan could be repaid), so more subprime loans got made, ultimately to anyone with a pulse. Of course unscrupulous loan officers made it worse by taking advantage and making ever more ridiculous loans. A recipe for disaster as predictable as the sunrise.
William Jefferson Clinton gets the credit for starting the ball rolling.
Wasn’t Andrew Coumo the head of HUD and he demanded that the banks do these sub-prime loans?
And his Prince of Darkness Treasury Secretary Robert Rubin, for decimating Glass-Stegall, and letting Goldman securitize mortgages (with Liar Loans), health club memberships, car loans, ad nauseum…And then let them all off the hook, with taxpayers picking up the tab.
That set a precedent. Bankers started to see a whole new business model…Privatize the gains; socialize the losses.
I want my 7% mortgage rates back, 5% passbook savings accounts, 20% down on a house w/a 20 years duration (thus keeping housing prices lower and related to the local wage base), stocks without algorithms, bonds that actually measure risk, one-income families, etc.
Why can’t we just backtrack to times with proven benefit to the average man, manners, knowing your neighbors by name, respect for teachers, church on Sunday, etc.?
Yeah even W called it out at the time, its going to get much worse before it could get better.
Don’t imagine that the Kenyan waited until he sat in the Oval Office to damage the country:
https://freerepublic.com/focus/f-bloggers/2926220/posts
Clip From the Article:
(The Daily Caller) President Barack Obama was a pioneering contributor to the national subprime real estate bubble, and roughly half of the 186 African-American clients in his landmark 1995 mortgage discrimination lawsuit against Citibank have since gone bankrupt or received foreclosure notices.
As few as 19 of those 186 clients still own homes with clean credit ratings, following a decade in which Obama and other progressives pushed banks to provide mortgages to poor African Americans.
The startling failure rate among Obama’s private sector clients was discovered during The Daily Caller’s review of previously unpublished court information from the lawsuit that a young Obama helmed as the lead plaintiff’s attorney.
Those events were caused by a Democrat controlled Congress… they deemed home ownership a “civil right”….. Dubya actually warned about it but he was unable to control the Congress.
Clinton..Bush continued it.
He is rightfully referred to as the criminally corrupt kenyan
Used car loans are often more limited and at higher interest. It can be cheaper – and easier for a poor person to purchase a new car. They may not even be able to get into a used car loan.
At the tail end of the Carter Admin. the interest rates on a new car loan were around 18%. Used car loans were running around 21%.
There are laws to prtect us from loans that are really bad. Of course poor credit customers are high risk and deserve a higher rate because they’ve proven this with credit history. This is a case of supply and demand. Now mix in a recession and ot a perfect storm for repos.
“ Those banks and financial institutions have recently rented more storage space”
Also, I suspect supply issues and the resulting higher prices for new vehicles impacts things as well.
because the original loan rates were higher, if the lenders were to release all the repos onto the market at once the price would collapse and they would lose their shirts….instead they hope for you to lose yours when you buy one on these repos at auction…therefore like DeBeers limits the amount of diamonds on the open market to inflate the retail price so too they limit the available used cars to keep prices higher for available buyers
I’m in the market now for an 80s Japanese motorcycle. There must be a way to capitalize on this. Fall is the best season to buy used motorcycles. People needing money will be more inclined to sell then because they reason that with winter coming, they can’t ride anyways and they have till next year to get another bike.
Maybe I’ll be on the lucky end of a double whammy?
Don’t buy anything too exotic. Select a few prefered models and then go hunting for parts for that specific machine. Only after you’ve confirmed that parts are still readily available for your intended choice should you go out shopping for one. It’s getting near impossible to find parts for some of the less popular models of that vintage. Remember, 1982 was 40 years ago.
Looking for another Yamaha XS650 or maybe down a bit to a Suzuki GS450S, Kawasaki KZ440 or possibly a Suzuki GS500E or F. I’m partial to air cooled twins and Japanese dependability. All the bikes mentioned have parts available. Your advice is right on!
Go to craigslist. That’s where Private Sales happen. At a much different price level than anything you will find Googling.
Did you even read the damned article??
Sundance clearly states: “The banks have a vested financial interest in limiting the number of repossessed vehicles they allow into the used car auction market in order to keep the book value of the cars as high as possible. Those banks and financial institutions have recently rented more storage space for the vehicles being repossessed.”
The banks are hoarding used cars to keep prices up!
It didnt sink in after the first read. So it is in fact operation hide the cars after all. Thanks dammit
Just like real estate.
I’m in the wholesale end of vehicles…. Banks are not hoarding vehicles. Auctions where Repos are sold do not have a plethora of vehicles.
According to SD, because the banks are storing the repo’d vehicles instead of putting them on the market (auctin etc), so as to keep the book value high.
When I get moved abroad. I’ll be selling my low mileage Prius in FL. It has another 200,000 miles to go on it.
Maybe I should offer it here first, to Treepers?
I just bought a motorcycle from a guy for 3K less than MSRP. It was a 2021 BMW with 1600 miles. With options (all of them) bike was 31K new. I paid 22K. This guy took a huge hit on depreciation. I could sell the bike tomorrow and make a min of 3K. Bike gets 42 MPG is the reason i purchased. And the deal was to hard to a pass up. This guy lost his job and had to sell. Mint condition.
here’s Lucky Lopez’ latest … goes with and enhances what Sundance is discussing👇
If this were a Republican President saying what SloJoe said on video tape it’d be running 24/7/365 on a loop an every cable news network.
How many of those autos are going to sit and rot in storage somewhere to never see the light of day again? likely as many as it takes to prop up the market prices.
Just more evidence that some cannot allow any significant deflation of goods without causing it all to implode from over leveraging. To big to fail, again.
The banks don’t like that the loans aren’t being paid off. I heard they will put pressure on the dealers to move these cars at lower price than they want.
Sounds like the banks problem that a loan is not being paid off. After all, they are the ones underwriting the loans are they not?
Meh, something about assuming risks and doing their due diligence.
Aren’t auto loans being securitized anymore?
Accusations of “white privilege” or other probably put an end to that for good.
We will buy the cars under the name of the government, and they will be sent to the crusher.
Paint them green. load them with ten 155 howitzer rounds in the backseat and send them to Ukraine.
100% Incorrect. The repo asset is worth MORE. Banks are no longer incentivized to restructure loans with the consumer because it’s more beneficial to repo a car and resell cause used cars are so expensive. This is likely why we’re seeing this Stat. No unusual defaults.
Repo and sell for more that the loan balance.
In previous years, many repos were upside down.
Worth much less than the unpaid balance.
Well, that doesn’t make sense to me.
If your car–which you’re about to lose to the bank anyway– is worth more than the loan, why wouldn’t you just sell it yourself instead of letting it be repossessed?
You might not find the buyer for your vehicle in a timely manner.
So banks can sell your car for more than the loan amount because the used car market has more demand than supply but the seller can’t sell in a timely manner because…. Their time line is what? Too short?
The only way the timely manner idea works is of the average car time to sell rate is longer than the notice someone would have that they can’t manage their loan.
The car you want to get out from underneath has a lien on the title that has to be satisfied before the new owner can take ownership of that car. Myself, I wouldn’t pay anyone a dime for a car unless they had a free and clear title.
It seems way too risky and complicated and I think most buyers would rather just look at another car. If you knew the insolvent owner personally you might take the risk? I would think the insolvent owner and the prospective new owner could go to the bank together but still …?
I seldom own my cars. Always, I’m right side up on my loans ( specific to my wife and I ) so when we sell a car, we deal with our credit union.
Most times we sell the car to a dealer’s used car manager, so that’s simple, we just wait a week, or less, for our check.
Sometimes, with the best cars we might sell to family, friends or coworkers. Working with the credit union is very simple.
Thank you for the insight!
Wouldn’t this be considered manipulating the price of cars for the average consumer, so that they don’t lose money? Wouldn’t this also benefit them by keeping vehicle prices higher, so that they can write more loans and take advantage of the higher interest rates? Final question. Isn’t this illegal?
“The banks have a vested financial interest in limiting the number of repossessed vehicles they allow into the used car auction market in order to keep the book value of the cars as high as possible. Those banks and financial institutions have recently rented more storage space for the vehicles being repossessed.”
“Wouldn’t this be considered manipulating the price of cars for the average consumer, so that they don’t lose money? Wouldn’t this also benefit them by keeping vehicle prices higher, so that they can write more loans and take advantage of the higher interest rates? Final question. Isn’t this illegal?”
If they are conspiring to do this in some way to manipulate the market, it could perhaps be illegal…but…I do not see any difference between this and e.g. farmers keeping grain in silos to await higher prices for their product, or you not selling your house until the market is more favorable.
So, if they want to withhold their “product” to keep prices high, how could that be illegal?
Reminds me of De Beers with respects to restricting the supply of natural diamonds on the market.
<Reminds me of De Beers restricting the supply of natural diamonds…>
As long as it’s not De Diamonds restricting the supply of beers 🙂
Love ya wordman. Always get a chuckle!!
if it is a coordinated effort among a consortium of banks it would qualify under collusion and conspiracy, thus making it illegal just like any other monopoly action
I think for it to be illegal would require them all to have gotten together and agreed to do it.
Lots of illegal things go on, manipulating repo/car pricing is not on anyones radar screen.
Cars depreciate with time. They are not assets. They won’t recover value if you hold onto them (unless they are collectibles). Certain parts like tires, batteries, and plastic trim are subject to age decay.
Banks can’t just hang onto them indefinitely. Unlike homes, they will have a clock running on how long they can hold them before the financial curves go negative and they need to dispose of them.
One way or another, high value durable goods will be seeing significant contraction in demand as people simply can’t afford them. Normal people. The ones who are supposed to “own nothing” anyways. This is just another step along that road.
The car loan is carried on the banks balance sheet as an asset. The banks will be required to increase their balances for
“non-performing assets”
Cars are not depreciating items when the banks have the very realistic expectation to be bailed out on the ones they hold. They expect to be paid off for the vehicles they sit on, based on the “value” at time of repo.
Your analysis assumed a fair market system, whereas their analysis accepts a balance of political grift and manipulation.
Who needs a car when gas in unaffordable?
LOL. We bought a 2015 Fusion SE hybrid threes ago. Best investment we ever made. even with gas priced like it is, we can afford to drive it.
How is the transmission???
Purchased a 2021 Toyota Venza hybrid last year, cash. Gas prices still stink.
Yes they do. FJB!
So I need to fill my tank to go to work and it is running 800 dollars a month.
After a few months of that,
$200.00 /week is a bit much. Are you driving a humvee? Ot is your commute 100 miles/day?????
Plausible.
I have been running close to $350/week commuting some 110 miles/day to work. Don’t have a better option in the short term between trying to find a closer place to live and/or a different car. Both of which are pretty scarce for a reasonable cost in Maine.
Zing!!
Number one and number two for Obama jobs created were
Telephone bill collector
Repo man.
The Crimson Kenyan was also the gun and ammo salesman of the year for 8 1/2 years straight.
Lol!
If Bungles and his gang keep this up a lot more poor people will be walking and if they can’t drive to work they might lose their jobs and become homeless. But not to worry Bungles and his gang intend to import a lot more cheap labor to take those jobs.
The first thing most people will do after a repo is quit their job, because most folks have a job to pay for car loans, etc.
Many people that are laid off can’t afford 600 a month for gasoline and a car payment.
When Obama cleared out “back to school” high mileage old cars, the shortage is now a problem.
Yes last year I was looking for a reliable older vehicle for a friend. I was astounded at the prices for clunkers. They were asking 5-8K for junk that might not run.
Sounds like a Ghetto Grift to me. How typical.
“Many people that are laid off can’t afford 600 a month for gasoline and a car payment.”
That is correct. Also, those who are laid off are forced to pay double and triple their previous amounts for the healthcare they had as employees. Further, the unemployment checks do not cover food, housing, heat, electricity, water,sewage, phone bill, etc costs.
Even employed citizens are going to have to make hard choices to eke out a living and make ends meet come this autumn.
A lot more people than that require a car to get to work. They will quit their jobs because they cannot get to them.
Remember Glenn Beck, and his story of what Van Jones told him about how Communists smash the average person..
Top down, bottom up, smush in the middle. Wash, rinse, repeat.
Excellent conclusion about the housing market. Cars always go first. Then credit cards. The houses are last. Meltdowns are happening at a faster pace now because of deliberate actions to tank the western economies.
Of course, the great majority of so-called financial pros remain ‘cautiously optimistic’ about housing. I can recall only one who is specifically warning of housing trouble, and he has a great track record. (Larry K – if you’re lurking here, what do you think?)
Frankly … look at the PRICE of cars these days … is more than a modest HOME cost not so many years ago. Inflated car prices are simply unaffordable … unless you’ve taken a second mortgage to pay for them.
Most new trucks are a house on wheels, relative to historic prices. The people buying them are a little lost in the head.
You’ve got that right, we have been watching truck prices for about 3 years and, although I could afford it, there is just no way I’m willing to pay that much for a new truck. I just put a new engine in my 08 and will keep trucking.
I see current new truck costs as completely unreasonable UNLESS purchased for a business and you can recover the costs in taxes avoided due to business expenses.
It’s all part of the plan.
I was blown away by the price of that new Lexus ‘600. Beautiful but….~$100k?. Unreal…
Only the elite can afford a brand new Lexus and many other new car brands. In a nutshell: People need to learn to not exceed their budget. Hopefully, people will stop living beyond their means of their own accord.
My Vietnamese wife brought part of her philosophy from the “old Country” that’s worked very well. If you can’t pay cash, we don’t buy it. ….And here we are – debt free….Can’t tell you how good that feels.
They (and Koreans) have inter-family business lending setups, so they don’t have to go outside the family. And it discourages imprudent borrowing.
Or $65K for a Jeep Wagoneer?? And $90+K for a Grand Wagoneer? NFW.
Nah, we ain’t follow’n no recent precedent that taxpayers end up backstopping the financial institutions. You’ve broken the social contract folks. Now you tell us to eat bugs. Nope, and the ‘recent’ precedent is Sri Lanka so there’s no infinite repeat for this. You guys do understand that, right? Because your money is worth half of what it was two years ago.
We’re watching our family members drop dead because of their parasite stress pogroms of injecticides, looming world war, famines, and plagues (i.e. 4 horsemen of Rev.6.1-8) all created by “you” and “yours”. Destroying our food chain. Turning hospitals into death centers where patients are euthanized with Remdesivir. Anyone know what happens to this “Harlot” system of theirs? Read the Book of Revelation, Chapter 18. That’s what’s coming for those guys, the banks, and their corporations along with their bought and paid for puppets in every World Bank owned government.
If anyone would even think for one second that people are going to go along with their little plan of screwing everything up and then giving us their little broken dystopian solution of owning nothing? Wow! That really is one incredibly strong delusion! (Isaiah 66.3-4,2 Thessalonians 2.9-12)
My husband, now retired, sold high-end vehicles.
The number of people who would try to purchase one with credit scores in the 400s was astounding. And I am including those whose incomes which were well beyond triple digits. Or should I say especially those people in such professions that produced those sort of incomes.
They simply had no grasp of finance or their personal situations whatsoever. But these people, on learning their credit scores were so bad that they’d have to put more $$$ down in order to purchase a vehicle, would depart, go to their bank or credit union, and would be instantly granted whatever they needed.
As he used to tell those in such a situation, many completely upside down with their trade ends because of unscrupulous previous salesmen who knowingly put their customers into that situation, ” I am so sorry to tell you but you’ll need to wrap your arms around your current car and love it, because I regret to tell you there is nothing we can do at the moment”
He would never ever manipulate the deal to do to his clients what was done to them by others.
And this sounds very much like what is happening now with the repossessions ongoing. Too much payment necessary from those with too little income to start.
Alot of BMW’s, Mercedes, etc. coming up forsale and Repo’d with Biden economic war on Americans. They are really getting after the normal over achievers in this country, trying to undermine them every where possible. Too bad most of those European cars are crap…. (they do look nice though) most people would be lucky to get 100,000 miles on a modern one without a major engine/transmission, wiring problem, etc.
Agreed. Marques sold. Example…Jaguar sold to TaTa motors, and Landrover and Range Rover to Ford, and VW took over Rolls Royce and Bentley…and those good British motorcars were no longer British. Passed around like a cheap date.
On a car site somewhere. BMW means Broke My Wallet.
What’s funny about BMW, the mechanics labor is often more expensive than the part, due to bad engineering. My friend once had an oil leak on his 5 series BMW, turned out to be a $1.00 O ring gasket, had to take apart almost half the accessories on the engine to replace it, which ended up being a $1,000 bill by his mechanic.
I remember hearing about a rather hilarious engineering problem with BMW’s Mercedes and/or other German built cars a while back. Though not so much for the owners.
Anyhow, somewhere along the line these cars starting from a relatively recent model year where having issues with shorts in the electrical system. Turns out that rodents were chewing up the wiring harnesses due to some EU mandated biodegradable insulation made of some sort of plant material rather than the typical synthetic rubber (petroleum). Seems that rodents had a taste for it.
Yup…they used soy based wiring insulation, a rodent buffet. Most people that drive euro trash are trying to impress others. As a long time mechanic,the only thing impressive is the repair bills.
I’m not proud. Been driving Toyotas since ‘07 because they don’t break down.
Yes, love them. They’ll easily take you 200,000 miles, and all you’ll have to do is a water pump or belt.
They’re like the Energizer Bunny.
I was a service advisor at a Mercedes Benz dealership in the early 80s. They had some ridiculous factory defects that most customers tried to ignore. You look mighty foolish if you pay $100K for your Mercedes that is no better than a comparable Cadillac or Lincoln for $30K less. I knew every customer’s complete repair and service history because it was my job to grab their blue Mercedes folder that followed them from dealership to dealership and make sure that whatever they were bringing their car in for was or wasn’t covered by a vehicle or parts warranty.
I asked every customer I dealt with how they liked their car. I also checked every car I drove to see what most people considered “normal” bass on the radio! What can I say!
Most people lied and said their Mercedes never let them down.
Most people turn the bass all the way up.
All German Stable here. Minimal issues and maximum value. Of course, they were in the family so I did not pay the new price, they have been great vehicles with low operating cost. 3 MBZ and 1 4×4 VW Van(my habit), then Mom passed and left me an AWD Lincoln MKZ.
My son has a Ford Fusion and it has happened twice to his car, we live on a marsh across from Atlantic Ocean and it is the swamp rats that keep doing it. It also happened to my neighbor, its a real problem when the cars are parked outdoors at night in my area.
Just got a Ford Bronco that I have to park outside ,we have two Mercedes sports cars parked in garage. I was told that the soy wiring is on most new cars. My neighbor gave me a rat box that I put poison in so that might help.
I REALLY want to see a “leader sets the example” provision that anyone who wants to mandate an enviro crap has to have it done to THEIR cars, etc, until it passes muster.
Actually, that’s happening a lot, and not just to the German cars.
The push for “Green” stuff is at fault: the resulting parts being used are tasty for rodents.
I long for the days when a 1000 dollar bill from the shop was the norm…can’t get out for less than 2k these days.
To my eye, which can appreciate a gorgeous automobile, it seems to be that design of these vehicles has gone south…way south.
These days I get behind a high end marque and think that if the BMW or Merc or Audi, etc ornament were not on the car, there is nothing about it that would instantly let me know I’m looking at an expensive vehicle.
So it is beyond me why anyone would spend that sort of money on a car that could just as well be any mid-price Hyundai or Nissan.
“Wind Tunnel Effect” on design/styling….fuel efficiency/performance……laws of physics forces similarities you rightly notice across all manufacturers.
And isn’t it a shame?
It certainly is a shame, at least from my perspective.I consider myself a “car guy” and have my preferences, but can also appreciate many vehicles I would never buy for myself. A friend has often said America has “homogenized” (town business centers) HD/Lowes/Staples/McD/Etc.
So it appears auto industry has followed suit.
Love the word “homogenized”. That’s exactly the mot juste. It seems what people who drive these cars are getting into debt for is a status symbol badge. Not like the cars of old which were pleasing to the eye and a joy to drive.
However, having said that, to each his or her own. What appeals to one, doesn’t to another. In the end, spending massive amounts of money, or going into debt for a product which starts losing its value the second one drives off the forecourt seems not a wise use of that money…but that’s just me.
That would have made Enzo chuckle.
Jaguar XKE, Studebaker Avanti, AC Cobra, ’67 GTO, ’66 Chevrolet Corvair Corsa, ’36 Bugatti 57SC, ’66 Oldsmobile Toronado, ’63 Chevrolet Stingray Coupe
My NEWEST automobile is a 2011 BMW 335i convertible. N55 engine E93 Simply put, it is far and away the BEST automobile I’ve EVER owned. It has 150k Mike on it and drives nearly showroom new. Yes, it had the typical BMW repairs; water pump, thermostat housing, and valve cover gasket (plastic parts) … however … the car is easy-enough to work on, and I did all those repairs myself. I also do my own brakes, and both major and minor inspections. I have NEVER had the car into a shop. Ever. Anyone who calls these cars crap … must be a government motors salesman.
You are definitely the exception, euro trash cars tend to be money pits..hands down the Japanese are the most reliable. Toyota and Honda lead the pack
Love my 2004 Toyota Sienna Limited.
210,000 miles and going strong. Comfortable for travel, and we haul everything from suitcases to Christmas trees 🙂
Taken us from the UP of Michigan to West Palm Beach FL…and many places in between!
So reliable…plan on driving it until the wheels fall off!
Also, an old car smart guy said that Toyotas had the best suspensions in a passenger car.
Sounds like you may follow the make/model specific forums (N55/E93)where there is a wealth of detailed information (step x step x/pix) on model specific (common) problems and often times more than one repair option. Great resource for those that don’t mind wrenching on their own vehicles.
Yes I do … and yes YouTube has enabled many of my repair projects. But TBF … if you haven’t grown up around mechanics such as I have … good luck with your DIY repairs. I have taught my kids (yes, even my daughter) how to repair basic parts of their cars.
I own a 1990 VW Cabriolet and I also do most everything. It’s going to need a new top soon so I can drastically change the appearance of my baby. The car is now med. blue over dark blue. I’m thinking cream over dark blue? My actual car:
http://www.2040-cars.com/_content/cars/images/96/648396/001.jpg
Thats why I bought a lexus and hope to get miles
300,000 plus
I own my reliable ‘12 Toyota Tundra. Won’t purchase any new vehicle until the planned crash is well underway and all my assets are protected.
70 percent of purchasers have no budget, and live “check to check”, living beyond their means, and making up for the built in shortfall, by “robbing Peter to pay Paul” and paying the minimum balance.
They have NO IDEA whether they can afford a purchase, or not,…cause they have no idea what monthly income minus monthly outgo equals.
They are probably right in fearing the truth, which is that the answer is a negative #.
Like businesses before 2008, that made no profit, and made payroll by regular short term loans, these people can “coast along” when the economy is good, skating just above default.
A significant increase in what they HAVE to spend, for neccesities, and their ‘ride’ ends, as everything crumbles.
Which is why, Dutchman, I feel more and more strongly that finance, personal and otherwise, is desperately needed in high schools as a requisite course for graduation.
Along with Civics and actual History!
Oh yes, CR. So let’s leave out the pornographic sexual grooming and CRT propaganda indoctrination courses, and restructure for essential, life useful ones.
When comes to personal finances the bulk of Americans are dumb and stupid as a pile of rocks.
60% of them wait around for tax time and it’s like winning the lottery for a few days. Then back to waiting for next years refunds!
We’ve had 40+ years of cream-puff economy for the coasters to snowball their income and debt while still living paycheck to paycheck.
This is a real recession – one that will make the ’70s look like a cakewalk and the ’80s corporate middle management gutting look charitable.
“If you rob Peter to pay Paul, Paul will always vote for you.”
Saw the repo tow truck circling the parking lot of my apt complex. He quickly snatched one and left. Saw him the next day – same outcome. IMO the empty lucre handed over by Biden during the plandemic, the exorbitant QE, $5 trillion+ spending – made its way into the car market, credit cards. The collapse will be unprecedented.
Dealers nationwide buying “used” 2021-22 vehs and selling them at MSRP – new veh’s sell at or above MSRP. Just passed local Ram dealer this morning. Two unsold TRX trucks still sitting in the lot that were up for $30k above MSRP in early June. That’s a sign.
RE market here already showing corrections. Lowering price in only 7-14 days on the market. No one is buying except from builders who have their own financing. Soon cars will follow unsold.
Biden ensuring the coming worldwide collapse will include America when previously, we were somewhat insulated. Recessions are government’s incompetence. This time it’s been planned for their NWO.
Being from flash flood prone Arizona, where we have a “Stupid motorist law” that allows Fire Depts to bill people for rescues, for being stupid enough to try to drive across a flooded street,…I KNOW it is a bad thing, when your CAR is “underwater”.
Sorry, had to get that out of my system.
Sure am glad I swore off credit, 20+ yrs ago, and all my vehicles are PAID for and owned outrite!
Good for you Dutch. Hope I don’t jinx the wife and me but we’re driving 2 Toyotas, 2005 with 216,000 and 2007 with 65k!
320k Chevy 2500HD 2015
165k Ford Expedition 2008
90k Impala 2014
198k Camry 2002
All paid for. No codes.
Yeah buddy.
’94 Z-71 – 374k – my baby. Showroom condition, tons of miles.
2016 Ram Ecodiesel – 99k
2015 Honda Accord 154k
2001 Saturn SL2 – 167k
2007 Yamaha Vstar – 35k
1978 Kawasaki KZ1000 – 25k odometer, but 500 miles on complete rebuild
1980 ATC110 – no odometer, but lots of fun
1999 Honda 4trax
1985 Kubota L235DT – great tractor. About 2500 hours
All paid cash, and bought the Honda Accord new for my wife
Saab 9/5 170k
Volvo XC 230k
Crown Jewel….
2003 Dodge, Cummins 6speed Manuel
You won’t. Toyotas are reliable and long lasting. For a while, “pre-driven” Toyota 4 Runners were much sought after and very low on the ground for those looking for one. You’re both good, I’m thinking.
May be wishful thinking. A lot of these Bubbas bought trucks, bass boats, 4 wheelers, guns, jet skis, airplanes, hunting RVs, sporting gear like gold & tennis, etc. Cars are the tip of the iceberg.
I saw a classified ad online last week for $120,000 mercedes sl, said they couldn’t afford it anymore lost their job. In the background was a brand new $60,000 jeep, a $80,000 tahoe, a new boat and a 4 wheeler. I kid you not… welcome to the american dream kiddo’s. (Biden Nightmare)
Dave Ramsey would often mention people that finance a pizza (on the CC with a revolving balance).
Local bank has a video billboard advertising for vacation loans. That is a depreciating asset with a one week financial life.
We had yacht club neighbors with a almost new boat. Great income. Built a new home and had to use a credit card for their first house payment.
Dave Ramsey
“the paid off mortgage has taken the place of the BMW as the status symbol of choice” (paraphrase)
wait 6 months; you’ll be able to buy toys like that for pennies on the dollar.
I am waiting but I expect it to be a bit longer to wait.
When bass boats first got up to $30,000, I asked my banker how they could make those loans. He said he had no concern about making those loans. When the house is gone, the wife is gone, the truck to pull the boat to the lake is gone, he will still be making payments on the boat.
Waiting on a lightly used 3/4 or 1 ton Ram or Sierra. I’ve needed an HD truck for about 6 months, but saw this coming. Biding my time. I figure I can probably save about 30% over costs today
You’ve got that right, the regional Kubota dealer here went through 2 complete inventories during the covid crisis. There were well aware that probably half the inventory would be repo’d in the coming year. It’s the companies problem…they finance them.
True dat
Banks are repossessing used cars at a time when automakers are experiencing production delays for new vehicles.
The net result will be fewer vehicles of all kinds going forward.
Then there is this story:
“After ruling that motorists can no longer buy a new gasoline- or diesel-powered car after 2035, European Union regulators have passed a law that makes anti-speeding technology and a so-called black box mandatory for all new cars. The controversial features are a requirement in every car introduced after July 6, 2022, and they will become required in all new cars regardless of launch date starting in July 2024…
As for the black box also made mandatory by European officials, it’s a device that records and saves data points like the car’s speed, the engine’s revolutions, the brake and accelerator pedal inputs, the force of the impact, and whether the occupants are wearing a seatbelt 30 seconds before and 10 seconds after an accident. Regulators stress that this information will exclusively be available to law enforcement officials in the event of a crash and to the various government agencies in charge of compiling traffic accident-related data.”
Old vehicles are disappearing from the market. New vehicles are being delayed from entering it. Concurrently, Orwellian tracking devices are now being required for new vehicles when they do become available.
Another series of coincidences with dovetail with the World Economic Fabian agenda.
They already have those tracking devices in most vehicles. Onstar has been doing it for over 20 years.
Correct. However, now such devices are required by law.
It is the classic “convenience to compulsion” model of advancing authoritarianism.
only legally REQUIRED post-2025 models…..the rest just happen to have them already
That is why I drive a 1986 Porsche 944 (951) turbo. Porsche you say?!? Yes bought it used, undervalued and I work on it myself for the most part. I have developed a network of friends and clubs where i can get used parts and new after market parts online. I love that car and it handles and screams like a spanked monkey. I’m 64 years young going on 19!!!! PS. and the wife thinks its sexy!
Given today’s fuel prices you are going to see RV and Boat repo’s hitting the market….These are luxury items and are always the first to go…..Think about this….I’m a offshore charter guide in SWFL, my average charter for Grouper and Snapper is 40-50 miles Offshore….My twin 300hp Yamaha’s get 1.2 miles a gallon….I burn 80-100 gallons per trip…..Think about that….Fuel costs for me are $400 on avg…I use ethanol fuel across the street since my boats on a trailer…If you fuel at the Marina you’re spending $5.50-$6.25 for non-ethanol fuel…. …. I pass the increase costs to my clients….Sadly, The weekend warrior can not do this…..
I just sold my Truck for a couple grand more
Then I would of guessed.
Time to get some Gold and beat the Rush!
My son deals with analyzing the mortgage market for a certain large bank.
He says that, so far, nothing similar seems to be happening with house mortgages, except…
…most large banks now sell their mortgages in bundles to investment companies, once the mortgages have been established for a year or two.
And so banks per se would not notice defaults on the mortgages still in their possession! It would be a problem for the investment companies now owning the mortgage in the bundle.
Or…he said that certain government agencies (i.e. The FedRes, etc.) buy those bundles and those agencies hire the banks to “service” the mortgages they just sold!
“It’s a racket!”
Of course it is, because politicians have been hired to write the laws allowing such a racket!
You don’t have to be a bank to be able to sell a mortgage. My parents used to flip and finance houses after they retired. I’m now the trustee and handle the work. Letters arrive on a frequent basis from investors wanting to buy the house loans.
Not selling. Mortgage servicing ain’t that hard.
That is something I’d be interested in learning about. Any tips Sherri Young?
MidknightRambler,
Deny yourself. Try to work in cash. Stay out of debt as much as possible. There will always be surprises. My father used to say to calculate the cost of a project, then double that number.
Deal in houses people need, not McMansions.
Think twice before you use a realtor to sell a modest investment house.. Realtors want to sell McMansions. They get 6% of the selling price -not 6% of the markup – 6% of the selling price. If you work with houses that people need, a salesman is not necessary. This is especially true when you are providing the financing.
Provide a title policy. My attorney understands that I’ll pay him for a closing but not an escrow fee. He gets to do the releases and other work too. He is not suffering.
Invest your own sweat equity into your projects. Try to do as much of the work as possible. Start with a clean house then keep it clean and organized. You will get paid for your work through the principal profit. The first year is treated as a short-term capital gain. Every year thereafter is a long-term cap gain.
If you understand workflow and need to use tradesmen, consider being your own general contractor and decorator. As much as you can, purchase materials and supplies and deliver them to the worksite to keep the work flowing. Don’t have your workmen run the errands. Hint: Order any windows on the first day. It takes 6 months to get windows now.
When others are working inside a house, turn on the heat in the winter and A/C in the summer. You can tough it out when you are working alone if you so desire.
Try to get your buyers to take 15-year mortgages. If a buyer runs into hard times and needs a workout that extends the duration, you have some room for modification. Don’t write 30-year notes. Be ready to write reference letters.
Take monthly tax deposits, pay the taxes and provide tax receipts. Explain to your buyer how to apply for a homestead exemption (very important in Texas).
Do a good job and treat people well. Don’t try to turn a starter home into a fancy castle but don’t cut corners and hope things will hold together long enough to close. You will be dealing with your buyers on a monthly basis. If they like you and think you have been fair and honest with them, they will refer friends and family.
Hope something here is useful.
Banks have been bundling and selling mortgages for decades; nothing unique about that.
At the higher end of the used car market, you also have the unavailability of the new vehicles driving up prices, as people buy the available used ones…
2008 the tranches often sold in packages which were NOT run thru risk managers.
Some packages were sold as prime and were 30% sub prime.
Now a car used price tag is 38,000, and it should be 23,000, the amount they will loan against the car is much lower.
I bought a 2021 truck last December. It was manufactured in October 2021 and Ford gave me $1000 off the sticker price as an incentive when other dealers were charging above MSRP. I figured they has a year quota to make.
I was surprised by the trade in offer for my 2018 truck with 84,000 miles on the odometer. The dealer gave me 80% of the original sale price I paid in 2018.
I would never pay what they gave me for the old truck.
There has never been an explanation as to what happened to all the home owners / businesses that fell behind on their mortgages?????
Obiden happened. The Obiden regime cancelled all of Trump’s great work. Further, the Obiden regime cashed in on the Covid virus and dictated the closure of businesses, affecting both employers and employees, and ordered a Vax mandate. The Regime is responsible for crashing our economy, which they continue to PURPOSELY do.
Yep. All those Chargers, Challengers and Mustangs (and Altimas lol!) are about to be on rollbacks. Early next year you’ll get great deals on them, but the engines will need rebuilding.
IMHO, cars are being destroyed as part of demand destruction thru inflation. They want us buying EV’s
The average Joe Shmoe cannot afford an EV. The Joebiden Regime fails to understand that by crippling our economy through their man-made inflation, they are impeding their grandiose “green new deal” plans.
This is why Joe Biden rides a bike and uses publicly financed transportation.
OK I am trying to figure out how the covid stimulus helped anyone get anything…I got a $1400 and a $600 check…that wasn’t extra income to be able to report for loan in my book? So am I missing something?
I also bought a “hybrid” in 2018-brand new – it doesn’t do anything to lower my gas bill – maybe I get an extra mile an hour driving in the city but I never drive in the city so what’s all the hype on hybrids? The newer ones must be different than mine.
We didn’t buy anything with our “stimulus” checks. We kept paying our bills. No new TVs, fancy geegaws. Nothing.
Mortgage, car loan and all our utilities, then groceries all got paid.
i have no sympathy for anybody who went out and blew that money that should have kept a roof over their head and fed their family.
Our government plague checks actually helped pay for a new roof over our heads!
Hybrids do not get better mileage on the highway as the battery supply is not infinite. At best, they can help on hills.
Where they excel is within cities at creeper speeds and in heavy stop/start driving (red light/green greenlight).
Not really true.
Serial hybrids get very good mileage on the open road because the ICE is small and runs efficiently – running the generator that powers the electric motor(s) while the car is cruising on the interstate.
Parallel hybrids can’t do that, their ICE is much larger and it runs, like normal ICE powered cars, at a less efficient cycle while on the interstate.
There were a couple years of extra federal add-on (from one or another covide relief bill) to one’s state unemployment benefits if covid was the reason you couldn’t work at your job (closed restaurants, shops, schools, etc.). It was taxable income (unlike the bonus payments) but it still lulled some people into thinking they had more money to buy things they would not have done ordinarily.
After the first stimulus, my washer died, the dryer had not worked for about a year. I replaced both with the first stimulus.
After the second stimulus, I replaced the original 1980s vintage beige stove with a white one to match the rest of the appliances that I had bought over the years. After 20 years of waiting for the stove to die, I gave up. During the installation of the new stove, July, my son noticed spalling on my balcony. Sunrise in Miami fell the prior June. I decided to move. I sold my condo in August. So, the new stove helped my sale. They wanted the washer and dryer (6 months old), but, they did not want to pay full price. I had already been through one jarring balcony maintenance operation with a literal scaredy cat. I did not want to experience a second and I could NOT afford the assessment. So, I down sized by 500 sf and 100K. Happily relocated closer to my grandchildren in a tiny house with a 2 car garage. The washer and dryer relocated with me.
We got nothing… oh we did get something… two income tax bills due on April 15th.
BRICS has the chips.
Thanks for finding this indicator that I never would have thought of looking for myself.
I think I’ll keep my 13 year old Honda Accord with less than 100K miles.
The car market sounds scary.
Our ’16 Civic has 70K miles, the ’18 Passport has 29K miles ( we had to do some long distance drives last year on account of family issues) and our ‘2o Clarity PHEV has 9500 miles.
We bought the Civic off lease on ’18. We looked at buying the Passport and Clarity off lease but the resale values are crazy so we just keep extending the lease until the resale value gets reasonable.
Can’t get a new Honda or Acura.
Due to specific business circumstances, we are NEVER upside down in our leases… so we normally buy out at the end of the lease, hold on to that car for six months or so and then sell it. At the same time we will lease a new car when the old lease ends.
So, we’re always in new cars, always making about 10% on our cars… but that’s due to our specific conditions.
However, with the used car prices nuts and the lack of new car inventory, plus the very low miles we are suddenly doing (working from home) we decided to hold on to the leases.
Thanks.
Keep an eye on the rental car market. As we draw ever closer to the new model year, cash strapped agencies will have to park existing inventory, auction it off, or find creative financial solutions that get them off the hook without putting the banks on it. The real question is how much debt the banks are willing to finance here, when collateral takes the form of an asset that the banks are already repossessing.
My husband travels for work and uses rentals. They’ve been keeping the cars longer than usual with higher miles.
I work for a major steel company, in shipping. Our open line times are expanding every week. Most car companies have stopped their orders, and are not accepting any orders placed recently. One car company in the news very much recently, an electric car maker, thier orders keep coming. The economy is in free fall, there will soon be many ready to deal on all their toys I feel?
My cousin who lives near Dallas wants an electric vehicle. There are 2-year waiting lists for new EVs. The wait for a hybrid is several months.
Let’s see what happens through the rest of hurricane season. Flooding could bring even more demand for used cars.
We keep looking at this little sector and that little sector, always seeing the same thing. The whole damn thing is coming down. Watching it collapse floor by floor is just depressing. The only hope, OUR only hope, is a MAGA Republican tsunami sweeping away both democrats and RINOS in 2022, and Trump re-election in 2024. The only thing holding everything up at this point is the hope that both will occure. WE are WILLING it all not to fall in the meantime.
First off, our hope is always in Christ. If we find ourselves in chains He’s still our hope. But that being said, have you looked at the state of moral decline in this nation? Even if Trump cones back in 2024(he won’t, the election was stolen, the government is gone, get over it now because if you don’t the future will hurt), there’s no fixing how far gone we are without the floor dropping.
America is an addict and addicts go to rehab. At rehab you don’t make money or fame…you do the hard work to be better and when you leave you aren’t rewarded with anything but the shirt on your back. YOU have to rebuild your life.
America’s government is gone. The people’s morals are rough at best. We’ve fallen far from the God who runs the show and even repenting today won’t stop the flood waters from crashing.
And frankly it’s long over due. This nation sold it’s soul to the banks a hundred years ago, but the people didn’t. It’ll be rough, God will provide, we may have to fight and risk (and possibly loose) our lives, but the promise is always that it will be worth it.
Better to die free than to live a slave. And we’ve been sleeping slaves too long.
Housing prices have already started dropping closer to pre-pandemic levels, and they are on the market a little longer. Rent is still higher though, and I don’t expect that to drop any time soon.
I think it depends on the area. Here in the Southeast we are still seeing home prices climb. In my neighborhood they’ve been selling within 1 day with multiple offers driving the price well over asking. I keep wondering when the bottom is going to fall out.
CASH FOR CLUNKERS 2.0 coming right up…. cash for climate change.
interesting tale… we leased a 2018 for fusion back in april of 2019… last year (2022) the 3 year lease ended. we chose the ‘buy it for the payoff’ option of 12,041.00
the dealer tried to buy it from us for 17,500. because it had 22,000 miles on it, we kept it for 12k. wasn’t a point in trading it in on an inflated new or used car.
now it has 29,800 miles. not bad. 🙂
I had a similar experience, did a low mileage lease of a new Sentra in 2019 when it would have been about $20k. Three years later, I exercised the lease residual price to buy the car for a little over $10k when the dealer and others wanted to give me $20k for it. So I would say that “premium” price in the chart around $10k sounds pretty spot on.
I don’t think the banks have any interest in holding used vehicles out of the market to drive up prices for the simple fact that if they all got together and colluded, they are still a small fraction of the auto auction market and cannot really have any effect on it at all. Typically they want to get rid of a depreciating asset as quickly as possible but, in these weird times, they may be thinking they can hold them a while and wish for used car prices to continue their climb forever like many wish for the stock market. Both will continue to climb forever, of course but, the trend can go up and down and do it quickly in the short term. Bubbles do happen. I am not sure this is one. Used car prices began a structural climb for eight years under Obama beginning with the complete removal of a large segment of supply all at once called cash for clunkers. They stayed relative stable under Trump before beginning a drastic climb mostly due to supply issues with very little demand effect in my opinion. It’s probably not being under water that is causing people to bail. Like houses before 2008, it is simply less credit worthy people being given exceptions to get deals done and move those refrigerators and color tvs. The increase in prices means a consequent increase the monthly payments and that is what they are walking away from. If they could barely afford the payment before, they sure can’t now and buy gas for it and food for themselves.
The banks are bidding their time because right now the dealers that buy at auction will not pay the bid ask price because the dealers can’t move cars off of their lots at $8 k above normal price.
But the repos will keep coming and eventually ? anybodys guess, the banks will have to take a loss and sell to the dealers at auction for the dealers bid. At that time the dealers will have lowered the price on the cars on their lots that they can’t sell because of over pricing.
Hope that makes sense.
Maybe all those used cars should be sent to Cuba. Lord knows they need an upgrade from their 50’s vintage cars.
It’s the BULLWHIP effect on cars. Just like food and soon to come, Housing.
All part of the plan.
I would advise all here to take a look at monkeywerx sitrep ( GOD Bless Texas ). In those videos he covers shipping and it’s freaking amazing!!
Sundance you just might want to pay the yearly subscription for the open source that he uses? It could come in handy with your analysis of things.
I watch Monkeywerx but I prefer Sal Mercogliano’s “What IGoing on with Shipping” channel for the shipping part of the story.
Both good but Sal is better able to interpret maritime shipping.
https://www.youtube.com/c/WhatisGoingonWithShippingwSalMercogliano
I second that
Check out this YouTube post. Seeing is believing! In 2019 there were 1.2 million repos. This year so far there are 2.2 million in the first six months! People were given free government money, paid not to work, had their rent and house payments deferred, car loans were extended to 84 months. People with bad credit were given huge car loans. Fancy new cars and $6.50 per gal gasoline are the new normal! It’s coming home to roost.
CHECK OUT THIS VIDEO:
“Houston we got a problem!”
So much wrong in this post. 84 month loans have been around for twenty years. I say that as a car dealer, I know. Have lived it.
Lenders aren’t giving people with bad credit car loans, unless they are secondary financing loans. Good rates require good credit and good debt to income. None of this is a secret to those in the business.
gas is outrageous , but where I live ( and most everywhere else, it isn’t) , and hasn’t been 6.50.
Regards the fancy new cars..hardly. Most dealers don’t have enough new car inventory to even look like they are in business.
What I see are repair shops eating good, because they are backed up with work because people are fixing what they have instead of buying new. The mechanic that says…..” your car needs 2.000 to fix everything on it” is now hearing….” OK, when can you have it done”
the 2000 thrown at a car they know the warts of, is worth fixing to remain viable for another 2 or 3 years, instead of trading it in and spending 10,20,30, 40 times more money on.
For a long time that wasn’t the case
Repair shops is where the money is, you can charge $100+ an hour and only need about $1000, – $2000 in basic hand tools.
The service departments in most dealerships are grossly overpriced and charging large sums of money for repairs. I know. I have been working on vehicles all my life. Now that I’m older and don’t want to turn a wrench I can find a reputable mechanic for easily half the cost of a dealership. Most dealerships in this country are out of control with almost everything they do.
The cost of repair tools and equipment costs many thousands of $. Rental/purchase of shop space is not cheap anymore. There are few start-up garages; established garages survive.
Few people know how to service & repair what they have (the majority don’t even want to know). Add in the problems with electronics and most peoples eyes just glaze over (mine too).
Little help here. I’m baffled and somewhat confused and I can’t wrap my head around why I am seeing the extremely huge volume of new and used trucks (most in the $50-$100k range) on the road here in the Pacific Northwest? I thought that we were in the middle of an recessionary economy? Am I missing something?
A great percentage of Americans purchase new cars and trucks because they want one. I have always positioned myself to be in the category of purchasing because I need a new ( or used ) vehicle.
I often see some young family driving down the freeway with a $70,000 truck pulling a $100,000 camp trailer or boat and wonder how the heck they pay for all of that.
One of my friend’s just bought an $800,000 house. She has a brand new Escalade and her BF has a 7 series BMW. She has 3 kids to feed and both her and BF have regular jobs. I have no idea how these people do it either. It baffles my mind.
I wonder if there is a way I can utilize this information to obtain a better price on a used 1980s motorcycle?
I have been riding and selling early 90’s BMW K75’s and K100’s for 8 years now. These are easily some of the best deals on two wheels. Low prices(often under $2500), lots of spares on eBay, easy to maintain and incredibly reliable. They will easily go 200,000+ miles and get 45-50 mpg on 87 octane E10 if you are willing to spend a couple of afternoons and a couple hundred bucks a year in lubes and tires. You can find them on Craig’s List or eBay( I prefer Craig’s List).
Homes are next.
I vote no on taxpayers bailing these guys out. Instead I vote they pay me back all the money they pissed away trying to be politically correct with home loans the last 25 years.
A dealer usually needs to go to a special lender for these types of loans. That dealer then installs systems that incapacitate the vehicle so they can easily get it back to said dealer. If the banks and dealers didn’t do that, let them settle it amongst themselves.
Perhaps there is a reason the ABA decided to stop publishing these stats. Bank earnings release cycle coming up. It will be interesting to see what is happening to aggregate loan loss reserves across the industry. I kinda think the economy is being fluffed up by leadership while they close their positions in advance of the announcement of the downturn. If all the banks come out as building their reserves, then all the BS jerome Powell speeches will mean nothing.
Just wait till all that inventory piles up… 1-2 years and we’ll see pricing fall through the floor.
With noone being able to afford gas, the vehicles will litter the landscape like the wind turbines. Just Saying
CL listing:
2021 Dodge Ram TRX 1500 $95,000. Hurry, wont last long! (Sarc)
My local Ford dealer selling new trucks a minimum of several thousand over MSRP. Broncos? Crazy–five to ten thousand over MSRP.
In Missouri. I have seen a big increase in the number of cars on the road with expired temporary plates. The state allows 30-days from the date of purchase to pay the sales tax and license and title the vehicle. These people are buying cars but can’t seem to afford the sales tax to title the car. Doubtful they have car insurance either. Without a title and registration the drivers are also most likely not paying their annual personal property taxes like the rest of us. I have seen many temporary tags expired as far back as 2019. Many are from 2021. It is not just a bank loan default issue.
Have seen temporary tags expired in Illinois. All fees and taxes paid when the temporary tags are issued. State is slow at times in getting the real plates to the owner.
Not so in Missouri. Dealer issues the tag but car owner has to go to DMV for title and pay sales tax. No sales tax paid at time of purchase but it should be.
Some of those vehicles probably have annual property tax as high as $1000, if people can’t a payment, or barely afford Biden’s inflated food, where will they scrape up an extra $1000.
Market forces of supply and demand tilted by the jackboot of government Covid19 response strikes again. Due to the lack of travel, rental car companies sold their fleets in 2020 and when travel picked back up started replenishing their fleets in 2021 just in time for Covid related chip shortages.
This double whammy dried up supply of new cars which caused demand for used cars to soar.
I traded in a 10 year old F150 4×4 for $12k less than what I paid for it in 2011 and purchased a new truck (Ram 2500 diesel) for $1000 less than MSRP. I also sold a used Versa for $4k more than I paid for it.
It’s a terrible time to buy a vehicle but some people have to in order to function due to their vehicle breaking down or getting totaled out in an accident.