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I don't think this one bit. I've been fortunate in life to have needed to finance a car, but I buy used cars for >60% off their original MSRP. A new car is just not how I would want to spend my money as insurance and registration is also more than I care to spend. I wish cars were not so expensive, I wish folks would take better care of their cars, and I wish folks would distract themselves less while driving. I can't help but think if folks didn't get into so many accidents then perhaps we could all spend less on owning them.
We're seeing a bump in delinquent car loan payments, though I'm not sure if it's a bump proportional to the historical car sales volume, and that means there's less discretionary spending for economy and comfortable living for the loan holder. We'd like to blame the inflated price of cars for this, but I think the rise in housing costs and relatively stagnant wage increases are the bigger culprit. This is not a good trend.
Yeah. Typical new car buyer is something like early 50s with an 80,000 income. It's just not going to trickle down and become a taxpayer issue. If anything it's a positive. They'll just delay retirement and work a few extra years.
We're seeing a bump in delinquent car loan payments, though I'm not sure if it's a bump proportional to the historical car sales volume, and that means there's less discretionary spending for economy and comfortable living for the loan holder. We'd like to blame the inflated price of cars for this, but I think the rise in housing costs and relatively stagnant wage increases are the bigger culprit. This is not a good trend.
Of which at least 90% being conservative is coming from subprime loans. Subprime makes up a bit less than 10% of new car financing and 25% overall (used and new)
It really has nothing to do with new car prices as the delinquency is almost entirely driven by the subprime market which is buying a negligible number of new cars.
Who cares. I know people who think of nothing of dropping $7K on a 1 week vacation that has a 100% depreciation in value 1 week later.
1)Either people make more money and $600 car payments are proportional to what people would have paid back in the day.
2)They know they can keep cars longer (length of car ownership is also at an all time high).
3) they like cars more than they used to and are willing to spend a larger portion of their income to get what they want.
4) they want to keep up with the Joneses and will go heavily in debt to get it.
None of these scenarios have anything to do with anybody else. Anybody who cares obviously has some other issues to work out.
Perhaps I have “issues” to work out, but I’ve been in heavy debt in the past & I wouldn’t wish it on my worst enemy. Our economy is cyclical & no matter how great things seem today, they will change tomorrow. Even if your job is “fireproof”, there are bumps you just can’t predict in life.
I have a co-worker who’s son lost his job & she bailed him out on a car-lease he got behind on, then her husband got a DUI & wrecked his car & a few weeks later she got a letter from the IRS, apparently she made an honest mistake on her taxes & they want a big pile of cash now. I don’t think any of it was her “fault” really- there’s nothing irresponsible about helping a child or having a spouse make a mistake, but she’s calling creditors & hanging on by her fingernails about now. Literally selling plasma after 12hr shifts. Her car isn’t flashy or expensive, but there’s a payment attached & that isn’t convenient when life throws you a curve.
I don’t think feeling empathy for others is a bad thing & when you see people getting themselves into situations like that (based on life-experience) , you can’t help but cringe. I want the best for my friends, family, neighbors & co-workers & I know based on living in big debt how hopeless & discouraging it can be.
I also know how nice it is to get a paycheck & to not have to mail every dollar out to someone else & I wish more people had a chance to live that way.
I have never had a car payment. I buy 3-to-5 year old cars in full and in cash, usually coming off lease. My first cars were hand-me-downs from my brothers (yes, families used to do this), but since the 1990s I've simply bought off-lease cars.
Some of the national financial advisors say not to buy a new car without a million in cash. A bit unreasonable, but then again who are these people signing a 60-month note at $600 per month for a depreciating asset?
I guess all of this debt keeps the peeps in metro Detroit in warm clothes.
I have never had a car payment. I buy 3-to-5 year old cars in full and in cash, usually coming off lease. My first cars were hand-me-downs from my brothers (yes, families used to do this), but since the 1990s I've simply bought off-lease cars.
Some of the national financial advisors say not to buy a new car without a million in cash. A bit unreasonable, but then again who are these people signing a 60-month note at $600 per month for a depreciating asset?
I guess all of this debt keeps the peeps in metro Detroit in warm clothes.
Typically I buy used cars cash out myself my wife found one she liked but it was under $10K. I paid cash for my last 3 cars. It’s easier that way.
Me neither. Last car payment I had was in 1986, and have paid cash for every car since then. I also would never lease. Why spend money on something every month that you hand back in a few years ?
Perhaps I have “issues” to work out, but I’ve been in heavy debt in the past & I wouldn’t wish it on my worst enemy. Our economy is cyclical & no matter how great things seem today, they will change tomorrow. Even if your job is “fireproof”, there are bumps you just can’t predict in life.
I have a co-worker who’s son lost his job & she bailed him out on a car-lease he got behind on, then her husband got a DUI & wrecked his car & a few weeks later she got a letter from the IRS, apparently she made an honest mistake on her taxes & they want a big pile of cash now. I don’t think any of it was her “fault” really- there’s nothing irresponsible about helping a child or having a spouse make a mistake, but she’s calling creditors & hanging on by her fingernails about now. Literally selling plasma after 12hr shifts. Her car isn’t flashy or expensive, but there’s a payment attached & that isn’t convenient when life throws you a curve.
I don’t think feeling empathy for others is a bad thing & when you see people getting themselves into situations like that (based on life-experience) , you can’t help but cringe. I want the best for my friends, family, neighbors & co-workers & I know based on living in big debt how hopeless & discouraging it can be.
I also know how nice it is to get a paycheck & to not have to mail every dollar out to someone else & I wish more people had a chance to live that way.
Cool story but still not my problem nor yours. You’re not their financial advisor.
Maybe they don’t drink as much as you do. Maybe they don’t have kids. Maybe they pay less income tax, property tax, insurance, have less house payment, go on less vacations.
Here’s a tip, you’ll live much longer not worrying about everybody els’s problems. It sounds like you barely have your own act together and in no position to offer advice to anybody else.
I only pay $640 for 36 months at zero percent interest on my special order [2019] Dodge Charger Scat Pack!
Oh, yeah...I can pay it off any time I want, just like the last one but why should I if FCA is giving me a free loan? I'll keep mymoney in savings at 2% and let them float me at 0%.
Our economy is cyclical & no matter how great things seem today, they will change tomorrow. Even if your job is “fireproof”, there are bumps you just can’t predict in life.
So true. We can't set our personal finance model that only works if things go perfectly with no curve balls.
Reasonable car finance that isn't a massive chunk of your take home pay I can understand... The car is what gets you to work.
But jet skis, ATVs, lawn tractors, etc... Who wants to be that guy on Craigslist looking for someone to "take over the payments" on an upside down Yamaha??
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