Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
You can still find some used good condition cars that will run fine for under $4k but they are usually older cars. Most clueless people would not touch a 2001-2006 Camry for $2k but those things are tanks and easy to maintain. IF you can find a V6 Camry that are really very cheap to service. But the problem today is that people all want a used late model car within 5 years old and those are not cheap to get because of several factors.
Uber drivers must buy used cars that aren't older than 7 years in NYC, some states it can be as old as 10 years old.
Then there's Carvana, Carmax, and whatever online dealerships buying up used cars around the country and flipping them on their site for almost 2x-3x. Many people help them make money by trading in their cars for cheap.
With easy access to loans, these car sites will give anybody a car loan.
I recently watched a Youtube Podcast about the recent Car market explosion. So my title sounds very misleading but the podcasters talked about the very situation that will cause an implosion soon. The main podcaster who sold cars for over 25 years said he's seen this before but what's worse recently is the subprime loans are what's gonna cause this market to implode if people lose their jobs or income.
He talked about the kind of ways people get into cars. Many people who don't have good jobs or income usually have negative equity or are underwater in previous car loans. They then trade in their negative equity for even longer term car loans further increasing their loans and could lead to people defaulting on their loans.
The average folks change cars 36-48 months and used to carry a 36 month loan, now he's seeing people with atleast a 60-80 month loan and will never be able to pay it down if they keep adding more debt.
Which will lead to the eventual day when the car market has a surplus of used cars and tons of repo action as well as many subprime loans defaulting that could lead to a few billion in write downs.
I expect within 3-5 years we'll see a car market implosion.
I saw this also....the father and son team.
Very interesting.
Some people are going to have their butts handed to them.
Some people are going to have their butts handed to them.
It's setting up to be a massive bubble just like the housing bubble itself. While the car market bubble won't be as devastating when it pops as the housing bubble. It will cause some companies mainly subprime lenders to belly up.
I predict the car bubble will pop following the start of any recession or especially when the housing bubble pops.
For those people who disagrees, they didn't look at the hard numbers. Car loans in he past traditionally never went past 48 month, now people are taking out 70+ months loans while being underwater with their previous car loans. So they've simply increased their debt for the privilege of driving.
People are paying market price for used cars right now. The prices may be higher, but buyers have shown a willingness to pay those prices.
Ditto for new cars. I inquired about a new 911 GTS and was told by the stealership their 2021 and 2022 allotment of 911s is already sold out, and people are paying $30,000 in added dealer markup. In cash.
Which will lead to the eventual day when the car market has a surplus of used cars and tons of repo action as well as many subprime loans defaulting that could lead to a few billion in write downs.
I expect within 3-5 years we'll see a car market implosion.
That is the nature of debt. Market corrections are almost always violent. You saw the same thing happen in the real estate market.
Look at the federal government revenue and outlay. Tell me that is not going to implode.
Revenue Fiscal Outlay
$2,523,991 2008 $2,982,544 - outlay is 18% more than revenue
$2,104,989 2009 $3,517,677
$2,162,706 2010 $3,457,079
$2,303,466 2011 $3,603,065
$2,449,990 2012 $3,526,563
$2,775,106 2013 $3,454,881
$3,021,491 2014 $3,506,284
$3,249,890 2015 $3,691,850
$3,267,965 2016 $3,852,616
$3,316,184 2017 $3,981,630
$3,329,907 2018 $4,109,044
$3,463,364 2019 $4,446,956
$3,421,162 2020 $6,550,396
$3,580,777 2021 $7,249,456- outlay is more than double revenue
Quote:
Originally Posted by vision33r
Car loans in he past traditionally never went past 48 month, now people are taking out 70+ months loans while being underwater with their previous car loans. So they've simply increased their debt for the privilege of driving.
Well they haven't been 48 months for many years. I always said that the terms of a lease, and the terms of a 72 month loan are actually very similar. The reality is leasing has gone from a businessman's perogative to the most common way of acquiring vehicles.
Well they haven't been 48 months for many years. I always said that the terms of a lease, and the terms of a 72 month loan are actually very similar. The reality is leasing has gone from a businessman's perogative to the most common way of acquiring vehicles.
Err…. Hyperbole much? Leases in Q1 of 2021 were 26.66% of new car transactions.
Err…. Hyperbole much? Leases in Q1 of 2021 were 26.66% of new car transactions.
The average loan term for a new car also hit a record high of 70.6 months in March. The most common term currently is for 72 months, with an 84-month loan not too far behind.
I said that leases are very similar to 72 month loans. I think of them as 72 month loans, with a buyback arrangement at 3 or 4 years.
I wasn't very clear, but I meant that leases and 72 month loans are the most common way of acquiring vehicles.
The average new vehicle loan amount was $35,392 in Q1 2021.
My first job in Florida was working as a busboy at two different restaurants. I paid $ 140 a month for a studio apartment 300 yards from the Gulf of Mexico in Sarasota and I drove a used 1972 Oldsmobile Toronado and a new Honda CB 450, depending on my desire / the weather. Both purchased for cash. For a damn busboy. It can be done.
Good for you, and "hats off" to your work ethic!! Further proof that you can succeed, in the US. All you have to do is want it bad enough and work toward your goals.....
My first job in Florida was working as a busboy at two different restaurants. I paid $ 140 a month for a studio apartment 300 yards from the Gulf of Mexico in Sarasota and I drove a used 1972 Oldsmobile Toronado and a new Honda CB 450, depending on my desire / the weather. Both purchased for cash. For a damn busboy. It can be done.
Except that studio apartment in Sarasota is now $1500 / month and the busboy is likely making similar wages+tips to what you were making then.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
