Fear of an impending car-price collapse grips auto industry(bloomberg.com)
bloomberg.com
Fear of an impending car-price collapse grips auto industry
https://www.bloomberg.com/news/articles/2020-04-13/fear-of-an-impending-car-price-collapse-grips-the-auto-industry
141 comments
I bought new snow tires a couple weeks ago (long story, relocation has since been cancelled). The shop was empty. Regardless of the decrease in travel, when times are hard people put off general maintenance. Nobody is buying new tires atm. But what about the flip side of COVID? Air and bus travel is not going to come back anytime soon. Even taking a taxi/uber driven by a stranger will remain an issue. I think car use might increase in certain sectors. Prices may take a hit overall but I see a coming push towards private vehicle ownership.
The main issue with more car ownership, at least in the US, is financing. People cannot afford to take on new auto loans.
Even before this subprime auto loans were a bubble starting to burst: https://wolfstreet.com/2020/02/11/subprime-auto-loans-explod...
Even before this subprime auto loans were a bubble starting to burst: https://wolfstreet.com/2020/02/11/subprime-auto-loans-explod...
I have received offers of 0% financing from Jeep and Ford for 84 months. They are desperate to sell cars and trucks.
0% financing for 80+ months is insane. I gotta look into these deals once my credit hit from refinancing my house is clear in a month or two.
I've always found the "zero percent" financing to be misleading: if you opt to pay with cash there is usually a cash rebate (or equivalent) that makes your purchase price lower. This difference amounts to something like a 4% interest rate. Are there any cases where the cash price matches the "zero percent loan" price?
Time value of money [1]. You should evaluate if the cash rebate is a greater amount than you could've earned taking a 0% loan and sticking the cash into investments. Any interest rate on a loan at or below the rate of inflation is essentially free money (assuming you can service the debt without fail).
Also, lots of comments in this thread not understanding the cost of the vehicle versus the cost of financing. You should always negotiate the cost of the vehicle separately (as low as possible, obviously, between different dealerships), before the financing to prevent being sold on a monthly payment versus total vehicle price. Otherwise, it becomes trivial for the dealership to inflate their margins on your transaction.
[1] https://www.khanacademy.org/economics-finance-domain/core-fi... (Khan Academy: Time value of money)
Also, lots of comments in this thread not understanding the cost of the vehicle versus the cost of financing. You should always negotiate the cost of the vehicle separately (as low as possible, obviously, between different dealerships), before the financing to prevent being sold on a monthly payment versus total vehicle price. Otherwise, it becomes trivial for the dealership to inflate their margins on your transaction.
[1] https://www.khanacademy.org/economics-finance-domain/core-fi... (Khan Academy: Time value of money)
>sticking the cash into investment
Which is essentially zero (or less than zero) return adjusted for risk and and discounted for inflation. All of which is especially hard to gauge at the moment. Maybe I'd take a 0% loan for something I'd otherwise put cash on the barrel for at the moment. But it wouldn't be for the purpose of putting the cash into an equities bet.
Which is essentially zero (or less than zero) return adjusted for risk and and discounted for inflation. All of which is especially hard to gauge at the moment. Maybe I'd take a 0% loan for something I'd otherwise put cash on the barrel for at the moment. But it wouldn't be for the purpose of putting the cash into an equities bet.
If you gave me $37k in cash today (average price of a new vehicle), I would still immediately put it in the equities market. It is likely one of the few investments left with reasonable risk adjusted returns (>4%) accessible to your average retail investor. Yes, there's high vol currently, but as long as you think the world will continue to exist (and the cashflows generated by said world), it's a sound strategy (dollar cost averaging).
To each their own. I still have a lot of money in equities but I'm keeping or have switched quite a bit to cash or near-cash as well. It limits the upside but offers some floor if things really go south.
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And then you lose your job because of Covid 19 and you can't liquidate your assets to cover the car payments.
That’s why you should have an emergency fund or some other sort of cash reserves.
That's generally not true in the auto world. The dealer makes more when you finance a car vs when you pay cash. You can generally get an overall lower purchase cost by agreeing to finance as the expectation is the finance arm of the dealership makes it up there. Just finance through the dealer and pay off through your bank within 30 daysm
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Why does the % figure for financing matter?
I don't care what they're charging me for the financing. I just care about the final bottom-line price. They can make 50% or 0% on financing for all I care.
Ignore how they say they're arriving at their final number - just look at what the final number is.
I don't care what they're charging me for the financing. I just care about the final bottom-line price. They can make 50% or 0% on financing for all I care.
Ignore how they say they're arriving at their final number - just look at what the final number is.
> I just care about the final bottom-line price
Then you are making bad decisions by not considering the time value of money. And I think it's obvious that that's the case and then you can adjust your position to take that into account.
Consider. I have a car that I will sell to you for $100,000. Alternatively, I will offer you a financing arrangement where you get the car today and in 10 years you pay me $105,000.
Now, in this scenario, two things are immediately obvious. First, I'm really dumb for making this offer. I have little to gain and it's a super risky loan for me and it gets really bad over time. Second, you'd be dumb to accept the pay now option over the financing, despite the fact that the final bottom-line price is higher for financing. Even a ridiculously conservative, barely over inflation, adjustment of 4% per year gives you an extra ~$43,000 at the end of that 10 years by taking the financing.
Then you are making bad decisions by not considering the time value of money. And I think it's obvious that that's the case and then you can adjust your position to take that into account.
Consider. I have a car that I will sell to you for $100,000. Alternatively, I will offer you a financing arrangement where you get the car today and in 10 years you pay me $105,000.
Now, in this scenario, two things are immediately obvious. First, I'm really dumb for making this offer. I have little to gain and it's a super risky loan for me and it gets really bad over time. Second, you'd be dumb to accept the pay now option over the financing, despite the fact that the final bottom-line price is higher for financing. Even a ridiculously conservative, barely over inflation, adjustment of 4% per year gives you an extra ~$43,000 at the end of that 10 years by taking the financing.
No, you're misunderstanding how this works.
> gives you an extra ~$43,000
So that's counted in your bottom-line price, isn't it?
All that matters is the price at the end, not how it was arrived at.
The finance price on its own gives no information.
> gives you an extra ~$43,000
So that's counted in your bottom-line price, isn't it?
All that matters is the price at the end, not how it was arrived at.
The finance price on its own gives no information.
> All that matters is the price at the end
Paying $1000 today is not the same as paying $1000 in six month's time - that's the time value of money that people have mentioned.
If you just add up total amounts without factoring in differences between how payments are distributed over time, your comparison can be incorrect, since the larger number in that case isn't necessarily the more expensive one.
To do a proper comparison, you need to calculate the net present value (NPV) or a similar measure that takes into account time value. See e.g. https://corporatefinanceinstitute.com/resources/knowledge/va...
Paying $1000 today is not the same as paying $1000 in six month's time - that's the time value of money that people have mentioned.
If you just add up total amounts without factoring in differences between how payments are distributed over time, your comparison can be incorrect, since the larger number in that case isn't necessarily the more expensive one.
To do a proper comparison, you need to calculate the net present value (NPV) or a similar measure that takes into account time value. See e.g. https://corporatefinanceinstitute.com/resources/knowledge/va...
Sure, but the "final bottom-line price" includes the value of the financing.
If a bank would charge you 4%, then on a 5-year loan for a $30K car, 0% financing is worth on the order of $3,000.
I'd regard the interest rate as fictitious on its own, but it goes into your calculation to determine how good your deal is for comparison.
If a bank would charge you 4%, then on a 5-year loan for a $30K car, 0% financing is worth on the order of $3,000.
I'd regard the interest rate as fictitious on its own, but it goes into your calculation to determine how good your deal is for comparison.
> 0% financing is worth on the order of $3,000
It doesn’t make any sense to think about it like this - the finance isn’t available without the car and if you want the car without the finance you will suddenly find the price of the car can be lower. They aren’t two separate things. It’s one price!
It doesn’t make any sense to think about it like this - the finance isn’t available without the car and if you want the car without the finance you will suddenly find the price of the car can be lower. They aren’t two separate things. It’s one price!
It's useless to negotiate it separately; I understand that.
Even though the provided interest rate, the price of the car, and the trade-in value (if any) are fictitious numbers, they still go into your bottom line cost.
Even though the provided interest rate, the price of the car, and the trade-in value (if any) are fictitious numbers, they still go into your bottom line cost.
So why say ‘wow the finance is 0%’? The cost of finance is meaningless on its own.
I could be paying 20% finance and be getting a better deal than you paying 0% finance.
I could be paying 20% finance and be getting a better deal than you paying 0% finance.
Because in the real world those scenarios don't happen. We can go all day making up ridiculous wild scenarios and working out the math of how they compare, or we can stick to what people actually experience when buying cars.
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Be afraid of those deals. In the US, there is an entire industry based on people defaulting on car loans. It is very possible for a lender to make substantial profit a loan they know is going to fail. The money comes from repossession and resale of the car (a conveniently mobile asset as opposed to houses) combined with penalty charges. So they might push 0% loans onto people who they know are likely to default. The inclusion of GPS trackers on cars has made this all the simpler.
Remember the adage: If you aren't paying, you are the product.
84 months is also ridiculous for a car loan. That means you will very quickly owe more than the car is worth, a dangerous situation for a lender. They would only offer such a loan if they had alternative contingency plans such as massive penalties.
Remember the adage: If you aren't paying, you are the product.
84 months is also ridiculous for a car loan. That means you will very quickly owe more than the car is worth, a dangerous situation for a lender. They would only offer such a loan if they had alternative contingency plans such as massive penalties.
These loans are offered because that is what it costs to "move the metal". Someone in Ford accounting has done the math that its more capital efficient for "Ford" the manufacturer to offer "Ford" the credit finance arm a sum to push the rate down (similar to points on a mortgage) to "well qualified buyers" ("prime" credit) versus what it would cost to not move those units (assuming carrying cost of existing unsold units, depreciation on manufacturing capacity, etc). "Ford Credit" then goes to the capital markets and packages up these loans for investors (which, in a yield starved world, there is a voracious appetite for depending on risk profile of the loans packaged; another time, another thread about bond ratings and how it impacts money management). Dealers have to pay interest as well on cars sitting on their lots by the way. Every month a unit goes unsold, that interest cost eats into the margin for that unit.
This is not to negate your point about "buy here pay here" subprime dealers/lenders, which are also part of the problem. But that is a distinctly separate arrangement to what's going on here with new car financing sponsored by the manufacturer.
TLDR Automakers pay to subsidize zero percent financing on new car sales to get the cars out of inventory during periods of weak sales volume.
This is not to negate your point about "buy here pay here" subprime dealers/lenders, which are also part of the problem. But that is a distinctly separate arrangement to what's going on here with new car financing sponsored by the manufacturer.
TLDR Automakers pay to subsidize zero percent financing on new car sales to get the cars out of inventory during periods of weak sales volume.
This is more the model for buy-here-pay-here type lots. They make their money reselling the same car worth $2,000 for $4,000 to desperate people with few options and no hope of paying it off.
These 0% deals are the lending arms of the manufactures performing some financial wizardry to keep the metal moving, so to speak. These companies abso-fucking-lutely do not want a bunch of new buyers defaulting on their loans and flooding the market with cheap, lightly used cars.
This for two reasons. The first is obvious, a 1 year old used car is absolutely competition for a new car. The second is much more subtle, a glut of comparable used cars suppress prices below lease residuals. That second fact is critical because, depending on market, leases can make up to 70% of new car sales. The losses from leases can pile up quickly. Imagine selling 80,000 cars on lease and have the fair market value come in just $2,000 less than expected, that's a $160,000,000 loss in a single year. It's a lagging loss too, so you made the money from the sale when times were good, and now you have to pay the penalty for the mistake in three years when times are lean.
It's a balancing act for sure. They want to keep the cheap money flowing to get people in cars, but they know going too far over that line is a kiss of death. Mitsubishi crossed that line during the last recession and couldn't recover. Also, these lending arms act as a solid asset that can be disposed of when times get tough, so it's a good idea to keep them financially healthy.
These 0% deals are the lending arms of the manufactures performing some financial wizardry to keep the metal moving, so to speak. These companies abso-fucking-lutely do not want a bunch of new buyers defaulting on their loans and flooding the market with cheap, lightly used cars.
This for two reasons. The first is obvious, a 1 year old used car is absolutely competition for a new car. The second is much more subtle, a glut of comparable used cars suppress prices below lease residuals. That second fact is critical because, depending on market, leases can make up to 70% of new car sales. The losses from leases can pile up quickly. Imagine selling 80,000 cars on lease and have the fair market value come in just $2,000 less than expected, that's a $160,000,000 loss in a single year. It's a lagging loss too, so you made the money from the sale when times were good, and now you have to pay the penalty for the mistake in three years when times are lean.
It's a balancing act for sure. They want to keep the cheap money flowing to get people in cars, but they know going too far over that line is a kiss of death. Mitsubishi crossed that line during the last recession and couldn't recover. Also, these lending arms act as a solid asset that can be disposed of when times get tough, so it's a good idea to keep them financially healthy.
I think the buy-here pay-here "everyone approved" dealers that put disabling devices on their cars and those who sell new cars at 0% are kind of different worlds.
I see 0% financing as just an accounting trick to discount a car a few thousand $ without setting expectations for discounts or giving away the money up front.
There may be exceptions, but I've never had or been offered a car loan that had early repayment penalties, so as many other people have said in conversations like these, might as well go for the longest term that gets the lowest rate and pay it off whenever you feel like.
I see 0% financing as just an accounting trick to discount a car a few thousand $ without setting expectations for discounts or giving away the money up front.
There may be exceptions, but I've never had or been offered a car loan that had early repayment penalties, so as many other people have said in conversations like these, might as well go for the longest term that gets the lowest rate and pay it off whenever you feel like.
>> might as well go for the longest term that gets the lowest rate and pay it off whenever you feel like.
That is a great textbook approach, pick a car you can afford and demand the best deal, but things work differently at car dealerships. These very long loans are not about getting someone a better deal on a selected car. It is more often about taking a monthly payment that the customer can afford, then maximizing the amount of car that payment can finance. At the really shady end it is about getting someone into ANY car.
That is a great textbook approach, pick a car you can afford and demand the best deal, but things work differently at car dealerships. These very long loans are not about getting someone a better deal on a selected car. It is more often about taking a monthly payment that the customer can afford, then maximizing the amount of car that payment can finance. At the really shady end it is about getting someone into ANY car.
> Remember the adage: If you aren't paying, you are the product.
This is not that. The person above you is referring to manufacturer financing deals. You're buying the financing and the car at the same time from the same parent company. You are paying. The part you pay for is the car. The financing is simply a loss leader.
> They would only offer such a loan if they had alternative contingency plans such as massive penalties.
Penalties aren't a good plan for recovering anything from a person who has defaulted. Nobody is paying the penalties on a car that was already repossessed.
Financiers who are worried about about the default risk on a loan typically do this by requiring down payments up front.
This is not that. The person above you is referring to manufacturer financing deals. You're buying the financing and the car at the same time from the same parent company. You are paying. The part you pay for is the car. The financing is simply a loss leader.
> They would only offer such a loan if they had alternative contingency plans such as massive penalties.
Penalties aren't a good plan for recovering anything from a person who has defaulted. Nobody is paying the penalties on a car that was already repossessed.
Financiers who are worried about about the default risk on a loan typically do this by requiring down payments up front.
> That means you will very quickly owe more than the car is worth
Well duh that happens the second you drove the car off the lot. On day two of your ownership you still owe the full cost of a brand new car but can only sell someone a second hand car.
That’s just a truism of buying a new car. The length of the finance agreement is irrelevant.
Well duh that happens the second you drove the car off the lot. On day two of your ownership you still owe the full cost of a brand new car but can only sell someone a second hand car.
That’s just a truism of buying a new car. The length of the finance agreement is irrelevant.
Exactly. Plus you have to dig out from under the taxes and fees.
You always want the cheapest money for the longest term. The only reason to go with a shorter term is if the interest rate is significantly lower. Being "underwater" has nothing to do with it.
You always want the cheapest money for the longest term. The only reason to go with a shorter term is if the interest rate is significantly lower. Being "underwater" has nothing to do with it.
This is generally not true.
Most loans were structured to have a down payment (meaning that you still had equity in the deal) and to amortize faster than the car depreciated, so you were never underwater.
Only recently have we started financing cars the way we financed houses in the 2000s, and mobile homes in the 1990s etc etc.
Only recently have we started financing cars the way we financed houses in the 2000s, and mobile homes in the 1990s etc etc.
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Those are for brand new cars, you're thinking of shady used dealers
The article is focused on the rental agencies dumping their older fleet cars onto the market in about 6 months. But there's no way I'd buy a former rental car - I know how people treat those cars. The buyers will be people who are fine with a not-so-gently used car in a lower trim spec. They're going to negotiate hard, driving the prices down even further.
And like others have said - I have very little sympathy for car dealers. I helped mom buy a new CUV recently, and one dealer had it sewn up .. until they swapped the vehicle we had been talking about for a different one when we got to the "We're buying today - how much will you come down on price?" part.
And like others have said - I have very little sympathy for car dealers. I helped mom buy a new CUV recently, and one dealer had it sewn up .. until they swapped the vehicle we had been talking about for a different one when we got to the "We're buying today - how much will you come down on price?" part.
> I have very little sympathy for car dealers. I helped mom buy a new CUV recently, and one dealer had it sewn up .. until they swapped the vehicle we had been talking about for a different one when we got to the "We're buying today - how much will you come down on price?" part.
Helped my parents buy a car recently and had a very similar experience. The guys at the first dealership we went to kept switching the car and trim they were talking about, then promising deals that magically disappeared a few minutes later. They really don't help themselves if they actually care about rehabilitating their reputation for being shady.
Helped my parents buy a car recently and had a very similar experience. The guys at the first dealership we went to kept switching the car and trim they were talking about, then promising deals that magically disappeared a few minutes later. They really don't help themselves if they actually care about rehabilitating their reputation for being shady.
This is probably an unpopular opinion, but I don't think honest dealerships can really survive the cut-throat car sales industry. You have to figure that these dealerships often get stuck selling whatever the manufacture sends them. So to get that nice, $70,000 truck they are required to accept a few shitty, stripper economy cars that sit on the lot for months, collecting interest payments.
Shit rolls down hill, so when the the manufactures screw over the dealerships, the dealerships find ways to screw over the customers. It doesn't help that the owners of dealerships tend to be politically connected locally, which gives them a staggering amount of leverage to combat any consumer protection legislation.
Shit rolls down hill, so when the the manufactures screw over the dealerships, the dealerships find ways to screw over the customers. It doesn't help that the owners of dealerships tend to be politically connected locally, which gives them a staggering amount of leverage to combat any consumer protection legislation.
You point out the conflicts of interest involved, this just means that dealers (at least for new cars) need to be completely cut out, and the car manufacturer itself should be responsible for selling (like Tesla). This would solve so many issues.
From my uninformed perspective, it's hard to disagree with this. Tesla seems to have the whole manufacturer direct thing figured out pretty well. Anecdotally, no one I know who's bought a Tesla has had a major complaint about the purchase and pickup process.
But there's no way I'd buy a former rental car - I know how people treat those cars.
Not sure what part of the country you're in, but in my area most rental cars are driven from the airport to a hotel and back and nothing more.
I personally owned a japanese econobox that came off Enterprise after 18 months and I drove it for 100,000 miles. So YMMV (pun intended) but rental cars are usually a great deal for the price. The companies get the car cheap to begin with, they're maintained on schedule, and usually sold off fairly early in their lifetime with low mileage to keep the flow from the factory coming.
Not sure what part of the country you're in, but in my area most rental cars are driven from the airport to a hotel and back and nothing more.
I personally owned a japanese econobox that came off Enterprise after 18 months and I drove it for 100,000 miles. So YMMV (pun intended) but rental cars are usually a great deal for the price. The companies get the car cheap to begin with, they're maintained on schedule, and usually sold off fairly early in their lifetime with low mileage to keep the flow from the factory coming.
I think you're they're ideal customer. :)
I agree that most get driven like you said - from the airport to the hotel and back - i.e. sensibly. But I have known people to seriously abuse their rental car. One drove back to the rental lot in 2nd gear because he was mad they gave him a model he didn't like. Those are the ones I wouldn't want to end up with.
I agree that most get driven like you said - from the airport to the hotel and back - i.e. sensibly. But I have known people to seriously abuse their rental car. One drove back to the rental lot in 2nd gear because he was mad they gave him a model he didn't like. Those are the ones I wouldn't want to end up with.
And now we know why they charge more for drivers under 25...
Most people don't look that closely, and many vehicle history reports lump fleet/lease/rental all under the same designation, making it difficult to even tell the difference. Flooding the market will affect the prices for all vehicles though, as most used vehicle buyers highly prioritize price.
I'm on the other end of this. I've been monitoring Craigslist the past couple weeks to see if people start trying to dump vehicles.
Sort of terrible, but also I've been hearing that we're in a vehicle financing bubble for several years now.
Sort of terrible, but also I've been hearing that we're in a vehicle financing bubble for several years now.
You will find the best deals in 3-6 months; that's about how long it's going to take for delinquencies to turn into repos or distressed sales.
Make sure to have cash in hand or financing lined up, and that you're taking possession of title immediately (or in a way that you're not going to be left hung out to dry due to the repo process, if the sale is distressed). A branch of the institution that is the lienholder on the title is the ideal place to complete the transaction.
Make sure to have cash in hand or financing lined up, and that you're taking possession of title immediately (or in a way that you're not going to be left hung out to dry due to the repo process, if the sale is distressed). A branch of the institution that is the lienholder on the title is the ideal place to complete the transaction.
My guess is you’ll see loan programs for auto and houses. A car price collapse will be devastating to jobs.
Programs will arrive, but they will be woefully inadequate, defaults will occur regardless. Agree with the outcome.
A lot of manufacturers have already put programs into place that are eerily similar to what they did during the Great Recession: https://yourautoadvocate.com/guides/coronavirus-car-deals/
I'm on yet another end; trying to get all my old bicycles listed on CL while everyone is avoiding mass transit.
And put parts on Ebay. People will prefer mail-order rather than a retail store.
I've sold a few things that I've been trying to sell for over a year. E.g. inkjet printer cartridges. I guess a lot of people suddenly can't print at work anymore!
I've sold a few things that I've been trying to sell for over a year. E.g. inkjet printer cartridges. I guess a lot of people suddenly can't print at work anymore!
That's brilliant.
That's a good idea. I suspect you are a little early, I don't think the forced selling is happening too much yet, but it is good to be watching the trends so that you are first in line when that day comes.
I think people have unrealistic hopes for discounts. Partly because I've been window shopping auctions and partly for theoretical reasons.
Just because car sales are down doesn't mean the people who aren't buying cars now are going to change their mind because of a slightly lower price. So I doubt it's in the interest of a savvy seller to change their asking price much.
If you're selling mundane utilitarian cars, then lowering your price isn't going to increase the number of essential workers who just got their car totaled and need to buy now.
And if you're selling sporty toys to people who are financially unaffected by current events, maybe you could increase sales a little with discounts, but maybe they are by definition buying anyway, so why bother?
Just because car sales are down doesn't mean the people who aren't buying cars now are going to change their mind because of a slightly lower price. So I doubt it's in the interest of a savvy seller to change their asking price much.
If you're selling mundane utilitarian cars, then lowering your price isn't going to increase the number of essential workers who just got their car totaled and need to buy now.
And if you're selling sporty toys to people who are financially unaffected by current events, maybe you could increase sales a little with discounts, but maybe they are by definition buying anyway, so why bother?
I don't actually need a different car. Mostly just checking to see if it actually happens.
Have you seen any movement?
A relevant read:
https://www.coxautoinc.com/an-open-letter-to-dealers-from-da...
By Dale Pollak, Executive Vice President, Cox Automotive and Founder, vAuto
"Author’s note: We are in a crisis that challenges everyone in the automotive ecosystem. OEMs. Financial institutions. Dealers. Suppliers. We are all in uncharted waters where there are more questions than answers. In the weeks ahead, I’ll be writing and speaking about the challenges and opportunities the current crisis brings to all parts of the car business. This letter, however, focuses on the challenges and concerns franchise and independent dealers are facing as the crisis disrupts their businesses."
By Dale Pollak, Executive Vice President, Cox Automotive and Founder, vAuto
"Author’s note: We are in a crisis that challenges everyone in the automotive ecosystem. OEMs. Financial institutions. Dealers. Suppliers. We are all in uncharted waters where there are more questions than answers. In the weeks ahead, I’ll be writing and speaking about the challenges and opportunities the current crisis brings to all parts of the car business. This letter, however, focuses on the challenges and concerns franchise and independent dealers are facing as the crisis disrupts their businesses."
The body of the letter starts out with the author offering his sympathy to car dealerships, saying his heart goes out to them. Well, my heart does not go out to them. They have spent the better part of the last decade refusing to innovate, and in fact have spent millions on lobbyists to keep their vaunted position as the government-mandated middle men between manufacturers and customers. Every time I have had the misfortune to spend a day (because that’s how long it takes to do anything with them) at a dealership I’ve left wanting to take a shower.
If they all go under because of this I’ll consider it a brilliant upside.
If they all go under because of this I’ll consider it a brilliant upside.
Thank You! I've been waiting for a golden opportunity myself for years and even now nothing seems that different. I've been cycling through one clunker after another and each time I just buy something of equal or slightly more than equal value waiting to catch a break. It's been so long now I am highly skeptical of anything coming close to news of that magic moment. If the average consumer wants to pay 500$ a month for a questionable vehicle what can an informed consumer really hope to do? I went to a dealer hoping to make a deal as if I could get the better of them and found something really rare- someone who was honest to a fault. I urged the salesman to sort of open up the books and described the vehicle I wanted: inline 6 or turbo 4 or V6 or V8 with RWD in a sedan. He sighed and said "We really don't sell to people like you, look you see all of these people here? They wouldn't even know what your talking about and they'll agree to just about anything. The cars you see on our page here priced with the even numbers...that's not the real price. The ones that end with a 7 we don't actually have. Those with the 5 in the middle- we have those but look at the interest you wouldn't get that one would you? They all come out to about that much and that's why your probably going to leave- right?" I gave my sincerest thanks and walked out of there like it was an episode of the twilight zone wondering if I was still here on earth. I look at auctions all the time too and I have never seen such cooperation to hide the good used cars as today's car market.
Maybe this is their PR firms gearing up for a cash for clunkers deal.
Doubtful. C4C was too small to do much of anything, and is probably the most politically expensive piece of legislation in my lifetime. Plus, I think a lot of businesses ended up getting paid very late, or not at all for various reasons (such as not understanding the requirements).
Though, it did make for a good scapegoat when used car prices spiked in the years following the recession. The popular narrative is that it was this massive scheme to crush perfectly good cars. When the reality is, the scheme was capped to just 700k cars, most of which were already barely operable. And while 700k sounds like a lot, there was something like a quarter of a billion registered vehicles in the USA at the time.
If you plot monthly car sales during that time, and you know what you're looking for, you can kind of see small bump, then subsequent dip of C4C. But what is plainly obvious is the fact that new car sales dropped from 15 million vehicles per year to around 8 the next.
Though, it did make for a good scapegoat when used car prices spiked in the years following the recession. The popular narrative is that it was this massive scheme to crush perfectly good cars. When the reality is, the scheme was capped to just 700k cars, most of which were already barely operable. And while 700k sounds like a lot, there was something like a quarter of a billion registered vehicles in the USA at the time.
If you plot monthly car sales during that time, and you know what you're looking for, you can kind of see small bump, then subsequent dip of C4C. But what is plainly obvious is the fact that new car sales dropped from 15 million vehicles per year to around 8 the next.
> most of which were already barely operable.
It really depends on the vehicle. A lot of older used cars are worth more as parts than as barely operable.
Cash for clunkers helped take off the market the older used cars that weren't worth anything as parts either. They would've kept driving (barely), but the scrap value wasn't worth deregistering them.
It really depends on the vehicle. A lot of older used cars are worth more as parts than as barely operable.
Cash for clunkers helped take off the market the older used cars that weren't worth anything as parts either. They would've kept driving (barely), but the scrap value wasn't worth deregistering them.
More interested in the housing market. There is an entire generation out there that has little hope of ever owning a place at current prices
I've been shopping around because my lease is up. There's no collapse that I can see. Nor should there be. The auto plants are shut down. There's no new product being built. While most people aren't driving as much, some folks (delivery drivers, nurses) are driving more. Those cars will wear out.
The article predicts a glut 6 months from now. Specifically in used car auctions. Are you shopping at Copart or IAAI? That's where rental companies liquidate their fleets.
> some folks (delivery drivers, nurses) are driving more. Those cars will wear out.
Iunno, the delivery drivers using cars are using Corollas or Civics. They don't really die. And when they do, they become parts cars to keep the rest of the fleet up.
Iunno, the delivery drivers using cars are using Corollas or Civics. They don't really die. And when they do, they become parts cars to keep the rest of the fleet up.
Seems like maybe the company who leased you the car might be willing to do a deal to get you to keep the car a bit longer. It's not like they'll be able to sell it quickly.
I just traded a 2006 miata for a 2005 Ford Ranger. It feels like truck times.
Trucks are wildly impractical. No way to secure your cargo from ne'er do wells.
I am doing lots of volunteer work with my car - and a Prius hatchback seems to be an ideal vessel for deliveries and transporting goods. If you need to haul more, a minivan or cargo van could be the way to go.
I am doing lots of volunteer work with my car - and a Prius hatchback seems to be an ideal vessel for deliveries and transporting goods. If you need to haul more, a minivan or cargo van could be the way to go.
There's much more room in the cab of the Ranger than in the MX-5 the OP started with. Can also add a lockable box in the truck bed. Also beats having your soft-top cut open :)
I'm a truck guy and I think OP is off about the practically of trucks, but those mini vans where all the seats go under the floor (Dodge caravan, not sure about others), have way WAY more cargo space than just about any pickup you'll see these days.
I have a Chrysler Pacifica and with all the seats dropped into the floor the cargo volume is tremendous. There’s still practical limitations on width and height due to the rear wheel wells, curvature of the interior walls, etc. A pickup can’t be beat for large bulky items.
Getting all the kids car seats out and back in is no fun though.
Getting all the kids car seats out and back in is no fun though.
I have a bunch of whitewater paddler friends who are really into their minivans. Lots of space, lots of seats for vehicle shuttles, easy to add roof racks. Personally, I have an SUV but the minivans are nice for a lot of purposes.
Or even the old school mini Vans where you can remove all the seats
Way lower insurance rates too.
You aren't going to get far off-road in your Prius, are you? And isn't the load capacity of a pick-up truck going to be 2-3x that of a Prius?
Heh, I agree with you. But I also have friends though that don't use their truck to carry loads or off-road. I often wonder why they bought the truck, probably for the look?
I took "truck times" as being some sort of comment on vague preparation for societal collapse.
Another aspect to consider is dealerships make much more money off used than new. Sometimes they'll even cut a deal on a new car just to get the trade-in.
A used car price collapse will have big impacts on dealer franchises. I know they're not necessarily a sympathetic group but it will definitely have an impact on the economy in many ways. Tighter margins, consolidation of territory as dealerships go out of business, and so on, means those dealerships are spending less on contracts.
There will be some kind of auto dealer market in a year or two but, barring massive government intervention to keep everything right where it is, it's going to be different in ways that touch many parts of our economy.
A used car price collapse will have big impacts on dealer franchises. I know they're not necessarily a sympathetic group but it will definitely have an impact on the economy in many ways. Tighter margins, consolidation of territory as dealerships go out of business, and so on, means those dealerships are spending less on contracts.
There will be some kind of auto dealer market in a year or two but, barring massive government intervention to keep everything right where it is, it's going to be different in ways that touch many parts of our economy.
I'd caution against the notion that dealers make much more money off of selling used cars than new cars... At the end of the day car dealers make their money from the Service department, not from sales: https://www.youtube.com/watch?v=B41twMsMW-Q
I wouldn’t caution against it because I know for a fact what I said is 100% true.
The piece about auto sale vs. service as proportions of total revenue is a different data point.
The piece about auto sale vs. service as proportions of total revenue is a different data point.
I don’t know if this is important but I just listened to an hour interview last week with an economist, retired from the Federal Reserve, who said if you remove the statistics for cars sold to corporate fleets, rental companies, or any other corporations, car sales to end consumers has been going down for three or four years.
Our economy is driven by consumer spending and from my non-expert point of view consumer spending will never come back to anywhere near old normals.
EDIT: the economist was Danielle DiMartino Booth who wrote the book “Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America”
Our economy is driven by consumer spending and from my non-expert point of view consumer spending will never come back to anywhere near old normals.
EDIT: the economist was Danielle DiMartino Booth who wrote the book “Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America”
Cars are a huge sink on the American economy, and honestly, we should be buying fewer of them.
I totally agree. I gave my car to my granddaughter 10 months ago, and I never replaced it. This decision is not financially motivated, I just don’t want a car. I borrow my wife’s Car a couple times a week, or just let my friends drive. I live 2+ hours from an airport, and I would rather use a shuttle service so I can read or work instead of driving myself.
I also challenge the idea of owning large homes. My wife and I have not had a mortgage for over 25 years but we “just” have a small beautiful house while many friends with less assets have mega-homes.
I might be very wrong about this, but think more people will embrace a new style of frugality and re-evaluate what they are willing to sell their time to get.
I also challenge the idea of owning large homes. My wife and I have not had a mortgage for over 25 years but we “just” have a small beautiful house while many friends with less assets have mega-homes.
I might be very wrong about this, but think more people will embrace a new style of frugality and re-evaluate what they are willing to sell their time to get.
Maybe they should (prices collapse). People are getting into 7 and 8 year loans. That's just not a good place to be when they depreciate so quickly.
They are if you are getting 0% APR on the 80 month term like a poster in this thread has!
Unless you pick the right vehicle, you'll be underwater for some significant chunk of that time period, which is fine if you keep it forever, but problematic if you can't.
Assuming you were going to buy that particular car anyway, I don't think that matters.
I suspect what the parent comments are hinting at is you can then pocket the money you would have spent on a car anyway and put it in the bank or stocks and earn interest on that money.
I suspect what the parent comments are hinting at is you can then pocket the money you would have spent on a car anyway and put it in the bank or stocks and earn interest on that money.
I'm buying a new car now. Parked ([price of car] - [1st years payments]) in a 1 year CD.
The great thing about predatory lending schemes in car financing is that you get ot be the predator if you have the cash on hand.
The great thing about predatory lending schemes in car financing is that you get ot be the predator if you have the cash on hand.
I've never seen a car loan you can't pay off early.
As many people have said before me, if you get the maximum term you have flexibility if you lose your job or something.
As many people have said before me, if you get the maximum term you have flexibility if you lose your job or something.
Something that commonly occurs when it comes to deals like that is the price of the item is marked up, so it ends up costing more in the end.
Having let go of my car years ago and having never missed it, I feel that car ownership is still not cheap enough to make sense, and we can do better.
I realize that if you live out in the countryside or in the suburbs, the car is your lifeline. But for city folk cars are a luxury. You can walk everywhere you need, you can use Instacart and Amazon to handle groceries and shopping, and, if you're lucky, you can work on distributed teams. You never need to get behind the wheel, and even then you're better off getting a Lyft.
$250/mo for a parking spot where random people can still scratch up, dent or break into your car. $100-200 for insurance, $x for gas, $300+ for financing or leasing a car, $y for repairs and maintenance, $z for tickets and parking meters.. This stuff adds up. If you only need the car occasionally, let's say a couple of times a month on the weekends, then this system is horribly inefficient.
Of course you end up paying more for living close to work in say.. downtown Seattle, NYC, SF, LA etc... but the tradeoff is to move to the burbs, shave off $1000 from your rent, and instead spend that same amount on your car, in addition to now having to sit in traffic jams for an hour or two every day? No, thanks.
I'm hoping networks of press-a-button-on-phone-receive-car systems like Zipcar keep expanding. Seems like their growth has been sub-linear at best this last few years.
I realize that if you live out in the countryside or in the suburbs, the car is your lifeline. But for city folk cars are a luxury. You can walk everywhere you need, you can use Instacart and Amazon to handle groceries and shopping, and, if you're lucky, you can work on distributed teams. You never need to get behind the wheel, and even then you're better off getting a Lyft.
$250/mo for a parking spot where random people can still scratch up, dent or break into your car. $100-200 for insurance, $x for gas, $300+ for financing or leasing a car, $y for repairs and maintenance, $z for tickets and parking meters.. This stuff adds up. If you only need the car occasionally, let's say a couple of times a month on the weekends, then this system is horribly inefficient.
Of course you end up paying more for living close to work in say.. downtown Seattle, NYC, SF, LA etc... but the tradeoff is to move to the burbs, shave off $1000 from your rent, and instead spend that same amount on your car, in addition to now having to sit in traffic jams for an hour or two every day? No, thanks.
I'm hoping networks of press-a-button-on-phone-receive-car systems like Zipcar keep expanding. Seems like their growth has been sub-linear at best this last few years.
> But for city folk cars are a luxury
Cars aren't a luxury. Being a "city folk" at all is the luxury. Being able to afford a place, where you can outsource all of your errands to poor people, is the luxury. Being able to live in a place where "you can walk everywhere you need" is a luxury. (Not just in location and housing, but in job flexibility and leisure time, and in safety). Having the lifestyle flexibility to completely re-write your entire life around extreme high expense and very limited options, is the luxury.
> shave off $1000 from your rent, and instead spend that same amount on your car, in addition to now having to sit in traffic jams for an hour or two every day? No, thanks.
For a regular average American, it's more like "pay ~$400/month TCO to own a car, to save $1200/month off your rent". Generally speaking, no one actually spends money on a car, because unless you've made a terrible mistake (or are especially poor), a car earns you more money than it costs.
And that's before you get to all the other benefits -- (cheaper housing, larger housing, higher-quality housing, safer transportation, free personal distancing, disease-resistance) -- most of which are especially relevant now that we live in a never-ending-pandemic society.
Cars aren't a luxury. Being a "city folk" at all is the luxury. Being able to afford a place, where you can outsource all of your errands to poor people, is the luxury. Being able to live in a place where "you can walk everywhere you need" is a luxury. (Not just in location and housing, but in job flexibility and leisure time, and in safety). Having the lifestyle flexibility to completely re-write your entire life around extreme high expense and very limited options, is the luxury.
> shave off $1000 from your rent, and instead spend that same amount on your car, in addition to now having to sit in traffic jams for an hour or two every day? No, thanks.
For a regular average American, it's more like "pay ~$400/month TCO to own a car, to save $1200/month off your rent". Generally speaking, no one actually spends money on a car, because unless you've made a terrible mistake (or are especially poor), a car earns you more money than it costs.
And that's before you get to all the other benefits -- (cheaper housing, larger housing, higher-quality housing, safer transportation, free personal distancing, disease-resistance) -- most of which are especially relevant now that we live in a never-ending-pandemic society.
At least around me, people buy houses that are not in walkable places not because they can't afford somewhere else. It is because they can get some massive new house with a huge yard and gas is cheap so long commutes are fine. We subsidize roads so much that they can drive 30 minutes/30 miles to work every day and back. Meanwhile there are houses that are 1/3 of the price that are only a few miles away from their work but they are also smaller houses.
Interesting, can you leave the source where you determined we subsidize roads so people can move to wealthier neighborhoods? Because last I checked, we subsidize roads so big trucks can drive on them every day. If we didn't have trucks and buses, our roads would easily last 100 years.
Sure we also subsidize them for other vehicles too.
https://www.chron.com/neighborhood/katy/news/article/Braggin...
Edit: would also like to point out that the billions that they spent to widen that freeway 10 years ago did not reduce congestion because more people built in sprawling suburbs 30 miles from Houston: http://cityobservatory.org/reducing-congestion-katy-didnt/
Edit: would also like to point out that the billions that they spent to widen that freeway 10 years ago did not reduce congestion because more people built in sprawling suburbs 30 miles from Houston: http://cityobservatory.org/reducing-congestion-katy-didnt/
Many city folks I know do (normally) still go to visit friends and attend events in the suburbs on a regular basis. And they head well outside the city frequently--2-3 times a month on weekends. Even though it doesn't make direct economic sense, if you can afford it, it may make sense in terms of convenience given the hassle of renting a car on a regular basis. Especially if you have specific vehicle requirements for sport activities. I know quite a few people in that position.
The ZipCar model seemed like it was going to be a big deal at one point. But it seems to have been too much of a niche between Uber and occasional traditional rentals. (I know a couple of folks who use it and they find it a bit of a hassle.)
The ZipCar model seemed like it was going to be a big deal at one point. But it seems to have been too much of a niche between Uber and occasional traditional rentals. (I know a couple of folks who use it and they find it a bit of a hassle.)
You're hitting the nail on the head here though: it's currently still inconvenient to have access to the kind of vehicle you want on a moment's notice. Getting a car through a traditional rental company is excruciating, and services like Zipcar and Maven are still not snappy enough. Their inventories tend to be limited in many places too, compounding the issue.
I'm hoping someone manages to make this as effortless as calling an Uber. Otherwise the alternative is that $10k/y expense on a rapidly depreciating asset you're not really using.
I'm hoping someone manages to make this as effortless as calling an Uber. Otherwise the alternative is that $10k/y expense on a rapidly depreciating asset you're not really using.
> Otherwise the alternative is that $10k/y expense on a rapidly depreciating asset
You don't have to run out and buy a brand-new Tesla just to own a car.
Most people own nice reliable vehicles for half that price. I drive a 2013 Chevy Volt, on pure electricity most of the time, and my TCO is only ~$6k/yr (including gas, insurance, maintenance, registration, car payment + interest, electricity to charge it, fancy winter tires every two years, etc).
Frankly, even that expense was a bit of a luxury. If I hadn't been so obsessed with EV's, I probably could have easily shaved $1,000/yr off that price with zero effort.
You don't have to run out and buy a brand-new Tesla just to own a car.
Most people own nice reliable vehicles for half that price. I drive a 2013 Chevy Volt, on pure electricity most of the time, and my TCO is only ~$6k/yr (including gas, insurance, maintenance, registration, car payment + interest, electricity to charge it, fancy winter tires every two years, etc).
Frankly, even that expense was a bit of a luxury. If I hadn't been so obsessed with EV's, I probably could have easily shaved $1,000/yr off that price with zero effort.
Part of the problem is that demand is spiky. A lot of people are going to want these rentals on weekends. So, for a reliable on-demand weekend rental, you're probably going to spend a decent chunk of a weekly rental fee if this became common.
What more tends to happen in practice is that urban folk who decide not to own a car just minimize activities that require one unless they can can draft off friends.
What more tends to happen in practice is that urban folk who decide not to own a car just minimize activities that require one unless they can can draft off friends.
> $10k/y expense
$10k/y seems very high. Are parking fees $5k/year or something, or frequently buying a new car for some reason?
$10k/y seems very high. Are parking fees $5k/year or something, or frequently buying a new car for some reason?
Average cost of car ownership in the US is in the $10k/yr range: https://www.investopedia.com/articles/pf/08/cost-car-ownersh...
And the average sugar intake is 65 lbs/year. You don't have to eat that many cookies, just as you don't have to spend that much on a car if you don't want to.
They're including new cars (20-30% value gone in the first year) and large vehicles like SUVs and trucks (Ford F series is the best selling vehicle in America) in those statistics, along with average mileage (13k/y) numbers for average fuel and maintenance costs, which would be much less for a minimal use vehicle.
They're including new cars (20-30% value gone in the first year) and large vehicles like SUVs and trucks (Ford F series is the best selling vehicle in America) in those statistics, along with average mileage (13k/y) numbers for average fuel and maintenance costs, which would be much less for a minimal use vehicle.
> $10k/y seems very high. Are parking fees $5k/year or something
At $10/work-day parking ($2,600/year), the remainder is under 13k miles at the IRS standard mileage rate, which is presumably a reasonable actual total expense rate.
At $10/work-day parking ($2,600/year), the remainder is under 13k miles at the IRS standard mileage rate, which is presumably a reasonable actual total expense rate.
Being in the city makes public transport much more useful. At least where I am virtually all public transport lines have one end in the city and one end in the suburbs. So if you are in the suburbs you can get to the city and if you are in the city you can get to anywhere.
Getting from commuter rail stations to suburban locations is often difficult even with Uber/Lyft. In any case, even with relatively good commuter rail--I'm about a 7 minute drive from a station--it's basically useless for evening activities. Outside of rush hour it runs about every 90 minutes. And this is a good commuter rail system.
At least where I am the bus stop is never more than 30 minutes walking from wherever I want go. If I am visiting a suburb I am never in a rush and a 30 minute walk is quite nice.
There's effectively no public transit out where I live. I mean, there's some sort of regional transit presumably for poor people who don't own cars but it's not really practical otherwise. The one time I looked on Google Maps, it would have taken me 4 hours to get into the city, including walking along a busy street with no sidewalks, to get to a bus to take a train. And this is about an hour drive.
Stories like this make me feel that large chunks of the US are fundamentally broken. I just find it interesting that Americans assume that public transport is impossible rather than their current layout was designed purely for car transport and that it can be fixed.
OTOH, the context is that, although I'm only about an hour drive from Boston, I live in a largely rural town in a property that's between an apple orchard and a christmas tree farm plus conservation land. (With easy driving, but not walking, distance from a commuter rail station.) I'm not sure why it would be the norm for me to have a frequent/easy public transit option or whether that would be the norm in most of Europe either.
I actually can get into the city for 9-5 fairly easily by rail. Just not door to door.
I actually can get into the city for 9-5 fairly easily by rail. Just not door to door.
I find it funny how this comment is downvoted. It seems like he heavily American userbase of this site finds it inconceivable that life can go on without cars because their local system doesn't support it.
I currently do not own a car and don't really feel any desire to get one. I had to change my lifestyle slightly, cycling and PT is not a drop in replacement for a car but I feel the things I have let go are less important than the things I have gained.
I find that sitting in traffic is a huge negative on my mental health, working from home currently has made me much happier and if work tries to drag me back to the office I'll be looking for a new job.
I currently do not own a car and don't really feel any desire to get one. I had to change my lifestyle slightly, cycling and PT is not a drop in replacement for a car but I feel the things I have let go are less important than the things I have gained.
I find that sitting in traffic is a huge negative on my mental health, working from home currently has made me much happier and if work tries to drag me back to the office I'll be looking for a new job.
I have been doing the no-car thing for a couple years. I am very sick of it. Will be buying a car pretty soon.
The thing I hate about doing zipcar / getaround / etc. is the amount of time and hassle I have to spend making sure the car isn't damaged and reporting it BEFORE I hop in and drive off.
The thing I hate about doing zipcar / getaround / etc. is the amount of time and hassle I have to spend making sure the car isn't damaged and reporting it BEFORE I hop in and drive off.
Exactly.
In my early 20s, living in Cincinnati, I used to hate the stress of being tethered to car maintenance and ownership. So I moved into “The City” (Chicago, then SF) and got rid of my car. Well, that worked great in my able bodied youth days.
At some point in my early 30s, frustration with having complete dependence on someone else (MUNI/BART, Uber, Lyft) or worrying about having rentals available to get me from point A to point B became too much of a burden; too much of a time suck. At some point spending an hour a day total on transportation aggravation made the suburbs look appetizing. I told myself I would never settle for that commute again.
Staying in the city, I bought a car. I still hate maintaining cars, and EVs don’t require very much long term maintenance. Going EV simplified getting a car.
Renting in western San Francisco, everybody has a garage. It’s all suburbanesque mid century tract housing. Parking at home is not a problem.
What is? A 30 minute walk to Forest Hill station or :15 minute bus ride to Forest Hill station. By driving myself, In 15 minutes I could be in Civic Center without having somebody from Stockton get lost In SF In their rental Nissan Sentra with loud sales bro taking a conference call in a Uber Pool.
I can say the convenience of living in the city with a car is unparalleled. In (especially western) San Francisco, the transportation infrastructure is geared toward driving.
Hearing that BART stops at 9 PM now reinforces the practicality of my decision.
In my early 20s, living in Cincinnati, I used to hate the stress of being tethered to car maintenance and ownership. So I moved into “The City” (Chicago, then SF) and got rid of my car. Well, that worked great in my able bodied youth days.
At some point in my early 30s, frustration with having complete dependence on someone else (MUNI/BART, Uber, Lyft) or worrying about having rentals available to get me from point A to point B became too much of a burden; too much of a time suck. At some point spending an hour a day total on transportation aggravation made the suburbs look appetizing. I told myself I would never settle for that commute again.
Staying in the city, I bought a car. I still hate maintaining cars, and EVs don’t require very much long term maintenance. Going EV simplified getting a car.
Renting in western San Francisco, everybody has a garage. It’s all suburbanesque mid century tract housing. Parking at home is not a problem.
What is? A 30 minute walk to Forest Hill station or :15 minute bus ride to Forest Hill station. By driving myself, In 15 minutes I could be in Civic Center without having somebody from Stockton get lost In SF In their rental Nissan Sentra with loud sales bro taking a conference call in a Uber Pool.
I can say the convenience of living in the city with a car is unparalleled. In (especially western) San Francisco, the transportation infrastructure is geared toward driving.
Hearing that BART stops at 9 PM now reinforces the practicality of my decision.
"in addition to now having to sit in traffic jams for an hour or two every day"
I think you're taking for granted that everyone who lives and works in the general area of a city is commuting to the very center from a long way away. My reaction is "well, don't do that!"
I briefly worked in the DC area, and I still had a 10-15 minute commute as I am used to. That's because I was living a few miles from the center, in NOVA, and going outwards another mile or two in the morning.
Right now, I'm living just barely within the city limits of a smaller city, so technically you could say it's not a suburb, but practically it is, and again, my commute is (or was) about 10 minutes.
Any time you actually are living downtown in a significant urban area, it seems like a luxury to me, wouldn't you expect rents to be expensive when housing is competing with office space and fancy restaurants? I was able to afford that in Richmond, but in major, desirable cities, there's no way.
I think you're taking for granted that everyone who lives and works in the general area of a city is commuting to the very center from a long way away. My reaction is "well, don't do that!"
I briefly worked in the DC area, and I still had a 10-15 minute commute as I am used to. That's because I was living a few miles from the center, in NOVA, and going outwards another mile or two in the morning.
Right now, I'm living just barely within the city limits of a smaller city, so technically you could say it's not a suburb, but practically it is, and again, my commute is (or was) about 10 minutes.
Any time you actually are living downtown in a significant urban area, it seems like a luxury to me, wouldn't you expect rents to be expensive when housing is competing with office space and fancy restaurants? I was able to afford that in Richmond, but in major, desirable cities, there's no way.
I started using public transit in Denver for about 3-4 years then got infected by bedbugs 3 times from it. Stopped using it and I've been fine since. I'm willing to pay pretty much anything to avoid public transit especially now there's something worse than bedbugs going around.
That is wild. I have never got anything and I have used it all my life. Is Denver's system that unclean?
I live in Denver. I've ridden the bus to work off and on for the last 15 years. I've never heard of anyone getting bedbugs from RTD buses. A few sanitary issues, yes, but not bedbugs, and not systematic issues. The service has mostly gotten better the entire time. Buses are relatively up-to-date, and within the last 3 years, RTD put in real time GPS bus tracking. Very helpful
Denver's system is actually quite good, except for their staffing issues.
I think this is an extreme anecdote which I find hard to believe the RTD at fault for.
I think this is an extreme anecdote which I find hard to believe the RTD at fault for.
I would take covid and the associated possibility of death over bed bugs.
absolutely. i also haven't had a personal car for years, instead renting, scootering, biking, mass-transiting, and ride-hailing.
i'm just waiting for someone in the on-demand transportation sector to realize that the killer app for self-driving is not 100% level 5 autonomous driving, but a service that can self-drive to you from a cheap parking lot/structure and return to it after a trip.
(to be fair, i think many do realize this and are working on it already.)
i'm just waiting for someone in the on-demand transportation sector to realize that the killer app for self-driving is not 100% level 5 autonomous driving, but a service that can self-drive to you from a cheap parking lot/structure and return to it after a trip.
(to be fair, i think many do realize this and are working on it already.)
Anecdotally, I feel like Zipcar has been shrinking, not growing, ever since they got bought out by Avis (the #2 traditional car rental company).
On the other hand, Lyft is now trying to get into the car rentals game...
On the other hand, Lyft is now trying to get into the car rentals game...
I've never used them but know people who do. I suspect Uber/Lyft cut a big chunk out of the market between traditional rentals and awful cabs/public transit. The middle still exists--want a vehicle for a few hours to make a bunch of stops/drive a relatively far distance. But it's definitely a niche.
I wonder if this will finally drove the price of a Tesla down enough that I can afford it
They should fall to about $40k according to this analyst.
https://youtu.be/N7sjJ4jOhGM
https://youtu.be/N7sjJ4jOhGM
Consumer Reports coined the phrase decades ago. That purchasing a new car is the worst financial decision anyone can possibly make.
Eh, people have lost much more money buying overpriced McMansions.
If you intend to own the car for a long time, it is less risky to buy a reliable brand new car than a used one of the same brand. Unless you know the owner.
If you intend to own the car for a long time, it is less risky to buy a reliable brand new car than a used one of the same brand. Unless you know the owner.
Knowing the owner doesn't affect the rate of random failures in the middle of the bathtub curve. The only thing it gives you is maintenance data.
These days, it is extremely easy to get maintenance data for many late model used vehicles. Many manufacturer websites will spit out all of their maintenance records as soon as you register an account on their "owners" portal and put in a VIN.
These days, it is extremely easy to get maintenance data for many late model used vehicles. Many manufacturer websites will spit out all of their maintenance records as soon as you register an account on their "owners" portal and put in a VIN.
This is a good point. That will tell you if the car has been given regular oil changes, which is super, super important.
It doesn't tell you how hard the car was driven. But if you're like me, and mostly in the market for a hybrid, it probably wasn't driven that hard.
It doesn't tell you how hard the car was driven. But if you're like me, and mostly in the market for a hybrid, it probably wasn't driven that hard.
You can get a good idea from maintenance records; hard driving wears consumables faster. Compare a few vehicles of the same model and it'll be easy to see which ones were driven harder.
I also like to take a peek at the tire date codes, to make sure they corroborate with maintenance records: https://images.tirebuyer.com/visual-aids/pages/education/how...
The last car I bought had two original tires on it at 60k miles, and the service history showed the other two were replaced due to nails in the tread. I am confident the vehicle was not driven hard based on this.
I also like to take a peek at the tire date codes, to make sure they corroborate with maintenance records: https://images.tirebuyer.com/visual-aids/pages/education/how...
The last car I bought had two original tires on it at 60k miles, and the service history showed the other two were replaced due to nails in the tread. I am confident the vehicle was not driven hard based on this.
That's nonsense. I've purchased one new car so far. At the time of purchase I needed reliability; no maintenance issues, no shop time fixing anything. Zero. If anything did come up the dealer would have me covered with a good loaner for however long was necessary (which did actually happen.) This was worth many times the value of the vehicle to me. Working wheels, no excuses: it was an important time for me during my career.
I paid off that vehicle in 3 years and I still have it 18 years later. I know everything there is to know about it. I know what to expect, what's been neglected, how it's been treated and what the state of everything is. I've acquired tools necessary to do the bulk of both maintenance and repairs on it, and I know to whom I can turn for the stuff I shouldn't be touching. I have all that and I haven't had to make a car payment in 15 years. I estimate it's good for at least 5 and possibly 10 more years, at which point parts will become difficult to acquire and/or questionable in quality.
The narrow minded 'finance' view of the cost of a new vehicle misses the real value. I imagine the CR model will be the typical bonehead that jumps back on the new car debt treadmill about the time the second set of tires are needed, but we're not all that idiot.
I paid off that vehicle in 3 years and I still have it 18 years later. I know everything there is to know about it. I know what to expect, what's been neglected, how it's been treated and what the state of everything is. I've acquired tools necessary to do the bulk of both maintenance and repairs on it, and I know to whom I can turn for the stuff I shouldn't be touching. I have all that and I haven't had to make a car payment in 15 years. I estimate it's good for at least 5 and possibly 10 more years, at which point parts will become difficult to acquire and/or questionable in quality.
The narrow minded 'finance' view of the cost of a new vehicle misses the real value. I imagine the CR model will be the typical bonehead that jumps back on the new car debt treadmill about the time the second set of tires are needed, but we're not all that idiot.
You could have bought a 3 year old car that was still under warranty. You would have saved a ton of money and still had good reliability.
Not necessarily. There are certain makes/models that hold value so well (deservedly or not) that the prices of used models that are 2-3 years old is within $1500 of an equivalent new model from the same manufacturer, which would have the advantage of a better warrantee && no miles on the tires.