Subprime Auto Bubble Bursts As "Buyers Are Suddenly Missing From Showrooms"

Or rather the people who typically trade in a new car after only 1 or 2 years are the type of people who get all the extra little expensive accessories.

Suffice to say, there's a lot of middle of the line luxury cars available with only 1 year of past use on them. This may not really help the true budget-conscious shopper.

Despite what you would be inclined to think, I've noticed that used cars don't tend to be that much of a bargain. Buyer can take on a lot of uncertainty and risk since there could be something wrong with the car that is not discovered later. The used car dealers have to pass this risk down to the consumer in the form of higher prices, and of course the retail of a car lot adds a lot to the price too.

There's a mismatch in the used car market between what's available and what someone just trying to save money would want. People who have a good budget model car that is reliable generally hold on to it. If you do find one it is likely to be very close to the end of it's lifespan or is going to require a lot of maintenance because things are starting not to work right. Such a purchase might make sense if you're an amateur mechanic, and don't mind having to tow it away if it becomes temporarily undrivable, but that's not really the most optimal situation for most people.

 

Exactly.

 

You having reading comprehension problems or was that post to make you feel better about yourself?

Quoting: True, but that's not a valid comparison. The USPS was created with an infrastructure that private delivery companies can NOT compete with. Amazon is closing in fast though. My Amazon Prime costs less than 3 rolls of stamps per year and includes entertainment and other benefits.

Steve

 

What the f.... hell!

Nowhere, in that article does it say that USPS costs taxpayers $18 billion per year. As a matter of fact, the amount that the USPS receives from taxpayers is.... $ZERO $ZILCH $NADA

You made it up!

You have ridiculed yourself. .And demonstrated that you are not to be taken seriously.

You are definitely the king of wingnut kool-aid.

 

You realize cars are massively marked up by dealers who are protected in such by federal law?
Why do you think Tesla had such a hard time of it at first?

 

Are you serious? You want me to respond to the underlined part? Well...It's your credibility on the line. Here goes...

Of course! That's what I'm saying! The "infrastructure" you are referring to is called "the government". No private company can compete with a government business on price.

That's exactly my point. What part did you not understand? If it wasn't the part about Amazon not being a delivery company but a retailer, I don't know what it might have been.

 

You should just leave it at "Of course! That's what I'm saying."

The infrastructure of the USPS is an office in every neighborhood with carriers that make daily rounds. That's not something private business would tackle without justifying it with profitability.

There are other government services that can be privatized efficiently and with less cost just by virtue of employment costs (includes benefits, pensions etc). Let alone the bureaucracy that accompanies it, pencil pushers, gov CYA, endless reports, yadda-yadda-yadda.

Steve

 

See this is the problem with liberals. They know so much about things they don't know anything about.

You could have taken two minutes and educated yourself, but you were just so sure.

http://fortune.com/2015/03/27/us-postal-service/

But as Robert Shapiro—former Treasury undersecretary and chairman of the economic consultancy Sonecon—points out in a new analysis, American taxpayers subsidize the USPS at a rate that surpasses the costs associated with any Congressional mandate. He estimates that, all told, the subsidies and legal monopolies that Congress bestows upon the post office is worth $18 billion annually. These include:

 

Do you mean other than the government choosing UPS over USPS?

 

Not necessarily. I refuse to discuss ANYTHING else with the sales dept until we have settled on a price for the vehicle I want to purchase. Last time I bought a new vehicle, the process took about a week.

Decide which vehicle you want to purchase, what trim level/options you want and what color(s) is acceptable to you. In my case, it was a Nissan Altima SV. It easy to find on Edmunds, KBB, etc the average pricing so you have a ballpark idea of where your final price should be. It doesn't really change much over the six months or so I had been researching vehicles online and shopping, so I would disagree that when a good financing deal comes along it is built into the sticker price....I find the available incentives currently offered just seem to be a bonus for good timing. There are six Nissan dealerships in my tristate area. I emailed the internet sales dept of each one with my specifics, told them I was comparison shopping and asked them to give me their best price. They all have access to the same vehicles, it can just take a day or two to get from another dealer. Three were eliminated right off the bat because they paid no attention to what I requested in the email. The other three I emailed back and forth with a few times, eliminated the least attractive and then talked on the phone a couple of times with each of the last two.

They knew they were competing for business, and I did not share any of the competitors' specifics, but did tell them where they ranked and asked for their final best price. The final difference was $600 and an extended powertrain warranty between the two offers, and the drop in price from the original quotes was significant. The offer was firm, in writing, THEN we discussed how I planned to pay for it. I put half down in cash and financed the rest at 3 years zero percent interest thru Nissan......but basically, it didn't really matter -- to them, because my price was my price. If I hadn't liked their terms, I could have financed anywhere I wanted to.

 

PEOPLE ARE STUPID
It is their own fault..

You all just accept the fact that you are going to lose huge money on your cars and lose huge money on your car loans..

I have a bunch of cars, 7, and I could sell them all for what I paid or more easily, including my maintenance expences..

Only 1 is depreciating, the one the GF wanted and drives daily, but its worth about 1/3rd more than I paid for and have into it.. So.. Not too bad..

One we put a lot of miles on in 4 years, its got about 230k now, I just got an offer on it just under double what I paid for it years ago, and I don't have that much maintenance into it by far..


You know how to accomplish this?
Know the market, shop and buy smart for one..
And DRIVE COOL CARS!!

Nobody is going to give a crap about your kia past it's warranty date.. It will be worth less than the mass of its metals..

Buy the rare ones all the kids wish they had..
Just the bumpers on a few of my cars are worth stupid money because the tuners want to swap them onto their base models. I have those LSD diffs, rare lightweight forged factory wheels across the board, that engine they want to swap into calssic bodies or base models, the engines that can make and handle power..

Even the interiors, sets of sport model seats go for $1000 all the time.. Got that one year only carbon fiber trim, rare gauge clusters, the works..

Buy the coupe, the RS, the M, the SS, the Turbo, the special ones.. If you think worst case scenario what are it's parts worth.. That's the car..

Then drive em!! Enjoy them, rack up the miles..
Oh you know that guy in that $30k minivan wishes he was driving your scooter but he is a scared normie..

I just retired that car with over 200k now and I'm not selling it, heck no.. It'll be worth double again in 5-10 years.
Numbers match, may even be a restoration candidate in the future.. Serious..

Watch barrett jackson.. You notice those 1/2000 cars, 1/900 cars going for huge money, buy those special cars, modern equivalents..
Think about what is just now getting popular in classic car circles, think about what is going to be the hot classics in 20 years from now.. Those top sport models.. The first.. The last..
Man you can get a lot of those cars for a steal right now.. Steal..

Look how the E30 BMWs are going up right now (wishing I still had that).. It was a friggen automatic though..

But the coupe, with the sport package, manual transmission, LSD, get those wheels, get those bumpers and the good bits everyone else wants..



I watched something a little while ago about how it is often cheaper to own and drive a ferrari for 5-10 years than it is your average car, because they hold their value..

 

It burns me up to have to buy a $1-2,000 package to get the one feature I want. Of course new regulations add to the cost with a lot of new safety features being included these past few years.

 

Yeah, try to put the grocery bags in the trunk of that Ferrari, if it even has one. Even if you could sell a used Ferrari for what you paid, what good is it if the payments are higher than the mortgage? Maybe you have the cash to blow on fancy exotic cars, most of us need them to do practical things and can't afford to have a different car for every day of the week. Few could even afford the insurance on all those cars.

 

People who have bad credit or no credit rating need to accept they may need to buy a good used car you can outright save for and purchase or use public transportation if that's an option. Old model VW Beetles are cheap and with a new engine etc. can last for years and can be had around here from one person for $5k if one pays cash for $600 less. One customer had hers for a decade with few issues assuming she does oil changes and other customary maintenance. The man sells ten a year or so a nice underground economy income to boot most opt to pay cash.

 

A well maintained modern car can be kept running for 15-20 years now.

The electronics keep the engine running as efficiently as possible and, barring accidents, the basic construction using robots results in a better made vehicle that, if not abused ,can last for 200,000 miles or more.

The proof of this is actually on the roads already. In the USA outside of affluent areas you will find many 10+ year vehicles on the road. In 2016 the average age for cars was 11.6 years. Compare that to 1996 when it was 8.6 years.

https://www.statista.com/statistics/185198/age-of-us-automobiles-and-trucks-since-1990/

 

I don't mind paying for seat belts and air bags. The problem is all the other useless stuff they add on. Nicer looking chrome trim? Give me a break.

BTW: The newest safety features, like Subaru eyesight, for example, are not mandated by government rules, but demanded by the free market.

 

Thanks for the link, interesting data.

One statistic I look at when assessing reliability is the % cars over 200,000 miles. For the best it is somewhere around 6%. The car we have right now has 2.3% of vehicles over 200,000 miles.

 

I suppose you could look at it that way if 18K was a large sum. It's just cheaper than renting one and I like a full warranty the entire time keep a vehicles. Plus I live in a state that sands and salts the roads sometimes six months out of a the year so I've never kept them very long and I don't buy expensive vehicles.

 

You’re assuming and projecting too much.

One of our cars was bought for $38k when it was two years old with 20k miles on it, the new sticker on it was in the low $60k range. I’ll gladly pay $22k less for a nearly new car.

And what “extra junk” with a 500% mark up are you talking about??

 

Can you quote this "federal law"?

 

https://franbuslaw.com/blog/2012/08/16/531/
http://prospect.org/article/tesla-car-dealers-and-anti-competitive-state-laws

State laws, my bad. Been awhile since I discussed this subject

 

Sounds like you might have a keeper.

If you look at vehicles on the road in places like India they still drive cars made in the 1950's. Cuba managed to keep their car fleet going too. Granted these are not pristine car show vehicles but rather everyday working vehicles that are kept going out of necessity. They also don't have the benefit of modern technology. Most cars built nowadays come standard with rustproofing and better quality steel. That alone gives them a survival edge.

Looking over all the vehicles I have had in my lifetime they averaged 8 years in duration and cost an average of $2k per year to own. Now that I am down to a single vehicle I decided that I was going to buy a new one which I managed to bargain 15% off the list price before paying cash. Since I am going to only be doing around 8k mileage per year I expect it have around 120k on the clock in 15 years time. That is going mean that I will be slightly over my $2k/year cost to own (excluding running costs) and even lower if I can keep it going for another 5 years after that. It sounds optimistic but I don't see why it is not possible to achieve.

 

1) Different strokes for different folks. I'd hardly consider a $38k used car a deal. A car that depreciated $22k in the first two years will not suddenly stop depreciating rapidly after those two years, so be prepared to take a huge hit on resale.

We've never spent more than $27k on a car, all but one new. Our last car is a 2018 Honda CR-V base model for $24k out the door, new. We traded in our 10 year old Honda Fit, bought new as well. The total depreciation of the Fit was $11k over 10 years, really low cost to own. I've looked, but couldn't find any deals on slightly used CR-Vs. Most likely because people who buy base model Hondas and Toyotas drive them for 10+ years and buy for the reliability, not for the prestige, and don't trade up every two years.

2) The "junk" I am talking about is, for example, sun roof, in-car entertainment system (would pay $100 for a tablet, but it is $500 when installed into the head rests), chrome trim, leather seats, heated seats (can buy a heat pad for $20 on ebay) etc. Some people like this stuff and fall for the up-sell to the "premium" models. For the CR-V, you can easily spend $35k+ for those type of models. All of a sudden, it is not such a great deal anymore.

 

Seems like we have a similiar approach to car buying .

 

Thanks for the link. It just shows how competition, free markets, labor costs, tariffs, etc...do not control prices as some suggest.