Subprime Auto Nation

[Wreckem]

I don't know why people are shocked at the $30K average price. Car prices have shot up a lot, especially in the last 5 years or so. Econoboxes are pushing up against $20K now. The Honda Fit STARTS at over 15K. Aren't minivans like $30K? Throw in the full size trucks that are approaching the size of an 18 wheelers and a healthy dose of audi and BMWs and I'm surprised that number isn't even higher. They're a lot safer, more fuel efficient, have more features and are probably more reliable than the older models but you can't buy the older models new anymore and even if you could they still wouldn't sell for their old prices due to inflation. Moreover, the used car market is a rip off right now so it isn't much of an alternative in many cases. The supply of them is low since few people with serviceable vehicles are discarding them and the government decided to crush a lot of the supply. I've seen 2 year old cars priced within $500 of a new model. To me that sends a clear message to potential used car buyers: Get Lost.

I'm not saying Americans aren't taking out god awful loans and buying ginormous vehicles but the article is acting like this is some sort of new phenomenon and Americans have just up and decided to be stupid. I read an article a few weeks ago about how Americans are keeping their cars longer than ever. And in his zeal to imply Americans are looking for the most gas guzzling vehicle available the author glosses over the fact that new vehicles across all classes get better gas mileage. He also presents very little comparison data from previous years leading me to believe he's cherry picked a few statistics and ignored broader trends. I'd look it up but I'm feeling kinda of lazy honestly, but often what some one doesn't say tells volumes.

You mention outliers(like the fit) and do not look at the overall picture. The avg prices for small sedans and mid-sized sedans, the sizes with the highest volume, have stayed at a fairly steady price. Trucks can still be had in the $18k-24k range, so can small to mid sized SUV/Crossovers. Yes mini vans are expensive, but the market for them isn't as high as it once was so much so manufacturers are pairing down the number of models offered.

 

[rudder]

Good god - thats about $25,000 for a 5 year or $20,000 for a 4 year loan. Thats ridiculous. But then what do I know - We got a used Civic in 2005 for $14,000 (Financed $10,000) that now has 170,000 miles and we don't expect to replace it for another 2 years...

Amen.... just sent my 2001 Civic to the Honda graveyard. Bought it with 30K miles on it in 2003. Had 250,000 miles on it when it was over. I would have kept it going but the body was so crapped out after 2 major and 2 minor collisions... that it wasn't worth putting money into.

Just bought a used hyundai that I hope to keep for 8-10 years.

but I have know a lot of people who lease and get new cars every 2 years... or have payments higher than a house payment. It's crazy.

 

[Doppel]

Peeps gosta drive an extended bed pickup to work, you know that.

Also, every new family needs a minivan or full size SUV, it's impossible to fit a kid or two in a typical sedan these days.

The kids? They love the big vehicles, the definitely care about having a new massive 18 mpg vehicle than having monthly contributions to their 529.

 

[Wreckem]

Amen.... just sent my 2001 Civic to the Honda graveyard. Bought it with 30K miles on it in 2003. Had 250,000 miles on it when it was over. I would have kept it going but the body was so crapped out after 2 major and 2 minor collisions... that it wasn't worth putting money into.

Just bought a used hyundai that I hope to keep for 8-10 years.

but I have know a lot of people who lease and get new cars every 2 years... or have payments higher than a house payment. It's crazy.

If you have really good credit, you can find some exceptional lease deals.

Like those Volts for $199/month for 24 months with as low as $250 down.

Thats an outlier, but you can routinely find say Prii for $249/month/36 months with 0 down if you qualify.

Leasing makes sense if you want a hybrid and have really good credit.

 

[actuarial]

I'm astonished at those rates of auto loans to sales. I haven't had an auto loan since the federal tax laws were changed to make them nondeductible-a couple of decades ago. Anyone who owns a home with equity (on paper at least) that does a car loan instead of an equity line of credit is either (1) fairly certain they will default and don't want to risk the home or (2) financially stupid.

I can't get an equity line of credit that gives me 1.9% or 0.0% financing (the rates I have on my two auto loans).

 

[jackschmittusa]

Car loans/leases are strange these days.

Wife and I went to a Kia dealer to look at a Soul with a good lease deal. Test drove one, decided to lease, Did the paperwork and found the payment more than the advertised price. They explained that they did not have any of the models in that range for lease (though they didn't tell us that when they brought one up for a test drive). When we told them that we were pissed and going to leave, they said that maybe they could do some re-calculating. Suddenly they found a way to offer it at $53/mo less, with nothing more from us. So, in the end, we got a significantly upgraded vehicle for $17/mo than what we had planed. So just getting pissed off saved us $1900 off the first lease offer, with the same residual.

I went to buy a Corvette convertible (item on my bucket list). Found an older one in pretty good shape. Went to the credit union. No dice! They won't loan on anything older than '97. But they then gave me an unsecured personal loan to buy it. Go figure!

 

[rudder]

If you have really good credit, you can find some exceptional lease deals.

Like those Volts for $199/month for 24 months with as low as $250 down.

Thats an outlier, but you can routinely find say Prii for $249/month/36 months with 0 down if you qualify.

Leasing makes sense if you want a hybrid and have really good credit.

How many miles do you get a year?

 

[Wreckem]

How many miles do you get a year?

The Volt special that happened last month was 10k miles/year, the special depended on dealer, the lowest were offering $199/month and 0 down. Some were offering $199/$2999 down. Chevy originally started the deal at $249, but dealers have huge incentives to move Volts, so thats why they chopped a further $50/month off.

The Prius specials that happen time to time(but still quite often) on a regional basis vary. Some are 10k some are 12k.

 

[Jhhnn]

Peeps gosta drive an extended bed pickup to work, you know that.

Also, every new family needs a minivan or full size SUV, it's impossible to fit a kid or two in a typical sedan these days.

The kids? They love the big vehicles, the definitely care about having a new massive 18 mpg vehicle than having monthly contributions to their 529.

There are quality roomy vehicles available for under $20K-

http://www.scion.com/cars/xB/

It's a Toyota product, with great headroom & the back seat is enormous. Holds 4 adults in comfort.

 

[Exterous]

The Volt special that happened last month was 10k miles/year, the special depended on dealer, the lowest were offering $199/month and 0 down. Some were offering $199/$2999 down. Chevy originally started the deal at $249, but dealers have huge incentives to move Volts, so thats why they chopped a further $50/month off.

The Prius specials that happen time to time(but still quite often) on a regional basis vary. Some are 10k some are 12k.

Eesh. Thats the other thing about leases. Might work for some but only 10-12k a year? We put almost 20k a year on the civic

There are quality roomy vehicles available for under $20K-

http://www.scion.com/cars/xB/

It's a Toyota product, with great headroom & the back seat is enormous. Holds 4 adults in comfort.

I think he was being sarcastic

 

[Jhhnn]

Eesh. Thats the other thing about leases. Might work for some but only 10-12k a year? We put almost 20k a year on the civic

I think he was being sarcastic

Probably, but I just wanted to point out realistic possibilities for people who need roomier vehicles.

And, yeh, they don't even want to talk about what they charge for mileage overages on lease vehicles- it's a killer. Lots of people end up cornered behind that, buy the vehicle rather than pay the overages, actually pay more in the long run. It's a used car, so the interest rate is higher, of course... And they pay for low deductible insurance all along to protect the lessor, when they could often have had cheaper higher deductible plans while buying...

Leasing is a trickbag, intentionally so.

 

[Doppel]

Probably, but I just wanted to point out realistic possibilities for people who need roomier vehicles.

And, yeh, they don't even want to talk about what they charge for mileage overages on lease vehicles- it's a killer. Lots of people end up cornered behind that, buy the vehicle rather than pay the overages, actually pay more in the long run. It's a used car, so the interest rate is higher, of course... And they pay for low deductible insurance all along to protect the lessor, when they could often have had cheaper higher deductible plans while buying...

Leasing is a trickbag, intentionally so.

Not always. Many overages are only $.15/mile. You run the numbers on that with a Prius, for example, and even if your miles are high you're coming out in great shape if you leased at a good price.

I haven't advertised the rates I got on my last three vehicles, but trust me they were fvcking absurd and the math behind them stands up to any argument. I can delve into TCO with the best of them and these deals I got were stellar. When you're paying $2500/year to drive a $22-30k vehicle you got new you're able to sleep soundly at night, particularly if they get industry-leading fuel economy, thus chewing into that payment even further.

 

[Wreckem]

Probably, but I just wanted to point out realistic possibilities for people who need roomier vehicles.

And, yeh, they don't even want to talk about what they charge for mileage overages on lease vehicles- it's a killer. Lots of people end up cornered behind that, buy the vehicle rather than pay the overages, actually pay more in the long run. It's a used car, so the interest rate is higher, of course... And they pay for low deductible insurance all along to protect the lessor, when they could often have had cheaper higher deductible plans while buying...

Leasing is a trickbag, intentionally so.

You can kick out the mileage to 15k for not much more on most lease deals. And most overages are fairly cheap.

A really good lease deal, like the Volt deal in August, are extremely favorable deals. Even the regularly offered low priced Prius lease deals are really good.

And when it comes to hybrids you are more than likely going to come out ahead leasing a new one every three years over buying one out right.

 

[zanejohnson]

never bought a "new" car in my life, never will.. this is good news

 

[MrColin]

The fun part is where the investment bankers move your 401k into those securitized sub-prime loan "assets."

 

[halik]

The fun part is where the investment bankers move your 401k into those securitized sub-prime loan "assets."

Insurance companies, pension funds, endowments etc all already own ABS securities. Ask me how i know.

 

[halik]

I can't get an equity line of credit that gives me 1.9% or 0.0% financing (the rates I have on my two auto loans).

Ditto, even my used Porsche is financed at 1.99% (semi-exotic stuff like that usually comes in at a higher rate)

 

[Doppel]

yeah penfed is at 1.49% now. it was .99% or maybe even .49 recently (definitely no higher than .99), that was on a 60 month loan on a used car!