patrick.net

clambo says

Cars are too complex and fancy to be cheap sometimes.

My father bought a new Volvo in 2013 "loaded" "leather" etc.

It has some stuff that I could do without; extra airbags (4 in the front). front anti collision radar, front parking radar, rear parking radar, side blind spot radar, rear camera, electric windows, moon roof, GPS,

This!!!

I don't want oversized rims, traction control, air bags, power windows, power door locks, more then 2 doors, power mirrors, anti-lock brakes, and a bunch of other things I can't think of right now that are unnecessary. The only relatively new things I want in a car are bluetooth / MP3 player / reverse camera built into the stereo system, and a built in dash cam.

Tenpoundbass says

Water pumps and alternators(most common problem) were around 70 bucks and you could fix it yourself.

New alternators for most cars, even old ones are way more than that now. I have no idea why a 75A alternator now costs almost as much as one that puts out twice as much current. But even $70 is too much when you can just replace the brushes for around $10 or maybe a voltage regulator or diode pack.

I don't want oversized rims

Yeah, whats is with the oversize rims, even on F-150s. It is as if everyone wants to emulate the ghetto-mobile look of a pimped out 90's Caprice. Oversize rims make for a harsher ride.

zzyzzx says

NuttBoxer says

a recall for a battery solenoid,

What the fuck is a battery solenoid???

It's the thing which prevents muffler bearings from running out of blinker fluid.

DASKAA says

It's the thing which prevents muffler bearings from running out of blinker fluid.

My Wife would pay to fix that.

DASKAA says

It's the thing which prevents muffler bearings from running out of blinker fluid.

Never ever leave home without some spare blinker fluid.

Reading tenpoundbass I was feeling bad; I had a 71 Chevy Nova in 1984 which I should have kept forever.

It had a few little problems but I fixed them; I took out the radiator and a guy repaired it; I got a new water pump for it for $15 and installed it. It had a straight 6 cylinder engine which ran like a top. Driving the car felt like it had an electric motor, no noise and plenty of torque.

The brakes were the sore point; no boost and four wheel drum brakes meant I had to stand on them to stop the car.

I sold it to some hippies for $500 and now I regret it.

The car was great for San Francisco runs up Hwy 1.

Wife has been pleased with a Honda Fit. Good basic commuter car, no frills. But, "hecho mexico". As such, we had an initial problem with AC not getting cold. Dealer found that some packaging was not removed when a vent was put into the car... Odd. Car is <17k though....

Tenpoundbass says

DASKAA says

It's the thing which prevents muffler bearings from running out of blinker fluid.

My Wife would pay to fix that.

Then definitely take care of any undersized and poorly performing seminal fluid injector.

Buying a BRAND NEW automobile without having the rest of your wealth strategy figured out, in progress, or otherwise at the point you could retire tomorrow, is foolish at best.

You are taking a direct fucking hit with the depreciation. These stupid things ARE NOT investments for the most part, with 99% of them going only down in value.

Not to mention the cost of insurance, registration, and (for most people) financing that screw you out of even more of your income. Higher sale price equals more paying of all 3 of those. Yeah, you may get lucky and not have ANY repairs over the time you own the car, but the previous mentioned costs plus depreciation will likely cost much more than repair costs on comparable used auto.

If you want to be wealthy, or otherwise financially secure, own no more in items with engines than 50% of your annual take home...

Seven months worth of Chevy Corvettes are sitting unsold on dealer lots - That's about 9,000 unsold models

The next-generation Chevy Corvette is coming. We don't know when and we don't know where the mid-engine C8 will finally make its debut, but we've been watching and waiting for years now. There was hope that the new model might debut at last month's Detroit Auto Show, but nothing came to pass. As much talk as there's been about the new model, we can't forget that the C7 is still in production at GM's factory in Kentucky. It seems production has far outpaced demand, as CorvetteBlogger reports that there are about 9,000 unsold cars sitting on dealer lots.

The data comes from eInventoryNow.com, a site that connects dealers to help move and trade unsold inventory. 9,000 cars equates to 232 days worth of inventory, a number calculated using the average daily sales over a 30-day period. That's more than any other GM product listed aside from the all-new Chevy Blazer. The number can fluctuate based on how well a car is selling (and Corvette sales could see a seasonal uptick after the winter months pass), but as it stands, there are more than seven months worth of Vettes sitting around on dealer lots. CorvetteBlogger says that nearly 180,000 C7s have been sold since the car went on sale in the summer of 2013.

There are a lot of reasons that dealers keep ordering a car that's sales are slowing. Allocation is one. If a dealer doesn't order enough C7s, it's likely to get fewer C8s. GM could also be padding numbers so there are cars available while the plant is retooled for the C8. Poking around the internet might reveal some pretty good deals.

https://www.autoblog.com/2019/02/20/chevy-corvette-unsold-seven-months-supply/?ncid=edlinkusauto00000021&yptr=yahoo

U.S. auto sales are forecast to drop slightly for a second straight month in February as the industry struggles to gain traction in the new year.

Estimates released by three leading forecasters see declines of as much as 2.6 percent from February 2018 levels, while Cox Automotive projects a 0.7 percent gain.

Forecasts of the seasonally adjusted annual sales rate range from 16.6 million to Cox's 17.1 million. Those would be in line with analysts' expectations for the year, which is forecast to come in below 17 million for the first time since 2014.

A February drop would mark the second time in three years that the industry has started the year with two consecutive monthly declines. The last time that happened, in 2017, the industry went on to record its only annual sales setback since the Great Recession. Automakers are scheduled to report their February results on Friday.

Among those anticipating declines, TrueCar's ALG estimates a 2.6 percent slide (and a SAAR of 16.6 million), Edmunds projects a 2.2 percent drop (16.7 million SAAR), and J.D. Power/LMC Automotive sees a 0.9 percent decrease (16.8 million SAAR).

January sales slipped 1 percent after the industry eked out a 0.6 percent advance to 17.3 million sales for 2018. At the start of last year, few analysts expected annual sales to top 17 million.

Chill factor

Analysts show no sign of consensus on how the extremely cold weather in January played out in February's results. Cox Automotive says last month's polar vortex, which sent temperatures plunging into sub-double-digits in parts of the Upper Midwest, may have boosted February traffic.

"Some lift in February sales is expected as delayed vehicle buyers complete their purchases," Cox senior economist Charlie Chesbrough said in a statement. He cautioned that if February comes in weaker than expected, "we may be in the early stages of the vehicle market's shift to a much slower pace."

Edmunds said its forecast of slower sales indicates there was little pent-up demand following the extreme cold and a 35-day partial U.S. government shutdown.

"It's easy to point fingers at anomalous factors like the polar vortex as the reason for a sales slowdown, but the numbers don't show that's the case," Jeremy Acevedo, Edmunds' manager of industry analysis, said in a statement.

Edmunds also said the Presidents Day weekend, which marked the first big sales "event" of the year, did not give a significant boost to the rest of February. "Although the drop-off in sales is rather subtle year over year, February is shaping up to be a good barometer of the gradual sales decline we expect through 2019," Acevedo said. "We're really starting to see a slump in retail demand that stems from the growing costs of new-car purchases."

J.D. Power's projections, which are based on the first 14 selling days of the month, include a 2.4 percent decline in retail sales, those delivered to individual customers. There were 24 selling days last month, the same as in February 2018.

Affordability concern

Rising interest rates and transaction prices are the main factors weighing on new-vehicle sales, Edmunds said. Cox, too, said it expects affordability could affect the market going forward, as well as tariffs, increased off-lease volume, and shrinking demand for cars vs. light trucks.

ALG forecasts the average transaction price for new light vehicles in February was up 3 percent to $34,565, while incentives as a percentage of ATP were down 3.7 percent.

J.D. Power estimates ATPs are on pace to hit $33,267 in February, marking an all-time high for the month. At the same time, incentive spending is expected to be down on an annual basis for an eighth straight month at $3,721 per unit, a drop of $161 from February 2018.

Among automakers, Edmunds is estimating a 5.8 percent decline at General Motors, which does not release monthly results. Edmunds also sees a slip of 0.8 percent for Ford Motor Co., and a 1.9 percent decrease for Fiat Chrysler Automobiles. It's expecting declines of 3 percent for Toyota Motor, 1.4 percent for American Honda and 13 percent for Nissan Group.

Volkswagen/Audi's sales are projected to drop 3.3 percent, while Hyundai/Kia is estimated to be the lone increase at just 0.6 percent, said Edmunds.

Cox estimates GM's sales dipped 1.3 percent in February, while Ford's fell 1.7 percent and FCA's rose 2.5 percent. It sees declines of 1.2 percent at Toyota, 0.5 percent at Honda, 6.1 percent for Nissan and 1.1 percent for Volkswagen. Cox forecasts Hyundai/Kia's sales grew 3.7 percent.

J.D. Power's Thomas King, senior vice president of data and analytics, noted that January and February are among the weakest months of the year in terms of retail sales volume. He said that the two months, which command more than 16 percent of calendar space, comprised just 13.5 percent of last year's annual retail sales total.

https://www.autonews.com/sales/us-auto-sales-projected-fall-again-feb

marcus says

bacon and Trucks are a good trigger for across the board price increases.

The bacon and trucks inflation index? so simple its brilliant. That's why we keep @Marcus around.

Trucks are interesting. OTOH the technology is always improving so I get why they are so expensive...but then why are flat screen TV's $80/each at walmart?

ForcedTQ says

Buying a BRAND NEW automobile without having the rest of your wealth strategy figured out, in progress, or otherwise at the point you could retire tomorrow, is foolish at best.

Mostly agree with you but...

I sold my Jeep and bought a brand new 2002 accord V6. I have an enormous set of tools from owning that Jeep. The accord has been worry free for 16.5 years. If you keep it long enough and don't buy American it's not so bad. Paid it off in less than 3 years and my insurance is a breeze these days.

Most American's are similar to my sister though. She gets a new car every 2 years and swims in debt. For the last decade that isn't as irresponsible as it sounds though. Up until recently used cars held up their value pretty well and so dealerships would cycle people like her into new ones easily. A couple times she even came out ahead.

The used car market has been tanking recently though which will make that sort of activity more painful and might finally bring on the infamous Carmageddon I keep reading about.

ForcedTQ says

Buying a BRAND NEW automobile without having the rest of your wealth strategy figured out, in progress, or otherwise at the point you could retire tomorrow, is foolish at best

Spot on!

So many foolish dummies swimming in debt with the latest new car.

Yeah, I'm actively searching Craigslist for a new used car lately. I don't want to have to drive my next car for 17 years to make the numbers work out haha...

Actually I'm thinking of picking up another Accord coupe V6 which they quit making after 2016. Maybe hold it 6-7 years and then buy an electric after I own a house.

I’m a car guy, love sports and muscle cars... but I hate owning them.

I get my fix by renting a Corvette or Porsche two weekends a year and pass up all the ownership headaches.

On the subject: New cars cost too much.

Compared to 1970s, 1980s, and 1990s cars, the cost is up moderately (adjusted for inflation). But consider a 3 year old used car with 50k miles. That car is SO MUCH BETTER than a brand new "old" car for "most people" in EVERY WAY. And it's WAAAAAAY cheaper. Buy yourself a slightly used car and be VERY GLAD to live in the 2010's. There has been no better time in history to buy a car (new or used).

Let's drag race a 3 year old 4-cylinder Honda Accord automatic ($12k) verses Magnum P.I.'s Ferrari, which cost more than that in the 1970s. Should we even talk about a 4-year-old V6 Accord? Reliability? Maintenance? Ha!

We live in the greatest era of cars. By far. Lowest prices ever. Seriously... stop complaining.

ForcedTQ says

Buying a BRAND NEW automobile without having the rest of your wealth strategy figured out, in progress, or otherwise at the point you could retire tomorrow, is foolish at best.

If people followed that rule, EVERY car maker would be out of business and bankrupt, since 3/4 of the population live paycheck to paycheck.

ForcedTQ says

You are taking a direct fucking hit with the depreciation. These stupid things ARE NOT investments for the most part, with 99% of them going only down in value.

That can be said with just about everything you buy new. Appliances, furniture, jewelry, firearms, electronics, motorcycles, etc. Sometimes, people just want to be the FIRST owner and don't like sloppy seconds, and will take the depreciation.

ForcedTQ says

Yeah, you may get lucky and not have ANY repairs over the time you own the car, but the previous mentioned costs plus depreciation will likely cost much more than repair costs on comparable used auto.

Also not true. I bought a brand new Honda Ridgeline. First, it held it's value amazingly, I've seen some four years old selling for a few thousand less than new price. Plus, I haven't had to do a single repair over five years except for standard maintainence items. There's no way a used vehicle would have that type of track record.

ForcedTQ says

These stupid things ARE NOT investments for the most part, with 99% of them going only down in value.

Who ever said buying a new car was an investment? Every one knows it's a depreciable asset.

Hell, I just bought wifey a brand new Subaru BRZ two weeks ago. It, being a "investment", was the furthest from my mind. It's a play toy. Period. and we'll be the first ones to stain the seats, no sloppy seconds from a previous owner.

marcus says

No no no, you're both wrong. IT's the 8 years of Obama that made cars so fricken expensive. Duh ?

Actually, you finally posted something accurate... Congratulations!!



Interest rates went way down under Obama, which forced prices up. Finally basic math skills.

Why Americans are suddenly paying $550 per month for new cars

The average price of vehicles hit an all-time high of more than $36,000 in 2018, according to Kelley Blue Book – and with interest rates rising, car shoppers are now borrowing more than ever and extending their loans to record lengths.

New-car buyers agreed to pay an average of $551 per month for 69 months in January, according to car-buying advice site Edmunds. That’s nearly 10 percent more per month than three years earlier.

Car debt has risen 75 percent since the Great Recession in 2009, reaching an all-time high of $1.2 trillion, according to the U.S. Public Interest Research Group.

"Easy credit and longer repayment terms have coaxed many consumers into buying more car than they can really afford," said Ed Mierzwinski, U.S. PIRG's senior director for consumer programs, in an email. "It's even worse for those who have been subjected to deceptive and predatory lending practices at auto dealers."

Average annual interest rates jumped from 4.68 percent in January 2017 to 4.99 percent that same month in 2018 and then to a 10-year high of 6.19 percent in January 2019, according to Edmunds. With new-vehicle prices averaging nearly $37,000 in January, according to Kelley Blue Book, monthly payments are getting out of reach for many buyers.

Several automotive executives interviewed recently by USA TODAY said car buyers can afford it amid a strong job market and encouraging stock gains.

“The economy is still at a very strong level," said Henio Arcangeli, Jr., a leading executive in Honda’s U.S. division. "Although interest rates are coming up, which obviously can increase the purchase cost of the vehicle, on a historic basis they’re still at a very low level.”

That’s true. Auto interest rates on 4-year loans were never this low in the 1990s, for example, when they ranged between about 7 percent and 12 percent, according to the St. Louis Fed.

But car buyers could run into trouble if the economy takes a turn for the worse and their income drops, especially because they’re locking themselves into long-term loans.

Netflix subscriptions can be canceled. Car payments can't – at least not without giving up the vehicle. About 83 percent of Americans rely on their own car or someone else's to get to work every day, according to an August 2018 poll by research firm Gallup.

More than 7 million Americans are now at least three months delinquent on their auto loan payments, the benchmark for many lenders to trigger a repossession.

According to the Federal Reserve Bank of New York, the number of these troubled borrowers is a million more than in 2010, following the global financial crisis that led to a bailout for automakers and financiers.

Phaedra Wainaina, a new law school graduate in Michigan who recently lost her job as a legal researcher, was quickly overwhelmed by her bills, including a car loan.

"I had to make the decision between paying car notes and buying food,“ the 26-year-old single mom said. She defaulted on her 2010 Chevrolet Equinox loan and the SUV was repossessed. "I am considered someone who has higher education and still got behind."

Deals dry up

One reason the tab is getting more expensive is because deals are harder to find. Zero-percent interest rate offers, which were common following the Great Recession, hit a 13-year low in January, according to Edmunds.

One big reason is the Federal Reserve’s interest-rate hikes, which are aimed at curbing inflation in a strong economy. But the impact on consumers is higher monthly payments.

“The biggest surprise for me is how quickly we’ve seen interest rates go up above 6 percent,” Edmunds analyst Jessica Caldwell said, referring to auto loans. “People were used to low interest rates, and that’s no longer the case. That is kind of frightening for a lot of people.”

One big driver of the bulkier loans is bulkier vehicles, said Melinda Zabritski, senior director of automotive financial solutions for Experian Automotive.

A decade ago, the best-selling segment of vehicles was affordable small cars, like the Ford Focus sedan, she said. Today, it’s entry-level crossovers like the Toyota RAV4 and Ford Escape, which carry starting prices of several thousand more dollars.

“Fundamentally consumers have changed what they’re buying,” Zabritski said. “That’s part of where we’re seeing these rising prices.”

They’ve changed so much that the Focus, in fact, is gone. Ford is discontinuing the car, along with the Fusion and Fiesta sedans. And General Motors is killing the Chevrolet Cruze, a Focus competitor, along with several other car models.

That’s because rising interest rates simply haven’t stopped people from borrowing more to fuel their thirst for bigger and bigger vehicles in the SUV boom, which has depressed sales of cheaper and smaller passenger cars.

The average new-car buyer borrowed $31,707 in January, marking an all-time high for the month, according to Edmunds.

And the most common loan term is now 72 months, according to Experian.

The good news is the average consumer has “a very healthy balance sheet” right now, said Lakhbir Lamba, executive vice president of retail lending at PNC.

But Lamba noted that while PNC doesn’t offer loans beyond 72 months, many of the bank’s competitors are offering 84-month loans or even longer in some cases.

“There’s been a lot of debate over, is there stress … in that asset class, and I’ll tell you, a lot of it depends upon the financial institution and the type of consumer they’re lending money to,” Lamba said. “We’ve seen some stress but nothing that would concern us.”

How to avoid paying too much

Advisers say car buyers should consider the total amount they’re paying over time. But many people think more about whether they can handle the monthly payment.

At January's rates, a 60-month loan on the average amount borrowed costs a total of $36,947 over time. Adding just 12 months to the loan increases the cost of the vehicle by $1,092.

“It feels like everything is advertised to us at a monthly rate,” Caldwell said. “That’s the way we’ve been conditioned now.”

Another tip: If you can’t afford a midsize SUV, for example, consider a midsize car. The price difference between the average midsize SUV and the average midsize car in January was $38,744 to $25,930, according to Kelley Blue Book.










https://www.usatoday.com/story/money/cars/2019/03/01/care-payments/3001818002/

Kakistocracy says

"Easy credit and longer repayment terms have coaxed many consumers into buying more car than they can really afford," said Ed Mierzwinski, U.S. PIRG's senior director for consumer programs, in an email. "It's even worse for those who have been subjected to deceptive and predatory lending practices at auto dealers."

This just has to be Trump's fault, right?

just_dregalicious says

Yeah, I'm actively searching Craigslist for a new used car lately. I don't want to have to drive my next car for 17 years to make the numbers work out haha...

Actually I'm thinking of picking up another Accord coupe V6 which they quit making after 2016. Maybe hold it 6-7 years and then buy an electric after I own a house.

Smart fella, you are the real reason ICE sedans are dying.
A lot of ppl are waiting for EV prices to fall so they can buy in.
When I see the latest ICE gimmicks, Superchargedturbo, variable displacement, variable valve timing & lift, CVT, direct injection, rotary Wankel is back, compression ignition...more complication=more failure modes, end of the road, ICE.
https://www.greencarreports.com/news/1120319_vw-says-it-is-now-developing-its-last-generation-of-gas-diesel-engines

Tarantula says

Do right-wingers see

Who?

Tarantula says

Do right-wingers see everything through a Trump lens?

There's no lens like a big beautiful Trump lens - he has the best lenses in the universe and they are all about Trump

kt1652 says

you are the real reason ICE sedans are dying.
A lot of ppl are waiting for EV prices to fall so they can buy in.

Trick will be to offload the used ICE while I can still break-even or make some money. I don't think that will be a problem in the next decade. At some point you'll have to pay someone to come drag them away.

Meanwhile, my 2002 accord might get me $100-500. Too many people have hit it and it's salvage at this point. Runs great though. Could easily drive it another 3 years. It (was) black and the sun here in San Diego has oxidized the paint quickly. Thought I might have to paint but I've noticed that after a while the white oxidation peels off and the layer below that is black too!

Reminds me of the first civic:

www.youtube.com/embed/MfD67KCFxqI

Skip to 20:29 to see the dashboard. Very nice layout. Not the car for me but I think they have a hit. Basically the electric version of:

https://en.wikipedia.org/wiki/Honda_Civic#First_generation_(1972%E2%80%931979)

By the way. They made the 'prototype' AFTER they built out the manufacturing line. It's basically ready to go and will be selling in 2019.

just_dregalicious says

By the way. They made the 'prototype' AFTER they built out the manufacturing line. It's basically ready to go and will be selling in 2019.

Once Japanese get into the car game, everyone will have to play catch up. They know how to make cheap and reliable.
Fucking killed our unionized and outdated auto industry back in the 80's

Patrick says

* it is illegal to buy a car directly from the manufacturer, just because dealers have enough clout to corrupt our laws like so many industries do

How does it work for buying a Tesla?

FortWayneIndiana says

just_dregalicious says

By the way. They made the 'prototype' AFTER they built out the manufacturing line. It's basically ready to go and will be selling in 2019.

Once Japanese get into the car game, everyone will have to play catch up. They know how to make cheap and reliable.
Fucking killed our unionized and outdated auto industry back in the 80's

This is such a loser’s mindset. If one is so terrified of his enemy, why even bother to start the battle in the first place?

Car buyers face financing squeeze

Editor’s note: This story will be part of a special section on affordability and finance in the March 11 edition of Automotive News.

Car buyers are at the center of a vehicle-finance tornado. Quarter after quarter, auto loan amounts, interest rates and monthly payments keep rising, and incentives keep falling.

Those auto finance trends are starting to pinch — hard, especially at the low end of the new-vehicle spectrum. And that's driving some new-car shoppers into used vehicles, experts said.

"This is reality now," said Frank Maione, owner of Henderson Hyundai Superstore near Las Vegas. Maione said some customers are shocked to learn that compared with the last time they bought a vehicle, sweet finance deals such as 0 percent interest are harder, if not impossible, to get.

If a customer's payment rose $50-$100, Maione told Automotive News, "I can understand them being surprised. But we in the industry really shouldn't be surprised."

New-vehicle sales remain strong, and overall, consumers are making on-time payments. So it's tempting to conclude that financially, consumers can keep handling those bigger auto loans, rising interest rates and higher monthly payments. Some car buyers are able to fork over an extra $50-$100 per month, but sticker shock and budget constraints will push others to consider other options.

More than a year ago, Maione predicted "0 percent people" would be in for sticker shock when they returned to the market. Even in early 2018, incentives were on their way down.

Nowadays, he said his finance managers tell loan applicants, "You got a special offer last time, but that's the thing about a special offer — it doesn't last."

In January 2019, 0 percent loans accounted for just 3.2 percent of new-vehicle volume, down from 7.7 percent a year earlier, said Jessica Caldwell, executive director of industry analysis at Edmunds.

In the dark on rate hikes

Interest rates have been gradually increasing over the past 2 years, but nearly two-thirds of consumers surveyed by Automotive News and DealerRater have not been following the interest rate rises that would affect their auto loan payments. Only about a quarter of survey respondents have been following the increases and understand their effect on auto loans.

Q: Have you been following the rise in interest rates over the past 2 years and evaluating how it may affect your auto loan payments?

64%: I have not been following the interest rate increases.
22%: I have been following the rise in interest rates and understood how it will affect my next vehicle loan.
11%: I have been following the uptick in interest rates but have not considered its impact on my next vehicle loan.
4%: I have been following the rise in rates and considered it would lead to a higher loan payment, but I didn't realize how significant the impact would be.

Total does not add up to 100% because of rounding. Source: Automotive News-DealerRater survey of 10,565 customers who recently visited a dealership. The survey was fielded Feb. 6-11.

"January's not usually a big month for incentives, but that's incredibly low, when you look back a few years," she told Automotive News. The share of 0 percent loans hit its most recent high in August 2015, at 15.2 percent. The industry nearly equaled that again in September 2016, at 15 percent, Edmunds said.

The Federal Reserve has gradually raised interest rates over the past two years, and that made it progressively more expensive for automakers to subsidize interest-rate incentives. The January 2019 decline marked 18 consecutive months that 0 percent share fell from the year earlier, according to Edmunds.

Payment levers

The interest rate on the average new-vehicle loan was 6.13 percent in the fourth quarter, up about 1 percentage point and a 10-year high, Experian said, while the average rate on a used-vehicle loan was 9.59 percent, up 0.75 of a point.

Plus, negative equity levels have remained high. In January, 32 percent of vehicle sales included an average of $5,029 in negative equity, down about $250 from the year earlier as lenders apply more stringent underwriting standards, said Jeremy Acevedo, manager of industry analysis at Edmunds.

"Still, the fact that negative equity is part of nearly a third of finance transactions and maintains an average above $5,000 means that there are major ramifications from an affordability standpoint," he said.

Some car buyers switch to used

More than half of customers have taken monthly payment rises in stride, buying the vehicle they initially wanted, according to a survey by Automotive News and DealerRater. Still, more than a quarter said they switched to a used vehicle, rather than new, to stick to their budgets.

Q: During your most recent vehicle purchase, how did the vehicle price and monthly payment affect your buying decision?

52%: The payment did not change my buying decision; I purchased the vehicle I initially wanted.
28%: I bought a used vehicle rather than the new vehicle I wanted to accommodate my budget.
16%: Instead of buying a new vehicle, I leased.
2.7%: I was already shopping for a used vehicle but purchased a higher-mileage or older car than I planned in order to fit my budget.

Total does not add up to 100% because of rounding. Source: Automotive News-DealerRater survey of 13,238 consumers who recently visited a dealership. The survey was fielded Feb. 11-18.

Borrowers have resorted to longer loan terms to stretch out their payment time, but that growth has slowed as lenders are increasingly selective about who qualifies for terms of 72 months or beyond, analysts said.

Stretching exercises

Many customers are unaware of the interest rate hikes until they buy a vehicle.

Nearly two-thirds of consumers who recently visited a dealership said they had not been following the interest rate increases, according to a DealerRater-Automotive News survey of 10,565 respondents last month. Only about a quarter of respondents said they had been following the increases and understood how they will affect their next vehicle loan.

Maione said most people just "suck it up" and pay more, once they accept they're not missing out on some special deal everybody else is getting.

About half of consumers who had recently visited a dealership said the monthly payment did not change their buying decision; they bought the vehicles they initially wanted, according to a separate DealerRater-Automotive News survey of 13,238 respondents last month.

Caldwell agreed that customers are choosing bigger loans and higher payments, and they're keeping up with the payments as time goes by. But, she suggested, sooner or later, people with limited means will stretch just so far.

"In terms of what people would have normally paid when it was 3 to 4 percent, and now it's shifted to 5 to 6 percent, a lot of folks are choosing to pay more — whether it's more down payment, or through monthly payments," she said. "Will that last? For everybody? Probably not."

Monthly payment push

Feb. 2019

Year-over-year change

Average retail transaction price
$33,267 $1,123

Average incentive amount
$3,721 -$161
Source: LMC Automotive, J.D. Power

Q4 2018

Year-over-year change

Average new-vehicle monthly payment
$545 $30

Average used-vehicle monthly payment
$387 $16

Average gap between new and used payment
$158 $14
Source: Experian

The New York Fed reported last month that serious auto loan delinquencies, defined as 90 or more days overdue, represented 4.47 percent of the outstanding balance in the fourth quarter of 2018, up from 4.05 percent a year ago.Two years earlier, in the fourth quarter of 2016, it was 3.75 percent. While the number has increased over time, it's been a gradual rise, and serious delinquencies are still well below the most recent peak, at 5.27 percent in the fourth quarter of 2010, according to New York Fed data. Thirty-day delinquencies improved slightly to 2.32 percent in the fourth quarter, according to Experian.

Used-vehicle converts

For consumers who don't stretch their budgets for a bigger down payment or a higher monthly payment, Maione said a lease could be Plan B, or of course, financing a used car. "We've got plenty of other cars," he said. "We can find something to suit anybody's needs."

Patrick Manzi, senior economist for the National Automobile Dealers Association, said new-car intenders switching to used are "absolutely" a factor in NADA's 2019 light-vehicle sales forecast of 16.8 million, down about 3 percent from 17.3 million 2018. That's after four straight years of more than 17 million. More than a quarter of customers surveyed by Automotive News and DealerRater bought a used vehicle rather than the intended new vehicle to accommodate their budget.

Besides the financial difficulty, for new-vehicle buyers in the low-price range there simply are fewer vehicles to buy on the car side, Manzi said. "At the lower end of the new spectrum, from the domestics, they are pulling out of small cars altogether," he said, in favor of bigger, more expensive and more profitable light trucks.

"Look at Ford, the Ford Fiesta. Now, I think, their cheapest offering is the Ford EcoSport, which is like five grand higher than the old entry level. That's kind of a big jump," Manzi said. Ford Motor Co. is expected to phase out the Fiesta in North America this year.

"That's likely to affect those people who are income-constrained, or who are monthly payment-focused," he said. "A lot of those people are going to be priced out of the market and forced to buy used."

So, while the overall auto finance market doesn't seem to be hurting that badly, the low end of the new-car market is feeling the effect of the affordability problem, according to analysts.

Those low-end new-car customers will be challenged to find a new vehicle priced at $20,000 or less. Even those looking for a new vehicle between $20,000 and $29,000 may be pressed to find one.

In 2018, vehicles with a sticker price less than $20,000 accounted for just 2 percent of new-vehicle sales, Cox Automotive said. That number was already in the low single digits, declining steadily from 7 percent in 2012.

The $20,000-to-$29,999 sticker price is also on the decline, to 34 percent of new-vehicle volume in 2018, from 36 percent in 2017, or 47 percent in 2012, according to Cox Automotive.

Feeling the effect

A focus on used vehicles could be bad news for automakers, which depend so much more on new-vehicle sales than dealers or lenders, experts said. But if some new-vehicle intenders switch to used cars, dealers' used-car departments and lenders that cater to customers with subprime and near-prime credit will benefit.

At Group 1 Automotive, for example, "if you have confidence in the value you can put on … used vehicles, you put more into the trade. That helps you get the deal done and can help with affordability," said CFO John Rickel.

It's still a trade-in business, added Daryl Kenningham, president of U.S. operations. "If we can build our strong used-car business, we'll be able to trade better, make better valuations."

Brad Bradley, CEO of subprime auto lender Consumer Portfolio Services, said the affordability strain in new vehicles probably works to his company's advantage.

"If anything, subprime and near-prime lenders are doing quite well," Bradley said. "I'd rather be us than the new-car guys."

https://www.autonews.com/finance-insurance/car-buyers-face-financing-squeeze

Yesterday I put in a full day's work buying two cars.
First I went to Honda with my Daughter she was leasing a Honda Civic Coupe LX Sport.
She ended up with one that the dealer had and wanted to get rid of it. She got it for 179 a month, but had to put down about $2900 bucks.
But I heard the salesman next to our guy's desk working over his customer while our Salesguy was in the managers room crunching numbers.(Which is really talking shit leaving you on ice to wear down your resolve.) People tired and weary are less likely to reject hard sales in the finance room when they try to get you with the tack ons. Gap ins, Wheel and Tire ins, and other warranty crap like that.

So the guy is telling his Customers, why Leases have gone way up and not much difference than a Finance payment Less than a $100 difference in most cases not $300 and $400 difference. Is because the Finance companies are not getting the return on the off-lease and preowned sales that they thought they would. The last 6 to 8 years, most people opt to lease a car rather than buy it new or buy it preowned. My first lease back in 2012 was a different experience than it was yesterday. 0% financing, for new cars, and $99 to $199 for Lease cars. Plus Mazda gave me about $3K in Loyalty rewards even though I traded in a 10 year old MPV mini van that I bought used.

I ended up paying $470 a month for a 2019 Mazda 3, first one delivered in South Florida. There was no incentive on it at all. Mazda was shrewed. They made damn sure Markets cleared out all of their 2017 and 2018 models before delivering the 2019's. That's why they shipped so late in the year. I could have bought a 2019 or 2018 Mazda 6 for a little over $100 for the top of the line model. The only way you'll get a good incentive on leases now going forward is if they less desirable models that aren't selling as well.

I think if they haven't already, pretty soon they will hit that same wall that Retail Computers hit. And start reversing on the features offered right out of the box. We'll be seeing cars comparable to what was offered in 2006.

As it is right now even the economy base models for every brand is offering the full tech package, smart phone integration, smart fuel economy, some leather trim in most interiors, plus driver augmentation, lane assist, driver assist, auto braking it's even on the small clown cars now. But as a result those small clown cars are starting to post $24.000 window stickers.

It's not sustainable.

Tenpoundbass says

So the guy is telling his Customers, why Leases have gone way up and not much difference than a Finance payment Less than a $100 difference in most cases not $300 and $400 difference.

So why didn't she buy it instead of lease it and build up equity instead of just throwing the lease payments away, just like rent? She'll have nothing to show for all the money she spent when the lease ends. Bad choice.

Tenpoundbass says

Yesterday I put in a full day's work buying two cars.

I just went through something similar two weeks ago.

Dealing with car salesman is like getting root canal, having to play their little Jedi Mind Tricks. I bought a new play toy, a sports car, for wifey, to play with on nice days. Had to hit the sales guy over the head with a 2x4 to help him concentrate on what was going on. He wasn't happy when we left. Maybe I should send him to where I took all my sales training, so he can learn how to control the deal and not lose his shorts.



That actually was the cheaper deal of the two.

Next up, I bought a new motorhome, so I can have something to play with too. The RV dealers are so much easier to manipulate than the car dealers. I ended up getting a lot better deal then I thought I could. The owner of that dealership was definitely not happy when we left. She was an easy push-over. I love winning!!

Man, talk about blowing through a quick $110K+ in a short period of time.

Debt-saddled buyers lean on Mom, Dad

In a township outside Akron, Ohio, where Gregory DeLozier and his wife raised five children, there are few sidewalks and sparse public transportation. Getting their children behind the wheel of a car wasn't optional.

At the Bureau of Motor Vehicles, DeLozier once joked that he should apply for a dealer's license because of how many registrations he was renewing for his teenagers. "I got two insurance bills every month," he recalled. "Three cars on one, four cars on the other."

Even with four of the five children out of the house, DeLozier, 59, is still doing business as the "dealership of dad." The software engineer and adjunct professorat Kent State University still shoulders four of his children's vehicle expenses. In the last six months, he estimates, he has paid more than $15,000 in vehicle expenses for the children and their spouses.

"We're like the circus net below everything that falls. That's how parenthood is in America right now," DeLozier said. "Your kids are on a high wire, they fall down, you pick them up and put them back up again. We paid for lots of repairs."

With prices rising for new and used vehicles, and student debt posing a mounting burden, more young adults are asking their parents for assistance with auto purchases, insurance costs and repairs. As their children's personal debt reaches unprecedented highs — TransUnion says millennials have a record $683 billion in student loans to worry about when figuring out how to afford a car payment — some parents are putting their own financial security on the line to keep their family on the road.

‘Times are different'

There's little data available on how many parents shoulder vehicle expenses for their adult children. To determine who's driving what, automakers and other agencies garner demographic data that measures the number of households with children in them, but not the ages of those children. Parents may continue to pay for a vehicle after its driver leaves home or purchase vehicles in their names for a son or daughter to drive.

"We live in a country where you have to have a car. Uber is not an affordable alternative. You can't get an Uber every day to your job," said Jonathan Banks, general manager of vehicle valuations at J.D. Power. "The majority of our population is still in a rural setting."

Bill Lucy, 66, of Fort Wayne, Ind., gave a 2009 Toyota RAV4 to his youngest daughter in 2016 and still pays for its insurance. She didn't attend college, though, so he didn't need to help her with any student loan payments.

Mike Robertazzi, 63, of Toms River, N.J., purchased an Infiniti with his wife for their 25-year-old son. The son, who lives with them, previously owned a Chevrolet Corvette before being laid off.

"He didn't have any real income, and since he's going to school, we thought we'd do that for him," Robertazzi said. "Times are different. When I was young, I bought my first house when I was single."

Captive finance companies, which experts say are the type of lenders most likely to do deals that include a co-signing or co-borrowing parent because they have access to automaker incentives, won't disclose how often these deals cross their desks.

Student debt

Dina Wilson, general manager and finance director of Timbrook Kia in Cumberland, Md., said the prevalence of parent-and-child customers at her store has increased.

"I've seen a lot more of those than what there ever used to be," Wilson said. "As finance managers, we all need to be more aware of who our customer is in front of us."

Vehicle purchases and student loans — whether for themselves or their children — are two of the biggest contributors to increasing debt for older Americans. People 60 and up had total debt of $615 billion in 2017, according to TransUnion, which is less than millennials owe on student loans alone.

Americans 60 and older held 21 percent of total automotive balances in 2017, vs. 12 percent in 2010, TransUnion said. Auto loans now account for $246 billion, or 40 percent, of their total debt.

For all Americans, fast-rising student loan debt is sapping income they could have used for other purposes, including a vehicle. More than a quarter of millennials with student loan debt have delayed buying a car because of it, according to a survey by Bankrate.com released in February, with the Midwest as the region most likely to cite loans holding back a vehicle purchase.

Mark Hamrick, Bankrate's senior economic analyst, told Automotive News that many Americans are struggling with their finances even in a strong economy.

"It's not unusual for many small towns in this country to have essentially not participated in the economic expansion in the past 10 years," Hamrick said. "It doesn't surprise me that the Midwest would be having some warning lights going off there."

Student loan debt, which totaled $1.46 trillion in the fourth quarter for all ages, also is preventing younger Americans from purchasing homes, getting married and saving for retirement and emergencies, the Bankrate study found.

Expensive mistakes

Lacking a financial safety net for an unexpected expense also can compel a young car owner to turn to parents for help.

Though he considers his children financially responsible, DeLozier said they have made some costly mistakes with their vehicles.

A few years after he bought his daughter-in-law a used Toyota Camry, she called him from the road.

"We call that DadStar 'cause they would call me and say, 'Dad, I'm on the freeway, and something's making a funny noise,' " DeLozier said. "She's a young professional, a biostatistician, but she's no car mechanic."

His daughter-in-law had never gotten an oil change, he said, and the Camry's engine had thrown a rod.

He knew she and her husband, his 28-year-old son, didn't have the money to replace it. A few years before, he had co-signed on a Kia Soul with his son after he had hit a deer, DeLozier said. Before the accident, his son was overpaying for his vehicle, a used Nissan Murano.

"He paid like 50 percent more than what the Murano was worth, and at a ridiculously high interest rate. It was like $28,000 at 18 or 19 percent interest," he said. "The only way he could get reasonable rates was to have me co-sign. This is about access to credit for him."

DeLozier had an idea for his daughter-in-law. He passed down his vehicle, a Honda Fit, to his 19-year-old daughter and replaced it through CarMax. Her car, another Camry, went to his daughter-in-law.

"She's got a car now because I was able to afford a new car," he said. "That trickle-down effect gave two other people better rides."

But not every parent can afford to help their children in the same way.

The Consumer Financial Protection Bureau said in a December study that older Americans who provide financial support to children have lower financial well-being scores than those who don't.

"There comes a point we have to say, 'We can't do this anymore.' The parents, in trying to do the best for their kids, do the worst for themselves," said Ray Walker, who works in sales and marketing and lives near Orlando. He pays for two daughters' vehicle expenses while chipping away at a $50,000 student loan for one daughter, which represents about half the debt incurred while she earned a music degree at Belmont University in Nashville.

"We don't have retirement money right now because we've paid for student loans," Walker said. "People are sacrificing their own future."

In New Jersey, Robertazzi and his wife are retired but feel trapped by their son's financial situation. He couldn't remember the last time they took a vacation.

"Here, what I thought was going to be a phenomenal retirement and a phenomenal future wound up just being the opposite," he said. "Every little bit helps now, and every little bit that's going towards everything else — it hurts."

Used over new

Affordability and growing debt are increasingly driving young people and their parents to the used-vehicle market.

"Whether fresh out of college or becoming a first-time homebuyer, many young adults are just starting to plan their future and often look to their parents for financial assistance on big purchases," a spokeswoman for CarMax wrote in an email to Automotive News. "While young adults might be tempted to look at new cars, buying new isn't always the best choice."

Average monthly payments for a new vehicle have risen to $533 in the last five years, according to transaction data from Cox Automotive company Dealertrack, up roughly $40 a month for a loan and $70 a month for a lease.

Part of the reason is that vehicle transaction prices are rising as larger models loaded with more technology fill the marketplace. But smaller, more affordable alternatives also are vanishing in the new-vehicle market.

Looking for dependability

The number of new vehicles sold for less than $20,000 dropped nearly 20 percent last year, according to J.D. Power data, while sales of vehicles over $40,000 rose 7.4 percent. Meanwhile, the average income of car buyers in Generation Z — defined as those born from 1995 to 2004 — hovered around $20,000 a year in 2017, according to J.D. Power. The company cited census data for 2017 that shows the median income ranged from $17,700 for 18-year-olds to $24,000 for 22-year-olds.

Though not all of them are old enough to drive, Generation Z makes up 14 percent of the U.S. population and bought used vehicles 63 percent of the time, J.D. Power says. Millennials — born 1977 to 1994 — also make up 14 percent of the population and purchased used vehicles 51 percent of the time. Their median salaries in 2017 ranged from $26,100 for the youngest to $50,000 for the oldest, J.D. Power said, citing the census figures.

Parents and children alike are seeking attractively priced vehicles with a history of dependability, J.D. Power's Banks said.

"They seem to have that same mentality," Banks said. "Regardless of how you look at it, pragmatic parents or pragmatic young adults, they're opting for the value alternative."

Of 2,100 consumers surveyed for Cox's "Evolution of Mobility Study," Generation Z and millennial participants said owning or leasing a vehicle was too expensive much more than older respondents. The number who agreed with that statement has risen 9 percent since 2015 for Generation Z and 10 percent for millennials.

"They are far more likely to tell us that owning a vehicle has just become too expensive," said Isabelle Helms, vice president of research and market intelligence at Cox Automotive. "We know their financial situations. We know they are plagued with debt."

Other options

Many adults don't want to have to co-sign with their parents, according to Jenn Reid, vice president of automotive marketing and strategy at Equifax. If the dealership offers those customers a different scenario, especially for someone who hasn't had a vehicle before, it can dramatically change the outcome.

Reid says in a market saturated with certified pre-owned and first-time buyer programs, consumer education and underwriting standards enhanced with technology can go a long way in helping these customers become financially independent with their vehicles.

"I'm a firm believer that there is literally a lending program for everybody," Reid said. "It's about putting the consumer in the right vehicle, with the right terms, and setting them up for success."

Still, parents such as DeLozier who have paid for countless repairs, replacements and vehicles outright don't feel the options are as efficient as stepping in themselves.

"No one has a gun to our heads," he said. "I can tell my daughter, 'You have to make a two-hour bus commute into Cleveland every day to go work at the hospital.' I suppose I could tell her that.

"You want your children to succeed, so you basically say, what am I capable of doing for them?"

https://www.autonews.com/sales/debt-saddled-buyers-lean-mom-dad

Someone who had 5 kids brought it on themselves. No sympathy!

zzyzzx says

Someone who had 5 kids brought it on themselves. No sympathy!

This is true.

Kakistocracy says

Still, parents such as DeLozier who have paid for countless repairs, replacements and vehicles outright don't feel the options are as efficient as stepping in themselves.

"No one has a gun to our heads," he said. "I can tell my daughter, 'You have to make a two-hour bus commute into Cleveland every day to go work at the hospital.' I suppose I could tell her that.

"You want your children to succeed, so you basically say, what am I capable of doing for them?"

Absolute fucking idiots, parents like DeLozier. He should have his intestines ripped out.

Bailing out your kids by buying and fixing their cars NEVER makes them self-reliant, in fact, just the opposite, you're enabling them to continue being Socialist slugs. Let the bitch take the bus for two hours, it will definitely motivate her to stop paying $200 on a cell phone plan, buying $1000 new iPhones every year, eating out every meal and stop buying $5 lattes every morning.

LOL @ another whiny shit article courtesy of Kaki-bot. Idiots sre buying their 25y.o. kids Infinitis to replace Corvettes, because kid got laid off, but student loans are to blame. Right.