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Posted on 7/3/22 at 8:07 am to Wardniner01
quote:
1994 gmc z71
??????
Posted on 7/3/22 at 9:08 am to Major Dutch Schaefer
Some of you are missing the big picture.
As the price of necessities increase (gas, groceries, etc) people have less disposable income. Less disposable income leads to less demand. Less demand leads to job cuts. Job cuts lead to no money. No money leads to not paying loans.
When someone is faced with decision of not being able to pay a loan, their first non payment will be on a toy (boat, RV, etc) next will be a vehicle and finally a home. Why is that? Well because you can live without the toys and expensive vehicle but the home is close to a necessity.
I’m in the market for a new truck and boat. I’m holding out because they both will be cheaper in 18-24 months. Possibly much cheaper.
As the price of necessities increase (gas, groceries, etc) people have less disposable income. Less disposable income leads to less demand. Less demand leads to job cuts. Job cuts lead to no money. No money leads to not paying loans.
When someone is faced with decision of not being able to pay a loan, their first non payment will be on a toy (boat, RV, etc) next will be a vehicle and finally a home. Why is that? Well because you can live without the toys and expensive vehicle but the home is close to a necessity.
I’m in the market for a new truck and boat. I’m holding out because they both will be cheaper in 18-24 months. Possibly much cheaper.
Posted on 7/3/22 at 9:19 am to Major Dutch Schaefer
quote:
As the supply chain and chip crisis has improved from COVID times, used car prices have dropped for 4 consecutive months & are now down 6.4% since January.
About damn time. I need to replace my car but there isn't a snowball's chance in hell I'm buying a used car in this market.
Posted on 7/3/22 at 9:22 am to Tantal
quote:
Normally I wouldn't give a shite, but history has shown that the government will pass any losses onto the taxpayers before letting the banks take the hit.
This administration will do everything in their power to make sure the middle class gets hurt by this the most. The ultra rich and those on government assistance are their voting base so those groups won't feel any pain at all.
Posted on 7/3/22 at 9:25 am to Dawgfanman
quote:
Loans won’t go bad just because people are “upside down”
The problem is with the insane prices and the length of financing, an unprecedented amount of people ARE upside down.
When those cars go into default, that's going to be a black hole for all sorts of people. Lots of money that the system perceived to be circulating is going to just go *poof*.
The auto industry has never had this many consumers upside down at this amount of money. It's going to hurt. Bigly.
This post was edited on 7/3/22 at 9:27 am
Posted on 7/3/22 at 9:28 am to burke985
quote:
Until there are cars a plenty the used market will stay high.
The used market is currently being manipulated by keeping repo'd cars out of the market.
Watch this video
Posted on 7/3/22 at 9:31 am to SlowFlowPro
quote:
The auto industry has never had this many consumers upside down at this amount of money. It's going to hurt. Bigly.
Hurt the auto industry/banks, right? I mean the people who default obviously had other issues.
Posted on 7/3/22 at 9:36 am to lsut2005
quote:
??????
You commented about mitsubishi not holding up In an accident, gmc is American made.
Dude you're making this too easy if you can't even keep up with your "comebacks"
Posted on 7/3/22 at 9:40 am to Dawgfanman
quote:
Hurt the auto industry/banks, right?
Yes.
Lots of used car lots are holding the bat on goods that are already probably 10% less valuable than when they bought them a short time ago.
Tons of banks/financiers are holding the bag on huge loans for (now rapidly) depreciating assets.
All they can do right now is keep the lowered-value cars off the market to create artificial supply issues, but that will only last so long. I imagine once the prices start to drop, they're going to avalanche.
Posted on 7/3/22 at 9:44 am to SlowFlowPro
quote:
All they can do right now is keep the lowered-value cars off the market to create artificial supply issues, but that will only last so long. I imagine once the prices start to drop, they're going to avalanche
I hope so. I need at least one more car for my boys. They share a 2012 Toyota right now but one headed to college. Likely gonna make him go without a car for a while, live on campus anyway.
Posted on 7/3/22 at 10:02 am to Wardniner01
67,500 miles. 2017. Paid for. 100% bulletproof so far. Will drive until the wheels fall off.
I keep getting random feelers from all the Ford dealerships around here trying to get me to trade it in.
I keep getting random feelers from all the Ford dealerships around here trying to get me to trade it in.
This post was edited on 7/3/22 at 10:06 am
Posted on 7/3/22 at 10:10 am to BigMob
quote:
Pretty sure my neighbor who has a used car lot deals coke. If his already exorbitant lifestyle doesn’t change, it will be final confirmation.
Well if you were looking for a way to launder money, used cars would be a pretty good way to do it.
-Client buys overpriced used car in cash
-Write receipt to reflect whatever you want
-Put whatever you want in the trunk of said used car
-Used car is then “stolen” from purchaser and can be used in any number of illicit ways by organizations in need of vehicles
-Rinse and repeat
Posted on 7/3/22 at 10:11 am to tide06
quote:
Well if you were looking for a way to launder money, used cars would be a pretty good way to do it.
Well the problem is
quote:
Client buys overpriced used car in cash
This doesn't happen
Used car lots are financing vehicles and that's where they make their real money.
Posted on 7/3/22 at 10:11 am to Sayre
I agree with inflation eating away at the ability to afford the price of the vehicle they purchased a year ago for over invoice. Who they try to trade the Escalade they paid 30K over invoice and find out their 50K upside down they will walk away from the loan. There are way too many of these type of loans for it not to cause credit tightening again. Keep in mind half the USA does not have a grand in a savings account for emergencies. It is going to get ugly.
Posted on 7/3/22 at 10:13 am to VADawg
quote:
This administration will do everything in their power to make sure the middle class gets hurt by this the most.
The middle class is in the crosshairs for destruction. Sort of like the Kulaks in Russia. WEF->You will own nothing by 2030. Have to get a move on as they are not joking.
Posted on 7/3/22 at 10:13 am to iron banks
quote:
Keep in mind half the USA does not have a grand in a savings account for emergencies. It is going to get ugly.
US Consumer credit continues to surge
quote:
On an annualized basis, borrowing climbed 10.1%.
Revolving credit outstanding, which includes credit cards, increased $17.8 billion after surging $25.6 billion in the month before. Non-revolving credit, which includes auto and school loans, rose $20.3 billion after sizable gains in the prior two months.
Americans have so far continued spending in the face of surging prices, including in April, when personal outlays rose 0.9% from the prior month. Adjusted for inflation, spending also increased.
Posted on 7/3/22 at 11:13 am to SippyCup
quote:
Some of you are missing the big picture.
As the price of necessities increase (gas, groceries, etc) people have less disposable income. Less disposable income leads to less demand. Less demand leads to job cuts. Job cuts lead to no money. No money leads to not paying loans.
When someone is faced with decision of not being able to pay a loan, their first non payment will be on a toy (boat, RV, etc) next will be a vehicle and finally a home. Why is that? Well because you can live without the toys and expensive vehicle but the home is close to a necessity.
This, but to add to it (and SFP's initial post), it wouldn't shock me to find that a lot of people with subprime car loans pay rent for their domicile instead of a mortgage (as more people have cars than have mortgages). What this would likely mean is these are the types who can more easily move (and would) to avoid their vehicle getting repo'd once they default.
So it's no wonder car loan defaults can be a sign of coming home loan defaults (depending on the greater context).
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