this post was submitted on 08 Nov 2023

244 points (98.8% liked)

News

23030 readers

4044 users here now

Welcome to the News community!

Rules:

1. Be civil

Attack the argument, not the person. No racism/sexism/bigotry. Good faith argumentation only. This includes accusing another user of being a bot or paid actor. Trolling is uncivil and is grounds for removal and/or a community ban.

2. All posts should contain a source (url) that is as reliable and unbiased as possible and must only contain one link.

Obvious right or left wing sources will be removed at the mods discretion. We have an actively updated blocklist, which you can see here: https://lemmy.world/post/2246130 if you feel like any website is missing, contact the mods. Supporting links can be added in comments or posted seperately but not to the post body.

3. No bots, spam or self-promotion.

Only approved bots, which follow the guidelines for bots set by the instance, are allowed.

4. Post titles should be the same as the article used as source.

Posts which titles don’t match the source won’t be removed, but the autoMod will notify you, and if your title misrepresents the original article, the post will be deleted. If the site changed their headline, the bot might still contact you, just ignore it, we won’t delete your post.

5. Only recent news is allowed.

Posts must be news from the most recent 30 days.

6. All posts must be news articles.

No opinion pieces, Listicles, editorials or celebrity gossip is allowed. All posts will be judged on a case-by-case basis.

7. No duplicate posts.

If a source you used was already posted by someone else, the autoMod will leave a message. Please remove your post if the autoMod is correct. If the post that matches your post is very old, we refer you to rule 5.

8. Misinformation is prohibited.

Misinformation / propaganda is strictly prohibited. Any comment or post containing or linking to misinformation will be removed. If you feel that your post has been removed in error, credible sources must be provided.

9. No link shorteners.

The auto mod will contact you if a link shortener is detected, please delete your post if they are right.

10. Don't copy entire article in your post body

For copyright reasons, you are not allowed to copy an entire article into your post body. This is an instance wide rule, that is strictly enforced in this community.

founded 1 year ago

MODERATORS

rjc@lemmy.world

Thekingoflorda@lemmy.world

gedaliyah@lemmy.world

Blackbeard@lemmy.world

little_cow@lemmy.world

jeffw@lemmy.world

244

An Auto Loan Debt Crisis Looks Imminent (www.automoblog.net)

submitted 11 months ago by throws_lemy@lemmy.nz to c/news@lemmy.world

125 comments fedilink hide all child comments

top 50 comments

sorted by: hot top controversial new old

[–] msbeta1421@lemmy.world 76 points 11 months ago (7 children)

So basically,

Banks will repossess vehicles to try and minimise losses
Banks will not be able to sell those repossessed vehicles, resulting in losses
Banks may become insolvent as they are unable to liquidate the vehicles
Government steps in to bail them out

New vehicle prices are not in line with their actual value, so banks are making loans that aren’t covered by the collateral. This is shit management by the banking industry. If it’s impossible to get an auto loan then vehicle prices will eventually fall as supply stacks up. Banks are feeding this cycle by being unrealistic in these loan assessments.

[–] Krauerking@lemy.lol 26 points 11 months ago (1 children)

But... But price only go up?
The sky daddy book of economics says price only ever goes up and concentrated wealth is a good thing

load more comments (1 replies)

[–] reverendsteveii@lemm.ee 10 points 11 months ago (3 children)

Government steps in to bail them out *with tax money taken from the people who couldn't pay their car note in the first place

So either banks make money or banks take money.

load more comments (3 replies)

[–] ryathal@sh.itjust.works 4 points 11 months ago

4 probably won't happen. The mortgage bailouts were a bit of a special case, because the debt was rolled into securities and spread all over the place. To my knowledge there isn't a secondary market for auto loans, so the scope is limited to individual banks.

What may happen is the FDIC guarantees all deposits like they did with silicon valley bank, which is less bad than a full on bailout.

load more comments (4 replies)

[–] TenderfootGungi@lemmy.world 75 points 11 months ago (14 children)

Toyota is selling a basic (no ABS brakes, no airbags, crank windows) pickup in the rest of the world for $10,000. They could probably sell a version with the optional safety equipment in the US for $15-20k. But they will not sell it here and mess up the $50-100k luxury pickup gravy train.

https://www.motortrend.com/reviews/2025-toyota-imv-0-pickup-truck-first-drive-review-japan-mobility-show/

[–] HurlingDurling@lemm.ee 26 points 11 months ago (1 children)

At least they aren't doing what the big 3 do with their trucks. A mid range XLT F-150 will cost about the same as a fully decked out Tundra, and a fully decked out F-150 will set you back over $100K, but these were sold for $50-$75K just before the pandemic, so what changed? They just decided to charge more due to greed.

[–] WetBeardHairs@lemmy.ml 16 points 11 months ago (1 children)

I look at it as fleecing the assholes who buy those fucking things for vanity. Keep it up Ford and GM. Make them go fucking broke.

[–] bradorsomething@ttrpg.network 4 points 11 months ago (1 children)

Maverick is okay, if you can find a hybrid.

load more comments (1 replies)

[–] Semi-Hemi-Demigod@kbin.social 6 points 11 months ago

And also the chicken tax

load more comments (12 replies)

[–] malloc@lemmy.world 56 points 11 months ago (2 children)

The shift towards massive vehicles (SUVs) and trucks loaded to the tits with tech junk is to blame. Auto industry sold the idea to Americans that their fat ass needs a compensator instead of psychiatric help.

[–] Pasta4u@lemmy.world 7 points 11 months ago (9 children)

Nah.

It's poor planing and over spending that is the issue. People who lease cars are on an endless cycle of never owning anything and always laying a premium.

Just actually buy a car you can actually afford.monthly payments on and drive the car into the ground. Every car in have owned has made it at least a decade and a 150k miles. Once you are done paying off take what the monthly payment would be and out it into two banks account split 20/80. Woth the 80% being towards a new car and the 20% being for repairs.

[–] orrk@lemmy.world 9 points 11 months ago (4 children)

poor planing

well you got the poor part right

load more comments (4 replies)

[–] dan1101@lemm.ee 7 points 11 months ago* (last edited 11 months ago) (1 children)

Exactly. I like cars so it starts to suck keeping them for 10 years but otherwise I'd be in continual car payments.

Also taxes and insurance get cheaper as the car gets older too, so that helps.

load more comments (1 replies)

load more comments (7 replies)

[–] QuarterSwede@lemmy.world 4 points 11 months ago

Auto industry sold the idea to Americans that their fat ass needs a compensator instead of psychiatric help.

True or not, that got a good belly laugh out of me.

[–] Nobody@lemmy.world 52 points 11 months ago (1 children)

People in power will squeeze and squeeze. They’ll crank up the interest rates. They want you to default on the equity. Take your payments and your car. That’s how they make their money.

[–] CADmonkey@lemmy.world 8 points 11 months ago (1 children)

Have to be sure they don't repo a running usuable car, then.

[–] Mac@mander.xyz 4 points 11 months ago

I understand the sentiment but please leave us decent cars on the used market.

[–] Adalast@lemmy.world 24 points 11 months ago (1 children)

So what I'm seeing is to find any way I can to short the auto lenders so when they declare bankruptcy I can finally be able to afford a car?

load more comments (1 replies)

[–] aniki@lemm.ee 24 points 11 months ago (1 children)

Does this mean the used car market is actually going to not suck again soon? I need a new used Audi

[–] bradorsomething@ttrpg.network 10 points 11 months ago (1 children)

Dealers are starting to call around. They’re acting confident but they know the market has collapsed… they’re all trying to sell the last NFT.

[–] vivadanang@lemm.ee 5 points 11 months ago

they can hear the music and see the lack of chairs...

[–] mountainman131@lemmy.world 23 points 11 months ago (2 children)

My wife and I bought a Nissan Rogue in 2020 for 22K. 2020 model with 1400miles on it. We paid it off in 3 years. Today with 35k miles on it the trade in value is 23k at the Nissan Dealership. What a crazy time in the industry!

load more comments (2 replies)

[–] ryathal@sh.itjust.works 20 points 11 months ago (11 children)

Car payments are a poverty trap. Save and pay cash for cars, it's harder now that used prices are absurd, but it doesn't change the math.

[–] GiuseppeAndTheYeti@midwest.social 48 points 11 months ago (28 children)

It's not harder. It's not possible for a vast majority of people. You're telling people that are delinquent on their auto loans to "just pay cash" for used cars that are thousands of dollars. Sure you can find a beater for $800-1500 but what happens when the transmission goes or the engine throws a cylinder? Those of us with auto loans don't have the liquidity to pay outright for a decent vehicle.

[–] ryathal@sh.itjust.works 11 points 11 months ago (1 children)

You don't need to drive a beater forever. At this level cars are basically worth the same you bought them for. A year of driving a 1k beater and saving 500 a month that is less than an average payment leaves you with 7k for a better car.

[–] winkerjadams@lemmy.dbzer0.com 9 points 11 months ago (4 children)

Minimum wage in most of the USA is $7.25. Working 40 hours a week, 4 weeks of the month is $1160 dollars before taxes and all the other bullshit. Where exactly is that $500 to save coming from?

load more comments (4 replies)

[–] ASeriesOfPoorChoices@lemmy.world 5 points 11 months ago (1 children)

You're buying bad cars, but that aside there's a big range between your $500 shitbox and an overpriced $50,000 penis-extension.

Fyi, beaters can usually be sold for what you paid for them. Buy a beater for $1000, save for better car. Sell beater for $1000, and get $5000 good car.

[–] GiuseppeAndTheYeti@midwest.social 7 points 11 months ago (4 children)

Any used vehicle has the potential to be poorly maintained and unless you have the time and experience to thoroughly inspect every car you buy, there's a chance that the $4k 2004 Toyota Camry with 130,000mi you bought ends up with a piston rod through the bottom of the block.

On paper it looks like a steal, but you didn't know that it had an oil leak while it was sitting in the garage not being driven for months. Mom and Dad passed away and now it has to be sold along with all their stuff, so the family drove it to their property to make sure it runs. They noticed the oil was low when the light came on so they drained it and added new oil. Now you come along don't see any obvious signs of damage and buy it, but the cylinder wall is warped and it slips a bearing 3 months in. Engine needs a rebuild or you deal with the hassle of selling a car that no car enthusiast is wanting to rebuild an engine in, no dealer wants because it doesn't run, and no highschool kid can use because to get it to run they need to spend $3k on a drop in replacement for the engine.

The scenario you're painting is an infinite money glitch that doesn't exist.

[–] evranch@lemmy.ca 5 points 11 months ago (1 children)

I've driven nothing but beaters and beater-adjacent vehicles all my life. Even though I can afford a nice vehicle now, I don't waste my money. Good test driving and mechanical skill goes a long way.

Oil in the coolant? Coolant in the oil? White smoke? Run away.

Knock? Walk away. Lifter tick? Ask to knock the price down, flush oil. You won't throw a rod bearing on a modern car because it was low on oil a year ago. If it somehow does, you bought a car for less than a car payment. If it lasted 2 months you're still ahead and now you have a parts car, get another.

Always head straight to the scrappers and grab an alternator and starter, put them in the trunk for when one of them eats shit.

Learn to spoon tires or make a friend with a tire machine. Tires are a huge expense and used ones / takeoffs are nearly free. Haven't bought a new tire in many years. Get a plug kit too.

Learn to recharge AC and identify a working compressor with no charge. Then hard ball on the price. "Broken" AC devalues the car terribly and is a $10 fix.

Standard transmission cars go for a song, especially with slipping clutch they are worthless, learn to change a clutch and you can have one for decades. My favorite beater was a 1985 Corolla I owned from the age of 16 to 26, bought for $400 sold for $600.

load more comments (1 replies)

load more comments (3 replies)

load more comments (26 replies)

[–] sheogorath@lemmy.world 4 points 11 months ago

Yep, a properly maintained car can last you a long time. Thankfully used car prices in my country that are outside of the top 3 brands have very reasonable prices. My last car lasted me 18 years before we couldn't use it anymore due to emission regulations.

load more comments (9 replies)

[–] I_Clean_Here@lemmy.world 16 points 11 months ago

American banks fucking the world once again.

[–] tacosplease@lemmy.world 14 points 11 months ago (1 children)

I don't understand how people buy new cars. They cost like 1/4 of a house.

[–] dangblingus@lemmy.dbzer0.com 8 points 11 months ago* (last edited 11 months ago)

Debt that they can't afford. You can get approved generally for more debt than you can feasibly make payments on. Easier for a working class schmo to get approved for a $90K truck than a $500K house.

[–] afraid_of_zombies@lemmy.world 14 points 11 months ago (3 children)

Hopefully. Maybe I wont see so many people who make very little money driving pickups so large they can't even park them right and then returning them 4 years later to get an even larger one.

I have an economy car. My whole family fits it, it is already more car than I actually need. I bought it when it was 5 years old. I will repair it until the point it can no longer be repaired. At which point I will buy another reliable used economy car in cash.

A car is not an experience, it is not a status symbol, it is not compensation for your tiny penis, it is not for showing off, it is a machine that moves humans and goods from A to B.

I have known a retired accountant who lived in an apartment with an oversized pickup, I have known people who make $11 dollars an hour with a bright shiny pickup, I have known a small retail store manager drive around in a Hummer they got modified to look militarish-copish, homemakers with one kid with a SUV that sits 8, people on the verge of bankruptcy telling me how they will be rich restoring a mercedes from the 70s.

load more comments (3 replies)

[–] reverendsteveii@lemm.ee 9 points 11 months ago (3 children)

Where are we on the whole used car market thing? This could get wiggly if tons of people can't pay their car note, but for at least the first few they might actually be able to sell and turn around some money. Not a ton, mind, but until recently it was a given that your car is worth less than you owe on it.

load more comments (3 replies)

load more comments