Auto Loan Debt is Spiraling Out of Control

[CaptTom]

...It’d be great to get a deal on one of those repo’d luxury sporty cars or SUVs. I’m gonna watch it again to glean some tips on how to take advantage of the possible Golden Age to acquire a nice used vehicle cheaply.

Good plan! I always thought my last vehicle would be a sports car previously owned by some Boomer who has aged out of driving. They're all trying to re-live their youth by buying cars which were fashionable when they were young. And, frankly, I think those old cars are cool, too. Maybe one day there will be glut of them on the market which I'll be able to take advantage of.

[Disclaimer: Some would count me as a Boomer, too. I think they're casting too wide a net by extending it to the mid 60's. But in many ways I'm more like that generation than whatever you call us in-betweeners.]

 

[JoeWras]

[Disclaimer: Some would count me as a Boomer, too. I think they're casting too wide a net by extending it to the mid 60's. But in many ways I'm more like that generation than whatever you call us in-betweeners.]

Last of Boomers, first of Gen-X can be called "Generation Jones."

We have some unique problems and also some good opportunities.

https://en.wikipedia.org/wiki/Generation_Jones

 

[Montecfo]

Well now we know Ford's unspecified "supply chain issues" involved the nameplate.

Humorous, but better than it being chips.

 

[copyright1997reloaded]

I don't believe this either. I have a ford maverick that I ordered 1 Nov 21 and I just got a production dated of 10 Oct 22. 23 Maverick order bank was opened for a week and is already sold out. Supply constrains are a real issue.

Fellow Maverick owner here - ordered June 11, 2021. Received April 1, 2022.

The good news is that it is a fun little truck. I'm getting over 41 MPG overall life-to-date (about 5K miles) w/the hybrid.

Regarding this forums topic - I'm one of those with high car payment(s). I purchased a Bronco Sport Badlands in November 21 and since Ford offered 36-months @ 0% I financed the whole thing, including the taxes and registration. Then when my Maverick got built, I went for 0% 36-month AGAIN (I was grandfathered on that rate deal based on when I ordered it) and Ford AGAIN let me finance the whole thing (w/Taxes). I was quite surprised that Ford would approve the 2nd one.

Between the two vehicles I am close to a 2K monthly payment.

I was going to flip the Maverick after buying the Bronco Sport first especially given how crazy the market has been on the Maverick. I just checked on KBB and average retail for my configuration (Lariat w/Lux Pkg + Co-pilot 360 + Sunroof + hybrid) is easily 10K over what I owe. The "problem" is that I really like it so here I am with four vehicles between two people. (I guess this belongs in the "Blow that dough" thread.)

ETA: I have a friend in the auto repair business. I occasionally help him out with some office computer related stuff. In my conversations with him, he has been very busy with work and that people are keeping their cars longer than usual.

 

[disneysteve]

One thing that you really hear about in the media or even in discussions like this one is the fact that the "average" new car price is just that - an average. It is skewed upward by the big SUVs and luxury vehicles. You don't need to spend anywhere near 47K to get a new car. The 10 cheapest new cars right now are all under 21K. You could get 2-3 of them for the price of that average new car. And of course, there are used cars (which I realize are harder to find right now but that's a recent issue). The most we have ever spent on a car in our lives is 26K, but the media loves to talk about that average number. There's no way we'd ever spend anywhere close to 47K on a car.

 

[captain3d]

Our one car is worth $1,800. If it stops working I have no problem buying another.

 

[SecondAttempt]

One of the more intriguing things Lucky says is that the "chip shortage" no longer exists.

I can assure you he is dead wrong about that. Auto manufacturers may very well be getting what they need so if he qualified it "for auto manufacturers" perhaps he is right, But as an industrial customer buying the same kinds of FPGA and DSP chips they are, the shortage is as bad as ever.

The rise in interest rates will dramatically reduce the price of new and used cars I expect because no one will be able to afford to finance one!

 

[athena53]

The most we have ever spent on a car in our lives is 26K, but the media loves to talk about that average number. There's no way we'd ever spend anywhere close to 47K on a car.

But...but... you're not "on trend"!

 

[Koolau]

Good plan! I always thought my last vehicle would be a sports car previously owned by some Boomer who has aged out of driving. They're all trying to re-live their youth by buying cars which were fashionable when they were young. And, frankly, I think those old cars are cool, too. Maybe one day there will be glut of them on the market which I'll be able to take advantage of.

[Disclaimer: Some would count me as a Boomer, too. I think they're casting too wide a net by extending it to the mid 60's. But in many ways I'm more like that generation than whatever you call us in-betweeners.]

Just reconnected with an old friend who is about 78. His DW is in advanced stages of Alzheimers. He just bought a '04 Vette (automatic.) He admits it's a bit difficult getting in and out, but he loves the car. It's his "escape" from his other reality. Fortunately, he has a decent amount of help with DW so he can run errands in the Vette and not feel too guilty about abandoning her. Oh, and he bought it from a Boomer! YMMV

 

[Out of Steam]

I have a 2017 Subaru Legacy that I purchased 18 months ago. 55K miles. We figure we have at least 5 years on each vehicle.

I have a strange story with my 2015 Subaru Legacy. Because of a long commute, I put almost 120K on it in four years, and it had a fair number of issues between 60 and 100K miles (wheel bearings, several recalls). I wasn't sure it would be a long-term keeper.

Brakes, tires, fluid changes, and battery are the only things I've done to it since 100K miles. It's now at almost 160K, and I suspect that I or a family member will get to 200K with it.

Transmission fluid changes are expensive (specialized fluid), but I would recommend one by 80K if you haven't already done one.

 

[Out of Steam]

My new car was $20K in July, 2020. It's the trucks and tarted-up SUVs that cost $45K. I do get your point though, that more people are willing to buy these crazy-expensive vehicles because of the "easy monthly payments", so manufacturers have responded to the demand by making more of them than plain old sedans.

My wife bought a new sedan early this year for about $24K.

 

[Out of Steam]

Just reconnected with an old friend who is about 78. His DW is in advanced stages of Alzheimers. He just bought a '04 Vette (automatic.) He admits it's a bit difficult getting in and out, but he loves the car. It's his "escape" from his other reality. Fortunately, he has a decent amount of help with DW so he can run errands in the Vette and not feel too guilty about abandoning her. Oh, and he bought it from a Boomer! YMMV

He deserves the enjoyment!

 

[statsman]

Our kid's decision to buy their first new car almost two years ago was timely. Many prices were below sticker at that time, but for some reason, the somewhat loaded up vehicle they purchased was bit over 25% less than MSRP, even lower than the regularly equipped vehicles of the same model with their discounts. It will be paid off this November.

 

[Koolau]

Well now we know Ford's unspecified "supply chain issues" involved the nameplate.

Humorous, but better than it being chips.

Reminds me of the wooden bumpers of cars around the war years. Big scene (once deleted) in God Father movie. Metals were hard to come by (especially chromium, I guess) so many cars came with (or had installed) wooden bumpers.

 

[Chuckanut]

I for one am getting tired of hearing about "supply chain issues" as the source of every problem and deficiency. I now they exist and that some are bad. But, these three words are now used so often by so many people and organizations that one has to wonder.

 

[athena53]

I for one am getting tired of hearing about "supply chain issues" as the source of every problem and deficiency. I now they exist and that some are bad. But, these three words are now used so often by so many people and organizations that one has to wonder.

Well, they can't blame it on COVID anymore.

 

[Andre1969]

Regarding this forums topic - I'm one of those with high car payment(s). I purchased a Bronco Sport Badlands in November 21 and since Ford offered 36-months @ 0% I financed the whole thing, including the taxes and registration. Then when my Maverick got built, I went for 0% 36-month AGAIN (I was grandfathered on that rate deal based on when I ordered it) and Ford AGAIN let me finance the whole thing (w/Taxes). I was quite surprised that Ford would approve the 2nd one.

Between the two vehicles I am close to a 2K monthly payment.

No problem with a high car payment, if you can afford it. And with inflation, it just goes with the territory. Plus, some of those old car payments of years gone by, don't seem so low if you throw inflation into the mix.

For example, there was a famous campaign, "$56 a month for a '56 Ford!" Now, I don't know what the terms of it were. A '56 Ford could be had for as little as $2000 for a totally stripped down base model, but I'm sure a decent one would be around $3K. Anyway, adjusting for inflation, that $56/mo would be about $609 today.

I bought a new 2000 Intrepid in the fall of 1999. Total out the door price was $22,389. I put $2K down, financed the rest at 0.9% for 60 months. Payment was $347.66. Adjusting for inflation, that would be about $618 nowadays.

I bought a new Dodge Ram for around $20,750 out the door, at the end of the '12 model year, in September. I used my uncle's beat-up '97 Silverado for a trade, got $1300. Financed the remaining $19,450 for 5 years at 3.99%. It was $358/mo. Inflation adjusted, $462/mo. So, okay, that one WAS still pretty cheap!

One of my friends, in early 2021, bought a used 2011 Kia Sportage. I forget the mileage, and admittedly it was pretty nice, but still, that sucker was $11,000! Seems like not that long ago, a 10 year old car was something that got wholesaled off unless it was REALLY nice. Or, it was something that you handed down to your kids.

 

[CaptTom]

I for one am getting tired of hearing about "supply chain issues" as the source of every problem and deficiency. I now they exist and that some are bad. But, these three words are now used so often by so many people and organizations that one has to wonder.

I agree the term is over-used, but it is real. The system has had a series of shocks it wasn't designed to handle.

Specifically, the "just-in-time delivery" model, and all the MBA's insisting that inventory is evil, created a very fragile manufacturing environment. Add to that reliance on a small number of offshore manufacturers in a small number of locations. Computer chips are just one example, but you can find many more. The fact that Ford doesn't even have access to their oval badges makes a great headline, but it also shows how bad things have become.

Will manufacturers learn anything from this? I wouldn't bet on it.

 

[Chuckanut]

I agree the term is over-used, but it is real. The system has had a series of shocks it wasn't designed to handle.

Specifically, the "just-in-time delivery" model, and all the MBA's insisting that inventory is evil, created a very fragile manufacturing environment. Add to that reliance on a small number of offshore manufacturers in a small number of locations. Computer chips are just one example, but you can find many more. The fact that Ford doesn't even have access to their oval badges makes a great headline, but it also shows how bad things have become.

Will manufacturers learn anything from this? I wouldn't bet on it.

Can't the dealer just 3D print some badges?

I guess if I was in the market for a Ford, I would take delivery of the vehicle and then use a 3D printer to make a badge of my own choosing for the car. I might even sell a few to the Ford dealer so he can move some inventory. Let's see My Suggest Retail Price for the badge is $60, but add in supply chain issues and extra personal profit, the dealer can have the badge for $87. Sheesh!

 

[JoeWras]

Can't the dealer just 3D print some badges?

I guess if I was in the market for a Ford, I would take delivery of the vehicle and then use a 3D printer to make a badge of my own choosing for the car. I might even sell a few to the Ford dealer so he can move some inventory. Let's see My Suggest Retail Price for the badge is $60, but add in supply chain issues and extra personal profit, the dealer can have the badge for $87. Sheesh!

The article mentions this and the Ford spokesperson said they felt that 3D printed version would be inferior and they didn't want the poor quality.

 

[NW-Bound]

The rental agency gave me an Opel Grandland X Hybrid 4 for my month-long Europe trip. It's a nice plug-in hybrid. I never drove a hybrid before and learned to love this car.

No, I don't plug it in for the trip (they did not even provide a cord), but the larger battery allows regen on long hill descents, which means the mechanical brake is rarely used. This makes for nice fuel mileage when driving in hilly northern Italy.

Out of curiosity, looked up its price, and found it to be 51K euros. It's not cheap.

 

[ncbill]

I for one am getting tired of hearing about "supply chain issues" as the source of every problem and deficiency. I now they exist and that some are bad. But, these three words are now used so often by so many people and organizations that one has to wonder.

I think they've decided to punt on making parts for older vehicles.

They sold over a million of these yet my independent mechanic had to resort to eBay to get parts when the central locking system failed on mine.

 

[disneysteve]

But...but... you're not "on trend"!

I’ve been out of style for 58 years. No reason to stop now.

 

[Koolau]

I agree the term is over-used, but it is real. The system has had a series of shocks it wasn't designed to handle.

Specifically, the "just-in-time delivery" model, and all the MBA's insisting that inventory is evil, created a very fragile manufacturing environment. Add to that reliance on a small number of offshore manufacturers in a small number of locations. Computer chips are just one example, but you can find many more. The fact that Ford doesn't even have access to their oval badges makes a great headline, but it also shows how bad things have become.

Will manufacturers learn anything from this? I wouldn't bet on it.

I remember mgmt. of megacorp sitting down all the staff people and 'splainin' JIT to us. I spoke up (silly me) and asked what if one little supplier failed to meet the required timing. I was told that we would choose suppliers that wouldn't fail. For the next 15 years, I watched failure after failure of JIT. But guess who the brunt of the extra effort fell on. Service groups like mine that had to rush things through once suppliers managed to get their shipments through. Suddenly the JIT was all on us! YMMV

 

[FlaGator]

I remember mgmt. of megacorp sitting down all the staff people and 'splainin' JIT to us. I spoke up (silly me) and asked what if one little supplier failed to meet the required timing. I was told that we would choose suppliers that wouldn't fail. For the next 15 years, I watched failure after failure of JIT. But guess who the brunt of the extra effort fell on. Service groups like mine that had to rush things through once suppliers managed to get their shipments through. Suddenly the JIT was all on us! YMMV

I heard the same thing with IT outsourcing/offshoring. "Won't happen, they're a solid vendor" What happens if the work doesn't get done on time? "Don't worry about it, they know they have to deliver on the contract" What penalties can we impose if they don't? "Well, they are a 'valued partner'"

Have counseled my children to find a satisfying, self-supporting career that can't be off-shored or is painful for their employer to outsource. IOW, get paid to talk to people face-to-face every day.