Worried the used car market bubble wont pop anytime soon

[speedfrk]

If you think the used car market is crazy, the collector car/motorcycle market is insane. That's what happens when the Fed dumps 5 trillion dollars into the economy. The money has to go somewhere and inevitably, most of it goes to the people who already have the most.
https://bringatrailer.com/listing/1993-ford-mustang-svt-cobra-r-5/

Sponsored

 

[ICU812]

I've never understood the 72, 84 pmt terms. I mean, if that's the route you need to go, then odds are you can't really afford that vehicle. Again, understand means of transportation, but do people not do basic calculations themselves to see how much they'll really pay (out their a*s)?

Seasonal workers, A job that is only busy part of the year, These type workers need a lower payment for the thin months, most I know, save a set amount of cash for those months and after that pound down their loans, auto or other wise. Never going full term or even half of the loan length , but the lower payment gives them wiggle room in those thin months in case something comes up.
I dod a 72 month on wife's truck because her work is like this, seasonal, makes bank for 8 months and then almost nada for 4, She pays for her truck, and we are on pace to have it paid off in 30 months total. But the low monthly payment helps her make it through those "thin" months. Not everyone buys over their means, some are smart about it.
I've also at times done 72 month, because the 48/60 month interest rates were the same , so 72 month it is, that one was paid in full in 27 payments, other times, when a 24/36/48/60 interest rates were more than the 72 month 0.0% when the rebates were a joke, or when I'd get both the rebates and 0.0% for 72.
Like a credit card with a cash back program, it is all in how you play the game, I could have taken a 36 month note at 2.9% or a 48 or 60 month for 3.9% but why when 72 is zero point zero % and still got the rebate amount taken off after I dickered them down from sticker?

 

[ice445]

Seasonal workers, A job that is only busy part of the year, These type workers need a lower payment for the thin months, most I know, save a set amount of cash for those months and after that pound down their loans, auto or other wise. Never going full term or even half of the loan length , but the lower payment gives them wiggle room in those thin months in case something comes up.
I dod a 72 month on wife's truck because her work is like this, seasonal, makes bank for 8 months and then almost nada for 4, She pays for her truck, and we are on pace to have it paid off in 30 months total. But the low monthly payment helps her make it through those "thin" months. Not everyone buys over their means, some are smart about it.
I've also at times done 72 month, because the 48/60 month interest rates were the same , so 72 month it is, that one was paid in full in 27 payments, other times, when a 24/36/48/60 interest rates were more than the 72 month 0.0% when the rebates were a joke, or when I'd get both the rebates and 0.0% for 72.
Like a credit card with a cash back program, it is all in how you play the game, I could have taken a 36 month note at 2.9% or a 48 or 60 month for 3.9% but why when 72 is zero point zero % and still got the rebate amount taken off after I dickered them down from sticker?

I feel like a lot of people are used to days gone by. The last few years its been better to get the longest term you can if your interest rate is 0%. It's literally free money. A lot of better things you can do with your cash over 6 years especially with how inflation is going.

 

[ICU812]

I feel like a lot of people are used to days gone by. The last few years its been better to get the longest term you can if your interest rate is 0%. It's literally free money. A lot of better things you can do with your cash over 6 years especially with how inflation is going.

Many also forget that today to earn half way decent money you have to take a job that might not be local to you, and might have a 15-50 mile drive one way to work, and you need a vehicle that will get you there without getting put on a hook allot.
It isn't the 50's-80's that you could get a well paying job in most areas in under a 5 mile drive from your home. That ship sailed long ago.
At the end of the day, a used vehicle many times the payment is within 15 bucks of the new one, because of the interest rates on used always being higher than use.
Ans use vehicles prices have been nuts since "cash for clunkers" .
Those that never have had to commute to work in bumper to bumper and it take over an hour on a "good" day, and 90 minutes + on most, will never understand that having a living room on wheels is worth it's weight in gold.
I don't miss those days of having a job that the commute was hell.

 

[Crowd Hunter]

Meanwhile, I bought a carbon fiber steering wheel, and it took one day to get to me from Hong Kong via DHL. The world is a strange place.

 

[Bit_the_Bullitt]

Seasonal workers, A job that is only busy part of the year, These type workers need a lower payment for the thin months, most I know, save a set amount of cash for those months and after that pound down their loans, auto or other wise. Never going full term or even half of the loan length , but the lower payment gives them wiggle room in those thin months in case something comes up.
I dod a 72 month on wife's truck because her work is like this, seasonal, makes bank for 8 months and then almost nada for 4, She pays for her truck, and we are on pace to have it paid off in 30 months total. But the low monthly payment helps her make it through those "thin" months. Not everyone buys over their means, some are smart about it.
I've also at times done 72 month, because the 48/60 month interest rates were the same , so 72 month it is, that one was paid in full in 27 payments, other times, when a 24/36/48/60 interest rates were more than the 72 month 0.0% when the rebates were a joke, or when I'd get both the rebates and 0.0% for 72.
Like a credit card with a cash back program, it is all in how you play the game, I could have taken a 36 month note at 2.9% or a 48 or 60 month for 3.9% but why when 72 is zero point zero % and still got the rebate amount taken off after I dickered them down from sticker?

All good points! I didn't really think of it that way, but yeah, in all honesty I've done it on some of my cars as well, a tad longer term that I then paid off faster.

My point was mostly if someone gets an 84mo term, sticks with it as that's all you can afford and then after 3 years (less than half the term) they want a new car, always being upside down on their loan. That's what I mean by that.

That's the sign of the times though, things are getting expensive, we want the best/newest things and sometimes settling for the less expensive/less new thing is hard for some?

 

[ICU812]

All good points! I didn't really think of it that way, but yeah, in all honesty I've done it on some of my cars as well, a tad longer term that I then paid off faster.

My point was mostly if someone gets an 84mo term, sticks with it as that's all you can afford and then after 3 years (less than half the term) they want a new car, always being upside down on their loan. That's what I mean by that.

That's the sign of the times though, things are getting expensive, we want the best/newest things and sometimes settling for the less expensive/less new thing is hard for some?

Oh, I understand that.
I honestly think If you are a person that gets bored with a vehicle in 2-3 years, you should just lease it, even if you go over the mile limit, (unless you go way way over) it is still a better deal than buying it and owing at trade in.
I tend to hold on to vehicles for 10-15+ years.
This is why I am ok with taking a bath on value the first year or two instead of buying used. I know it's service history from day one.
Some rather not take that hit and buy when the vehicle is 2-3 years old, but you tend to be buying someone else's problem and leased units are driven and cared for like they stole it.
I have no idea what they are teaching in schools today but it isn't basic math.
Or many don't care they just want what they want.
These are the same people that only need a 2 bed one bath home, but NEED that 4-5 bedroom 2.5 bath home, because reasons.

 

[IPOGT]

ships at anchor waiting for Port of Long Beach to unload is all time high, charter rates are >10x normal. Freight forward rates are also obscene. There is severe China -> USA shipping stress. Isn't international trade grand?

I th

Oh, I understand that.
I honestly think If you are a person that gets bored with a vehicle in 2-3 years, you should just lease it, even if you go over the mile limit, (unless you go way way over) it is still a better deal than buying it and owing at trade in.
I tend to hold on to vehicles for 10-15+ years.
This is why I am ok with taking a bath on value the first year or two instead of buying used. I know it's service history from day one.
Some rather not take that hit and buy when the vehicle is 2-3 years old, but you tend to be buying someone else's problem and leased units are driven and cared for like they stole it.
I have no idea what they are teaching in schools today but it isn't basic math.
Or many don't care they just want what they want.
These are the same people that only need a 2 bed one bath home, but NEED that 4-5 bedroom 2.5 bath home, because reasons.

No one "needs" a Mustang either. A car, maybe. A Mustang, no.

 

[ICU812]

I th

No one "needs" a Mustang either. A car, maybe. A Mustang, no.

A mustang is a car. I don't have public transport that covers both home and work area, so a VEHICLE is a REQUIREMENT. Like it is for most folks that don't work from home.
A MUSTANG e/b is a basic 2 door car.
No one NEEDS a gt mustang lol.
That said, even a new gt is cheaper than a f-150 truck .
So there is that.

 

[Ebm]

I th

No one "needs" a Mustang either. A car, maybe. A Mustang, no.

Not to mention the price of a new Mustang over the past decade is really creeping up. Ford is pricing the Mustang out of reach of their target audience.

 

[Smunczen]

Not to mention the price of a new Mustang over the past decade is really creeping up. Ford is pricing the Mustang out of reach of their target audience.

I do agree with that.

 

[Bikeman315]

Not to mention the price of a new Mustang over the past decade is really creeping up. Ford is pricing the Mustang out of reach of their target audience.

The target market for the Mustang has also changed over the years. It has gotten older and more affluent. Also with an average new car price of $38k a moderately equipped Mustang is still a great value.

 

[ICU812]

Not to mention the price of a new Mustang over the past decade is really creeping up. Ford is pricing the Mustang out of reach of their target audience.

I am kinda shocked that a base E/B is a under 30k car.
And frankly, with 310hp and 350ft lb. is faster than 98% of the Fox body/s197 cars when new.
The options add up fast, but the fact that you can buy a 310 hp mustang for under 30k is a shocker.
My 1989 GTA sticker was 32 and change back in 1989.

 

[Strokerswild]

This whole mess is going to come crashing down at some point. Where I work we make steel coils and 75% of our output goes to automotive. About 3 months ago the company started rehabbing old decrepit buildings for coil storage. We keep making steel like there is no tomorrow but it does not ship, it just sits in storage. The steel we are making is already sold, but the auto plants are refusing delivery. At some point the contracts will run out and then what? We are pumping out coils at pre pandemic levels, but the finished product is just trickling out the door.

And sooner or later your company will end up paying tax on all that excess inventory. Then what? As you said, the whole mess is going to come crashing down and I'm not sure any of our crystal balls are all that clear at the moment.

Trickle-down continues to affect my employer as well, and that and the inability to find production workers could make things interesting as we head into our busy season. Couple that with new management in my department (engineering) that many are uncertain of, and I know I'm leery of making any high-ticket purchases. I really want that '22 GT500, but I like being free of debt more, especially right now.

 

[Ebm]

The target market for the Mustang has also changed over the years. It has gotten older and more affluent. Also with an average new car price of $38k a moderately equipped Mustang is still a great value.

The target audience is older and more affluent because younger people can't afford a Mustang. When Ford started price creeping the Mustang, they forced a whole different target audience. I think they will regret doing that in the coming decade or two. When all the older folks who grew up with the Mustang start to pass, the Mustang name won't mean as much and Ford will struggle to sell them without a different approach to the younger generation.

I think the average new car price is heavily skewed by the cost of a new truck these days. Trucks are way overpriced. It's getting out of hand.

Sponsored