• booly@sh.itjust.works
    link
    fedilink
    arrow-up
    1
    ·
    59 minutes ago

    The explanation is pretty mundane.

    The last 2 years have seen really, really fast depreciation, because the car shortage of 2020-2022 drove up cars way beyond their normal prices. Some cars actually appreciated in value in 2021.

    So when the shortage untangled eventually, used car prices plummeted. Here’s a chart of the most robust used car price index.

    At the same time, several EVs saw huge price drops as Tesla tried to preserve market share against increased competition. When the new car drops in price by $20k, then the used market for that car similarly drops suddenly.

    So when the value of vehicles drops unexpectedly across multiple markets, you’ll have a lot more people whose car values failed to keep up with their loan balances.

  • GissaMittJobb@lemmy.ml
    link
    fedilink
    arrow-up
    4
    arrow-down
    1
    ·
    2 hours ago

    Yet another reason why car-focused transportation is a hilariously dumb idea.

    Build some transit already

    • Flocklesscrow@lemm.ee
      link
      fedilink
      English
      arrow-up
      2
      ·
      1 hour ago

      *siphons all the funding away to cronies and general corruption

      “See? Mass transit just doesn’t work here.”

  • Obi
    link
    fedilink
    arrow-up
    5
    arrow-down
    1
    ·
    8 hours ago

    Feels good to be completely debt free on the cars. Yes it meant when my work car started showing issues, I had to review my expectations when going electric and couldn’t get the van/large car I thought I needed and we downsized to a hatch back instead, but truthfully I think that was a kick in the nuts I needed to realise I was getting pulled into a weird spiral of thinking I always need more, when really 99% of the time I’m fine in a small vehicle (and it’s so much nicer to drive and get around in). For these few times stuff won’t fit I’ll use our older ICE which is a bit more spacious, and when that’s not enough I’ll rent a van and bill it to the client!

  • Kairos@lemmy.today
    link
    fedilink
    arrow-up
    19
    arrow-down
    1
    ·
    15 hours ago

    An increasingly large number of Americans owe more on their auto loan than their car is worth

    So thats what it actually means.

    • stoly@lemmy.world
      link
      fedilink
      arrow-up
      12
      ·
      14 hours ago

      The same term is used with housing and perhaps anywhere a loan is involved with yes purchase of property.

      • Obi
        link
        fedilink
        arrow-up
        2
        ·
        8 hours ago

        But in the case of (new) cars isn’t this applicable to literally everyone the moment they drive off the lot? Like it’s gonna take a while untill the loan payments catch up to the depreciation of a new car.

        • booly@sh.itjust.works
          link
          fedilink
          arrow-up
          1
          ·
          1 hour ago

          Most people make a down payment so that their loan balance starts off being significantly lower than the value of the car.

        • SoJB@lemmy.ml
          link
          fedilink
          English
          arrow-up
          8
          ·
          edit-2
          6 hours ago

          This might be a bit controversial

          But if you can’t afford to buy the vehicle in cash, you can’t afford the vehicle.

          This is the inherent evil in the spread of Western values. Build car centric societies. Keep people poor, keep them dumb, and keep them fat.

          • Obi
            link
            fedilink
            arrow-up
            3
            ·
            5 hours ago

            I totally agree, and proudly own our vehicles outright! Don’t care if they’re a bit older.

            • Fredselfish@lemmy.world
              link
              fedilink
              arrow-up
              1
              ·
              3 hours ago

              Damn skippy. We own all our cars hell just bought a 20 year old truck for 3300. Fuck paying 40 to 90k on fucking car. Plus all the computer bullshit where it can be expensive to fix, or worse car companies can shut down features or put them behind paywalls. Not happening for me.

              I rather we had better public transportation though and not have to rely on cars to get around if I could I rather only have a small car or van that you use for long road trips and commute by bus or train.

      • Kairos@lemmy.today
        link
        fedilink
        arrow-up
        5
        ·
        14 hours ago

        Part of me thinks this [the article] is entirely false due to the fact that as soon as someone buys a new car and finances it, they owe more on the loan than the car is worth due to the drive-off value drop (blanking on the actual name)

        But I didn’t actually read the article, and intuitively I know that the face value conclusion is very likely correct.

  • WoahWoah@lemmy.world
    link
    fedilink
    arrow-up
    28
    arrow-down
    3
    ·
    17 hours ago

    How else can I buy the newest Ford “own the libs” truck with the lift kit and coal-rolling accessories?

    • Mac@mander.xyz
      link
      fedilink
      arrow-up
      9
      arrow-down
      3
      ·
      13 hours ago

      Funny, but let’s not pretend this is solely a conservative issue.

      People want to own nice shit with modern amenities that’s newer so they dont have to mess with it and i don’t blame them. That’s absolutely reasonable. It’s just crazy expensive and many loans are predatory.

        • Mac@mander.xyz
          link
          fedilink
          arrow-up
          1
          arrow-down
          5
          ·
          11 hours ago

          And people deserve lots of things whether or not the market values them highly.

          • WoahWoah@lemmy.world
            link
            fedilink
            arrow-up
            5
            arrow-down
            1
            ·
            edit-2
            5 hours ago

            People deserve nice, newer cars with modern amenities even if they can’t afford it? Yeah, you’re correct: that does seem to be the mindset of the people I know with nice, new cars that cost more each month than their rent. Not sure I agree with the idea that they “deserve” them. But, then, I’m not sure anyone “needs” or “deserves” new cars just because they want “nice shit.” Very modern capitalist of you though.

  • Gerudo@lemm.ee
    link
    fedilink
    arrow-up
    3
    ·
    11 hours ago

    Most people go for low money down offers on loans and stay upside down for at least half the life of the loan.

  • Fosheze@lemmy.world
    link
    fedilink
    English
    arrow-up
    25
    arrow-down
    2
    ·
    17 hours ago

    I’ve only ever bought like 20 year old used cars. I can’t even comprehend how anyone has enough money to afford a new car. It’s not even the price of the car itself, which is always absurd anyways, but the cost of insurance on a car that new and registration is also just insane. A friend of mine recently bought a car that was only 5 years old and their payments including insurance and everything are still almost as much as the mortgage on my house. It’s no wonder everyone is under water with their car loans.

    • BruceTwarzen@lemm.ee
      link
      fedilink
      arrow-up
      3
      ·
      7 hours ago

      When the pandemic hit, i was just looking for a car. A lot of people back then were selling the cars they haven’t payed off yet. I was truly shocked to find out that some people spend like 1300 a month on car payments.

        • Fosheze@lemmy.world
          link
          fedilink
          English
          arrow-up
          11
          ·
          14 hours ago

          Nope. 2021. It just looks like a place where people turn into missing persons and it’s in a fairly low COL city. I am also just barely scraping by on the payments until the PMI drops off.

      • Fosheze@lemmy.world
        link
        fedilink
        English
        arrow-up
        6
        ·
        14 hours ago

        Picked myself up a crack den (not literally but might as well be) like 8 years ago. My dad built houses and taught me how to do most of the work so I bought a cheap place I knew I could eventually fix. Also in a fairly low COL area. So a shit house in a fairly cheap city in a cheaper housing market. It was either that or just accept never owning a house so I jumped on it and just barely scrape by.

        My mortgage payments cost me just as much as renting a slightly nicer house in my area so the point still stands that my friend is paying nearly as much for their vehicle per month as most people here pay in rent.

        • SpaceNoodle@lemmy.world
          link
          fedilink
          arrow-up
          3
          ·
          13 hours ago

          Well, it’s not exactly fair to compare a crack house in crackville - which I’m picturing as Mantua, OH - to the average house, let alone any place in an urban area. But congratulations all the same.

          • bizarroland@fedia.io
            link
            fedilink
            arrow-up
            3
            ·
            15 hours ago

            There were a lot of cheap houses available in 2012 through 2014, the problem was having the credit you needed to get one of them.

            I recently saw a house that I saw for sale back in 2013 for $75,000 on the market for $530,000.