Car Talk 1: Passengers matter

[ChrisoftheNorth]

Its just like the mortgage thing. Mortgage BRO wanted to know what I made including bonuses and overtime. But why. Why would ANYONE base their financials to require overtime to balance them out?

[Johnny_P]

Its just like the mortgage thing. Mortgage BRO wanted to know what I made including bonuses and overtime. But why. Why would ANYONE base their financials to require overtime to balance them out?

So many fucking idiots at work do this. Hourly mechanics buying Escalades and whatnot. I mean good for them, that's a nice truck. But if the OT gets slashed it's getting repo'd. It has happened to a few of them over the years.

[Johnny_P]

One guy got so pissed that OT was getting slashed that he punched out the glass on a pressure gauge in one of the control rooms and needed stitches. Fucking retard. He had bought 2 new cars that year and just got a boat.

[Apex]

So many fucking idiots at work do this. Hourly mechanics buying Escalades and whatnot. I mean good for them, that's a nice truck. But if the OT gets slashed it's getting repo'd. It has happened to a few of them over the years.

Dang...

[ChrisoftheNorth]

So many fucking idiots at work do this. Hourly mechanics buying Escalades and whatnot. I mean good for them, that's a nice truck. But if the OT gets slashed it's getting repo'd. It has happened to a few of them over the years.

[Apex]

One guy got so pissed that OT was getting slashed that he punched out the glass on a pressure gauge in one of the control rooms and needed stitches. Fucking retard. He had bought 2 new cars that year and just got a boat.

What got repo'd first?

[ChrisoftheNorth]

One guy got so pissed that OT was getting slashed that he punched out the glass on a pressure gauge in one of the control rooms and needed stitches. Fucking retard. He had bought 2 new cars that year and just got a boat.

Because of course he did.

[Johnny_P]

One guy got so pissed that OT was getting slashed that he punched out the glass on a pressure gauge in one of the control rooms and needed stitches. Fucking retard. He had bought 2 new cars that year and just got a boat.

What got repo'd first?

I have no idea, the plant closed down like a month after that. So probably all of them.

[max225]

So many fucking idiots at work do this. Hourly mechanics buying Escalades and whatnot. I mean good for them, that's a nice truck. But if the OT gets slashed it's getting repo'd. It has happened to a few of them over the years.

Where is this?

[Johnny_P]

One guy got so pissed that OT was getting slashed that he punched out the glass on a pressure gauge in one of the control rooms and needed stitches. Fucking retard. He had bought 2 new cars that year and just got a boat.

Because of course he did.

I mean, many middle class white suburban people who go to decent schools and whose parents drive 15 year old Hondas and their dad is middle management don't have to worry about this shit. But its a reality for a giant part of the working population in the US. I think we do a horrible job as a nation, preparing our young ones for real life. Basic economics and personal finance should be taught in high school.

[Johnny_P]

So many fucking idiots at work do this. Hourly mechanics buying Escalades and whatnot. I mean good for them, that's a nice truck. But if the OT gets slashed it's getting repo'd. It has happened to a few of them over the years.

Where is this?

oil refinery
turbine manufacturing facility
anywhere industrial

[max225]

http://www.usatoday.com/story/money/car ... qV.QTfmZtA

Record number of car buyers 'upside down' on trade-ins


DETROIT -- The wave of easy credit and longer auto loans has left a record percentage of consumers trading in vehicles that are worth less than what they owe on their loans.

In auto finance parlance, these folks are underwater, or upside down. They already are affecting the market as automakers boost incentives and subprime lenders monitor their delinquency rates more closely.

So far this year, a record 32%, or nearly one-third, of all vehicles offered for trade-ins at U.S. dealerships are in this category, according to research by Edmunds.com. When these people go to buy a new vehicle they must add the difference between their loan balance and the vehicle's value to the price of the one they want to buy.

For perspective, the lowest the underwater percentage has been was 13.9% in 2009, the depths of the Great Recession when credit was tight. The previous high was 29.2% in 2006, about when the housing market was near its frothiest point.

“There’s been a lot of water building behind this dam for some time because of higher transaction prices, lower down payments and long-term loans," said Greg McBride, chief analyst with Bankrate.com, a consumer finance information service.

The average new car loan is for 68 months, according to Experian Automotive, which tracks the auto finance market. But subprime borrowers, generally those with FICO credit scores in the low 600s or lower, are borrowing over an average of 72 months, or six years.

While those loans reduce monthly payments, they also mean that the buyer's equity, or the portion of the loan principal paid off,grows more slowly than the vehicle depreciates.

"It’s problematic for the consumer because there’s no foolproof way to eliminate his financial exposure," McBride said. "If the car gets stolen, is totaled or you get new car envy while you’re upside down then it’s a big problem."

This is happening as the average selling price of a new vehicle is near a historic high of about $34,000. Some of that increase is driven by consumers' preference for larger, fully equipped pickups, SUVs and crossovers.

The result is consumers borrow more to get the vehicle they want. The average new auto loan was $29,880 in the second quarter of this year, according to Experian Automotive. That's 4.8% higher than a year earlier.

Moreover, leasing, which has reached record levels of more than 30% of all vehicle sales, has grown more popular for several years.

Already, especially in segments such as subcompact, compact and midsize cars, used car values are falling as a wave of 3-year-old models are returned by lessees. This increased supply is pushing down the price dealers are willing to pay for them at auctions.

Just last week, Ford Chief Financial Officer Bob Shanks told analysts that the company's finance arm, Ford Credit, cut its forecast for 2017 pretax profits because of declining auction values for used cars.

Credit agencies, such as Moody's, Standard & Poor's and Fitch, so far, have expressed mild concern about the trend. Their focus is on the $38-billion market for securities backed by auto loans. These are bundles of auto loans, similar to the tranches of mortgages that collapsed in the 2008 crash of the housing bubble.

But they are also different. History shows borrowers are more likely to stay current on their car loans than on their house payments if the economy weakens. Lenders can repossess automobiles more quickly than it takes for mortgage holders to foreclose on a house.

Fitch reported that 60-days-plus delinquencies on subprime auto loans rose to 5.05% in September, the second highest level since 2001, and 13.2% higher than a year earlier.

"When you look at recessionary levels where unemployment was near 10% in 2009 and late 2008, we touched 5.04%," said Hylton Heard, senior director at Fitch Ratings. "Today you’re pretty much at that peak."

Fortunately, unemployment is down to 4.9% nationally. Prime borrowers have a 60-day delinquency rate of only 0.44%. Those factors tend to offset the higher risk in the subprime market.

New vehicle sales are expected to continue slightly below their record year-ago levels in November, according to J.D. Power and LMC Automotive.

Yet even their forecast flags some warning signs.

Incentive spending -- discounts or extras to lure buyers to close a deal -- in early November rose to $3,886 per vehicle, up 15% from $3,374 from November 2015 and the second-highest level ever behind the record $3,939 set in September.

"People's monthly payments are being kept very low by low interest rates that most manufacturers are willing to subsidize," said Ivan Drury, senior analyst at Edmunds.com. "But if we see those rates go up a bit, some of these people won’t be able to afford their cars."

Middle class getting pinched hard. Wage stagnation, but vehicle prices keep climbing. And people getting tricked into buying these more expensive cars on stretch pay to meet their monthly payment targets.

I have been bitching about this for a long time... it just keeps snowballing with every new report.

The average american can not afford the average vehicle purchase. Unless that shit stops... this madness will continue. You should be capped at 30% of your gross pay for car payments similar to a mortgage.

[max225]

Where is this?

oil refinery
turbine manufacturing facility
anywhere industrial

Some of those dudes make bank though... at least out here... especially when in a Union... ~40+ an hour plus

[max225]

Because of course he did.

I mean, many middle class white suburban people who go to decent schools and whose parents drive 15 year old Hondas and their dad is middle management don't have to worry about this shit. But its a reality for a giant part of the working population in the US. I think we do a horrible job as a nation, preparing our young ones for real life. Basic economics and personal finance should be taught in high school.

I am surrounded by AZNs that buy 2 million dollar houses, and drive 2001 Corollas, I suppose it is just a function of mental retardation and lack of common sense.

I mean how STUPID do you have to be to do that... its arithmetic that is taught in elementary school not rocket science.

[Johnny_P]

http://www.usatoday.com/story/money/car ... qV.QTfmZtA



Middle class getting pinched hard. Wage stagnation, but vehicle prices keep climbing. And people getting tricked into buying these more expensive cars on stretch pay to meet their monthly payment targets.

I have been bitching about this for a long time... it just keeps snowballing with every new report.

The average american can not afford the average vehicle purchase. Unless that shit stops... this madness will continue. You should be capped at 30% of your gross pay for car payments similar to a mortgage.

All those good rules of thumb are out the window breh. Almost everyone who lived through and was affected by or remembers the great depression is dead at this point.

[Tar]

http://www.usatoday.com/story/money/car ... qV.QTfmZtA



Middle class getting pinched hard. Wage stagnation, but vehicle prices keep climbing. And people getting tricked into buying these more expensive cars on stretch pay to meet their monthly payment targets.

What could go wrong?

[Johnny_P]

I mean, many middle class white suburban people who go to decent schools and whose parents drive 15 year old Hondas and their dad is middle management don't have to worry about this shit. But its a reality for a giant part of the working population in the US. I think we do a horrible job as a nation, preparing our young ones for real life. Basic economics and personal finance should be taught in high school.

I am surrounded by AZNs that buy 2 million dollar houses, and drive 2001 Corollas, I suppose it is just a function of mental retardation and lack of common sense.

I mean how STUPID do you have to be to do that... its arithmetic that is taught in elementary school not rocket science.

Problem is, you can't assume Jr is actually being taught that. Most if not all the financial stuff I know was taught to me by my parents. Or it wasn't and I had to experience it myself. Taking a personal finance course in college was a help for sure.

[Davestr]

Classic dill. Well done Hows the house shaping up!!

Should be getting painted this week!

[Tar]

This is how we end up with V6 Camaro's with $800+ monthlies.

gasm:

This is how we end up with V6 Camaro's with $800+ monthlies.

My buddy has a 4-banger for $800/mo.
ol:

gasm:

It's his dream car, doe...

gasm:

[max225]

I have been bitching about this for a long time... it just keeps snowballing with every new report.

The average american can not afford the average vehicle purchase. Unless that shit stops... this madness will continue. You should be capped at 30% of your gross pay for car payments similar to a mortgage.

All those good rules of thumb are out the window breh. Almost everyone who lived through and was affected by or remembers the great depression is dead at this point.

Ppl should remember the "Great recession" which was what.... 7-8 years ago?

not taking everything into consideration when making the second biggest purchase of your life is just stupid.... I mean ppl line up for black friday sales for HOURS and research all that junk for weeks preceding a $199 TV purchase. However going into a dillershit and dropping $30k seems like an afterthought.

Which is why I constantly bitch about (from all evidence not those on this forum) and the whole what's another $500 ? That's 1% of the purchase price of the car.

It is a PREDATORY industry that PRAYS on the incompetence and emotion of those seeking new vehicles. There is no other industry like it in the US. Other than Pharma which is probably even worse, but that's another story...

[max225]

Leasing prevents you from being upside down. IMO it is the way to go right now.
Soon enough leasing payments will EXCEED the actual monthlies for stretch pay so leasing will once again fall out of favor though.

[Johnny_P]

All those good rules of thumb are out the window breh. Almost everyone who lived through and was affected by or remembers the great depression is dead at this point.

Ppl should remember the "Great recession" which was what.... 7-8 years ago?

not taking everything into consideration when making the second biggest purchase of your life is just stupid.... I mean ppl line up for black friday sales for HOURS and research all that junk for weeks preceding a $199 TV purchase. However going into a dillershit and dropping $30k seems like an afterthought.

Which is why I constantly bitch about (from all evidence not those on this forum) and the whole what's another $500 ? That's 1% of the purchase price of the car.

It is a PREDATORY industry that PRAYS on the incompetence and emotion of those seeking new vehicles. There is no other industry like it in the US. Other than Pharma which is probably even worse, but that's another story...

Preaching to the choir here Max. GF and I were just texting about this. How the $2k off morphed into $1600 off after explained that the costco price is an estimate. Which I'm not really buying, it sounds like a load of BS because GF's dad has bought 3 cars through costco now and the price they email you is the damn price.

Just more fucking games. The whole industry is based on hiding things and fucking people over.

[ChrisoftheNorth]

Ppl should remember the "Great recession" which was what.... 7-8 years ago?

not taking everything into consideration when making the second biggest purchase of your life is just stupid.... I mean ppl line up for black friday sales for HOURS and research all that junk for weeks preceding a $199 TV purchase. However going into a dillershit and dropping $30k seems like an afterthought.

Which is why I constantly bitch about (from all evidence not those on this forum) and the whole what's another $500 ? That's 1% of the purchase price of the car.

It is a PREDATORY industry that PRAYS on the incompetence and emotion of those seeking new vehicles. There is no other industry like it in the US. Other than Pharma which is probably even worse, but that's another story...

Preaching to the choir here Max. GF and I were just texting about this. How the $2k off morphed into $1600 off after explained that the costco price is an estimate. Which I'm not really buying, it sounds like a load of BS because GF's dad has bought 3 cars through costco now and the price they email you is the damn price.

Just more fucking games. The whole industry is based on hiding things and fucking people over.

Wait, they're not honoring the price Costco emailed you? They can't do that and it's breach of contract with Costco...or at least it was.

[Johnny_P]

Leasing prevents you from being upside down. IMO it is the way to go right now.
Soon enough leasing payments will EXCEED the actual monthlies for stretch pay so leasing will once again fall out of favor though.

Leasing is not bad at all. You get a rock solid number that you pay monthly for your new car, and at the end of the term that's it. You're not on the hook for market fluctuations.

The problem is if you get laid off or work changes or something to where you need to off the lease. As you're experiencing, that is much stickier than selling a car.

[max225]

Ppl should remember the "Great recession" which was what.... 7-8 years ago?

not taking everything into consideration when making the second biggest purchase of your life is just stupid.... I mean ppl line up for black friday sales for HOURS and research all that junk for weeks preceding a $199 TV purchase. However going into a dillershit and dropping $30k seems like an afterthought.

Which is why I constantly bitch about (from all evidence not those on this forum) and the whole what's another $500 ? That's 1% of the purchase price of the car.

It is a PREDATORY industry that PRAYS on the incompetence and emotion of those seeking new vehicles. There is no other industry like it in the US. Other than Pharma which is probably even worse, but that's another story...

Preaching to the choir here Max. GF and I were just texting about this. How the $2k off morphed into $1600 off after explained that the costco price is an estimate. Which I'm not really buying, it sounds like a load of BS because GF's dad has bought 3 cars through costco now and the price they email you is the damn price.

Just more fucking games. The whole industry is based on hiding things and fucking people over.

Yea in your case unfortunately the price is the price... I know that they literally don't discunt that model period. And getting even $1 off sticker is "winning" Considering the amount of time and dealers you polled on the topic I think the 1400-1600 is as GOOD as it'll get for that particular vehicle.

You're actually one of the few ppl that follows a cool and calm approach to car buying vs the whole ... LEMME BLOW MY LOAD RIGHT NOW AND WALK IN THERE AND MAKE A DEAL.
You never make a deal... like that... not with how the cards are stacked against you.