Record number of Americans cannot make car payments now. Perhaps the solution is to make cheaper cars available? The average new car costs $50,000.

14 comments

1. Buy a used car. When did it become the norm to buy only new cars?

2. You know what will be better for people to afford cars… a tariff.

3. You can’t really get used cars when people don’t buy new cars

4. Source?

   ETA: didn’t read. Got a link?

5. Not to mention, but the price of parts and service will go up. Insurance? Be prepared for a hefty increase to your premium and deductibles. It’s just a hilarious self own, so much winning.

6. There are inexpensive cars out there, people don’t buy them.

   Americans overextend themselves for big HUGE suv and truck things.

7. What’s the reasoning on the yearly cycles? People missing payments until they get their tax refund?

8. This graph is of subprime loans, which represents a fairly small portion of overall auto purchases. Less than 17% of all vehicles that are financed are done through a subprime loan. Prime loans–which represent the lions-share of auto loans–continue to have very low delinquency rates.

   Only people with really bad credit are getting subprime loans to purchase vehicles. Regular dealers, banks and finance companies are not issuing subprime loans–they’ve already turned these folks down. So they go to these shady dealerships that offer subprime loans at exorbitant interest rates.

   For why subprime delinquencies are surging, I think some of it is the flush of money that came during the pandemic, which meant more people who maybe don’t typically have excess cash and have low credit scores had some excess cash, which they could use for a down payment on a car. Subprime default rates were falling at the time (people were more flush with cash), so these shady dealerships specializing in subprime loans could be a bit looser in who they were offering these loans to. The dealership then sends the subprime loans to be securitized into ABS, and you get the current predicament.

9. I just paid my truck off with 2.3% interest rate on a 2019 Ram Rebel with a 5.7 Hemi that I bought for $37,777. I went to look at a new truck… 6 years later… that same truck is $78K with an 8.6% interest rate. Grab some lube, because we are getting screwed.

10. While the *average* price is very high, there are new cars that cost down in the $20,000 range, although thanks to Donnie Dumb, that will soon bump up to the 23,000 range.

    A big part of today’s high prices is attributable to development of highly desirable electronics and safety features, greater fuel efficiency and durability.

    Interestingly, Gemini calculates that a1955 car priced at $2,400 would be worth approximately $20,819.40 in today’s dollars.

    That $2,400 in ’55 would buy you a Ford Fairlane four-door sedan with V8 motor and automatic transmission, vinyl upholstery, carpeting, AM radio, two-tone paint, whitewall tires and backup lights. Or you could buy a similarly equipped Chevrolet or Plymouth sedan for about the same price.

    In those days, after about three years, in northern climates, rust started to appear on the body, the tires needed replacing, a brake job might’ve been in order, and a split or two in the upholstery wouldn’t be surprising. Also, those cars required oil changes and lube jobs every 90 days or 3,000 miles. Safety features? Nada.

    Another reason for today’s high prices is many Americans’ strong preference for BIG. Popular long-bed, four-door pickups are huge compared to what was available 25 or 30 years ago, and they’re typically equipped as luxury rolling land yachts. $60,000-$80,000 each. Those, along with BIG SUV’s, really boost the *average* price.

    It’s always possible to make cheaper cars. The problem is selling them to enough people to make producing them worthwhile for manufacturers.

11. Most discussion here revolve around current car prices and ignore two simple things:

    – Most people will also not be able to make car payments on cheaper cars. Cheaper cars won’t solve that.
    – The main issue being that people HAVE to own a car they cannot afford to own.

12. I mean most people who buy new cars seem to just buy way outside their price range though. Because they want a “cool” car instead of a Hyundai Elantra for 23-24k or a Toyota Corolla.

13. No, the solution has always been denser walkable cities and rapid mass transit.

14. Wish they would copy the 67 VW Beetle. Even without all the fancy gear it would sell

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