Record number of defaults on auto loans

[bronsin]

Could this lead to a recession? I’m hearing 7 million people have defaulted on their car loans. Considering the average car is well over $30,000, that’s almost like the mortgage defaults into thousand and eight leading to a recession. Add in the record number Of the faulted college student loans and we may have a big problem! :w00t:

Could all the safety regulations be making cars so expensive that defaulting on the loans will come back to bite us in the ass? How about trucks? Those damn things are like $50-$75,000 now. And people don’t seem to have a common sense that they can’t afford these things. :eek:

[tmontague]

It's ok, it will all get added to the magical number called the national debt which will is owed to the federal reserve...

[DarkShadowFox]

i defaulted on my loan because i was underpaid and overworked leading to more expenses.

and i owed 10 grand, its because everywheres so expensive to live that you have to room ina crummy shitty rent a room to afford even a basic life or live at home now. idk why people buy cars over 20 grand, what do you need all that shit for? showboating?

[suprf1y]

Could this lead to a recession?

That plus a lot of other things.

I work in an automotive parts plant and it's been very slow for 3 months now. I also deal with a number of automotive machine shops and they've been telling me it's been really slow since January.

It could be coming, we've had a long run.

https://www.bloomberg.com/news/articles/2019-02-12/auto-loan-performance-worsens-on-rise-in-subprime-delinquencies

[tmontague]

idk why people buy cars over 20 grand, what do you need all that shit for? showboating?

You had a whole thread going about how butt hurt you were over Toyota not offering the GRMN state side. Turns out Toyota was right, even its most prolific self appointed GRMN expert wouldn't buy one...

[Hamster]

I don't think it's all the safety regulations. Yes, that adds to the cost of cars, but it's not really that bad. Car prices are still very reasonable. A Kentucky-made Camry LE can be had for as low as $25,000 MSRP, with of course the actual purchase price being a few thousand dollars less than that. I think it's all the SUV's. Pretty much any SUV will cost tens of thousands of dollars more than what a car costs. Everywhere I look I see SUV's, and I don't understand how everyone suddenly became able to afford one. Well, probably they can't. Banks are handing out auto loans like candy. Someone in my family bought a SUV, specifically a fully-loaded Jeep Grand Cherokee, with a loan, for $50,000. And trust me, everything this guy owns is paid for with debt.

[tmontague]

I don't think it's all the safety regulations. Yes, that adds to the cost of cars, but it's not really that bad. Car prices are still very reasonable. A Kentucky-made Camry LE can be had for as low as $25,000 MSRP, with of course the actual purchase price being a few thousand dollars less than that. I think it's all the SUV's. Pretty much any SUV will cost tens of thousands of dollars more than what a car costs. Everywhere I look I see SUV's, and I don't understand how everyone suddenly became able to afford one. Well, probably they can't. Banks are handing out auto loans like candy. Someone in my family bought a SUV, specifically a fully-loaded Jeep Grand Cherokee, with a loan, for $50,000. And trust me, everything this guy owns is paid for with debt.

You're correct, people cannot afford them, they just don't want to come back to reality and admit that because the base Civic doesn't get much social media cred. But a civic type R certainly does - who cares if you can't afford it, you'll get all the likes in the world.

This current generation struggles with the concept of living within their means. I see it with my circle of friends a lott. They drive cars they have no money for, or are therefore car poor and cannot afford anythig else. They then complain that that they still live with their parents while they drive around their $80,000 Challenger Hellcat.

[suprf1y]

It's not just the current generation, they're learning it from their parents and grandparents.

I know people my age with $100k or more on their line of credit, little to no savings, driving new financed trucks and think they're going to retire in a few years.

Not a clue.

[DarkShadowFox]

You had a whole thread going about how butt hurt you were over Toyota not offering the GRMN state side. Turns out Toyota was right, even its most prolific self appointed GRMN expert wouldn't buy one...

i wont buy one if they dont offer it. they decided to make a corolla hatchback, the stupidest waste of money in the world, they had a hatchback, there was no need for it.

why buy one? when i can build it :bellyroll: plus i cant drive manual nobody in the US my age and drive a manual.

id spend alot of money on a GRMN though, the real one from japan, not the one from europe, thats the really bad one.

[DarkShadowFox]

It's not just the current generation, they're learning it from their parents and grandparents.

I know people my age with $100k or more on their line of credit, little to no savings, driving new financed trucks and think they're going to retire in a few years.

Not a clue.


why though.

[DarkShadowFox]

You're correct, people cannot afford them, they just don't want to come back to reality and admit that because the base Civic doesn't get much social media cred. But a civic type R certainly does - who cares if you can't afford it, you'll get all the likes in the world.

This current generation struggles with the concept of living within their means. I see it with my circle of friends a lott. They drive cars they have no money for, or are therefore car poor and cannot afford anythig else. They then complain that that they still live with their parents while they drive around their $80,000 Challenger Hellcat.


but instagram clout and Burnouts BRO look i smoked that minivan :headbang:

[DarkShadowFox]

https://www.bloomberg.com/news/articles/2019-03-13/america-s-most-hated-home-loan-is-staging-a-comeback?srnd=fixed-income

[DarkShadowFox]

You're correct, people cannot afford them, they just don't want to come back to reality and admit that because the base Civic doesn't get much social media cred. But a civic type R certainly does - who cares if you can't afford it, you'll get all the likes in the world.

This current generation struggles with the concept of living within their means. I see it with my circle of friends a lott. They drive cars they have no money for, or are therefore car poor and cannot afford anythig else. They then complain that that they still live with their parents while they drive around their $80,000 Challenger Hellcat.

you know how much social media cred i get for driving my yaris?

20 likes per post.


couldnt be happier.

[suprf1y]

why though.

That looks like a question, though I'm not sure if it is, and if it is, what is it questioning?

[DarkShadowFox]

That looks like a question, though I'm not sure if it is, and if it is, what is it questioning?

why would you spend money you dont have? isnt that the basic rules of economics.

[bairjo]

[QUOTE=bronsin;822868]Could this lead to a recession? I’m hearing 7 million people have defaulted on their car loans.

So is this the last 12 months, the last month? By itself, this number does not tell me much. 7 million out of how many loans? You can have record number...but if the number of loans is a record number also, the 7 million may be at the same percent rate of failure as any other similar time frame. As for who is at fault? "Drive any car in a get $5000 trade in value and you are approved!..as long as you make $200 a week." Of course you are approved. If you fail to make your payment, they just come take your car from you sell it again.

[tmontague]

why would you spend money you dont have? isnt that the basic rules of economics.

In simple terms as it applies to individuals, yes.

Refer to your post (#3)...

[DarkShadowFox]

In simple terms as it applies to individuals, yes.

Refer to your post (#3)...

still will build/ buy a GRMN because its a middle finger to toyota for not making one, hope it pisses them off that in need to mod there crummy hatchback to make it better. good luck getting it back from me .

[suprf1y]

In simple terms as it applies to individuals, yes.



How so?

[DarkShadowFox]

How so?

the rule of economics is dont borrow more then you can afford on a depreciating asset regardless if you can afford it now, can you afford if it you lose your job tomorrow? become injured? die?

[tmontague]

How so?

In business ventures often times money needs to be spent that in order to make money and you run at a loss for the first while.

For individual banking generally not living outside your means is a good choice for sustainable living. This is especially important when buying a depreciating asset like a car

[myfirstyota]

Enter the yaris...

[suprf1y]

That's fiscal policy, not a rule of economics.

Regardless, spending money you don't have, long term, on consumer debt is not a winning strategy no matter how you look at it

[KALISPEL II]

A social & economic crash is coming, & it will make 2008 look like Disneyland.

[bronsin]

Imagine if people making unwise auto loans through the economy into recession...:eek:

[tmontague]

That's fiscal policy, not a rule of economics.

Regardless, spending money you don't have, long term, on consumer debt is not a winning strategy no matter how you look at it

Correct and agreed

[suprf1y]

A social & economic crash is coming, & it will make 2008 look like Disneyland.

You could be right.

And you could be wrong.

Even the 'experts' can't predict it accurately and nobody saw the 08 crash coming. We all think we'll be smarter this time around, but we always think that, and we're always wrong :laugh:

[DarkShadowFox]

Enter the yaris...

if america lessenss its car modification laws all our yarises could be the next best thing and the hottest secondhand tuner car to have on the market,


ADD A TELESCOPING STEERING WHEEL ALREADY.

[myfirstyota]

We're kinda lucky in Canada about that. Ontario anyway. The only times I hear of people getting fines for vehicle modifications is the guys with massive jacked diesel trucks with the dpf system removed. I've never heard of anyone getting a fine for too much power or having their car too low.

[DarkShadowFox]

We're kinda lucky in Canada about that. Ontario anyway. The only times I hear of people getting fines for vehicle modifications is the guys with massive jacked diesel trucks with the dpf system removed. I've never heard of anyone getting a fine for too much power or having their car too low.

its harder here in BOS because we have CARB now, which is great because now my same year same engine swap is more legally regulated and stuff. rather then being an open market and having hondas with just fart cans and cut springs, thank god.

[myfirstyota]

We just got rid of emissions testing. April 1st it's done!

[Hershey]

I remember when people were trying to get out of their large vehicles after Katrina + Rita . Used market flooded and book values plummeted with large SUVs' , etc.. Some even claimed their large vehicle stolen or set them on fire . Just a matter of time for the same scene with high gas prices . Also crazy how many are financing up to 7 or is it 8 years . Talk about being upside down at the end of the loan and get slammed on next loan . Amazing how short memories are . 3 crises due to high fuel cost and likely be others . Time to WAKE UP !

[DarkShadowFox]

We just got rid of emissions testing. April 1st it's done!

yeah we still have it here.

[KALISPEL II]

Most people seem to need a $30-50K new vehicle in order to fit their ego comfortably - and are willing to drown in debt & interest-charges for that ego comfort. Same with their credit cards likely. I personally prefer to be 100% debt free & not paying interest charges to anyone, outside of a reasonable, modest house mortgage perhaps (or auto loan less than $15K over 36-48 months maximum). Better yet, get 1.5 to 5% cash back on your credit cards each month by charging everything possible that you normally would purchase each month & paying it all off each monthly statement cycle.

[Hamster]

Yes, that's exactly what I do with my credit cards. I charge as much as I can, get cash back, and I never carry a balance. Also, doing that establishes a good credit history. That's good for getting a great rate on a mortgage or other loans.

[IllusionX]

I'm in a situation right now where I need a bigger vehicle (35-45k) for the growing family, which I can't afford.

I'm a year or so to finish paying for my 2010 Mazda 5, and I also spent a fuckton on repairs.

It's a huge debate for me now to get another used car vs spending more on a new car.

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[suprf1y]

I'm in a situation right now where I need a bigger vehicle

Need or want?

[IllusionX]

Need or want?Got 3 kids. Needs bigger.

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[tmontague]

I'm in a situation right now where I need a bigger vehicle (35-45k) for the growing family, which I can't afford.

I'm a year or so to finish paying for my 2010 Mazda 5, and I also spent a fuckton on repairs.

It's a huge debate for me now to get another used car vs spending more on a new car.

Sent from my CLT-L04 using Tapatalk

Go used, let the original owner be a sucker and take the loss of it being driven off the lot. Find a used Toyota Sienna and learn as much as you can about them and their potential albeit small issues. You will have a reliable family move for a while.

[DarkShadowFox]

Most people seem to need a $30-50K new vehicle in order to fit their ego comfortably - and are willing to drown in debt & interest-charges for that ego comfort. Same with their credit cards likely. I personally prefer to be 100% debt free & not paying interest charges to anyone, outside of a reasonable, modest house mortgage perhaps (or auto loan less than $15K over 36-48 months maximum). Better yet, get 1.5 to 5% cash back on your credit cards each month by charging everything possible that you normally would purchase each month & paying it all off each monthly statement cycle.

say your average expenses like me, charging a credit card would only net me like 30$ extra a month, dont forget you also have interest tacked on each month.

[myfirstyota]

Go used, let the original owner be a sucker and take the loss of it being driven off the lot. Find a used Toyota Sienna and learn as much as you can about them and their potential albeit small issues. You will have a reliable family move for a while.

+1. I couldn't ever seeing myself buying a vehicle off the lot. Well, maybe with lottery winnings.

A few years ago my mom bought a mini. 3500km on it. Hadn't seen it's first oil change. Called another dealer and asked for the history. Came back clean. Someone bought it, didnt like it and traded it in. She saved $13000 off the out-the-door purchase price.

[KALISPEL II]

say your average expenses like me, charging a credit card would only net me like 30$ extra a month, dont forget you also have interest tacked on each month.

You aren't charged any credit card interest if you pay off your monthly statement balance in full each month. $30 (or whatever) cash-back free money per month is better than $0 free money per month. That is extra free funds that I can donate to various animal rescue organizations, instead of letting the bank keep it for their shareholders.

[WeeYari]

Better yet, get 1.5 to 5% cash back on your credit cards each month by charging everything possible that you normally would purchase each month

+1

My wife rolls her eyes at me each month when she views the statement and sees $1.78 charge for something like a McDonald's coffee. I charge EVERYTHING. She on the other hand is of the mindset that under $20 she'll pay cash, and I roll my eyes at her for leaving rewards on the table.



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[Dodge Aries K]

That is extra free funds that I can donate to various animal rescue organizations, instead of letting the bank keep it for their shareholders.

That is a good idea. I donate and volunteer for the Midwest Shiba Inu Rescue so I'll start doing the same.

[IllusionX]

Go used, let the original owner be a sucker and take the loss of it being driven off the lot. Find a used Toyota Sienna and learn as much as you can about them and their potential albeit small issues. You will have a reliable family move for a while.Yeah, I've been looking at used cars as well to get an idea what to expect. I wish to be able to find some almost new car and save 10k. But so far what fits out budget are mostly 5-6 years old. We have to live with what we have until the last car is paid off first, so it's not going to be another year or so..

What I really like is a Kia Sorento right now. We'll see down the road what comes up.

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[ern-diz]

You could be right.

And you could be wrong.

Even the 'experts' can't predict it accurately and nobody saw the 08 crash coming. We all think we'll be smarter this time around, but we always think that, and we're always wrong :laugh:

There were people that saw the 08 crash coming and some of those same folks are piping up again. Never stopped, really.

[suprf1y]

Who?

[KALISPEL II]

All the signs are there.

- Crazy Auto loan bubble.
- Crazy College loan bubble.
- Middle-class pretty much extinct as a single-income household.
- Consumer-driven-economy full of mostly lower-income, debt-ridden consumers.
- Cost of living becoming untenable for most Americans - most especially those in 'single-income households', and/or with children.
- Deficits as a country beginning to reaching the point of no return.

It's like watching a balloon fill with air & waiting for that bursting point. A tiny tiny segment of the population is getting richer & richer in a rigged/corrupted system, while everyone else sinks or barely stays afloat. That never tends to end well, from a historical perspective.

[antiquantum]

Thanks for the information.

[momentumglue]

It seems to me that it's not about people who just want a basic necessity, but globally about economics, or more precisely about monopoly. Too high prices for cars have led to exactly the consequences that you described. What if someone really needed a truck? If prices were at least a little lower, it`d be simpler for people. I remember when I needed a car, for work in the first place, I realized that if not a loan, I would never be able to afford it. I applied for a loan on the advice of my friend at Mortgage Broker London (https://Londonmoneyman.com), who had also taken a loan from them. I`m still paying it off, more than half of it is already paid off and I don't regret.

[GrasityFox]

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