Americans Are Falling Behind on Their Car Payments
Americans Are Falling Behind on Their Car Payments
A record number of owners spend more than $1,000 on their monthly car payments. Read on to learn how to cope with payments that are too high.
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Do Americans predominantly buy new cars then? Seems like a really weird thing to do if your cash strapped couldn't you just get a second-hand car?
They car I've got his third hand and other than a minor electrical issue it works fine and I paid the equivalent of about 1000 dollars for it
The used market is terrible. A used crossover or sedan (Camry sized) from 2019 is like $25000. In 2020, it would have been more like $15000 for that SAME year vehicle.
New cars are limited to drive prices up. Also, in the US everyone thinks they need a pickup, Wrangler, or Bronco which are ridiculously marked up.
In 2015 I had a beater I got for $2500 from a third party used car salesman. Those seem to be gone in my area and a beater is now 3x that price.
There are big used-car buying corporations like Carvana that buy up used cars by offering better prices than dealer trade ins.
This means way less used inventory on dealer lots and higher prices across the board, so that means a lot more people need loans to buy cars, and loans are longer with higher rates.
Most Americans live paycheck to paycheck. It's pretty hard to save up enough to buy even a used car cash anyway.
This is also true. No disagreement at all.
A used car in the US will run you 10k easily. And that's just for the oldest stuff they're willing to sell instead of junk.
In a country where people have trouble scraping together an extra few hundred dollars for an emergency expense, that's going to hurt.
And it's not like you can just not have a car. In most of the country having a car is pretty much a requirement.
Very true. The days of cheap beaters are gone. A car from 2009 can cost $10000 it it just looks decent.
I had no idea the used market was this bad in the US. I've never paid more than 3000 Euros for a car here in central Europe and most were in pretty solid condition. Hell, one just cost me 100€ and I drove that thing for 4 years with zero issues.
They're primarily talking about cars from used car lots or dealerships. You can find cheaper cars all day on Facebook. The real cheap beaters are pretty much gone these days but cars are also a lot better built than they were in the 80s and 90s where those uber cheap beaters originated.
It's a covid thing, the lack of new cars caused a supply shock that made everythingmore expensive. The used market is getting better, but there's still really low inventory all around, which is causing higher prices.
I've seen them as low as £500 but never dead get one as I've always assumed that they're secretly some kind of final destination style death trap.
Some definitively are, which is why I do a thorough inspection before I buy. The one and only time I bought one without inspecting it first, it had a hole in one of the front control arms that I could almost stick my hand through...
Used market used to be better-priced, but I felt it was sketchy unless you were handy or "knew a guy" who could repair it. I decided years ago to only buy new so that I knew it was well-maintained and not abused. I make payments into a savings account and pay cash, or if the best offer is a financing offer, I'll take the financing and either make payments or pay it off right away, depending on whether my savings interest is outperforming the rate of the loan. I only buy pretty basic things. Last car was a base model 2010 Mitsubishi Lancer. I'm in a 2022 Honda HR-V now. My next car will probably be something that takes advantage of the EV tax credit before it expires in 2032. Wife and I share one car, for what it's worth, since we work in the same place.
Financial literacy is often lacking amongst the populace.
This, and a lot of young adults getting enlistment bonuses and buying Dodge Chargers. Seems like in Maryland, everyone 18-22 had one with their instagram handle on it.
Used car prices skyrocketed during/post COVID. Still bad now compared to before, but better.
I have no idea why I found this so interesting, but here are some car facts:
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average vehicle age in the US is 12 years (but I believe this counts commercial vehicles, which would skew the number)
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40 million used cars were sold in 2021-22
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new us cars sales are steadily dropping, a trend started before the pandemic, and are hanging out around 12-14MM per year
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most new sales are trucks
https://autoleap.com/blog/how-many-cars-are-sold-in-the-us-each-year/
https://www.marklines.com/en/statistics/flash_sales/automotive-sales-in-usa-by-month-2022
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There’s a sizeable portion of Americans who are obsessed with making sure people know just how rich they are by purchasing the newest, most expensive toys to show off, even if they aren’t rich. In fact, especially if they aren’t rich. Then when they implode, it’s someone else’s fault.
Yeah I feel bad for people struggling right now making payments on some beater.
The people who decided during the pandemic that they needed a $80k truck and suddenly can't afford it. Yeah, I'm not losing sleep.
Us d cars have also skyrocketed. I bought a used NV200 in July with 36,000 miles on it and it's costing me 465 a month for the next 6 fucking years. And I got a really good interest rate.
I buy new which is against the overall trend, but I also tend to drive my cars into the ground and want something functional and warrantied, I don't want second hand issues in the event someone didn't do the regular maintenance and I live in the boonies now where reliable transportation is a must. I'm not interested in "new" just functional.
Last car before this I drove for 14 years and I only traded it in because I needed a CUV crossover to handle light off-road use after moving to a rural area (my old car was a small sedan style hatchback with a fixed suspension). I'd otherwise still be driving the old one I bought in 2006.
My "new" car (bought in late 2020) was fairly cheap as these things go (I got the 2020 model instead of the new 2021) and I paid a third of it cash down and got a 0% APR on it due to a financing deal, so zero interest at all. I'm also paying well above the monthly payments and expect to have it fully paid off within the next year, just because I hate having a car payment. Currently the car costs as much or more on the used market than I paid for it new, and with many more miles on it than I currently have.
Also, in fairness, I can 100% afford it and if needed could pay it off lump sum right now. I don't buy or finance things I can't comfortably afford.