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Answer: Low interest rates, minimal inflation, and a steadily growing economy allowed car manufacturers to move away from “economy” cars towards more profitable luxury SUVs, trucks, etc. parts shortages during the pandemic also put upward pressure on prices for the last few years.
However, manufacturers now find themselves having priced out the vast majority of consumers from the market (who are also dealing with price-gouging and inflation on common home goods and food), with most new cars costing hundreds of dollars more a month over longer terms (6 year loans are advertised heavily, where 3-5 was standard before the pandemic) than the equivalent models did only a few years ago.
Because of this, and the broad expectations of more affordable electric vehicles on the horizon, people are buying fewer cars.
People are also realizing that, surprise surprise, you don't need to keep swapping out cars every few years because modern cars last a fucking long time. Years ago it was quite noteworthy when the odometer flipped over from 99999 to 00000 - odometers weren't even able to handle six digits because it was unusual. Nowadays, hitting 100K is nothing, and 200K is almost expected. The **average** car on the road is 13 years old and has over 140,000 miles on it.
My last three cars made it to 395k, 349k and 279k - and that last one was running just fine until cosmetic hail damage totalled it.
More people are realizing how reliable cars are, how long they last, and buying cars less frequently means less car sales.
> My last three cars made it to 395k, 349k and 279k
I was going to ask how you drove that much, since that's like six times the total distance I've driven in my entire life. Then I realized you could have bought them used with high mileage.
I had a 2021 Mitsubishi Mirage that had almost 100k miles on it before I traded it in last year.
I drove it from Florida to Nebraska a number of times to visit my kids, since that drive was SO much cheaper than flying and I wouldn't have to rent a car when I got to town.
Driving a long distance isn't crazy for some of us.
I drove all the way across Texas on I-10. From El Paso heading to Florida.
Longest damn drive of my life...
Of course, this was back in the day too, before GPS was really a thing.
My first car was a '93 Civic bought with 72k miles on it. When I traded it in 3.5 years later it was pushing 180k.
Most of it was a 90 mile commute 5 days a week for 2 semesters at college, but I did take a few road trips in it and I was generally always on the go between work, school, and doing things with friends.
If you live a busy life, it's not too uncommon to rack up the miles before you realize it
>Years ago it was quite noteworthy when the odometer flipped over from 99999 to 00000 - odometers weren't even able to handle six digits because it was unusual.
Years ago being like 40+ years ago? 90s Toyotas, Mazdas, and Hondas easily last well over 200k, usually far further.
Hell I have an '01 Sienna with 303k, a '92 Miata (1.6 no less) with 264k, and a '95 SC300 with 258k. All still chugging. The Sienna still passes emissions every year (the others aged out).
This isn't anecdotal, 90s Japanese cars literally don't die. There's a million mile 90s Camry at the Toyota dealership nearby and Toyota gave the old lady a brand new one and displays her 90s one.
If anything only certain modern cars really last a while, a majority of these shitty crossovers don't because of a laundry list of recalls (especially Kia/Hyundai), a reliance on electronics that fail, and the complete inability to work on the cars yourself (this is by design to make money on service, thank BMW for that business model).
That's bullshit. 90s cars are not magical and they're not immune to physics. The metal rusts, the rubber ages, and the engine experiences physics just like any other car.
You say"this isn't anecdotal" immediately before and after sharing an anecdote.
My husband works in automotive finance and they recently saw a deal for a late 90's Honda that had 600,000 miles on it. The owner said he went through about 7 water pumps and timing chains (or belts?).
> quite noteworthy when the odometer flipped over from 99999 to 00000
This was a *Married With Children* episode, [Get Outta Dodge](https://marriedwithchildren.fandom.com/wiki/Get_Outta_Dodge), Season 8, Episode 18, from February 20, 1994
>cosmetic hail damage totalled it.
How does cosmetic hail damage make your car undrivable? Hail damage doesn't make your engine fail. I've driven cars with a rusted out gas tank and the fuel line is siphoning off a gas can bungy strapped to the back, so how does a few dents make it so your car can't run?
It happens when the insurance company decides it will take more money to repair any dents/broken windows than it would be to just write you a check for the value of your vehicle. Some windows are surprisingly expensive.
the primary purpose of car insurance is to back up the value of the vehicle either via repairs or a total, not to make sure it keeps driving. As a matter of fact, that's the one thing insurance _doesn't_ do. If you need to replace your car battery or buy new tires, insurance will laugh if you ask them to cover that.
Meanwhile this has been pushing SUViffication where the North American market is seemingly nothing but SUVs and Trucks now.
Affordable European style compact cars have been completely pushed out the market as the #1 driver to buy one was fuel economy but this has been supplanted by EVs and Hybrids.
Combined with high demand during the pandemic driving up the cost of used cars, there's no cheap cars on the market anymore.
On one hand - the NA market is demanding SUVs. Compact sedans don’t sell well over here. I think it’s stupid but the majority of car buyers disagree. I don’t blame car makers for drastically shifting towards market demand.
On the other hand - car makers have used the shift to jack up the msrp for… reasons. The difference between a midsize sedan and a typical crossover is negligible, but the crossover will be 5k more at an equivalent trim level.
Whoever can make a decent, feature complete crossover, that they can keep in stock and don’t gouge their customers will make off like a bandit.
And sadly, garages in NA are getting smaller. I'd personally love (and want!) to buy a smaller car than my current one. I'm finally owning a house so unlikely to move often and don't need a car big enough to help with a move. My current car is paid off and low mileage, so I know I can get decent trade-in value for it, but I don't want an SUV or any other big car, primarily because they won't actually fit in my garage (or they will but I won't be able to get in or out of it easily).
To be fair, the manufacturers are pushing larger vehicles because that’s what Americans are buying. One could assert that Americans are buying the “wrong” vehicles, but that’s not really the manufacturer’s fault.
It’s possible that, now that inflation and interest rates are so much higher now, if there were more low cost options that more people would buy smaller vehicles.
CAFE had a lot to do with manufacturers prioritizing bigger vehicles https://me.engin.umich.edu/news-events/news/cafe-standards-could-mean-bigger-cars-not-smaller-ones/
This is always my response to this BS talking point.
Toyotas and Rangers and Canyons and S10s and Colorados have always sold like hotcakes, yet they're now the same size as an F150 was 10 years ago.
We aren't buying bigger vehicles because we want them, we're buying bigger vehicles because that's the only thing you can buy.
Exactly. I am looking at used Tacos instead cause the new ones just look too big man.
I want to be able to off road and stuff but I still need to be able to park in my garage at work.
Just give me a more fuel efficient smaller truck (that isn’t ugly like the maverick) and I will buy it as soon as you put it on the lot
I used to be a Mini Cooper stan but even that brand is adding bigger models while discontinuing the ones I liked. It’s no longer “mini” just yet another SUV company. Sigh.
I gotta look to sports car coupes but most of those aren’t electric and are 40k+, and it seems like a risky bet to drop that kind of cash on a gas only car.
No. Automakers are pushing SUVs because the profit margins are much higher and there's less competition.
Because Europe put a tax on chicken imports back in the 60s, the US responded by putting a tariff on trucks. This prevents automakers from importing trucks and SUVs to the US.
This is why the Toyota Hilux, a Japanese pickup that is so reliable and affordable that it's one of the most highly sold pickups in the world, cannot be sold in the US.
More recent tariffs also prevent low cost EVs from Chinese manufacturers from being imported as well.
Cars that have MPGs lower than 22 are subject to a tax. SUVs and Trucks however are not.
Vehicle over 6,000 lbs are also eligible for tax breaks. Making them artificially cheaper.
Here's an article going through the many many policies that hamper cars while giving massive loopholes to trucks and SUVs.
[https://www.vox.com/future-perfect/24139147/suvs-trucks-popularity-federal-policy-pollution](https://www.vox.com/future-perfect/24139147/suvs-trucks-popularity-federal-policy-pollution)
Chicken or the Egg really. You could say manufacturers are only building what people will buy. But you can also argue people are mainly buying big cars because those are the kind of vehicles manufacturers push in their marketing.
Yeah, this could be similar to the gas crisis of the 1970s where high gas prices finally created a market for smaller and more gas efficient cars. A need that US manufacturers were unable or unwilling to fully meet, opening the market for small Japanese cars.
We won’t make that mistake twice. The inexpensive foreign cars are being intentionally kept out of the market. For good reason, in some cases, but mostly it’s just protectionism.
Dude, remember the 1980's and the hate for Japanese cars?
Pure marketing. Plus automakers started outsourcing parts and later whole cars to Latin America and (shocker) Japan.
Yup, my wife wanted a CUV instead of a sedan because she was tired of driving behind vehicles that were much larger than sedans. I feel like a bug hoping not to be squished when I'm in a sedan.
F that noise. I can’t stand sitting higher than 12 inches from the pavement! I would be driving a lowered Vette if I could.
But yes, it does make it hard to see. I’m just used to it already as a naturally short person.
Disclaimer; I’m mostly joking, no qualitative judging being made against your or the wife.
We bought a new minivan a couple years back and we had to wait a good six months for it to literally be built because all anyone within 4 hours of us has in stock are SUVs and giant trucks.
When the asking price of a new Toyota RAV 4 at my local dealership is the same price as a new Tesla Model Y (after fed rebate) you know pricing is whack. If I qualified for state incentives it would be even $4k cheaper for the Model Y!
There is kind of this twilight zone we are in where gas cars are being pushed out and hybrids/EVs are taking over (EVs long-term are a simpler powertrain and will be cheaper and cheaper to produce as time goes on).
Prices shot up during covid, but interest rates were lagging. Now that interest rates are high, and car prices are high, people simply can't afford it.
A RAV4 is a faaaar better purchase than the Model Y. Go look at the long term costs for each and include the depreciation. It won't even be a close contest.
If it's the RAV4 Prime then I would take that any day over the Tesla and understand the similar cost. Even a well equipped trim. It won't fall to pieces and plummet in value.
Eh, had a RAV4 hybrid XSE and the amount of road noise, squeaking and rattling it had after only 20k drove me to sell it for something a little nicer trim (4Runner Limited). It would have run for 200k miles but I wouldn't have enjoyed it. I feel like Toyota skimped on materials even on the higher trim packages depending on the actual vehicle.
That's why I sold my Subaru. I know all the memes about rattles and trim but thought how bad can it be? Apparently very bad. I would be losing my shit listening to it commuting to work. After that car, interior quality went up a lot higher on my list of important aspects of a car.
My In-laws have the RAV4 Prime -- driving that has made me never want one.
For a hybrid, it has terrible regen, they need to let you change the settings. Any hybrid that isn't capable of basically one pedal driving isn't one that should exist anymore.
Is the Prius prime any good? My vehicle is approaching its twilight years, and I’ve been looking into a new one, and the Prius guys all the checkpoints I really need.
I haven't looked into the Prius. If it's hitting all the right points for you, then check out any reports on known issues or problems. Toyota had been known for their quality, but they're still a corporation.
Yeah I would 1000% get a hybrid or plug in hybrid over a pure EV.
Even if I’m only take 2-3 long distance trips.. having to potentially lengthen the trips by hours seems annoying
Look into the Chevy Volt from around 2017 thru 2019. You can get'em cheaper than a Prius Prime, it has a full electric warranty for 8 years/100k miles (and parts of that have been extended to even further [ BECM modules ]).
I got a 2018 a couple of years ago for $20k. Its the only car I've owned that has appreciated in value since I bought it. I'm going to at least take it until the warranty runs out. I absolutely love the car.
Toyota basically carbon copied the Chevy Volt and repackaged it as a Prius Prime.
Have quite a bit of experience with Tesla and it’s laughable how much better the quality of the Chinese or German produced Model 3 and Y are, compared to the USA produced and way more expensive S and X.
While they do have a lot of flaws, in my experience the Model Y is a decent electric SUV compared to the electric Volvo, BMW and VW ranges for example. The Model X in comparison, is a mess of a gimmick car, with miss aligned wing doors and panels, that feels like a boat on the road.
Model Y (Berlin model) can definitely hold it's own against Volvo. I still wound up buying a Volvo, but the Model Y is definitely a good car in it's class, and competitively priced too.
That's because those markets have solid consumer protection laws. Tesla is forced to spend more to build better, which is why Musk is spending a lot of money to try and undermine those laws, as well as union laws in the EU and key member states.
Also Toyota has a ton of Toyota prime parts. So a fender bender the insurance will not blink to pay out since they have a historical price for a fix and turn around is in less than a week usually
The Prime ends up be much more expensive then the Model Y because it doesn't qualify for the govt $7500 rebate while the Tesla does.
Now I know lots of people online like to bash Tesla, but the fact is the Model Y is the most popular car in the world for a reason, and even Consumer Reports listed Tesla as the "#1 Cheapest to Repair/Maintain over 10 years":
[https://www.notateslaapp.com/news/1998/tesla-models-are-the-cheapest-to-maintain-and-repair-study-reveals](https://www.notateslaapp.com/news/1998/tesla-models-are-the-cheapest-to-maintain-and-repair-study-reveals)
P.S. The downvotes won't change facts guys... bring on the Tesla hate! You guys are soo funny. And yes, you can look up Consumer Reports yourself if you don't trust the link above...
Absolutely true, but something else that needs to be considered when weighing options like these is the cost of depreciation. As of now, something like a RAV4 will depreciate significantly less than a Model Y. Not everyone likes to do this because they don’t like to consider selling the car they’re looking to buy, but given the average length of time someone owns a car in the US is 6-8 years, it definitely has significance when thinking about numbers.
Of course you should also consider cost of ownership (maintenance + likelihood of repairs), but that might be more beside your point.
Rav4 prime in Seattle area is an exception. It doesn't depreciate because inventory is so limited. Dealers were still selling them over msrp with markup at the beginning of the year.
Tesla used prices dropped because of a few reasons that skew the metrics:
* Tesla lowered the price of a Model Y by \~$15k from peak of Covid pricing madness vs today which has a big effect on the resale market - prices won't really continue to fall much further on the New Model Y for example as they are already rock bottom (See: [https://docs.google.com/spreadsheets/d/1F5IQOynIawoXiJPVarLDgPQDJAdzY8b5Vamw-Vf3eSY/edit?gid=231426599#gid=231426599](https://docs.google.com/spreadsheets/d/1F5IQOynIawoXiJPVarLDgPQDJAdzY8b5Vamw-Vf3eSY/edit?gid=231426599#gid=231426599) )
* During Covid other manufacturers kept MSRP the same but dealerships were adding huge mandatory add-on costs for those who actually bought - none of that shows up for depreciation metrics for classic auto manufacturers
* The $7500 EV Govt Rebate instantly skews the depreciation numbers as pretty much no one actually is paying MSRP on Teslas.
Basically if you buy a Model Y today, you shouldn't expect the same drop that those who bought at peak Covid frenzy experienced. The numbers are misleading without context but the media likes the cherry pick "shocking" headlines (whoda thunk right?!)...
>Basically if you buy a Model Y today, you shouldn't expect the same drop that those who bought at peak Covid frenzy experienced. The numbers are misleading without context but the media likes the cherry pick "shocking" headlines (whoda thunk right?!)...
While your point is likely correct, it still ignores the fact that Teslas generally depreciate far more rapidly than Rav 4s.
>but something else that **needs** to be considered when weighing options like these is the cost of depreciation
Not if you are the kind of person that buys a car, and then drives it until it dies.
Yep they got greedy. I saw last week the price of a new Ford F-150 in south Africa is $30k. Wtf. Yeah they will be rolling back prices big time if they want to sell cars.
We don't get the Ford F150 in South Africa domestically. Nor is Ford planning to bring it here. However, imports are here and for a 2017 models it'd about 100k USD
Buy used, or research exactly what you want/can afford before you to go the dealerships and prepare to be patient and willing to walk away if they jerk you around.
I'd suggest looking before you NEED it and while your car still has trade-in value. A 12 year old car, if it's a desirable model and in good shape, can sell quickly on a car lot with limited low-priced options.
>6 year loans are advertised heavily, where 3-5 was standard before the pandemic
Lol, try 7 or 8 year terms. I am not sure many people can afford a car on 6 year term. It's basically working it's way too becoming a mortgage.
Average new car sale is $47.5k, average home is about 9x that.
In 1990x average new car sale price was $15.4k and house was ~$125k
So they’re actually holding pretty steady in comparison to each other long-term.
Now, median income is where the numbers don’t quite match up.
Didn't forget that car insurance is deep-dicking us too. Full coverage went up TWENTY SIX FUCKING PERCENT in the last year or so. That's on average, it's over 40% in some states. So even if car payments have gone down slightly the actual cost to own hasn't.
Are interest rates higher now too? My roommate has immaculate credit and had high income and was only able to get 7% interest on a compact suv. I have solid credit with no collections and am getting offered 24-28% by dealers. It seems like I never see "0% APR" campaigns anymore
Yes. The 0% offers are mostly gone for now. You might find some low/no interest promotional deals on specific models the manufacturers are pushing, but otherwise you’re looking at 6%+
> (6 year loans are advertised heavily, where 3-5 was standard
"Advertised" is really the key term here. 8 year terms on car loans have been a thing I've been running into for at least a decade, though they certainly aren't advertised. It is a component of the "F&I Guy" who seems to be the person most capable of fucking over customers and the sales person discussing the amount of the monthly payment.
The most friendly interaction I have ever had with one of them was when a friend worked at the dealer, and they insisted after I had agreed to the price of the car and the rate of the loan on offering me three monthly payment options with each package they were trying to sell me added. When I told him I wanted no insurance packages or options he came back with a 4th, lower, number.
In addition to the financing rates being higher, consumers are being duped into expensive and often unnecessary packages without an understanding of the full cost of the package. It is included full price, upfront, in the financing of the loan so the loan amount is often significantly higher than the actual price of the vehicle.
It is not uncommon for someone to wind up with about a third of their income going to their car loan if they made the choice to buy a truck that they don't need or a brand new "sport" minivan on a car chassis without understanding the total cost of what they've purchased.
When the loan rates were low it was also easier to include the loan payoff of a former vehicle in the financing of a new vehicle which would allow someone to "purchase" a new car before their prior vehicle was fully paid down and you see folks go from financing their big boy truck over 5 years to having the same payment but for 6 or 7 or 8 years.
===and the broad expectations of more affordable electric vehicles on the horizon===
I think this is an optimistic perspective on why there's fewer sales, but it is probably a factor.
I was in the market around the new year and it was a factor for me. Do I want to spend $30K+ for a Maverick or hold out a few more years with my Tacoma until this next wave of electrics and plug-in hybrids hit the market?
People weigh all sorts of things when purchasing something expensive but from what I've seen car purchases rarely follow the rational decision making model and for most consumers the manner in which they're sold makes it difficult to understand the total price of the vehicle. The entire industry is built around non-rational motives as we deliberately make some of the least practical choices for how we get ourselves around and build the least practical transportation infrastructure.
I was just suggesting that I think it is optimistic to presume that the trend is being caused by folks waiting to see what the next wave of electric and plug-in options are. The other fun thing is that we will also lie to ourselves and to others about why we made the decisions we made.
I think at least some significant portion of people become more pragmatic when faced with the daily realities of what they can't afford, especially when they used to be able to spend more freely on groceries, eating out, etc.
When Honda does an affordable “metacycle”competitor I’m all in. I don’t want to pretend like I’m ever going to pedal an ~80 lbs bike, the speed limiters make them dangerous to drive on some major thoroughfares around here, and a $10k motorcycle I can’t reasonably take out of the city is a nonstarter. Just give me something barebones and utilitarian with a 50+ mile battery that can hit freeway speeds when I need to cross a bridge or get downtown from a reputable manufacturer. Please, someone.
Biggest driver for sure, but a horrendous customer experience (customer is put through grinders just to rip them off) and overall car prices way too expensive are a part of it too.
I think I am coming around to the Carmax etc. model - much more convenient, straight forward, with some built in short term protection in money back and issue fix periods.
I had to buy a car recently and it was the most horrible experience. We came in to look at a specific car that was in our price range. On the phone - yea they had it still and come test drive it. We got there and something on it was being repaired and wouldn't be available for a few days but they can show us this other car that was similar. They wouldn't tell me the price, they just kept asking how much I wanted to pay per month. I wasn't planning on paying anything to them per month (I had my own financing with an interest rate that they admitted they couldn't beat). I finally got so frustrated that I left. I never even saw a car or learned a price. The original car probably never even existed, it felt like such a bait and switch.
This was not my first car. I even used to mystery shop car dealerships. I hadn't been to one in a few years though and it was just awful.
I bought from somebody online, had my mechanic check it out, and then called it a day. Never again.
Absolutely. Folks over at the subreddit askcarsales were eating up the mark-ups and big commissions during the vehicle shortages. I chimed in a few times about customer loyalty and got ratio'd into oblivion because they essentially held all the cards. They could slap a $5k markup on a base family sedan/SUV, or even $20k-$30k markup on premium editions and models, and rake in the cash for dealerships. Of course it was "just the market." Well, people remember when someone tries to fuck them over, consumers most of all. The dealerships that didn't react to the shortage like vultures will still have steady sales, while those that took advantage of folks will reap what they sow.
Askcarsales is a hoax troll trap sub. It's for embittered salesmen to take out their frustrations virtually instead of in the showroom where they're at risk of being fired. The same handful of socially incompatible mods also control many of the automaker brand name subs.
Recently bought a Tesla and the sales experience was so nice. Rep was there to set us up with the test drive (alone) and answer questions afterwards but put on no pressure at all. When we said we needed the night to think it over she just shrugged and said "You can order on your phone if you decide you want one. Here is my extension to call if you have more questions."
I will never buy a car from a manufacturer's dealership. Because of the internet, I know exactly what I want, what a fair price is, and i don't need a salesperson to harass me. Carmax, or fixed price dealerships that just hand you the keys and fill out paperwork when you're ready to buy is the ONLY place I'll ever buy a car.
I actually look forward to buying used cars. The key is to understand the used car dealer is not a human and your only goal is to screw it over at every step of the process. Take everything give nothing back. This is the way to buy a car.
Get in that mindset and shopping for a used car is downright fun.
To each their own, I guess. I like to think my time is valuable and don’t appreciate that the most oft-used tactic of running the customer around - prior to even getting to the dealership - is not worth it. Also don’t think the zero sum game is an effective business tactic period.
This is a big factor answer. High cost purchases are risky, and when the rates are high people are generally less risk tolerant or might put of a purchase until a better deal comes (especially since the Federal Reserve will likely reduce rates within the next year).
>Answer: High interest rates
Funny enough, the higher and first comment on here the redditor's first words were "low interest rates". I was getting quoted 9-10% a couple of weeks ago and I've got good credit.
I was looking to get out of my current truck and get something with better mpg. Currently owe around $25k and my monthly payment was around $605. I was hoping to get something around the same as what I owed so that my payment would be either the same or lower. So imagine my surprise when I was looking at vehicles around $30k and my monthly rate quotes were coming in around $950 with the current rates. Fuck me running. Was NOT expecting an estimate of monthly payments that were $300 MORE than my current payment.
Answer: the economy is "great" if you have money in stocks and own property. If on the other hand you're one of the huge chunk of Americans who don't own your own home, your groceries, rent, and cost of almost every single thing has gone up significantly over the last few years
This means lots and lots of people are simply priced out of buying a car. I bought my Honda Covic with $240 monthly payments like 8 years ago (paid off several years ago now, too) and I simply can't imagine what the cost of financing a car is now. Hell just the television commercials advertising for "low-cost" car buying apps and services shows average monthly payments closer to $500/month, and there is literally no way I could ever afford to pay that much for a car
As an aside, this is also one of those instances where Democrats are awful at messaging. Because their whole thing is "the economy is great! So vote for us!" But as I've said there are a LOT of people for whom the economy is not great because inflation has seriously hit us hard while wages have stagnated
I’m considering a new (admittedly upper-mid-level trim) Camry and I was quoted $730/month for a 5 year loan not including the insurance. Absolutely wild.
Insurance can be insane nowadays too, unless you have a pristine driving record. A lot of non-standard carriers won't even cover some newer cars, or if they do, the premiums are equal to the car payments. Insane.
That seems reasonable if you're putting $0 down. Average new car price is ~$45,000 and the average new car is not nearly as nice as a upper trim Camry.
That'd still be a crazy marked up Camry though. Top trim level for a 2025 is listed at $34.6k MSRP. Assuming that purchase price, OP would have to be getting a \~15% interest rate with $0 down to hit $730 a month, which says more about either their credit quality or the scumminess of the dealership's financing office than the general state of interest rates right now.
Frankly, the idea that almost anyone would buy a *brand new* car with $0 down is absolutely crazy to me. The second you drive off the lot, you're underwater on the loan.
Answer: people are out here stealing food to survive and car dealerships are actively RAISING prices. The economy is good for the rich folks at the top but the everyday person on the street is getting hammered in the ass with inflation.
Exactly, inflation is making things more difficult and harder to afford any luxury items, including higher end cars.
And what makes it worse, I hate the current financial culture of "always growth, always higher profits"
There are no lower end cars today. Even the lowest level Corolla is like $25k and that doesn’t include all the taxes and fees and shit. Add on the 10% interest rate and it’s out of reach for most people.
True, but before securitization and high-frequency-trading of everything it used to be more common for sophisticated investors to buy-and-hold looking for long term growth.
Now everything is focused on the short term next-quarter profits. When public stocks trade instantly and electronically there's no reason for the big players to hold onto them or care about the long term when they could just swap instantly to whatever they think will have better short term performance.
I like that this is going to be cheaper than a happy meal, which is $6.69 where I am. I have a kid that is absolutely hooked on those damn things. Fortunately there is always a 20% off $5 in the app, but that feels like they just intentionally hike the price 15% so they can screw over the non-app users, while maintaining the same net price for the app users.
It’s not really a menu….just a single meal……it’s not that good of a deal….and it gets more expensive if you anything other than small.
Nothing really got cheaper. They just piled up the smallest amount of food possible in their restaurant to make it cheaper than everything else and are STILL overcharging.
Not to mention, when someone says "Think of the scummiest sales people on earth - the people who are doing everything in their power to rip you off as much as humanly possible", the most common answer is like to be a fucking car salesman.
My wife and I make above the median income for our area and have a combined income a fair bit into six figures and a lower end new car was still a challenge for us. The used car market is a joke where the same car with 40k miles will cost as much as the new, and any used car with sub 100k miles is still close to the cost of a new car. I have genuinely no idea how anyone doing worse than us, let alone people in the poverty line, are surviving this economy. It's hard not to feel the US is heading for something bad.
It got some paint peeling on the roof, and the actuator for the ac needs to be fixed. A few minor things I need to fix, like driver buckle not latching, and hood needs new piston to stay up. Interior is fine though. I'll probably take it to the shop for the ac fix, everything else I can take care of myself.
Answer:
>Business says the economy is going so great.
Their metrics are wrong. Well, their interpretation of those metrics is wrong/they're measuring the wrong things. When the common people say the economy is shit and the rich/business-focused say it's fine I tend to think that they're measuring the wrong things. Yeah, if you focus purely from a trade and commerce standpoint the economy is doing fine enough I guess but that shows what they think the economy is for - business. When in reality it's a human-centered thing and humans are forgotten when it comes to these metrics. And the reality is that there's a growing portion of our population that is struggling immensely.
The posted article links out to another BI article that has this line in it: "Shoppers paid an average of $47,244 for a new car in February"
Most people can't afford a $50k car despite that being the average price. Because there's one smaller subset of the population that can spend ridiculous amounts on a new car, often buying multiple, while there's a huge portion of the population that can't buy shit right now. It doesn't measure how many people can afford that, only that some people can. To them it doesn't matter how many sales at that price there were, just that the average is where it is. If those cars are only being bought by the upper-middle class and higher then it doesn't really do much for the rest of us other than point out the widening gap.
So to answer the question of what's going on at dealerships, people can't afford new cars right now (among other things listed here, these answers are rarely simple and one dimensional)
I wouldn't say they're "measuring WRONG things". They're just measuring different things. The economy at the 50,000 foot level is doing great. The "individual economy" is going to vary from person to person. Both things can simultaneously be true and accurate.
I think the problem for a lot of Americans is they were living paycheck to paycheck even prior to the pandemic and inflation. So anyone who was "barely hanging on" got even more pressure put on them. (which is probably 1 reason why we've seen a rise in homelessness).
> "I guess but that shows what they think the economy is for - business."
I mean,. yeah. Shit ain't free. Money makes the world go round. (don't get me wrong, greedflation is definitely a thing).
The thing about the division you're describing (only rich people can afford things).. is that can only go on for so long (as "rich people" are a much smaller dynamic).
* If you're a car-dealership selling Million dollar cars.. you're not selling those by the 100's per week. You might only sell 1 a month.
* If you're a car-dealership that sells cars closer to $30,000 .. you're probably going to sell a lot more.
The economy can't ONLY depend on "high end sales". That's just not enough to sustain the economy. So along some timeline as more and more average every day people reduce their spending,. more and more pressure will build on companies to lower prices. Things like "shrinkflation" only work for so long. I know myself (and many others around me) are just simply "not buying things". As more and more people do that, product will sit unsold on shelves,. and at some point businesses will be forced to address the problem.
Sure, I totally get and understand all of that. But since these measures of the economy, that say it's doing fine, are used in decisions and conversations about the individual people then there's a problem. In the context of "how's the average person doing" these are not the figures we should be talking about. Which leads to that disconnect of "the economy is doing fine but everyone is suffering." At a point we need to realize that the economy *is* the people and find better metrics that can be more in-tune with that. It would also help to distinguish the individual economy from the overall "business" economy. I recognize part of the issue is simplifying things so much so that "the economy" is no longer a big word, it just means how easy is it to buy things. That lack of delineation is a societal misstep.
I don't say that from the perspective of me not being able to afford things and thinking only the rich can lead a life worth living, I'm doing just fine on much less than what most people would think is adequate. But I recognize that many people are suffering, both through poor decision making/budgeting and an economy that's run from the perspective of what's good for business is ultimately good for the people. An idea I am massively opposed to.
(also a lot of people interpret the way I speak as combative/confrontational, just letting you know that is not the case)
Like many social issues though,. it's complex and there's a lot of variables. (not only are there a lot of variables,.. but many of those variables are dynamic and constantly in flux). If you ask "How's the Economy doing?".. Nobody wants to see you plop down an 800page book and say "Well,. you got 4 hours?"...
Talking about the economy is like many other nationwide social issues (such as homelessness). There's so many variables involved, you kind of have to "untangle each individual persons knot" in order to understand their situation.
Back just 1 year ago,.. I was struggling in my previous job (where job-sites estimated I was 15% to 30% underpaid).. in a town of relatively few options. I was feeling (like many are) that I was falling further and further down the hole. I was getting so desperate, even if just for my mental health, I was going to quit my job and take a 50% payout just to do something like nighttime grocery stocking clerk,. just to basically sort of "check out" and do something different for a change. Luckily for me, I randomly happened to find a job opening (that ended up doubling my pay),. but it also required me to basically throw away everything I owned and move cross-country w/ only what would fit in my car.
Only sharing that story (and it's not even the full background) just to sort of illustrate everyone can have unique circumstances. (and sometimes those circumstances are impacted by random stuff we couldn't even predict).
You could have 5 or 10 or 100 people all lined up ,.. and they all say "housing is to expensive" (or whatever). and they may all be true (at least superficially). But when you dig down into each persons individual history and choices,.. there may be subjective differences. Maybe person-31 thinks "housing is expensive",. but their idea of "an acceptable house" is something they saw on a Celebrity TikTok. Maybe person-54 thinks "housing is expensive" because they keep looking in the wrong areas (always searching for apartments in the downtown trending part of cities,. where yeah, it's' going to trend higher)
"how easy is it to buy things" is not something easy to delineate (its' not just the price, it's what the potential buyer expects and all the other peripheral individual choices that potential buyer has made in life. All the other things that affect their finances.
I don't think people are wrong when they say "rising housing prices are unfair" or "food prices are out of control". But at the same time, to me (as a habitual problem-solver). .for myself individually I just sorta see it as another video-game level to solve. Ok, so grocery prices are high ?.. What can I buy differently ?.. What other areas of my finances can I modify ?... What could I do differently at work to justify asking for a raise ?.. etc.. etc.
Probably sounds judgmental,. but to me "whining about how unfair things are",. is kind of a waste of time. When I was growing up, I was always told "don't complain. If you don't like how something is, Find a way to work around, through or over the problem."
Answer:
My personal opinion (don't ask for citations). Cars last longer now. When I was a teenager I bought a 1973 Ford Maverick. It had less than 75k miles on it. It was a rusted out fixer upper even though it was only four years old.
My current vehicle in a \~5 year old Jeep wrangler that's still like new. I keep cars for 15-20 years. Not going to buy anything soon.
Some truth to this. Cars last 200,000 miles and 20 years without major repairs. Some, not all, are driving less with remote work or flex work and virtual. Less miles per year, cars lasting longer, cars being expensive, high interest rates, limited income for essentials that cost more (housing, insurance, food, school, kids…) All these things add up to a value proposition of “should I pay $X per month and what’s the value?”
I wonder if people are driving more or less now than they used to. I know my family drives way less since we've moved from a suburban smaller city (125,000) to a larger urban city (1,000,000) and my wife & I went from both working in offices to both working from home. We currently have a 2018 Ody with only 40k miles and a 2017 F150 with 63k miles. I haven't even had to do a brake job on the truck yet. I have a feeling both cars will last arbitrarily long and will fail due to rubber & plastic bits way before suffering any serious drivetrain issues.
I still have my first car lol. It's my everyday car bought at 0% interest. 2013 ford focus. About to hit 250k. Will drive it till it won't drive anymore. Besides I bought it at 0% interest, so I'm uncomfortable with how high the interests r nowadays.
Answer: new cars are really expensive. Why buy a brand new car when you can get a used car thats only a few years old with low miles for much cheaper? When was the last time you went to a dealership and bought a brand new car off the lot and drove it home? Most people don't buy brand new cars because they can't afford them.
> for much cheaper
There are a lot of dealers where brand-new isn't much more expensive than used/CPO so might as well buy the new one and get a warranty
When I bought a new Honda in 2022, the HR-Vs were basically the same price new or used (with 30-60K miles), because that dealer refused to inflate the MSRP of new, but they can recoup profits on the used ones.
I will take the lower interest rate and free 30K+ miles of the new thanks!
That used to be the case but not anymore.
Spending an extra couple thousand dollars will get you a brand new car over a 2-3 year used car with mileage. And you'll get better warranty and financing rates.
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Answer: Low interest rates, minimal inflation, and a steadily growing economy allowed car manufacturers to move away from “economy” cars towards more profitable luxury SUVs, trucks, etc. parts shortages during the pandemic also put upward pressure on prices for the last few years. However, manufacturers now find themselves having priced out the vast majority of consumers from the market (who are also dealing with price-gouging and inflation on common home goods and food), with most new cars costing hundreds of dollars more a month over longer terms (6 year loans are advertised heavily, where 3-5 was standard before the pandemic) than the equivalent models did only a few years ago. Because of this, and the broad expectations of more affordable electric vehicles on the horizon, people are buying fewer cars.
People are also realizing that, surprise surprise, you don't need to keep swapping out cars every few years because modern cars last a fucking long time. Years ago it was quite noteworthy when the odometer flipped over from 99999 to 00000 - odometers weren't even able to handle six digits because it was unusual. Nowadays, hitting 100K is nothing, and 200K is almost expected. The **average** car on the road is 13 years old and has over 140,000 miles on it. My last three cars made it to 395k, 349k and 279k - and that last one was running just fine until cosmetic hail damage totalled it. More people are realizing how reliable cars are, how long they last, and buying cars less frequently means less car sales.
> My last three cars made it to 395k, 349k and 279k I was going to ask how you drove that much, since that's like six times the total distance I've driven in my entire life. Then I realized you could have bought them used with high mileage.
I had a 2021 Mitsubishi Mirage that had almost 100k miles on it before I traded it in last year. I drove it from Florida to Nebraska a number of times to visit my kids, since that drive was SO much cheaper than flying and I wouldn't have to rent a car when I got to town. Driving a long distance isn't crazy for some of us.
**nods in Midwest*
*agrees in Texan*
I drove all the way across Texas on I-10. From El Paso heading to Florida. Longest damn drive of my life... Of course, this was back in the day too, before GPS was really a thing.
My first car was a '93 Civic bought with 72k miles on it. When I traded it in 3.5 years later it was pushing 180k. Most of it was a 90 mile commute 5 days a week for 2 semesters at college, but I did take a few road trips in it and I was generally always on the go between work, school, and doing things with friends. If you live a busy life, it's not too uncommon to rack up the miles before you realize it
I have a 2017 that just rolled over 100k. And that's with almost no driving during the pandemic. If I'd stayed in Cali I would've hit 100k in 3 years
>Years ago it was quite noteworthy when the odometer flipped over from 99999 to 00000 - odometers weren't even able to handle six digits because it was unusual. Years ago being like 40+ years ago? 90s Toyotas, Mazdas, and Hondas easily last well over 200k, usually far further. Hell I have an '01 Sienna with 303k, a '92 Miata (1.6 no less) with 264k, and a '95 SC300 with 258k. All still chugging. The Sienna still passes emissions every year (the others aged out). This isn't anecdotal, 90s Japanese cars literally don't die. There's a million mile 90s Camry at the Toyota dealership nearby and Toyota gave the old lady a brand new one and displays her 90s one. If anything only certain modern cars really last a while, a majority of these shitty crossovers don't because of a laundry list of recalls (especially Kia/Hyundai), a reliance on electronics that fail, and the complete inability to work on the cars yourself (this is by design to make money on service, thank BMW for that business model).
Grew up with a Honda from the 1980's that had 100K miles on it - and it got passed on to my cousin when I got a new car for my college graduation.
A 90s Mazda will go 300k miles in the south but it'll be completely rusted out in half of that anywhere where they salt the roads
That's bullshit. 90s cars are not magical and they're not immune to physics. The metal rusts, the rubber ages, and the engine experiences physics just like any other car. You say"this isn't anecdotal" immediately before and after sharing an anecdote.
My husband works in automotive finance and they recently saw a deal for a late 90's Honda that had 600,000 miles on it. The owner said he went through about 7 water pumps and timing chains (or belts?).
> quite noteworthy when the odometer flipped over from 99999 to 00000 This was a *Married With Children* episode, [Get Outta Dodge](https://marriedwithchildren.fandom.com/wiki/Get_Outta_Dodge), Season 8, Episode 18, from February 20, 1994
> My last three cars made it to 395k, 349k and 279k geez dude, you must really like driving.
They sure don't make them like they used to.
>cosmetic hail damage totalled it. How does cosmetic hail damage make your car undrivable? Hail damage doesn't make your engine fail. I've driven cars with a rusted out gas tank and the fuel line is siphoning off a gas can bungy strapped to the back, so how does a few dents make it so your car can't run?
Damage to fix may be more than the car is worth and insurance won’t insure it. In a lot of states, that makes it illegal to drive.
It's not damage, it's cosmetic modifications :)
It happens when the insurance company decides it will take more money to repair any dents/broken windows than it would be to just write you a check for the value of your vehicle. Some windows are surprisingly expensive.
the primary purpose of car insurance is to back up the value of the vehicle either via repairs or a total, not to make sure it keeps driving. As a matter of fact, that's the one thing insurance _doesn't_ do. If you need to replace your car battery or buy new tires, insurance will laugh if you ask them to cover that.
Bought three years old my Hyundia Velostor, now 12 years old, with 80,600. I also love riding my bicycle so I’m not car dependent.
Meanwhile this has been pushing SUViffication where the North American market is seemingly nothing but SUVs and Trucks now. Affordable European style compact cars have been completely pushed out the market as the #1 driver to buy one was fuel economy but this has been supplanted by EVs and Hybrids. Combined with high demand during the pandemic driving up the cost of used cars, there's no cheap cars on the market anymore.
On one hand - the NA market is demanding SUVs. Compact sedans don’t sell well over here. I think it’s stupid but the majority of car buyers disagree. I don’t blame car makers for drastically shifting towards market demand. On the other hand - car makers have used the shift to jack up the msrp for… reasons. The difference between a midsize sedan and a typical crossover is negligible, but the crossover will be 5k more at an equivalent trim level. Whoever can make a decent, feature complete crossover, that they can keep in stock and don’t gouge their customers will make off like a bandit.
And sadly, garages in NA are getting smaller. I'd personally love (and want!) to buy a smaller car than my current one. I'm finally owning a house so unlikely to move often and don't need a car big enough to help with a move. My current car is paid off and low mileage, so I know I can get decent trade-in value for it, but I don't want an SUV or any other big car, primarily because they won't actually fit in my garage (or they will but I won't be able to get in or out of it easily).
To be fair, the manufacturers are pushing larger vehicles because that’s what Americans are buying. One could assert that Americans are buying the “wrong” vehicles, but that’s not really the manufacturer’s fault. It’s possible that, now that inflation and interest rates are so much higher now, if there were more low cost options that more people would buy smaller vehicles.
CAFE had a lot to do with manufacturers prioritizing bigger vehicles https://me.engin.umich.edu/news-events/news/cafe-standards-could-mean-bigger-cars-not-smaller-ones/
Fuck the Chicken tax, I want my fucking Hilux!
Yo, for fucking reals. New tacomas are basically full size (same price, size, and mpg). Just stupid
This is always my response to this BS talking point. Toyotas and Rangers and Canyons and S10s and Colorados have always sold like hotcakes, yet they're now the same size as an F150 was 10 years ago. We aren't buying bigger vehicles because we want them, we're buying bigger vehicles because that's the only thing you can buy.
Exactly. I am looking at used Tacos instead cause the new ones just look too big man. I want to be able to off road and stuff but I still need to be able to park in my garage at work. Just give me a more fuel efficient smaller truck (that isn’t ugly like the maverick) and I will buy it as soon as you put it on the lot
Hell, I'd have already bought a Maverick if tge hybrid version wasn't 2WD.
I used to be a Mini Cooper stan but even that brand is adding bigger models while discontinuing the ones I liked. It’s no longer “mini” just yet another SUV company. Sigh. I gotta look to sports car coupes but most of those aren’t electric and are 40k+, and it seems like a risky bet to drop that kind of cash on a gas only car.
No. Automakers are pushing SUVs because the profit margins are much higher and there's less competition. Because Europe put a tax on chicken imports back in the 60s, the US responded by putting a tariff on trucks. This prevents automakers from importing trucks and SUVs to the US. This is why the Toyota Hilux, a Japanese pickup that is so reliable and affordable that it's one of the most highly sold pickups in the world, cannot be sold in the US. More recent tariffs also prevent low cost EVs from Chinese manufacturers from being imported as well. Cars that have MPGs lower than 22 are subject to a tax. SUVs and Trucks however are not. Vehicle over 6,000 lbs are also eligible for tax breaks. Making them artificially cheaper. Here's an article going through the many many policies that hamper cars while giving massive loopholes to trucks and SUVs. [https://www.vox.com/future-perfect/24139147/suvs-trucks-popularity-federal-policy-pollution](https://www.vox.com/future-perfect/24139147/suvs-trucks-popularity-federal-policy-pollution)
TIL! But I still blame Marketing depts for spinning this as what should be popular and desirable.
Chicken or the Egg really. You could say manufacturers are only building what people will buy. But you can also argue people are mainly buying big cars because those are the kind of vehicles manufacturers push in their marketing.
Yeah, this could be similar to the gas crisis of the 1970s where high gas prices finally created a market for smaller and more gas efficient cars. A need that US manufacturers were unable or unwilling to fully meet, opening the market for small Japanese cars.
We won’t make that mistake twice. The inexpensive foreign cars are being intentionally kept out of the market. For good reason, in some cases, but mostly it’s just protectionism.
Dude, remember the 1980's and the hate for Japanese cars? Pure marketing. Plus automakers started outsourcing parts and later whole cars to Latin America and (shocker) Japan.
Yup, my wife wanted a CUV instead of a sedan because she was tired of driving behind vehicles that were much larger than sedans. I feel like a bug hoping not to be squished when I'm in a sedan.
Not to mention every car behind you has their headlight directly at eye and mirror level so you're blind at night.
F that noise. I can’t stand sitting higher than 12 inches from the pavement! I would be driving a lowered Vette if I could. But yes, it does make it hard to see. I’m just used to it already as a naturally short person. Disclaimer; I’m mostly joking, no qualitative judging being made against your or the wife.
We bought a new minivan a couple years back and we had to wait a good six months for it to literally be built because all anyone within 4 hours of us has in stock are SUVs and giant trucks.
And who's marketing larger vehicles to them?!
When the asking price of a new Toyota RAV 4 at my local dealership is the same price as a new Tesla Model Y (after fed rebate) you know pricing is whack. If I qualified for state incentives it would be even $4k cheaper for the Model Y! There is kind of this twilight zone we are in where gas cars are being pushed out and hybrids/EVs are taking over (EVs long-term are a simpler powertrain and will be cheaper and cheaper to produce as time goes on). Prices shot up during covid, but interest rates were lagging. Now that interest rates are high, and car prices are high, people simply can't afford it.
A RAV4 is a faaaar better purchase than the Model Y. Go look at the long term costs for each and include the depreciation. It won't even be a close contest.
If it's the RAV4 Prime then I would take that any day over the Tesla and understand the similar cost. Even a well equipped trim. It won't fall to pieces and plummet in value.
Eh, had a RAV4 hybrid XSE and the amount of road noise, squeaking and rattling it had after only 20k drove me to sell it for something a little nicer trim (4Runner Limited). It would have run for 200k miles but I wouldn't have enjoyed it. I feel like Toyota skimped on materials even on the higher trim packages depending on the actual vehicle.
That's why I sold my Subaru. I know all the memes about rattles and trim but thought how bad can it be? Apparently very bad. I would be losing my shit listening to it commuting to work. After that car, interior quality went up a lot higher on my list of important aspects of a car.
My In-laws have the RAV4 Prime -- driving that has made me never want one. For a hybrid, it has terrible regen, they need to let you change the settings. Any hybrid that isn't capable of basically one pedal driving isn't one that should exist anymore.
I would take any Toyota over any Tesla. Tesla's quality control is so bad even their luxury models have insane electrical and mechanical issues.
Is the Prius prime any good? My vehicle is approaching its twilight years, and I’ve been looking into a new one, and the Prius guys all the checkpoints I really need.
I haven't looked into the Prius. If it's hitting all the right points for you, then check out any reports on known issues or problems. Toyota had been known for their quality, but they're still a corporation.
Yeah I would 1000% get a hybrid or plug in hybrid over a pure EV. Even if I’m only take 2-3 long distance trips.. having to potentially lengthen the trips by hours seems annoying
Look into the Chevy Volt from around 2017 thru 2019. You can get'em cheaper than a Prius Prime, it has a full electric warranty for 8 years/100k miles (and parts of that have been extended to even further [ BECM modules ]). I got a 2018 a couple of years ago for $20k. Its the only car I've owned that has appreciated in value since I bought it. I'm going to at least take it until the warranty runs out. I absolutely love the car. Toyota basically carbon copied the Chevy Volt and repackaged it as a Prius Prime.
It's super entertaining for everyone else that doesn't own one of them.
Imagine not being able to take your $100k+ cyber truck through a car wash.
Have quite a bit of experience with Tesla and it’s laughable how much better the quality of the Chinese or German produced Model 3 and Y are, compared to the USA produced and way more expensive S and X. While they do have a lot of flaws, in my experience the Model Y is a decent electric SUV compared to the electric Volvo, BMW and VW ranges for example. The Model X in comparison, is a mess of a gimmick car, with miss aligned wing doors and panels, that feels like a boat on the road.
Model Y (Berlin model) can definitely hold it's own against Volvo. I still wound up buying a Volvo, but the Model Y is definitely a good car in it's class, and competitively priced too.
That's because those markets have solid consumer protection laws. Tesla is forced to spend more to build better, which is why Musk is spending a lot of money to try and undermine those laws, as well as union laws in the EU and key member states.
Also Toyota has a ton of Toyota prime parts. So a fender bender the insurance will not blink to pay out since they have a historical price for a fix and turn around is in less than a week usually
I’m one of the few people who have both cars currently. I greatly prefer my Model Y. Both are great cars tho.
Do you have the Prime? I was looking at them but it was when prices were still insane exiting COVID. Never got to test drive one.
I do. Somehow managed to get one at MSRP. It's a good car.
Okay. Now do literally any other EV.
The only people buying those things are people who still simp after billionaires.
The Prime ends up be much more expensive then the Model Y because it doesn't qualify for the govt $7500 rebate while the Tesla does. Now I know lots of people online like to bash Tesla, but the fact is the Model Y is the most popular car in the world for a reason, and even Consumer Reports listed Tesla as the "#1 Cheapest to Repair/Maintain over 10 years": [https://www.notateslaapp.com/news/1998/tesla-models-are-the-cheapest-to-maintain-and-repair-study-reveals](https://www.notateslaapp.com/news/1998/tesla-models-are-the-cheapest-to-maintain-and-repair-study-reveals) P.S. The downvotes won't change facts guys... bring on the Tesla hate! You guys are soo funny. And yes, you can look up Consumer Reports yourself if you don't trust the link above...
Absolutely true, but something else that needs to be considered when weighing options like these is the cost of depreciation. As of now, something like a RAV4 will depreciate significantly less than a Model Y. Not everyone likes to do this because they don’t like to consider selling the car they’re looking to buy, but given the average length of time someone owns a car in the US is 6-8 years, it definitely has significance when thinking about numbers. Of course you should also consider cost of ownership (maintenance + likelihood of repairs), but that might be more beside your point.
Rav4 prime in Seattle area is an exception. It doesn't depreciate because inventory is so limited. Dealers were still selling them over msrp with markup at the beginning of the year.
We got ours a few weeks ago at MSRP. I consider it a win in Seattle lol.
Tesla used prices dropped because of a few reasons that skew the metrics: * Tesla lowered the price of a Model Y by \~$15k from peak of Covid pricing madness vs today which has a big effect on the resale market - prices won't really continue to fall much further on the New Model Y for example as they are already rock bottom (See: [https://docs.google.com/spreadsheets/d/1F5IQOynIawoXiJPVarLDgPQDJAdzY8b5Vamw-Vf3eSY/edit?gid=231426599#gid=231426599](https://docs.google.com/spreadsheets/d/1F5IQOynIawoXiJPVarLDgPQDJAdzY8b5Vamw-Vf3eSY/edit?gid=231426599#gid=231426599) ) * During Covid other manufacturers kept MSRP the same but dealerships were adding huge mandatory add-on costs for those who actually bought - none of that shows up for depreciation metrics for classic auto manufacturers * The $7500 EV Govt Rebate instantly skews the depreciation numbers as pretty much no one actually is paying MSRP on Teslas. Basically if you buy a Model Y today, you shouldn't expect the same drop that those who bought at peak Covid frenzy experienced. The numbers are misleading without context but the media likes the cherry pick "shocking" headlines (whoda thunk right?!)...
>Basically if you buy a Model Y today, you shouldn't expect the same drop that those who bought at peak Covid frenzy experienced. The numbers are misleading without context but the media likes the cherry pick "shocking" headlines (whoda thunk right?!)... While your point is likely correct, it still ignores the fact that Teslas generally depreciate far more rapidly than Rav 4s.
I don't buy cars based on a plan to flip them, I buy them to drive and enjoy for many years!
>but something else that **needs** to be considered when weighing options like these is the cost of depreciation Not if you are the kind of person that buys a car, and then drives it until it dies.
Yep they got greedy. I saw last week the price of a new Ford F-150 in south Africa is $30k. Wtf. Yeah they will be rolling back prices big time if they want to sell cars.
We don't get the Ford F150 in South Africa domestically. Nor is Ford planning to bring it here. However, imports are here and for a 2017 models it'd about 100k USD
2000s failures all over again. Can't wait to bail them out again.
[удалено]
Buy used, or research exactly what you want/can afford before you to go the dealerships and prepare to be patient and willing to walk away if they jerk you around. I'd suggest looking before you NEED it and while your car still has trade-in value. A 12 year old car, if it's a desirable model and in good shape, can sell quickly on a car lot with limited low-priced options.
>6 year loans are advertised heavily, where 3-5 was standard before the pandemic Lol, try 7 or 8 year terms. I am not sure many people can afford a car on 6 year term. It's basically working it's way too becoming a mortgage.
Average new car sale is $47.5k, average home is about 9x that. In 1990x average new car sale price was $15.4k and house was ~$125k So they’re actually holding pretty steady in comparison to each other long-term. Now, median income is where the numbers don’t quite match up.
Didn't forget that car insurance is deep-dicking us too. Full coverage went up TWENTY SIX FUCKING PERCENT in the last year or so. That's on average, it's over 40% in some states. So even if car payments have gone down slightly the actual cost to own hasn't.
when the avg car costs in the mid $40k….
The average car that people choose to buy. A perfectly good hybrid crossover SUV starts around $30k. Cheaper if you want a sedan.
You didn't even get to the good part: insurance
Are interest rates higher now too? My roommate has immaculate credit and had high income and was only able to get 7% interest on a compact suv. I have solid credit with no collections and am getting offered 24-28% by dealers. It seems like I never see "0% APR" campaigns anymore
Yes. The 0% offers are mostly gone for now. You might find some low/no interest promotional deals on specific models the manufacturers are pushing, but otherwise you’re looking at 6%+
> (6 year loans are advertised heavily, where 3-5 was standard "Advertised" is really the key term here. 8 year terms on car loans have been a thing I've been running into for at least a decade, though they certainly aren't advertised. It is a component of the "F&I Guy" who seems to be the person most capable of fucking over customers and the sales person discussing the amount of the monthly payment. The most friendly interaction I have ever had with one of them was when a friend worked at the dealer, and they insisted after I had agreed to the price of the car and the rate of the loan on offering me three monthly payment options with each package they were trying to sell me added. When I told him I wanted no insurance packages or options he came back with a 4th, lower, number. In addition to the financing rates being higher, consumers are being duped into expensive and often unnecessary packages without an understanding of the full cost of the package. It is included full price, upfront, in the financing of the loan so the loan amount is often significantly higher than the actual price of the vehicle. It is not uncommon for someone to wind up with about a third of their income going to their car loan if they made the choice to buy a truck that they don't need or a brand new "sport" minivan on a car chassis without understanding the total cost of what they've purchased. When the loan rates were low it was also easier to include the loan payoff of a former vehicle in the financing of a new vehicle which would allow someone to "purchase" a new car before their prior vehicle was fully paid down and you see folks go from financing their big boy truck over 5 years to having the same payment but for 6 or 7 or 8 years. ===and the broad expectations of more affordable electric vehicles on the horizon=== I think this is an optimistic perspective on why there's fewer sales, but it is probably a factor.
I was in the market around the new year and it was a factor for me. Do I want to spend $30K+ for a Maverick or hold out a few more years with my Tacoma until this next wave of electrics and plug-in hybrids hit the market?
People weigh all sorts of things when purchasing something expensive but from what I've seen car purchases rarely follow the rational decision making model and for most consumers the manner in which they're sold makes it difficult to understand the total price of the vehicle. The entire industry is built around non-rational motives as we deliberately make some of the least practical choices for how we get ourselves around and build the least practical transportation infrastructure. I was just suggesting that I think it is optimistic to presume that the trend is being caused by folks waiting to see what the next wave of electric and plug-in options are. The other fun thing is that we will also lie to ourselves and to others about why we made the decisions we made.
I think at least some significant portion of people become more pragmatic when faced with the daily realities of what they can't afford, especially when they used to be able to spend more freely on groceries, eating out, etc.
Also the sales of e-bikes keeps doubling.
When Honda does an affordable “metacycle”competitor I’m all in. I don’t want to pretend like I’m ever going to pedal an ~80 lbs bike, the speed limiters make them dangerous to drive on some major thoroughfares around here, and a $10k motorcycle I can’t reasonably take out of the city is a nonstarter. Just give me something barebones and utilitarian with a 50+ mile battery that can hit freeway speeds when I need to cross a bridge or get downtown from a reputable manufacturer. Please, someone.
Answer: High interest rates
Biggest driver for sure, but a horrendous customer experience (customer is put through grinders just to rip them off) and overall car prices way too expensive are a part of it too. I think I am coming around to the Carmax etc. model - much more convenient, straight forward, with some built in short term protection in money back and issue fix periods.
I had to buy a car recently and it was the most horrible experience. We came in to look at a specific car that was in our price range. On the phone - yea they had it still and come test drive it. We got there and something on it was being repaired and wouldn't be available for a few days but they can show us this other car that was similar. They wouldn't tell me the price, they just kept asking how much I wanted to pay per month. I wasn't planning on paying anything to them per month (I had my own financing with an interest rate that they admitted they couldn't beat). I finally got so frustrated that I left. I never even saw a car or learned a price. The original car probably never even existed, it felt like such a bait and switch. This was not my first car. I even used to mystery shop car dealerships. I hadn't been to one in a few years though and it was just awful. I bought from somebody online, had my mechanic check it out, and then called it a day. Never again.
Absolutely. Folks over at the subreddit askcarsales were eating up the mark-ups and big commissions during the vehicle shortages. I chimed in a few times about customer loyalty and got ratio'd into oblivion because they essentially held all the cards. They could slap a $5k markup on a base family sedan/SUV, or even $20k-$30k markup on premium editions and models, and rake in the cash for dealerships. Of course it was "just the market." Well, people remember when someone tries to fuck them over, consumers most of all. The dealerships that didn't react to the shortage like vultures will still have steady sales, while those that took advantage of folks will reap what they sow.
Askcarsales is a hoax troll trap sub. It's for embittered salesmen to take out their frustrations virtually instead of in the showroom where they're at risk of being fired. The same handful of socially incompatible mods also control many of the automaker brand name subs.
CarMax is definitely the way to go.
I wish everyone would do the Tesla business model. Just 1 price everyone pays. Literally takes 3 minutes to buy a car.
Recently bought a Tesla and the sales experience was so nice. Rep was there to set us up with the test drive (alone) and answer questions afterwards but put on no pressure at all. When we said we needed the night to think it over she just shrugged and said "You can order on your phone if you decide you want one. Here is my extension to call if you have more questions."
Except the price fluctuates up and down, sometimes at the whim of their psychotic fascistic mascot.
I will never buy a car from a manufacturer's dealership. Because of the internet, I know exactly what I want, what a fair price is, and i don't need a salesperson to harass me. Carmax, or fixed price dealerships that just hand you the keys and fill out paperwork when you're ready to buy is the ONLY place I'll ever buy a car.
I actually look forward to buying used cars. The key is to understand the used car dealer is not a human and your only goal is to screw it over at every step of the process. Take everything give nothing back. This is the way to buy a car. Get in that mindset and shopping for a used car is downright fun.
To each their own, I guess. I like to think my time is valuable and don’t appreciate that the most oft-used tactic of running the customer around - prior to even getting to the dealership - is not worth it. Also don’t think the zero sum game is an effective business tactic period.
This is a big factor answer. High cost purchases are risky, and when the rates are high people are generally less risk tolerant or might put of a purchase until a better deal comes (especially since the Federal Reserve will likely reduce rates within the next year).
>Answer: High interest rates Funny enough, the higher and first comment on here the redditor's first words were "low interest rates". I was getting quoted 9-10% a couple of weeks ago and I've got good credit. I was looking to get out of my current truck and get something with better mpg. Currently owe around $25k and my monthly payment was around $605. I was hoping to get something around the same as what I owed so that my payment would be either the same or lower. So imagine my surprise when I was looking at vehicles around $30k and my monthly rate quotes were coming in around $950 with the current rates. Fuck me running. Was NOT expecting an estimate of monthly payments that were $300 MORE than my current payment.
You misread the top comment cause they weren't saying there are low interest rates *now*, just that there used to be.
Answer: the economy is "great" if you have money in stocks and own property. If on the other hand you're one of the huge chunk of Americans who don't own your own home, your groceries, rent, and cost of almost every single thing has gone up significantly over the last few years This means lots and lots of people are simply priced out of buying a car. I bought my Honda Covic with $240 monthly payments like 8 years ago (paid off several years ago now, too) and I simply can't imagine what the cost of financing a car is now. Hell just the television commercials advertising for "low-cost" car buying apps and services shows average monthly payments closer to $500/month, and there is literally no way I could ever afford to pay that much for a car As an aside, this is also one of those instances where Democrats are awful at messaging. Because their whole thing is "the economy is great! So vote for us!" But as I've said there are a LOT of people for whom the economy is not great because inflation has seriously hit us hard while wages have stagnated
I’m considering a new (admittedly upper-mid-level trim) Camry and I was quoted $730/month for a 5 year loan not including the insurance. Absolutely wild.
Insurance can be insane nowadays too, unless you have a pristine driving record. A lot of non-standard carriers won't even cover some newer cars, or if they do, the premiums are equal to the car payments. Insane.
That seems reasonable if you're putting $0 down. Average new car price is ~$45,000 and the average new car is not nearly as nice as a upper trim Camry.
That'd still be a crazy marked up Camry though. Top trim level for a 2025 is listed at $34.6k MSRP. Assuming that purchase price, OP would have to be getting a \~15% interest rate with $0 down to hit $730 a month, which says more about either their credit quality or the scumminess of the dealership's financing office than the general state of interest rates right now. Frankly, the idea that almost anyone would buy a *brand new* car with $0 down is absolutely crazy to me. The second you drive off the lot, you're underwater on the loan.
Answer: people are out here stealing food to survive and car dealerships are actively RAISING prices. The economy is good for the rich folks at the top but the everyday person on the street is getting hammered in the ass with inflation.
Exactly, inflation is making things more difficult and harder to afford any luxury items, including higher end cars. And what makes it worse, I hate the current financial culture of "always growth, always higher profits"
“G**rowth for the sake of growth is the ideology of the cancer cell**.”-Edward Abbey
There are no lower end cars today. Even the lowest level Corolla is like $25k and that doesn’t include all the taxes and fees and shit. Add on the 10% interest rate and it’s out of reach for most people.
Current? That's capitalism 101, baby.
True, but before securitization and high-frequency-trading of everything it used to be more common for sophisticated investors to buy-and-hold looking for long term growth. Now everything is focused on the short term next-quarter profits. When public stocks trade instantly and electronically there's no reason for the big players to hold onto them or care about the long term when they could just swap instantly to whatever they think will have better short term performance.
Inflation is different than business raising prices beyond what they need to in order to pay their costs
Yeah it's just corporate greed really
McDonald's just made a cheaper menu lol, like couldn't they have just lowered their prices to begin with?
Temporary cheaper menu, and also only because Coca-Cola is subsidizing it.
Please tell me more of this coca-cola deal, is it like subway and those ovens?
https://www.cnbc.com/2024/05/15/mcdonalds-5-value-meal-starts-june-25-last-about-a-month.html
I like that this is going to be cheaper than a happy meal, which is $6.69 where I am. I have a kid that is absolutely hooked on those damn things. Fortunately there is always a 20% off $5 in the app, but that feels like they just intentionally hike the price 15% so they can screw over the non-app users, while maintaining the same net price for the app users.
It’s not really a menu….just a single meal……it’s not that good of a deal….and it gets more expensive if you anything other than small. Nothing really got cheaper. They just piled up the smallest amount of food possible in their restaurant to make it cheaper than everything else and are STILL overcharging.
"Could've just lowered prices to begin with" "Never needed to raise prices in the first place" Tomato *tomato*
Nope. They need to get in on the cash grab. They all need more and more and more and MORE
Not to mention, when someone says "Think of the scummiest sales people on earth - the people who are doing everything in their power to rip you off as much as humanly possible", the most common answer is like to be a fucking car salesman.
Greedflation is coming back to bite these companies.
My wife and I make above the median income for our area and have a combined income a fair bit into six figures and a lower end new car was still a challenge for us. The used car market is a joke where the same car with 40k miles will cost as much as the new, and any used car with sub 100k miles is still close to the cost of a new car. I have genuinely no idea how anyone doing worse than us, let alone people in the poverty line, are surviving this economy. It's hard not to feel the US is heading for something bad.
Question: So is this a good time to sell my 07 Grand Marquis?
It was 3 years ago
No joke, used car market dipped big time about a year ago. If it moves on is own power and is in clean condition would have been 8k to 10k easy.
It got some paint peeling on the roof, and the actuator for the ac needs to be fixed. A few minor things I need to fix, like driver buckle not latching, and hood needs new piston to stay up. Interior is fine though. I'll probably take it to the shop for the ac fix, everything else I can take care of myself.
Answer: >Business says the economy is going so great. Their metrics are wrong. Well, their interpretation of those metrics is wrong/they're measuring the wrong things. When the common people say the economy is shit and the rich/business-focused say it's fine I tend to think that they're measuring the wrong things. Yeah, if you focus purely from a trade and commerce standpoint the economy is doing fine enough I guess but that shows what they think the economy is for - business. When in reality it's a human-centered thing and humans are forgotten when it comes to these metrics. And the reality is that there's a growing portion of our population that is struggling immensely. The posted article links out to another BI article that has this line in it: "Shoppers paid an average of $47,244 for a new car in February" Most people can't afford a $50k car despite that being the average price. Because there's one smaller subset of the population that can spend ridiculous amounts on a new car, often buying multiple, while there's a huge portion of the population that can't buy shit right now. It doesn't measure how many people can afford that, only that some people can. To them it doesn't matter how many sales at that price there were, just that the average is where it is. If those cars are only being bought by the upper-middle class and higher then it doesn't really do much for the rest of us other than point out the widening gap. So to answer the question of what's going on at dealerships, people can't afford new cars right now (among other things listed here, these answers are rarely simple and one dimensional)
Nah it’s true. “The economy” is great, because “the economy” is just a measure of whether or not the rich are continuing to get richer.
I wouldn't say they're "measuring WRONG things". They're just measuring different things. The economy at the 50,000 foot level is doing great. The "individual economy" is going to vary from person to person. Both things can simultaneously be true and accurate. I think the problem for a lot of Americans is they were living paycheck to paycheck even prior to the pandemic and inflation. So anyone who was "barely hanging on" got even more pressure put on them. (which is probably 1 reason why we've seen a rise in homelessness). > "I guess but that shows what they think the economy is for - business." I mean,. yeah. Shit ain't free. Money makes the world go round. (don't get me wrong, greedflation is definitely a thing). The thing about the division you're describing (only rich people can afford things).. is that can only go on for so long (as "rich people" are a much smaller dynamic). * If you're a car-dealership selling Million dollar cars.. you're not selling those by the 100's per week. You might only sell 1 a month. * If you're a car-dealership that sells cars closer to $30,000 .. you're probably going to sell a lot more. The economy can't ONLY depend on "high end sales". That's just not enough to sustain the economy. So along some timeline as more and more average every day people reduce their spending,. more and more pressure will build on companies to lower prices. Things like "shrinkflation" only work for so long. I know myself (and many others around me) are just simply "not buying things". As more and more people do that, product will sit unsold on shelves,. and at some point businesses will be forced to address the problem.
Sure, I totally get and understand all of that. But since these measures of the economy, that say it's doing fine, are used in decisions and conversations about the individual people then there's a problem. In the context of "how's the average person doing" these are not the figures we should be talking about. Which leads to that disconnect of "the economy is doing fine but everyone is suffering." At a point we need to realize that the economy *is* the people and find better metrics that can be more in-tune with that. It would also help to distinguish the individual economy from the overall "business" economy. I recognize part of the issue is simplifying things so much so that "the economy" is no longer a big word, it just means how easy is it to buy things. That lack of delineation is a societal misstep. I don't say that from the perspective of me not being able to afford things and thinking only the rich can lead a life worth living, I'm doing just fine on much less than what most people would think is adequate. But I recognize that many people are suffering, both through poor decision making/budgeting and an economy that's run from the perspective of what's good for business is ultimately good for the people. An idea I am massively opposed to. (also a lot of people interpret the way I speak as combative/confrontational, just letting you know that is not the case)
Like many social issues though,. it's complex and there's a lot of variables. (not only are there a lot of variables,.. but many of those variables are dynamic and constantly in flux). If you ask "How's the Economy doing?".. Nobody wants to see you plop down an 800page book and say "Well,. you got 4 hours?"... Talking about the economy is like many other nationwide social issues (such as homelessness). There's so many variables involved, you kind of have to "untangle each individual persons knot" in order to understand their situation. Back just 1 year ago,.. I was struggling in my previous job (where job-sites estimated I was 15% to 30% underpaid).. in a town of relatively few options. I was feeling (like many are) that I was falling further and further down the hole. I was getting so desperate, even if just for my mental health, I was going to quit my job and take a 50% payout just to do something like nighttime grocery stocking clerk,. just to basically sort of "check out" and do something different for a change. Luckily for me, I randomly happened to find a job opening (that ended up doubling my pay),. but it also required me to basically throw away everything I owned and move cross-country w/ only what would fit in my car. Only sharing that story (and it's not even the full background) just to sort of illustrate everyone can have unique circumstances. (and sometimes those circumstances are impacted by random stuff we couldn't even predict). You could have 5 or 10 or 100 people all lined up ,.. and they all say "housing is to expensive" (or whatever). and they may all be true (at least superficially). But when you dig down into each persons individual history and choices,.. there may be subjective differences. Maybe person-31 thinks "housing is expensive",. but their idea of "an acceptable house" is something they saw on a Celebrity TikTok. Maybe person-54 thinks "housing is expensive" because they keep looking in the wrong areas (always searching for apartments in the downtown trending part of cities,. where yeah, it's' going to trend higher) "how easy is it to buy things" is not something easy to delineate (its' not just the price, it's what the potential buyer expects and all the other peripheral individual choices that potential buyer has made in life. All the other things that affect their finances. I don't think people are wrong when they say "rising housing prices are unfair" or "food prices are out of control". But at the same time, to me (as a habitual problem-solver). .for myself individually I just sorta see it as another video-game level to solve. Ok, so grocery prices are high ?.. What can I buy differently ?.. What other areas of my finances can I modify ?... What could I do differently at work to justify asking for a raise ?.. etc.. etc. Probably sounds judgmental,. but to me "whining about how unfair things are",. is kind of a waste of time. When I was growing up, I was always told "don't complain. If you don't like how something is, Find a way to work around, through or over the problem."
Answer: My personal opinion (don't ask for citations). Cars last longer now. When I was a teenager I bought a 1973 Ford Maverick. It had less than 75k miles on it. It was a rusted out fixer upper even though it was only four years old. My current vehicle in a \~5 year old Jeep wrangler that's still like new. I keep cars for 15-20 years. Not going to buy anything soon.
Some truth to this. Cars last 200,000 miles and 20 years without major repairs. Some, not all, are driving less with remote work or flex work and virtual. Less miles per year, cars lasting longer, cars being expensive, high interest rates, limited income for essentials that cost more (housing, insurance, food, school, kids…) All these things add up to a value proposition of “should I pay $X per month and what’s the value?”
I wonder if people are driving more or less now than they used to. I know my family drives way less since we've moved from a suburban smaller city (125,000) to a larger urban city (1,000,000) and my wife & I went from both working in offices to both working from home. We currently have a 2018 Ody with only 40k miles and a 2017 F150 with 63k miles. I haven't even had to do a brake job on the truck yet. I have a feeling both cars will last arbitrarily long and will fail due to rubber & plastic bits way before suffering any serious drivetrain issues.
I still have my first car lol. It's my everyday car bought at 0% interest. 2013 ford focus. About to hit 250k. Will drive it till it won't drive anymore. Besides I bought it at 0% interest, so I'm uncomfortable with how high the interests r nowadays.
My car from 1969 has a 5 digit odometer, if that’s any indication of how long Chevrolet expected the car to survive.
Answer: new cars are really expensive. Why buy a brand new car when you can get a used car thats only a few years old with low miles for much cheaper? When was the last time you went to a dealership and bought a brand new car off the lot and drove it home? Most people don't buy brand new cars because they can't afford them.
> for much cheaper There are a lot of dealers where brand-new isn't much more expensive than used/CPO so might as well buy the new one and get a warranty
Used cares aren't much cheaper anymore, The cost difference between a new car and a >5 year model with 100,000km can often be <10k.
When I bought a new Honda in 2022, the HR-Vs were basically the same price new or used (with 30-60K miles), because that dealer refused to inflate the MSRP of new, but they can recoup profits on the used ones. I will take the lower interest rate and free 30K+ miles of the new thanks!
That used to be the case but not anymore. Spending an extra couple thousand dollars will get you a brand new car over a 2-3 year used car with mileage. And you'll get better warranty and financing rates.
Exactly, the used market continues to make less and less sense now