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Forums - General Discussion - American car buyers are borrowing like never before—and missing plenty of payments, too (1.2T$ debt now)

 

How old is your car?

I have no car 5 33.33%
 
0-5 years 2 13.33%
 
5-10 years 2 13.33%
 
10-15 years 4 26.67%
 
over 15 years 2 13.33%
 
Total:15
numberwang on 26 January 2018
VGPolyglot said:

I think there's an answer in the article:

"Part of the boom in this segment is thanks to a technological advances that give banks more comfort lending to borrowers who may not be able to pay them back. Devices installed in cars let collections agencies remotely disable the vehicles when the borrower falls behind on repayment. Since these controversial and potentially dangerous devices make repossession easier, they dramatically reduce risk to the lender, opening up a new market of cash-strapped borrowers that banks were previously hesitant to approach."

 

So, the answer is that banks are more comfortable giving out loans for new cars because they have technology that makes it easier to re-possess.

Having collateral is good for lender and borrower because it makes reverting the loan easier for both sides.

When it comes to taking out a loan, are people forced to buy a 28K$ car instead of a 5K used car?



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Mr Puggsly on 26 January 2018
outlawauron said:
Are there any per capita looks? Average cost of loan doesn't really seem that big of a difference. I'm more surprised that so many people are buying cars.

I checked the article, the graph shows less than $4500 per capita.

There are even comparisons to mortgage debt during the crash, which was like $10 trillion.

Basically its not that bad, obviously this debt is spread across significantly more people, and even if there were many defaults it wouldn't have a huge impact on banks.

Meanwhile the $1.4 trillion in college debt is spread across significantly less people. A much bigger problem in comparison.



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super_etecoon on 26 January 2018
VGPolyglot said:
super_etecoon said:
Ego is a demanding master. I've seen too many young adults saddle themselves with unneccesary debt just for that new car smell. Plenty of inexpensive, well maintained 5-7 year old vehicles available at used car lots that would be just fine. For some reason they get excited about having a "new car" and think it somehow puts them in a new class.

Did you see my post above?

Not sure which of your posts above relates to my post.

People don't need NEW cars.  And just because a bank is willing to loan money to someone doesn't mean you should take that money.  This economy continues to fleece our youth into life changing financial situations.  It's a sad state of affairs.



Zisbest on 26 January 2018

My car is now 12 years old - guess I don't have to specify that I got it for cheap. It has done me good service thus far and by the current outlook will continue to do so for quite a few more yeras.

My point of view concerning cars: The less tech there is, the less can break. Considering repairs, it has been very easy on me.

 

Taking on debt for a car is out of the question for me personally.



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barneystinson69 on 26 January 2018

Don't spend money you know you won't have people! Its so simple!



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Aeolus451 on 26 January 2018

We're constantly being bombarded with vehicle commercials and there's some social trends that pressure ya into buying a new car every tear or so. It's not surprising that some will buy an overpriced truck to appear more masculine. It's not so different from the iphone craze.



EricHiggin on 27 January 2018
Aeolus451 said:
We're constantly being bombarded with vehicle commercials and there's some social trends that pressure ya into buying a new car every tear or so. It's not surprising that some will buy an overpriced truck to appear more masculine. It's not so different from the iphone craze.

So how do you plan on using your truck sir?

Well, I'm mostly going to drive it 20 minutes down the highway to school/work and back, then park it in my driveway.

Oh, and your only looking at the regular F150 model?

Umm, ya. Why?

Well to be honest, I've sold 5 of these to woman this week, and they really seem to love them. You sure you just want the F150?

Umm, uhh, I think so?

Tell ya what sir. Let me go get the keys to that Raptor edition over there, and we can talk some more about what your needs really are. Sound good?



Aeolus451 on 27 January 2018
EricHiggin said:
Aeolus451 said:
We're constantly being bombarded with vehicle commercials and there's some social trends that pressure ya into buying a new car every tear or so. It's not surprising that some will buy an overpriced truck to appear more masculine. It's not so different from the iphone craze.

So how do you plan on using your truck sir?

Well, I'm mostly going to drive it 20 minutes down the highway to school/work and back, then park it in my driveway.

Oh, and your only looking at the regular F150 model?

Umm, ya. Why?

Well to be honest, I've sold 5 of these to woman this week, and they really seem to love them. You sure you just want the F150?

Umm, uhh, I think so?

Tell ya what sir. Let me go get the keys to that Raptor edition over there, and we can talk some more about what your needs really are. Sound good?

lol Yep. F150's and Silverados are everywhere.



EricHiggin on 27 January 2018
Aeolus451 said:
EricHiggin said:

So how do you plan on using your truck sir?

Well, I'm mostly going to drive it 20 minutes down the highway to school/work and back, then park it in my driveway.

Oh, and your only looking at the regular F150 model?

Umm, ya. Why?

Well to be honest, I've sold 5 of these to woman this week, and they really seem to love them. You sure you just want the F150?

Umm, uhh, I think so?

Tell ya what sir. Let me go get the keys to that Raptor edition over there, and we can talk some more about what your needs really are. Sound good?

lol Yep. F150's and Silverados are everywhere.

I've always had a Silverado or Sierra. Growing up on a farm, had to have trucks. Still do now even though I really don't need one. Other than the just ok fuel economy, I don't know if I would ever buy anything other than a truck/suv. The fact that I never have to worry since it can pretty much do and/or get me out of anything is worth it as far as I'm concerned, especially in the winter. I've never bought new, and won't. I never buy the HD or luxury model. I always buy something that clearly has been taken care of and is actually worth it's condition, and it's worked out just fine over the years and ends up cheaper even with the cost of fuel over a new car. My 06 still runs and looks great and has plenty of life in it.

Adding aftermarket goodies to the interior is also quite easy nowadays, and not that expensive, so paying for a new ride just to be able to have some of those electronic options is just a waste of money. General maintenance, and general repairs aren't difficult or costly either. If teens/adults spent a little more time learning about vehicle basics, it would make their lives so much easier and would save them a tonne of money. I can understand the new vehicle thing as a teen though. If I had or could get the money, I would have been tempted to buy new back then, just for status. Thankfully, that wasn't the case, and I'm happy it wasn't.

Last edited by EricHiggin - on 27 January 2018

Mr Puggsly on 27 January 2018
Aeolus451 said:
We're constantly being bombarded with vehicle commercials and there's some social trends that pressure ya into buying a new car every tear or so. It's not surprising that some will buy an overpriced truck to appear more masculine. It's not so different from the iphone craze.

I don't think that's the case. Anecdotally, virtually everyone I know buys used. The debt would likely be much higher if many/most weren't. The article has graphs, show under $4500 debt per capita.

A used car that's only a few years old and in great condition could easily be around $10K-20K. Depending on style, etc.

In comparison buying the latest Galaxy or iPhone is a fraction of the cost and more of a trend. Even poor people seem to have iPhones.



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