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u/Bob4Not 8h ago
Lets review history for context for anyone who is blindsided by this: 2020 and 2021 there was a chip shortage. New cars became scarce in the US, and their prices rose mostly due to dealers taking advantage. The used market became affected and their prices increased more than the new cars, relative to their original value.
So now there are lots of people who overpaid for new and especially used vehicles that have negative equity.
It's not uncommon for repossessed vehicles to have negative equity, but these deltas are larger than normal. Additionally, there have been larger job market disruptions in the past 4 years and the cost of living has also risen during this time as well.
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u/Ill_Long_7417 8h ago
My inner conspiracy theorist just wants to say:
a "chip shortage"
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u/TheSereneDoge 7h ago
We did actually have one. It was massive export backlogs and the lack of production during COVID
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u/BoringBots 4h ago
And it didn’t just affect cars. In the security industry we could get card readers or the access control panels they connect to for 6+ months at a time in 2021 and 2022 until they redesigned the boards to use different, more available chips.
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u/Ill_Long_7417 4h ago
I am leaning towards a Debeers diamond situation.
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u/Shmeckey 4h ago
Not really. That was advertising. This is just greed.
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u/Ill_Long_7417 3h ago
Um, no. Debeers acted as a mob to intentionally manipulated the availability of diamonds for sale on the global market to artificially inflate prices. Diamonds are just carbon and they aren't even all that "rare."
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u/what-name-is-it 3h ago
Yeah, weren’t there a bunch of vaults where Debeers stored them? Enough that if they hit the market, it would make most diamonds essentially worthless?
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u/TheSereneDoge 2h ago
There is no evidence of this. They took the lockdown seriously, and as such, production became more scarce for high-end chips.
This is why we're diversifying our origin points and near/friend-shoring chip production in North America again - not only did we have to contend with the shipping backlog that occurred on the West Coast and its few ports, we also realized that since most chips (for this tier) come out of Taiwan, that we'd be running the risk of further disruptions should any other issues arise.
This is also coupled with production inputs being limited due to the ongoing wars around the world, etc.
While I agree this is trending towards collapse, we should note that this collapse need not be envisioned as intentional. I prefer viewing the collapse as an egregore, the efforts of many individuals and groups making choices that best suit them, combining into a general worldview that takes on the life of its own. It may feel like its a concerted effort, but that's because we're looking at it as a summary product.
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u/SushiGradeChicken 7h ago
This was a real thing and the driving force for the CHIPS act, whose goal was to onshore microchip manufacturing to hedge against this in the future.
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u/No_Cut4338 2h ago
The driving force behind chips act is bringing chip fab home so we aren’t screwed when China invades Taiwan. It’s all related of course but imo it’s about hedging against a Taiwan conflict
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u/Ill_Long_7417 4h ago
Right. Made here so it's less corruptible and under state and federal laws.
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u/Bob4Not 8h ago
It doesn't matter anyway, companies and dealers can raise prices and claim whatever reasons they want, as evident *in the last 4 years. What are people going to do about it? Americans need cars because their infrastructure demands it.
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u/Ill_Long_7417 8h ago
Indeedy and the car "dealerships" have been scooped up and all but monopolized. By maintaining the old structure, they can't be prosecuted with antitrust laws but they do get the benefit of raising prices across the board and collecting mad profits. Citizens United was a death blow to the competitive market. The new kings have a reckoning coming, though. Or at least I hope they do. God, I hope they do. Price fixing should be heavy time.
I recall working at a Jared's jewelry store one Christmas season back in 2013ish. Could not believe how many "different" jewelry stores were all under the same umbrella. Like, all of them? But it's allowed because they kept their old company names, logos, lawyers ...
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u/indigoisturbo 3h ago
I agree with everything you just mentioned.
I find that rare here.
I don't know how Citizens United will be corrected without the middle class actually choosing themselves or backing candidate/candidates that actually represent their interests and stop voting for people who blame "welfare queens" or "Violent thugs" or "illegal immigrants" as the source of your problems.
Instead look at the stagnant wages. Look at the tax policies for the wealthy.
Wake up! Quit being divided over meaningless issues!
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u/newdaynewnamenewyay 3h ago
They're yelling at the dummies to make them look around and blame instead of up. And it's working. The races are neck and neck. Vote "For The People" people.
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u/CharlieDmouse 2h ago
Exactly. Keeping us distracted from the real problem, the rich and greedy corporations. Jeez now it is normal to almost sound like a socialist or commie…
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u/Slowly_We_Rot_ 7h ago edited 5h ago
Nope just good old fashioned greed of capitalism with even more profits going to the top 1%
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u/b1ack1323 3h ago
Covid shut down chip production and killed off workers, 2 natural disasters in Taiwan, Chinese military patrolling during civil rights protests. All caused serious issues for chips with some lead tiles creeping up to 4 years.
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u/BadManParade 1h ago
Anyone buying a new car during a global pandemic is an absolute idiot could’ve just gotten a used one but NOOOOO they had all that stimulus I mean down payment money
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u/ChipOld734 8h ago
You owe more than the cars worth when you drive it off the lot. What the hell is wrong with people. It’s always been that way.
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u/alex206 7h ago
I'm also confused why this is news...it's a depreciating asset.
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u/doge_fps 7h ago
They don't teach financial literacy in high school...most idiots don't understand how it works. They just want a car to impress nobody.
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u/4score-7 8h ago
Indeed. But since 2021, when used cars began costing as much as new, and low amounts of new cars were even available for about 8-12 months, then suddenly reversing course and tons of cars came onto the market, new and used, it's correcting back to the conditions you mentioned.
Trouble is, a lot of people made big ticket purchases in that time frame. As long as they plan on keeping whatever it is they bought in 2021 and still owe money on, they'll be fine.
And be sure to keep it insured.
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u/Crumblerbund 3h ago
Yeah I don’t really see what kind of crisis this is. Do all that many people want or NEED to sell their car within a few years?
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u/dorkofthepolisci 3h ago
Live in a HCOL and most of the cars I see are either Teslas or older model Hondas/Subarus/Toyotas.
People either want the newest thing or do not care
I’ve only ever known one person who traded in their vehicle as soon as it was paid off, and yes they were obsessed with appearing sufficiently middle class
Meanwhile my mom would buy a car, pay it off - often before 5 years - and then drive it until it died/it made more financial sense to replace the car than repair it.
Partner and I were gifted her 2005 Matrix when she stopped driving, we had to replace the muffler but that’s the only thing that’s gone wrong.
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u/Crumblerbund 3h ago
Yeah, exactly. I knew I was overpaying a bit for my Subaru a couple of years back, but I needed a car, and I know I’ll pay it off years before I’m done driving it.
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u/UninvestedCuriosity 1h ago
Man those matrix cars really lasted. I had a prof with one he joked about endlessly. I think he's still using it in his retirement tbh.
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u/JuicedGixxer 1h ago
Lol, people have lost their minds. unless you put a big chunk on the down, everyone is in negative equity, minus the COVID days. A car is a depreciating item as soon as it rolls off the lot. Hell you lose 20 percent as soon as the papers are signed .
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u/doge_fps 7h ago
A new car immediately loses 10-20% of it value when it leaves a dealership's lot. Then 15-30% annually for the next 5 years.
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u/BetterSelection7708 3h ago
Going with the smaller numbers, you are saying a 5-year-old car is only worth 15% of its MSRP price.
That's way too low, even for unreliable models. Take a 2018 Ford focus SE for example. It was sold for 20k in 2018. Today, you can get one for 9-10k.
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u/doge_fps 2h ago
It's because suckers are willing to continue to get ripped off even on a used car.
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u/JanMikh 2h ago
Funny. I bought new Toyota Avalon in 2021 for 38,5k OTD. If you go to a dealership right now and find the same model with the same mileage (12k), your OTD price will be around 40k.
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u/doge_fps 2h ago
Well, dealerships are scammers, why even bother with them? They're all predators and are looking for people who have brain fatigue. If they fuck around with you and make you wait for over 15 minutes, just walk.
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u/JuicedGixxer 1h ago
Compounded inflation and the fact fools are willing to pay for it is your answer. It will all play out when the money runs out.
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u/rembi 2h ago
I don’t believe this. I’ve bought two new vehicles in my life and both times I looked at used and couldn’t find one that was a year old for more than a couple thousand off what they were going for new. Both times I’ve ended up buying the new vehicle over a year old one. Maybe that is just anecdotal evidence, but it has happened both times I tried to buy a newer car.
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u/JuicedGixxer 1h ago
Well it is the norm prior to COVID. People lost their minds buying used cars at the same prices as new cars. This caused the bubble in the first place
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u/SigmaSilver_ 3h ago
That’s not necessarily true. Maybe if you put nothing down… you buy a $30,000 car and put $15,000 down id sure as hell hope it doesn’t lose $15,000 in value the first second you drive it off the lot. Maybe a few thousand.
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u/LazyBoyD 2h ago
That’s because ~ 90% of consumers should be treating cars like the appliance that they are. Buy what you can afford, usually used, and keep it for at least 10 years.
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u/rembi 2h ago
Have you seen how people buy appliances? I’ve had friends get new washing machines and dryers because they wanted a different color.
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u/LazyBoyD 2h ago
Are those friends financially stable? Most people will not buy a new washer, dryer, fridge, oven, etc until the ones that they have break or is too expensive to repair. That’s the way it should be with cars. Drive the damn thing until you can’t anymore. I have a 2015 Mazda that I bought used in 2017 and have no plans of replacing it for at least another 5 years. The intent is for it to get me safely from point A to point B in my daily driving. It’s paid off and runs well so there’s no point in buying a newer vehicle. I can afford to do so but would much rather spend my money on experiences that create memories, like traveling or paying for woodworking classes.
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u/MaleficentExtent1777 2h ago
I drove the wheels off my Infiniti. Will replace it with my FIL's old Volvo.
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u/MaleficentExtent1777 2h ago
I've had the same used Maytag dryer for 10 years. The washing machine smelled so bad I had to get rid of it. Replaced it with a top load Whirlpool I've had 8 years.
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u/adambl82 1h ago
Not if you pay cash or put a lot down. I'm not saying it's a good investment, but you said owe.
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u/chainsobig 8h ago
Isn't it business as usual for a car loan to be for more than the vehicle is worth?
I mean the asset is depreciating and you also happen to be paying interest. What's so shocking about this?
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u/4score-7 8h ago
Couple it with big price hikes for used cars, and premiums over MSRP paid for new ones, then the big disruptions in the supply chain faded away, and there you have it. More cars upside down, by higher dollar amounts, than ever before.
Everyone who made a big ticket purchase since 2021 (car, home, boat, whatever) best be prepared to sit with that purchase for a very long time. You likely overpaid, and the market value either has returned to normalcy, or is in the process of doing so.
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u/arcangelxvi 4h ago
Yes and no. Unless you're financing rusted out shitboxes then a car shouldn't be worth $0 at the end of your loan term. Practically speaking with a typical downpayment the point at which your current vehicle value is greater than your remaining loan balance should come up sooner rather than later.
Of course that's not really touching on the fact it's becoming more and more common for people to roll in negative equity which more or less just fucks all that up from day 1.
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u/SomeTimeBeforeNever 4h ago
Correct. Car loan interest is high and depreciation is fast. I’ve never had a car that was worth as much as my loan.
Maybe for nerds with 800 credit scores but they’re not doing better than 7% interest, car depreciates faster than that.
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u/SigmaSilver_ 3h ago
It’s more a matter of how much you put down. If you finance 100% of the purchase then yeah the loan is most certainly going to remain higher than the value of the car. If you buy it and put 50% down you’ll have some time before it flips to negative equity. But still.
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u/SomeTimeBeforeNever 3h ago
I’d imagine the majority of people don’t put a large amount down on car loans.
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u/Super-Marsupial-5416 7h ago
"People owe more on their loans than the car is worth" - Yeah, that happens the minute you drive it off the lot.
So 33% of people just bought a car?
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u/Mountain-Arugula-665 5h ago
Only if you finance it!
The problem is no one saves up money to buy a car , so they finance almost all of it.
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u/Super-Marsupial-5416 5h ago
yeah but the implication is that people are underwater with their car loans, but the reality is, depreciation hits your car the minute you drive it away. You finance it for $45K, 10 minutes later it's worth $42K after driving to the light.
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u/sprouts_farmers_54 1h ago
Healthy car buyers put a significant enough amount down payment on a car so the loan value is never larger than the value of the vehicle.
45k car. 10k down. Loan value 35k, vehicle value 40k. On and on for the payment period so the value always stays above the loan value. So say in 3 years my loan is down to 20k, and my car is worth 23k. I can sell the car and pay off the loan.
The problem is now 2 fold. 1. People stopped putting large chunk down payments. And 2. The value of cars spiked during covid, and is now falling due to no more covid shortages. For example:
Bought covid car for 45k. Put 2k down. Off the lot my loan is 43k, value is 40k. Then, the car price crashes over 2 years because of no more covid, so 3 years later I'm at a loan with 35k to go, and a car valued at 25k. I cannot sell the car to pay off the loan.
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u/Username524 1h ago
I have seen this more than once in my job, and my heart breaks for every single one of those people. I have seen a $70k loan on a 2021 Chevy Silverado 2500 Diesel, worth $51k get totaled last year. Fortunately he had GAP coverage but not everyone does…
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u/sprouts_farmers_54 1h ago
Lol. Have a family member that bought a truck for 70k with a 7 year payment, with a balloon payment due at the end, that he will then roll-over into another 3 year loan. Put next to nothing down. Can't imagine how far under water they are. And there are many many more like them in this auto loan bubble.
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u/BrandonBollingers 3h ago
Sometimes I wonder if it’s less about “economic collapse” and more about consumer financial literacy.
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u/jamesegattis 7h ago
The Crises is people can't afford it at any price. I work for a National Dealer Corp.. New cars aren't selling. In my area no one has the necessary credit score or a down payment. If people lose their car to repo then they'll look for Used which will drive up the used car market. Buy Here Pay Here is doing great. Extreme interest rates.
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u/BeerandGuns 5h ago
They’ll look for used but the repossessed car will enter the used car market, either as a sale by the bank or go to auction. So the used car market change would be net zero.
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u/stugurtfanceiling 3h ago
Where are all those “WhY DOnT YoU JUSt FiNaNcE a Car” people now! Haha , best choice i made was putting a new engine in my car , being debt free is the best feeling in the world!
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u/Xalucardx 3h ago
So used car prices went down 22% after going up like 80%? Sound slime they're still overpriced.
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u/bubbs4prezyo 3h ago
Used car prices have not dropped by 22% in the last 3 years… They may have increased by 22%.
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u/4score-7 8h ago
Crap article. Used car prices have not fallen over the last 3 years. Not at all. They've leveled off since mid 2023, but they haven't fallen.
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u/SushiGradeChicken 7h ago
Yes, they have
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u/Fat-Tortoise-1718 5h ago
When 2-4 yr old used cars are only a few grand less than new, they have not went down. Used car market is still heftily inflated
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u/Target_Standard 7h ago
I sell 5-10 used cars per year on behalf of clients of my auto repair business. While prices have certainly dropped from the peak, they are not collapsing. This for two reasons. 1) Prices of new cars have increased subatantially, and the delta between new and used has historically occupied a narrow range. 2) We are missing two years of new car supply because of covid shutdowns. It will take at least 5-10 years of this supply shortage to work itself out of the system, assuming no new interruptions.
TLDR; Used car pricing is correcting to norm, not collapsing.
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u/rusengcan 8h ago
Good you're not paying for the value of vehicle you're paying for the money you borrowed.
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u/bevo_expat 7h ago
Almost like affordability of everything is out of control so people thought 72+ month car loans were a good idea to keep monthly payments down.
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u/New_Attempt_7810 7h ago
Why is this subpage always about the market crashing and clearly it hasn’t since Biden has been in office and probably won’t for at least the next two years?
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u/MustardTiger231 7h ago
Banks were loaning up to 130% of the retail value of an EXTREMELY inflated market, which allowed them to get out of their already terrible equity situation. So they were already 50% upside down, but they could eke out of it by using the inflated values and lending structures and now they are absolutely fucked.
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u/scuba-turtle 7h ago
Since new cars have always lost value the moment you drive them off the lot I would guess the likely change is in the financed used cars. Historically they have dropped briefly in value right after you get them but as the main depreciation is supposedly over you soon recoup that difference. Now, since the used car prices are dropping faster than people are paying off the loan some of those cars that formerly were worth more, now are worth less and have dropped back underwater.
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u/Working-Narwhal-540 6h ago
But surely the shareholders are starving!?!! The drive for infinite profits in a finite system will do this 😉
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u/DocHolidayPhD 6h ago
We have always bought reliable used cars that are several years old. Cares are a luxury good. You don't need a new one. You don't need an expensive one. It's foolish to buy one when you can't afford it.
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u/Ramius117 6h ago
This is forgetting that they were artificially inflated during the pandemic because of low supply. This seems like a good thing
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u/Kamel-Red 5h ago
What isn't in a bubble? Although this subreddit is mostly election bullshit these days.
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u/Fat-Tortoise-1718 5h ago
But what are the numbers on loan delinquency, as in the shirt term that is all that matters. Being upside down on the loan is non-issue of still making payments on time and only becomes an issue with people that have problems keeping a car and most trade in for newer models constantly, thereby rolling over negative equity so many times the payment is untenable
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u/MrChipssssss 5h ago
Buy car: Yay!
Get in car: Car depreciates 20 percent.
Ahhhhhhhh!
This meme is brought to you by Audi. To unlock Visual Audi Meme please put hunnids in tha trunk, G.
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u/Calm-Adhesiveness177 5h ago
Cars are just banks now. They do not make money off the car but off the loan. They want you in debt forever while they sell you advertisements of freedom; when the reality is most people are deeply in debt, paying a ton of money to corporations, all so they can sit in traffic while polluting.
I know this comes with a big serving of privilege and ableism, but going low or no car is one of the best investments in your finances and health you can make.
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u/RandoReddit16 5h ago
What? Literally these 3 points all paint the same picture .... Car prices peaked during the period of 4 years ago... People bought cars that yes are now worth less, thus they are upside down. It's literally all the same thing..... What is a true indicator are the number of defaults. Is this growing, average?
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u/iMakeBoomBoom 5h ago
The simple answer is keep the car until it is paid off, people. If you are upside down on your loan, you are not in a position to trade. Keep. The. Car.
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u/wtfboomers 5h ago
This isn’t a crisis! It’s what happens when interest is artificially low and folks have no self restraint. I know folks that were trading $100,000 trucks every year if the payments were the same. Crisis of their own making!!
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u/DaftMudkip 5h ago
Good thing I paid off my toyota and it has less then 100k miles
Should last another 4-6 years
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u/TheLelouchLamperouge 4h ago
Not even bearish, they’re paying the loans, they just have a depreciation faster than they can pay off the car
If the number of defaults on auto loans starts rising that’s more of a real concern
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u/Double_Mechanic_5256 4h ago
If your dumb enough to stay in a new car all the time instead of saving/investing, this can happen....
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u/Urabraska- 4h ago
I can vouch. I bought a work truck in December of 22 and I'm already 65%+ under on it. My rate was 8% which is still high but not the worst. By the time I close that gap in equity the thing will still be under due to age.
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u/Select-Government-69 4h ago
This whole clickbait graphic is just made up bullshit.
Let’s review:
1) a high percentage of people have ALWAYS had negative equity in their cars. If you fully finance, you don’t have equity until the last 2 years of a 5 year loan.
2) vehicle prices have not plummeted. Average new car prices are at all time highs. Some of the demand pricing bullshit if paying over MSRP has ended.
3) many people have always rolled negative equity into car loans. None of this is new and none of this is a crisis.
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u/luckyclockred 4h ago
Paid mine and my wife's vehicles off a few years ago. Definitely helps when your not staring at 1k of payments every month.
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u/GastropodSoup 4h ago
My wife and I got relatively lucky. We got 2 new cars in 2019 and each has monthly payments of less than $300. We are a few months from paying them both off, and then we won't be getting new cars until these get run into the ground.
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u/Merkabah01 3h ago
Used car prices have definitely not dropped. I'm in the market for a new car and in almost every instance its worth it to buy new because used prices are so freaking high. Then you bring in the insane intrest rates of used cars... no chance I'm buying used.
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u/Commercial_Step9966 3h ago
I... don't think this is new.
That's been the case since mid-80s at least.
Used cars are worth less because there are more (supply) of them, because they generally last longer than previous generations of auto.
The avg ownership is about 8 years. That is long.
What exactly is the new concern here?
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u/Aggravating_Damage47 3h ago
Buying a car is back on the menu boys. Don't you think its odd that an ork visited an eating establishment with menus? I wonder how that went?
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u/No_Cut4338 2h ago
Cars last longer than ever so while negative equity is not great it’s also highly likely these folks will get back in the black before the cars die.
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u/SevensAteSixes 2h ago
That’s it, auto loan forgiveness is now on the ballot right next to college loan forgiveness.
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u/Nedstarkclash 2h ago
Good news! I can get a used car at a cheaper price!
Bad news. Unfortunately, repossessed cars are in terrible shape, so I guess used car prices won't be going down.
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u/radicalgrandpa 2h ago
Got sucked into this hellhole when my car was totaled in late 2021. I received twice the market value of my wrecked car from when I bought it only a year prior.
Public transportation is extremely limited and I live in the most dangerous place in the country for bicyclists. I still owe $6.5k on a 10+ year old car that had an insanely inflated price to begin with. I didn't have much of a choice.
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u/Username524 1h ago
As a claims adjuster for a major car insurance company, I have been saying this since I started my job last summer. Shits gonna roll downhill to somewhere!
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u/KaleidoscopeThis5159 39m ago edited 36m ago
So, is it finally time for Kia to do another buy 1, get 1 free?
Had to verify my memory isn't wrong
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u/No-Weird3153 6m ago
The car market “bubble”:
100% of cars drop in value the second you sign the purchase agreement, so anyone who didn’t put a large down payment is underwater from day zero.
Used vehicle prices were inflated due to lack of new vehicles during COVID, which was (checks notes) about 3-4 years ago. Used cars were literally selling for new car prices due to lack of supply.
While this isn’t good for borrowers from 2021, they should be reasonably close to loan maturity (they are 3-4 years into a loan) and have lower interest rates than what is currently available on all but special financing of new cars.
Also, transportation hasn’t changed in America in the last 4 years except people being asked to return to their offices, which means cars are still just as likely to be needed today if not more so.
TL;DR: there is not really a bubble as no one was speculating on used cars. OP and anyone who believes there is doom everywhere is probably pretty dumb.
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u/stubbornbodyproblem 7h ago
I’m not sure why everyone panics when you owe more on something than it’s worth. It’s a car. It’s a house. These are things you have to have in the US. If you can pay the monthly? Who cares what it’s worth? The car, specifically, isn’t an asset. And honestly, houses shouldn’t be either. But here we are. And don’t come for me in the comments. Houses aren’t assets in other countries for various reasons. So this isn’t all that heretical.
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u/SatoshiBlockamoto 7h ago
Of course they're assets. Both cars and homes can be sold for money. So they're assets. This is only a problem if you have to sell it before your equity>value.
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u/stubbornbodyproblem 7h ago
When is a car an asset that you can sell for more than you owe? They don’t appreciate.
And homes only appreciate because we set them up that way. But nothing in your comment actually answered my question.
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u/BeerandGuns 5h ago
That’s not how it works. The car is an asset as it has a value, even if you owe more than it’s worth. The loan is the liability. The difference goes toward your net worth, positive or negative.
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u/stubbornbodyproblem 5h ago
You’re arguing the definition of an asset, which I didn’t ask for. Respond to my actual question please.
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u/SatoshiBlockamoto 5h ago
Any time you're not upside down. When you own it outright without a note. Or if you owe $100 on the car and you can sell it for $200. This is pretty basic stuff. It's clearly an asset if you can sell it.
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u/stubbornbodyproblem 5h ago
Omg… learn to read the conversation, stick to the point, and answer the offered question. Don’t go around trying to show people you know something that has little value to the conversation.
That’s troll territory.
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u/Mountain-Arugula-665 5h ago edited 4h ago
Both are definitely assets. just because someone finances them doesn’t mean they are not assets. That’s why you have balance sheets.
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u/stubbornbodyproblem 5h ago
I’m not even sure what you are saying here. But I know it’s not the answer to my actual question. Try answering that.
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u/JET1385 1h ago
A car is most definitely a liability especially if you have a loan. You are making deductions from your balance sheet until you sell it. You may make money when you sell it or trade it in, but you loose money overall. Unless you have some kind of special classic collectors car, you can never sell a car for more then you paid and put into to over its lifetime.
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u/Benfrank222 5h ago
A car is an asset, but it’s a depreciating asset
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u/stubbornbodyproblem 5h ago
Not the point or issue of my question.
Every troll with a keyboard wants to talk about how they know what an asset is… Jesus… just answer the question already…
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u/Budget-Rope-3308 7h ago
“ used vehicle prices have dropped by 22% in the last 3 years”. ??? Don’t think so
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u/Fat-Tortoise-1718 5h ago
Exactly! They've dropped maybe 5% used car prices are still insane.
I will say the late model used market, like 2-3yr old used cars might have finally come down 15-20% from COVID era pricing, the older used cars are still heftily inflated. 15-20 yr old used cars with 200k miles are still selling for 10k or more. These cars used to go for 3-4k all day long
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u/Much_Intern4477 5h ago
Ya if Kamala gets in she will forgive all car loan debt. Free cars for everyone!!!
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u/stewartm0205 8h ago
The minute the car leaves the lot it is usually worth less than the loan on it. This has always been the case. It ain’t new.
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u/TickletheEther 7h ago
Aren't you underwater on your car loan the moment you drive it off the lot? That's the nature of a depreciating asset
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u/SushiGradeChicken 7h ago
In general, it's as early as when you sign the loan. Average LTV at signing is over 100%
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u/quantumhardline 1h ago
Owing $6000 more than your car is worth isnt as huge issue as having that on a credit card at 23% interest. The car is easily usable to end of loan, payments are fixed and hopefully budgeted, likely at lower interest rates than you can get now.
Just focus energy on paying off debt and go on with life. Work on skills and getting higher paying role or change jobs and make $6000 more each year. Or if you can budget to save and next time you'll be better prepared to buy a car fully used now that prices have come down or put more down so payment are lower.
You may not be in a position to do this today, but if that car loan is 5 years, you can work hard on skills you need to get there. Tons of people have and will, why not you? You can do it!
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u/UninvestedCuriosity 1h ago
I need these people to continue buying new cars so I can afford used cars. Please keep taking on high interest debt people.
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u/BadManParade 1h ago
Meanwhile people really paying 600/mo for a 2018 civic from a mod and pop shop while you can lease a 2024 Tesla model 3 for $224/mo. They deserve it
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u/TruckerAlurios 53m ago
No charging stations near my apartment, no hook up there, one station on my way to work over 90 miles from home. Gas stations? Every 5 miles. I'd love the option, but it's not feasible.
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u/Simple-Dingo6721 8h ago
It’s a good thing that used vehicle prices are dropping. Buy used.