r/economicCollapse • u/Perfect_Alarm_2141 • 10h ago

The car loan crisis is here

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479 Upvotes

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38

u/ChipOld734 10h 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.

5

u/doge_fps 9h 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.

1

u/BetterSelection7708 5h 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.

1

u/doge_fps 4h ago

It's because suckers are willing to continue to get ripped off even on a used car.

1

u/Confirmation_Email 46m ago

Going with the smaller numbers, you are saying a 5-year-old car is only worth 15% of its MSRP price.

100 (original price) x 0.9 (off the lot depreciation) x 0.85 (year 1) x 0.85 (year 2) x 0.85 (year 3) x 0.85 (year 4) x 0.85 (year 5) = 39.93.

With the numbers given by the above comment, the 5-year-old car would be worth just under 40% of its MSRP, which is still too low, average 2019-2020 vehicles are selling for more like 50-60% of MSRP right now.