32% of used car trade ins are underwater

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Originally Posted By: fdcg27
Originally Posted By: Lolvoguy
Originally Posted By: Artem
People need to keep their cars for longer, until it's paid off, AND THEN you're free to go trade it in if you want. Use that 2-3k car value as your down payment on the next one, of you want.


This is currently not possible. Given that most vehicles since the mid 2000's are all made with plastic engine and powertrain components, means that they simply cannot be maintained long term without considerable repair/rebuild costs.

Add to that the computer software required to repair and service these vehicles, makes your statement financially silly. Much cheaper and easier to simply get a new(er) vehicle.

Now, don't get me started on the soy based wiring insulation and interior panels, seats etc which all have a finite life expectancy.
crazy2.gif



Figured that a Luddite would show up in this thread.
Plastic parts, just like everything else you own?
Meanwhile, todays cars last longer without major repairs through their working lives than have any that preceded them.
Finite component lives?
When were they anything else?
I'm confident that our newer vehicles will be just fine out to 200K+, plastic parts or not.


Yes and no.

Custom software and tool to diagnose? There's ebay knock off for that.

Plastic engine? Sure, if that's not the weakest link (these days it is the direct injection and timing chain guide), bad transmission design is probably the only thing you cannot do anything about because by the time you realize it is too late. You can buy from manufacturers that have reputation and have a history of extending the warranty to 150k miles, and then just rebuild or buy used junkyard unit to swap in when it is old.

Seriously, repairing cars are expensive these days and many good cars are sold to export after accidents than repair locally. The most expensive part is the paint job, and there's nothing you can do if you don't have full coverage insurance and got into accident at your fault. New car or not.
 
Originally Posted By: PandaBear
Originally Posted By: fdcg27
Originally Posted By: Lolvoguy
Originally Posted By: Artem
People need to keep their cars for longer, until it's paid off, AND THEN you're free to go trade it in if you want. Use that 2-3k car value as your down payment on the next one, of you want.


This is currently not possible. Given that most vehicles since the mid 2000's are all made with plastic engine and powertrain components, means that they simply cannot be maintained long term without considerable repair/rebuild costs.

Add to that the computer software required to repair and service these vehicles, makes your statement financially silly. Much cheaper and easier to simply get a new(er) vehicle.

Now, don't get me started on the soy based wiring insulation and interior panels, seats etc which all have a finite life expectancy.
crazy2.gif



Figured that a Luddite would show up in this thread.
Plastic parts, just like everything else you own?
Meanwhile, todays cars last longer without major repairs through their working lives than have any that preceded them.
Finite component lives?
When were they anything else?
I'm confident that our newer vehicles will be just fine out to 200K+, plastic parts or not.


Yes and no.

Custom software and tool to diagnose? There's ebay knock off for that.

Plastic engine? Sure, if that's not the weakest link (these days it is the direct injection and timing chain guide), bad transmission design is probably the only thing you cannot do anything about because by the time you realize it is too late. You can buy from manufacturers that have reputation and have a history of extending the warranty to 150k miles, and then just rebuild or buy used junkyard unit to swap in when it is old.

Seriously, repairing cars are expensive these days and many good cars are sold to export after accidents than repair locally. The most expensive part is the paint job, and there's nothing you can do if you don't have full coverage insurance and got into accident at your fault. New car or not.



I've spent very little to maintain my Rav4 and haven't needed any special software or tools.

Today's cars go 200k, 300k+ miles.
 
I for one am happy there are perpetual car payment people in this country. Someone has to make interest payments so I can make money on my investments.
 
Originally Posted By: fdcg27

Plastic parts, just like everything else you own?
Meanwhile, todays cars last longer without major repairs through their working lives than have any that preceded them.


What rock do you live under ? The life of the modern vehicle is defined by the plastic they are made of - plastic is the cause of 50% of the problems I see in the trade. No way is some modern car going to last as long as a car build in the 1930's, they are rubbish.
 
Originally Posted By: ZZman
Originally Posted By: madRiver
*If people stuck to paying for new vehicles in 4 years or less this would not occur.


Many if not most Americans can't or won't make monthly payments that high.


Exactly my point they can’t afford the car. You extend the payment period the depreciation will outpace the amount paid for on car and voila you are underwater. This is a real risk of people with 2 year cars totalled that have 7 year payment terms. They walk away owing money.
 
Originally Posted By: Silk
Originally Posted By: fdcg27

Plastic parts, just like everything else you own?
Meanwhile, todays cars last longer without major repairs through their working lives than have any that preceded them.


What rock do you live under ? The life of the modern vehicle is defined by the plastic they are made of - plastic is the cause of 50% of the problems I see in the trade. No way is some modern car going to last as long as a car build in the 1930's, they are rubbish.


Aren't you down under? Maybe you're the one living under a rock. Notice how many cars from the 30's aren't around anymore? I don't think you made your point. Average age of the US car fleet has gone up over the last few decades.

https://www.rita.dot.gov/bts/sites/rita...._01_26.html_mfd

https://www.usatoday.com/story/money/201...r-too/30821191/
 
People are so irresponsible when making these purchases sometimes, over the years ive come across a few former co workers who they had to have something, they had to buy something to make them feel good (perhaps they have some kind of disorder).
Financing new cars and a boat when they had a functional car.
One guys fiancé was about to get a job which supposedly was gonna pay her 80K, (she didn't get the job) they stared looking at a $400 K house, when I asked why are you guys jumping the gun so fast his response was " we can afford it now ". it's mind boggling how some people have no clue how to manage money, this includes about 75% of professional athletes who go bankrupt shortly after their career is over. They just don't think about tomorrow, live in the moment bra.
 
I thought this was a thread about flooded cars.

The term is upside down, not underwater.
21.gif


I know several people I work with that are driving vehicles that they are paying 2x what they should because they keep trading in before it is paid off.

My current vehicles are paid off, and I am saving for my next vehicle in another 18 months (will probably be a 1-2 year old vehicle, don't want to buy older than that due to the flooding we had here). While I probably will not have enough to pay cash, I should be able to pay it off within a year after getting it.
 
I have never purchased a new car in my life.
I never will, either.

I have always paid cash, never a loan -
except for one (my 2008 F150) right after my divorce.
My payment is only $162 a month.

I'll never have another car loan after this one, either. Cash only.
 
Originally Posted By: Wolf359
Aren't you down under? Maybe you're the one living under a rock. Notice how many cars from the 30's aren't around anymore? I don't think you made your point.


Nah, sorry, but cars are made as cheap as possible these days, and if they have made any improvements since the '30's then I'd be out of a job. They are just as unreliable as they ever were, and plastics are a big part of that.
 
I think you have a point to a degree. But I think fdcg27 has a point as well... Yes those vehicles made a very long time ago could hold up in a way very well. The new cars actually hold up very well as well. The 96 Toyota Avalon my step father has 315k miles on it and still runs like a top. Zero motor issues or trans issues. My Nissan Altima 3.5 coupe has 217k miles and it is doing very good as well. Those cars and trucks from way long ago definitely held up if not for huge rust problems. Or motor or transmission problems that sidelined them. Again, I think you both have good points here.

As one member said on here and it is very, very true in my opinion... This is another gilded age bubble that is based upon stupid credit decisions made by individuals and lending institutions. Very similar to pre 2007-08.....
 
I have bought my last three vehicles on craigslist with cash.

32% seems low though considering every time I turn on the radio half the ads are car dealers offering zero down financing to anyone with a pulse. I don't know what to make of it since on one hand, it seems wildly irresponsible, but on the other, selling cars (and everything else) on credit to people that can't really afford it is, sadly, an economic boon. Until there is a reckoning for bad loans, of course.
 
Originally Posted By: Silk
Originally Posted By: Wolf359
Aren't you down under? Maybe you're the one living under a rock. Notice how many cars from the 30's aren't around anymore? I don't think you made your point.


Nah, sorry, but cars are made as cheap as possible these days, and if they have made any improvements since the '30's then I'd be out of a job. They are just as unreliable as they ever were, and plastics are a big part of that.


They did make improvements. You just don't realize it because all you do is fix cars, but you don't notice the ones that don't show up at your shop. Ever notice how all the muffler shops are now gone and the rust proofing is also gone? Cars still need basic maintenance though.
 
So people are taking out finance they can't keep up with?. Anyone remember the crash after the NINJA mortgage bubble burst?.
Will Uncle Sam (you - the taxpayer) be asked to bail out the financial institutions?.

Claud.
 
Originally Posted By: Silk
Nah, sorry, but cars are made as cheap as possible these days, and if they have made any improvements since the '30's then I'd be out of a job. They are just as unreliable as they ever were, and plastics are a big part of that.

I hear ya. I get the feeling most modern cars are built to be replaced, not repaired. They've gone the way of appliances and high tech gadgets. If your TV breaks, are you going to repair it? Heck no. You are just going to get a new one.

The cars have become so complex and so technology laden that a break down just gives people the opportunity to consider upgrading to a newer vehicle with the latest tech gadgets. The basic drivetrain mechanics might still be working fine, but the associated electronics and creature comforts will either fail or become outdated, and fixing that stuff would require a large one-time payment for which a typical American has not budgeted.
 
Originally Posted By: 02SE
Those underwater on their car(s), or otherwise drowning in debt, are the willfully ignorant. They don't understand or WANT to understand finances, or they simply choose to ignore reality. They simply want to have the latest fancy cars, smartphones, etc., etc. with no care or concept of whether they can afford it.


As I've previously said and been chastised for, people need to live within their means. If they're not happy with their situation, do something to change it.


I'm also surprised it's only 32%. I agree with 02SE, people need to live within their means. I can't help but wonder when I see friends taking on 84 month loans for new vehicles that they will likely get bored of and want a different one after 2 or 3 years.
 
Another simple explanation... Driving a car off the lot it drops what, at least 20%? Sometimes more depending on the car. A fully loaded 4 cylinder Fiat or Focus or Hyundai isn't worth what most dealerships charge, making your new purchase not what people think it is. Its not that crazy to want a new car after a couple of years, heck I've done it a couple times.

I would say its not most consumers fault that a 30k car is really worth 20k trade-in value after they buy it and drive it 2,000 miles. Sure, most here know that...but the average person might not have a clue until they go to trade it in.
 
Originally Posted By: rat
Am I the only one that thought this was going to be about flood vehicles?


Nope. I thought the same thing.
 
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