Car payments being missed more ...

[SC Maintenance]

But that assumes the parents have the knowledge to pass on to their children.

My parents didn't - they were not good with money. They weren't bad people or at all irresponsible, they simply didn't know anything about finance.

The double whammy was that Dad, an academic, didn't know how to do auto and home maintenance and repair, so although he made good money, there was never enough.

I've had to learn whatever I know about finance on my own. I wish I'd had a head start by learning about finance in school.

In the same way, my parents were not able to teach me math or science or carpentry or auto mechanics. It wasn't their fault - they didn't know.

(In my opinion) schools are supposed to teach things that children can't or won't learn at home.

Countless times on various threads people are always liking to point immediately at the schools as if its there job to train someone's kids. As I have posted countless times on this board

• Most schools do teach personal finance - so they are attempting in most cases.
• If a school does not teach personal finance that is a local school board question. Go to a board meeting and speak.
• Do we really believe that a 16 year old kid whose parents spend every dime they get are going to follow a teachers advice?
• Every 16 yo kid I know - rich or poor, has a smart phone or access to the internet and the entire world of personal finance.

As an aside - if someone claims personal bankruptcy, they have approaching a 50% chance of claiming it a second time. Truly if one bankruptcy isn't enough do you really think its an education problem?

The issue is not a function of poor schooling, although we have somehow gone from admiring our public schools to either blaming them for the problem or assigning the task of fixing every problem.

The simple fact is personal finance is a personal responsibility question.

 

[Number_35]

Countless times on various threads people are always liking to point immediately at the schools as if its there job to train someone's kids. As I have posted countless times on this board

• Most schools do teach personal finance - so they are attempting in most cases.
• If a school does not teach personal finance that is a local school board question. Go to a board meeting and speak.
• Do we really believe that a 16 year old kid whose parents spend every dime they get are going to follow a teachers advice?
• Every 16 yo kid I know - rich or poor, has a smart phone or access to the internet and the entire world of personal finance.

As an aside - if someone claims personal bankruptcy, they have approaching a 50% chance of claiming it a second time. Truly if one bankruptcy isn't enough do you really think its an education problem?

The issue is not a function of poor schooling, although we have somehow gone from admiring our public schools to either blaming them for the problem or assigning the task of fixing every problem.

The simple fact is personal finance is a personal responsibility question.

Agreed, there are a lot more options now for young people.

I think we were all taught in school about Einstein's statement that compound interest is the 8th wonder if the world.

That was all theoretical to me. I wish I'd made the mental leap from theory to personal application back when I 16 and working part-time. "If I start saving now ..."

Instead, I didn't start saving until I was 25. Twenty-five was not nearly as good as 16, but better than 35, and way better than 50 ...

 

[Kurtatron]

Countless times on various threads people are always liking to point immediately at the schools as if its there job to train someone's kids. As I have posted countless times on this board

• Most schools do teach personal finance - so they are attempting in most cases.
• If a school does not teach personal finance that is a local school board question. Go to a board meeting and speak.
• Do we really believe that a 16 year old kid whose parents spend every dime they get are going to follow a teachers advice?
• Every 16 yo kid I know - rich or poor, has a smart phone or access to the internet and the entire world of personal finance.

As an aside - if someone claims personal bankruptcy, they have approaching a 50% chance of claiming it a second time. Truly if one bankruptcy isn't enough do you really think its an education problem?

The issue is not a function of poor schooling, although we have somehow gone from admiring our public schools to either blaming them for the problem or assigning the task of fixing every problem.

The simple fact is personal finance is a personal responsibility question.

I mostly agree with this. I think the vast majority of people can innately comprehend living within your means. Even if most people avoid used cars, far more people should just buy cheap economy sedans, but they don’t.

I think investing does require some kind of class, specifically different investment accounts and differences between mutual funds, stocks, shares, etc. but even then, only the students who are driven, will benefit from the class. How many students will have the motivation and drive to take advantage?

My coworker refuses to buy a cheap minivan. He has four kids. Refuses to buy one due to image. Vanity has got to be the biggest obstacle to financial prosperity for most people.

 

[andrew_j]

Can you walk away from a car loan in some states, just by returning the car? In that case, I'm surprised more people don't just hand over the keys and walk away.
Here you can't do that easily, so I think less people do.

The worst thing you can do is that. They charge excessive fees around repo and also simply auction at bottom dollar the car. You owe still owe loan amount - low auction sale price + repo fees. Debt does not go away , just the car.

 

[Rmay635703]

The repo lot not far from me is full of every sort of car although there are fewer low end vehicles. It is mostly fairly newer 50K+ cars and trucks.

And repos don’t help cheapen the used market because they are almost always trashed and get sent overseas.

The best thing the auto market could do is be forced to once again have 5mph bumpers and cheap universal headlights, no more $5000 insta crack “plastic bumper” made from plastic bags.
No $2000 insta break headlight enclosures

The worst thing you can do is that. They charge excessive fees around repo and also simply auction at bottom dollar the car. You owe still owe loan amount - low auction sale price + repo fees. Debt does not go away , just the car.

Sounds like the same failed system of education loans, people will be in their 70’s still paying $30/month for a loan that rolls into probate with no assets.

What’s strange is that the requirements to get an auto loan this year are basically being a warm body as compared to even the lax requirements last year, tons more loans this year to people that are incapable of ever paying, gotta keep metal flowing even if it comes back in a few months.

That said the auto industry supposedly has been actually worse by most metrics than 2008 on and off for some time, gotta wonder what is propping them up?
We have a ongoing shadow bank crisis 2 that is steadily pumping billions starting about a month ago directly into certain entities just like 2020,
gotta wonder if we finally have the economy that does great with no sales and no people, with no employees
that certain individuals have been dreaming of for years.

 

[Number_35]

The best thing the auto market could do is be forced to once again have 5mph bumpers and cheap universal headlights, no more $5000 insta crack “plastic bumper” made from plastic bags.
No $2000 insta break headlight enclosures

Amen!

 

[JeffKeryk]

But that assumes the parents have the knowledge to pass on to their children.

My parents didn't - they were not good with money. They weren't bad people or at all irresponsible, they simply didn't know anything about finance.

The double whammy was that Dad, an academic, didn't know how to do auto and home maintenance and repair, so although he made good money, there was never enough.

I've had to learn whatever I know about finance on my own. I wish I'd had a head start by learning about finance in school.

In the same way, my parents were not able to teach me math or science or carpentry or auto mechanics. It wasn't their fault - they didn't know.

(In my opinion) schools are supposed to teach things that children can't or won't learn at home.

My father was the son of poor imigrants from Ukraine; the Navy, in WW2, sent him to Yale U where he got an Ivy League education. His roommate was Victor Kiam.

In his later years, he asked me to take over his finances. I changed some investments, which worked out very well. The greater family always considered my Dad the smart, and successful one. Let's just say I helped him out.

 

[JeffKeryk]

The simple fact is personal finance is a personal responsibility question.

Spot on; this is true about just about everything. I would only add that I believe we need to give people a fighting chance. Knowledge is power.

What blows my mind is many (most?) of Silicon Valley workers, who made great salaries, now have to leave due to financial issues. But they sure looked good in their drop-dead gorgeous German cars and fancy clothes.

I mainly drove strippie Toyletta PUs until my house was paid off. Man I lusted over those BMW 3 Series, Boxsters and 911s!

 

[MCompact]

My parents and my wife's parents grew up during the Great Depression so there was no talking to them about any investments not covered by FDIC.

 

[wander2039]

@wander2039 can you tell me, high level, what the class went over? Was it a semester, a year, or ?
I am very curious. I am also quite the fiscal conservative. AKA cheapskate. I also only partly listen to my Schwab Wealth Advisory team because I am a knucklehead...

Thanks in advance.

I want to say I took it when I was in 10th.. that would of been 95ish so 30 years ago. The details are really fuzzy!!! Think it was half a semester. I know we went over checkbook and loans but don't remember past then.

 

[FTTSHO]

I work in a ford dealership, not in sales but I do hear stories about car buying customers every once in a while from sales guys.

It’s crazy that some people making $40,000 a year can buy a $80,000 truck, as long as the monthly payment supposedly fits their budget.

It boggles my mind that someone would actually pay $60,000 or more for a body on frame pickup, that has a nicer looking interior.

Even base model trucks are pushing $50k+ MSRP. Crazy.

And profit margins for car manufacturers are really really high with trucks.

And ford has a 0% apr program now, and that really doesn’t help much at all, because cars are still overpriced to begin with. It sure does bring more customers into the dealership, but the 0% apr doesn’t help the average person. It only helps people will real money, and most people don’t have real money.

For what I hear, Lots of people are not able to make the payments, and they back off to trade in their new depreciated truck for a used one, and lose money by doing so.

The only way to stop price gouging is to stop buying these overpriced vehicles. I just wonder what the automotive industry will look like in 2035. It’s scary when I look at what has happened in the last 15 years.

 

[Oillover]

Lots of people are not able to make the payments, and they back off to trade in their new depreciated truck for a used one, and lose money by doing so.

Do you mean to say that folks with vehicles they purchased new (which have depreciated), are trading them in for used vehicles?

 

[Mainia]

An article I read yesterday. More people are falling behind on their utility bills.
It seems to be more of an economic problem in general, not just that today's cars are expensive.

"Consumers usually prioritize their utility bills along with their mortgages and auto debt, said Julie Margetta Morgan, the foundation’s president. The increase in both energy costs and delinquencies may suggest that consumers are falling behind on other bills, too."

https://www.thenationalherald.com/n...rs-are-falling-behind-on-their-utility-bills/

Our city just started sending harsh letter out when I lost a water bill for one month. Through out the years I have skipped a 1/4 and nothing was said till the 5 month period. Now one month late and the nasty letter is sent. Thats telling you they are having problems.

 

[FTTSHO]

Do you mean to say that folks with vehicles they purchased new (which have depreciated), are trading them in for used vehicles?

Yeah. On certain cases it does work out for some people. Not always though. This is just what I heard from the sales department guys, not something I’m involved with at my job because it’s a different department.

 

[xspeedy]

All it takes today to learn personal finance is the Internet. I suspect people don’t want to understand it and find the ignorance to be bliss as they make poor choices so they can have a shiny new thing. This isn’t rocket science.

 

[ATex7239]

The only way to stop price gouging is to stop buying these overpriced vehicles. I just wonder what the automotive industry will look like in 2035. It’s scary when I look at what has happened in the last 15 years.

So you’re suggesting dealers wouldn’t attempt price gouging on “normal” priced vehicle? Doubtful. The sleazy and negative connotations assigned to car salesmen isn’t a recent development.

 

[lovcom]

If one accepts the lie that its ok to drive new cars, and payments their entire life, if they do simple math, they would calculate that their constant need for new cars + payments will cost them $ Millions in money they could've invested for retirement: compound interest. Some of these fools lease cars, which is about the dumbest thing a person can do...unless they can write off the lease through a business.

 

[Hollowed_Mist65]

No, I don't miss having a car payment at all.

 

[Rmay635703]

The reality the top earners are doing really well in this economy while low earners lopping off hard.

There is no surprise it impacts auto loan payments especially subprime.

Auto loan debt has ballooned to $1.66 trillion this year

Those with incomes of $175,000 and more represent 44% of auto loans (not by value) , with an outsized portion of the debt.

The bottom group of income earners who are typically considered sub prime only hold <3% of that 1.66T of debt despite holding 6% of loans.

AKA Despite all the noise and rhetoric about the small number of low value sub prime auto loans being defaulted.
The traditional type of sub prime auto loan has basically left the chat and makes up an insignificant portion of the auto market by value.

The new trend is that 6 figure earners are over leveraged due to the rule changes locking out lower earners from credit in “most” circumstances and indeed, the number of subprime is much smaller than historical averages.

If an insignificant loan value is provided to folks earning under $60k, how are we getting up to 3% delinquency by value, an amount that exceeds the entire value of the sub prime auto market?

Of the millions of repos vehicles under 2 years old are over represented, expensive vehicles corvettes, expensive pickup/jeep trims, expensive Luxury over-represented.
Each repro aligns nearly 1:1 to job loss, white collar are over-represented in job loss data.

This isn’t the same failure as 2008, it’s worse as it’s “safe” loans that are being defaulted

 

[Skippy722]

I work in a ford dealership, not in sales but I do hear stories about car buying customers every once in a while from sales guys.

It’s crazy that some people making $40,000 a year can buy a $80,000 truck, as long as the monthly payment supposedly fits their budget.

It boggles my mind that someone would actually pay $60,000 or more for a body on frame pickup, that has a nicer looking interior.

Even base model trucks are pushing $50k+ MSRP. Crazy.

And profit margins for car manufacturers are really really high with trucks.

And ford has a 0% apr program now, and that really doesn’t help much at all, because cars are still overpriced to begin with. It sure does bring more customers into the dealership, but the 0% apr doesn’t help the average person. It only helps people will real money, and most people don’t have real money.

For what I hear, Lots of people are not able to make the payments, and they back off to trade in their new depreciated truck for a used one, and lose money by doing so.

The only way to stop price gouging is to stop buying these overpriced vehicles. I just wonder what the automotive industry will look like in 2035. It’s scary when I look at what has happened in the last 15 years.

I bought my first ever new vehicle in April 2020 right before everything got insane, my Ram 1500 Classic Tradesman. It was recently totaled..... I'm heavily considering a GMT400 or GMT800 Suburban to replace it as yeah... That same truck now stickers for $55,000. Accounting for inflation, my 2019 would sticker for $52,000, it was $41,000. I can easily pay cash for an old Suburban by simply working a few weekends and not touching my savings or having to eat ramen.

Basically, I'm buying something old that I can easily work on. Sick of computers, sick of "security gateways" on the OBD (it's my car, let me do what I want to it), and I'm sick to my stomach thinking about a payment over $350/month. I wish 20 year old me thought this way....