Used Car Market In Turmoil As Prices Collapse And Demand Wanes

[VTECOverRated]

Rhw

There was no correction to housing begin in 2008. Fraud primarily based on bond brokers were the reason for the rise on housing prices during the period leading up to 2008. When fraud is the reason for the rise, stating the housing market corrected is erroneous.

Today's current housing prices are not based on fraud, but based on (1)change in the value of the USD, (2) more demand than housing available, (3) private equity funds as a new, very powerful competitor for single family homes.

If a correction on housing happens it will be because of total collapse of the USD. And if that happens, housing may actually rise, not fall.

"based on bond broker fraud". And that isn't happening now? Do you even understand how the credit based system works? It fails BY DESIGN because that is the only way to actually keep the machine going. Corrections happens regardless of fraud, covid, or any other trigger event.

The reason the fraud was exposed is because millions of people were failing to make payments on their mortgages. "who doesn't play their mortgage" was what bankers were laughing about, and then it caught up to them, and the bonds and MBS's they created, failed, because they made promises that couldn't be kept in times of crisis. This is what is happening now, because the market has yet again, reached a similar position, where people can't afford to keep paying, and banks are trying to offload bad loans off their books.

I can't facepalm hard enough at how people believe over simplified lies.

 

[GON]

"based on bond broker fraud". And that isn't happening now? Do you even understand how the credit based system works? It fails BY DESIGN because that is the only way to actually keep the machine going. Corrections happens regardless of fraud, covid, or any other trigger event.

The reason the fraud was exposed is because millions of people were failing to make payments on their mortgages. "who doesn't play their mortgage" was what bankers were laughing about, and then it caught up to them, and the bonds and MBS's they created, failed, because they made promises that couldn't be kept in times of crisis. This is what is happening now, because the market has yet again, reached a similar position, where people can't afford to keep paying, and banks are trying to offload bad loans off their books.

I can't facepalm hard enough at how people believe over simplified lies.

In recent trends continue, USD will be printed to keep people in their homes. Heck, USD may be printed to allow people to keep their vehicles if in risk of default. That is not fraud like took place in the housing market with bonds prior to 2008, that is people electing representatives that will provide methods to prevent losing property/assets from failure to pay.

 

[VTECOverRated]

In recent trends continue, USD will be printed to keep people in their homes. Heck, USD may be printed to allow people to keep their vehicles if in risk of default.

Yes, 100% agree, except as usually, it happens AFTER its just too late. Our ability to maneuver gets slower the more this goes on, because each subsequent cycle requires an exponentially higher amount of liquidity to be thrown at it to keep it going. 900 billion in 08. 12 trillion during covid. Next round....50 trillion? what is the current black hole in the bond market? This doesn't even factor in the treasuries issue. We are lucky Japan is our simp and will buy our busted never to be paid back treasuries indefinitely on command.

I just reread your comment. Guess who prints the money? The Federal Reserve, which is a PRIVATE entity. It not federal, not a reserve, and is not controlled by any government entity. That is in fact, fraud. Our representatives have nothing to do with it. If they want to bail out private banks, they have to go to a private bank to borrow said money to bail out other private banks.

The issue then arises that we prevent asset failure by hyperinflation, which quickens said asset failure because mere mortals can't work 100 jobs and 26 hours per day to keep paying. We can extend loans to 100 years on a 200,000 corolla for all I care, it is not sustainable.

This is why dozens of countries want out of the dollar before this happens, and why every economist and finance minister in the world is trying to find what will be the next system. The dollar system was created at bretton woods and will be folded just as easily.

 

[Nukeman7]

View attachment 188926
Here is my location looking at only accords, CRV's and civics (the rest is either bulky big garbage or tiny econoboxes that take 12 seconds to reach 60, but there are technically 600+ in my area if you look at all vehicles.) I live in the middle of nowhere too.

The Cars.com search engine you used is misleading in that it identifies all vehicles on the dealers manifests destined for delivery up to 90 days in the future. It shows 60 Honda's available at my local dealership, when in reality, their current actual inventory on the lot is 15 new vehicles today.

 

[GON]

I

Yes, 100% agree, except as usually, it happens AFTER its just too late. Our ability to maneuver gets slower the more this goes on, because each subsequent cycle requires an exponentially higher amount of liquidity to be thrown at it to keep it going. 900 billion in 08. 12 trillion during covid. Next round....50 trillion? what is the current black hole in the bond market? This doesn't even factor in the treasuries issue. We are lucky Japan is our simp and will buy our busted never to be paid back treasuries indefinitely on command.

I understand your theory, and it's alignment.

So what is the solution- US needs to go to a six day work week. Very deep hole, only solution is to export more than the US imports., along with a significant in increase in productivity for every US adult.

 

[VTECOverRated]

I

I understand your theory, and it's alignment.

So what is the solution- US needs to go to a six day work week. Very deep hole, only solution is to export more than the US imports., along with a significant in increase in productivity for every US adult.

We go back into isolationism most likely and hand over the keys to the next smart group of post world war rulers that can figure it out. Just like Churchill, Stalin, and Roosovelt did back in the day. Currently we keep the system on life support, see if it goes up or down and yolo on calls or puts 50/50 (many are in fact, doing so). New system must be developed, and it aint BRICS that is for sure.

My theory is that it will be universal basic income based on some non fungible digital currency that has an expiration date requiring constant spending or currency burn.

 

[Number_35]

This is funny because its not people buying the cars, but banks. Everything is being bought on credit, and thus, the bubble.
Banks will finance anything they can right now at stupid high interest to rake in every shred of profit, then dump all the repo'd cars on the market and finance that. In the end, they don't lose.

I agree there has been a fundamental shift in how dealerships make money.

Back in the day, cash was king. A coworker described his dad, back in the '70s, going into a Chrysler dealership with 50 hundred-dollar bills, to deal on a new car. This was likely a rainy Tuesday evening near the end of the month. Of course he cornered the youngest, most pimply, salesman.

Mr B: "I got five grand here for that Newport Custom. All in - no add-ons later."

Salesman: "Oh, sir, that car lists at 52 hundred, plus there's the sales tax. We couldn't possibly ..."

Mr B removes one bill and puts it in his pocket. "I got 49 hundred bucks now - take it or leave it."

Salesman: "Oh no, we couldn't possibly ..."

Mr B: "48 hundred."

Allegedly the kid caved at $4700.

Urban legend perhaps, but I trusted the fellow telling the story.

*******

But that model is gone now. The dealerships don't want cash any more - they want the customer to finance and be locked into forever payments.

Bonus: They can then add various options and trim levels which don't add that much to a monthly payment when amortized over 84 months.

 

[eljefino]

Today's current housing prices are not based on fraud, but based on (1)change in the value of the USD, (2) more demand than housing available, (3) private equity funds as a new, very powerful competitor for single family homes.

... and interest rates. People shop for a monthly payment like they always do but these 8% mortgages, the "old normal", are the new normal. The 2.5% notes from mid-Covid are long gone. People are holding onto these houses, hurting inventory.

Contractors building spec houses back then weren't dumb, they knew rates would go up before finishing so they quickly finished what they had and are now plodding along. So the demand is still there but noone wants to step out on a limb and make something they can't sell.

The dollar value is still strong-- Europe is having a worse inflation problem than we had (BTW it's nearly down to 2% again) and will be strong as long as foreigners-- both natural people and governments-- can spend dollars on cool stuff like oil and land in the US. Do funky stuff trying to "fix" either the value of dollars or real estate and you'll get a perverse effect on the other.

 

[CKN]

I agree there has been a fundamental shift in how dealerships make money.

Back in the day, cash was king. A coworker described his dad, back in the '70s, going into a Chrysler dealership with 50 hundred-dollar bills, to deal on a new car. This was likely a rainy Tuesday evening near the end of the month. Of course he cornered the youngest, most pimply, salesman.

Mr B: "I got five grand here for that Newport Custom. All in - no add-ons later."

Salesman: "Oh, sir, that car lists at 52 hundred, plus there's the sales tax. We couldn't possibly ..."

Mr B removes one bill and puts it in his pocket. "I got 49 hundred bucks now - take it or leave it."

Salesman: "Oh no, we couldn't possibly ..."

Mr B: "48 hundred."

Allegedly the kid caved at $4700.

Urban legend perhaps, but I trusted the fellow telling the story.

*******

But that model is gone now. The dealerships don't want cash any more - they want the customer to finance and be locked into forever payments.

Bonus: They can then add various options and trim levels which don't add that much to a monthly payment when amortized over 84 months.

This must have been before financial institutions and dealers had a relationship and dealers now get various incentives for loans. CASH is actually a negative now in a deal.

 

[Rust_Belt_Pete]

"based on bond broker fraud". And that isn't happening now? Do you even understand how the credit based system works? It fails BY DESIGN because that is the only way to actually keep the machine going. Corrections happens regardless of fraud, covid, or any other trigger event.

The reason the fraud was exposed is because millions of people were failing to make payments on their mortgages. "who doesn't play their mortgage" was what bankers were laughing about, and then it caught up to them, and the bonds and MBS's they created, failed, because they made promises that couldn't be kept in times of crisis. This is what is happening now, because the market has yet again, reached a similar position, where people can't afford to keep paying, and banks are trying to offload bad loans off their books.

I can't facepalm hard enough at how people believe over simplified lies.

Before Clinton administration changed the law you actually had to show/prove to creditors that you had the means and were planning on paying back the loan. After clinton passed the law it was basically Oprah time. You get a loan and you get a loan and everybody gets a loan.

 

[eljefino]

Before Clinton administration changed the law you actually had to show/prove to creditors that you had the means and were planning on paying back the loan. After clinton passed the law it was basically Oprah time. You get a loan and you get a loan and everybody gets a loan.

Are you referring to the Gramm-Leach-Bliley Act of 1999 that partially repealed Glass-Steagull? Considering its bipartisan enthusaism I wouldn't exclusively blame the 42nd President.

 

[Rust_Belt_Pete]

Are you referring to the Gramm-Leach-Bliley Act of 1999 that partially repealed Glass-Steagull? Considering its bipartisan enthusaism I wouldn't exclusively blame the 42nd President.

Community reinvestment act.
This is why I said Clinton Administration and not bill Clinton.

 

[eljefino]

Community reinvestment act.
This is why I said Clinton Administration and not bill Clinton.

That's a 1977 Carter era law that was modified under various Presidents, including Clinton, including via the Graham-Leach-Biliey Act. Not sure why to single out one particular player over decades.

 

[Rust_Belt_Pete]

That's a 1977 Carter era law that was modified under various Presidents, including Clinton, including via the Graham-Leach-Biliey Act. Not sure why to single out one particular player over decades.

Because there is the law and there is the executive branch interpreting and enforcing it. Two very different things. 1991-1999 had some serious changes.

 

[grampi]

I hope they're dropping, I don't know how much longer my 438K mile Corolla can hold up...

 

[jeepman3071]

I hope they're dropping, I don't know how much longer my 438K mile Corolla can hold up...

That's some impressive mileage. Sadly around here anything with 200k+ is basically falling apart.

 

[97K15004WD]

I hope they're dropping, I don't know how much longer my 438K mile Corolla can hold up...

Wait, I thought Corollas couldn't read mileage above 300K.

 

[grampi]

Wait, I thought Corollas couldn't read mileage above 300K.

I keep track of the mileage with the trip meter...the odo sits at 299999...

 

[dumkid]

You would think that with all the natural disasters, and influxes of new people coming across the border- there would be a high demand of used cars.

I suppose the economy is partly driven by consumer confidence…

You know what's funny is i regularly see a honda Civic pulling another honda Civic headed for the border. Im not sure why they buy old cars from the US and take them to Mexico, but it happens pretty often

 

[Rust_Belt_Pete]

You know what's funny is i regularly see a honda Civic pulling another honda Civic headed for the border. Im not sure why they buy old cars from the US and take them to Mexico, but it happens pretty often

Is this sarcasm?