Author Topic: The Seven-Year Auto Loan: America’s Middle Class Can’t Afford Its Cars  (Read 2774 times)

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Offline OfTheCross

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About a third of auto loans for new vehicles taken in the first half of 2019 had terms of longer than six years, according to credit-reporting firm Experian PLC. A decade ago, that number was less than 10%.

But the size of the average auto loan has grown by about a third over the past decade to $32,119 for a new car, according to Experian. To keep payments manageable, the car industry has taken to adding more months to the end of the loan.

The average loan stretches for roughly 69 months, a record. Some last much longer.

Even a conservative car loan often won’t do it. The median-income U.S. household with a four-year loan, 20% down and a payment under 10% of gross income—a standard budget—could afford a car worth $18,390, excluding taxes, according to an analysis by personal-finance website Bankrate.com.

wsj

I've never bought a new car in my life. I'd rather save and ride the bus than get into one of these long-term loans on an automobile
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Offline Wingnut

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I've never bought a new car in my life. I'd rather save and ride the bus than get into one of these long-term loans on an automobile

I think you riding the bus is best for your other travelers on the road.
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Offline roamer_1

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I've never bought a new car in my life. I'd rather save and ride the bus than get into one of these long-term loans on an automobile

No bus for me, but I'll bump that - The most I have ever spent on a car was $3500 bucks, and man was that one a sweet ride. Buy em broke, fix em, drive em for a few years... and then sell it for more than I paid for it.

I have never understood the people that would pay 10s of thousands of levered dollars for a piece of crap that loses most of its value before it is paid off. Makes no sense to me at all.

Offline OfTheCross

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No bus for me, but I'll bump that - The most I have ever spent on a car was $3500 bucks, and man was that one a sweet ride. Buy em broke, fix em, drive em for a few years... and then sell it for more than I paid for it.

I have never understood the people that would pay 10s of thousands of levered dollars for a piece of crap that loses most of its value before it is paid off. Makes no sense to me at all.

That's exactly what I'm planning to do for my next ride...

My current baby still has a lot of life left, though
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Offline SZonian

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Still driving a "lemon law" buyback 2005 F150 that I purchased in 2007.

It's a great truck...
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Offline Elderberry

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I remember back in 1970, Mavericks were advertised at $1,995.00(not that I would buy one). I just ran an inflation calculator and today that would be $13,191.58. Why have the price of cars skyrocketed? And why don't they sell a simple "work truck" anymore?

Offline Elderberry

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Still driving a "lemon law" buyback 2005 F150 that I purchased in 2007.

It's a great truck...

I'm driving a 98 K1500 my oldest son bought used in 05 going to "Nuke School". My youngest used it till he bought his own and now I'm drivin' it. It only has abt 270,00 sum od miles on it and still goin' strong.

Offline OfTheCross

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I remember back in 1970, Mavericks were advertised at $1,995.00(not that I would buy one). I just ran an inflation calculator and today that would be $13,191.58. Why have the price of cars skyrocketed? And why don't they sell a simple "work truck" anymore?



(Cyber Note:  Resized image)
« Last Edit: October 03, 2019, 01:16:56 am by Cyber Liberty »
If a well-regulated militia be the most natural defense of a free country, it ought certainly to be under the regulation and at the disposal of that body which is constituted the guardian of the national security.

Offline corbe

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   My ol van is 20 years old, Dodge also. Cops don't give me a second look even though my grey beard is a dead giveaway, maybe it's my long hair that makes them think I'm an ol lady just getting off a hard shift at the local Hospital. 

   
   
   I'm really itching for one of these, now that I'm way past my mid life crisis.  Used and half down payment, pay off in 2 years.
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Offline InHeavenThereIsNoBeer

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I remember back in 1970, Mavericks were advertised at $1,995.00(not that I would buy one). I just ran an inflation calculator and today that would be $13,191.58. Why have the price of cars skyrocketed? And why don't they sell a simple "work truck" anymore?

Airbags, UAW, O2 sensors, bumpers, catalytic converters, rear seat belts, backup cameras, radial tires, electric windows/mirrors/locks.

On the bright side, at least we're not paying for cigarette lighters and ashtrays anymore.
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Offline corbe

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   Exploding Gas Tanks also, that was an undesirable feature.
No government in the 12,000 years of modern mankind history has led its people into anything but the history books with a simple lesson, don't let this happen to you.

Offline Wingnut

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   Exploding Gas Tanks also, that was an undesirable feature.

only to nbc when the truck failed to blow up......oh and the pinto, which did..
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Offline Free Vulcan

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I try to find old Buicks in cherry condition and drive them forever.

One of the problems is the car companies' constant push for new and more features. Some of those things are good when it comes to drivetrain, frame, or suspension improvements.

Alot of it though is just useless junk that adds ridiculous expense. I love to ride around in vehicles with just a bare bones configuration. My parents found this '08 GMC truck a few years back that I occasionally borrow to haul big stuff. It has roll down windows, a basic radio, manual operated headlights, manual locks, AC and 4WD if you need it, and that's about it.

It's a joy to drive. Rolling down the windows and cruising through the countryside on a nice day with no distractions is hard to beat.
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Offline sneakypete

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   Exploding Gas Tanks also, that was an undesirable feature.

@corbe

You are thinking about Pinto's,not Mavericks.Also,Pinto's were no more dangerous than any other car their size in a rear-end wreck. I knew a bunch of people that had and drove them,and not a single one of them burned to death in their cars,

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Offline roamer_1

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I try to find old Buicks in cherry condition and drive them forever.

I dug an early 70's grand sport out of a barn a while back... Put it back together and wound up flipping it... Quick little car - But they started out looking like Chevelles, and somewhere right there in the early 70's they started looking more like Cutlasses... I really never left the Chevelles for my personal cars... Love em still.

Quote
Alot of it though is just useless junk that adds ridiculous expense. I love to ride around in vehicles with just a bare bones configuration. My parents found this '08 GMC truck a few years back that I occasionally borrow to haul big stuff. It has roll down windows, a basic radio, manual operated headlights, manual locks, AC and 4WD if you need it, and that's about it.

It's a joy to drive. Rolling down the windows and cruising through the countryside on a nice day with no distractions is hard to beat.

That's right. I have owned and flipped a few 90's pickups... I keep trying to graduate out of the 80's, but everything past 85 is just such a weak POS that I literally can't use it... IFS for instance. Ever hung a plow on an IFS suspension? Ever took an IFS 4x4 up a mountain track at all? Won't make it long without 1500 bucks in front end work... And what is so damn bad about getting out and turning in the hubs? Now you have that goofy ass vac/elec automatic junk that goes out when you need it most... And it's UNDER the truck on the front pot... Get that stuck in a mudhole and have to fix it.  You just can't. *****rollingeyes*****

So I just keep staying in the 70s/80's 3/4 heavys and 1T's... They do a job. The are easy to fix. They ain't got butt warmers or IFS, or cupholders dammit... But they work.

City folks done the same dang thing to pickups that they did to Levis.

Offline Free Vulcan

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City folks done the same dang thing to pickups that they did to Levis.

Surburbanite townies will be the death of us all.
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Offline dfwgator

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You can thank "Cash for Clunkers" for that.

Offline roamer_1

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Surburbanite townies will be the death of us all.

That's a fact.

Offline Bigun

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You can thank "Cash for Clunkers" for that.

That and the large infusions of cash we saw for years under the previous administration.
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Offline Smokin Joe

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I remember back in 1970, Mavericks were advertised at $1,995.00(not that I would buy one). I just ran an inflation calculator and today that would be $13,191.58. Why have the price of cars skyrocketed? And why don't they sell a simple "work truck" anymore?
From The Rise in Dual Income Households Something had to eat up that income, and inflation was the ticket. Throw in a few gee-gaws for 'safety' and 'emissions control" to justify the cost....

Then the quality had to improve so the warranty would last long enough to pay it off...
How God must weep at humans' folly! Stand fast! God knows what he is doing!
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Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline sneakypete

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From The Rise in Dual Income Households Something had to eat up that income, and inflation was the ticket. Throw in a few gee-gaws for 'safety' and 'emissions control" to justify the cost....

Then the quality had to improve so the warranty would last long enough to pay it off...

@Smokin Joe

They DO sell simple work trucks,but nobody wants to buy them,so you usually have to special order one.

Practically everybody I see today is determined to live as far beyond their means as possible. I see people with 100 grand motor homes parked in the driveways of 250 grand houses that are parked next to 50 grand boats on trailers.

NONE of that stuff is used more than 2 weeks a year,if that often. Yet they won't just rent that crap when they need it because you can't impress people you don't know with rental stuff they only see a couple of days a year. You need stuff you can cover your driveway with every day of the year.

I know of one couple in their 50's that don't seem to own a single damn thing but the clothes on their backs,and they both have pretty good incomes. Everything they have is leased or rented,including her car,his truck,and the house they live in. They spend all their money taking expensive vacations to mingle with millionaires. They have a daughter that was 15 when I met them,and they would leave her home alone to watch over everything while they were on vacation.

BTW,you don't want to hook any of your 70's or 80's trucks to my 6.6 turbo-diesel 06 GMC to see who pulls who backwards,and yes it has leather seats,ac,cruise, Allison transmission,AC that will give you a chill,etc,etc,etc. Every time I drive it I want to throw rocks at my 2016 Chevy crew cab 4x4 when I get home. I have pulled 20k loads with it down the highway at 75 mph with the cruise control locked,and forgotten I was towing anything.
« Last Edit: October 03, 2019, 11:15:55 am by sneakypete »
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Offline Elderberry

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My son picked up a 2016 Land Cruiser to go to an from the Oil Patch. He left me his 07 Chevy 2500HD Duramax 6.6L. Quite a truck.

Offline sneakypete

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My son picked up a 2016 Land Cruiser to go to an from the Oil Patch. He left me his 07 Chevy 2500HD Duramax 6.6L. Quite a truck.

@Elderberry

ESPECIALLY if it has the LBZ engine option. 365 HP and 665 ft.lbs of torque. The only smog controls they have are a PCV valve,and no special additives are needed to the fuel to drive them. The standard 6.6 turbo engine had a LOT less power. The ones with the LBZ option are hard to find now,and the people that have them don't want to sell them. I have people standing in line wanting to buy mine if I ever decide to sell it.
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Offline Smokin Joe

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@Smokin Joe

They DO sell simple work trucks,but nobody wants to buy them,so you usually have to special order one.

Practically everybody I see today is determined to live as far beyond their means as possible. I see people with 100 grand motor homes parked in the driveways of 250 grand houses that are parked next to 50 grand boats on trailers.

NONE of that stuff is used more than 2 weeks a year,if that often. Yet they won't just rent that crap when they need it because you can't impress people you don't know with rental stuff they only see a couple of days a year. You need stuff you can cover your driveway with every day of the year.

I know of one couple in their 50's that don't seem to own a single damn thing but the clothes on their backs,and they both have pretty good incomes. Everything they have is leased or rented,including her car,his truck,and the house they live in. They spend all their money taking expensive vacations to mingle with millionaires. They have a daughter that was 15 when I met them,and they would leave her home alone to watch over everything while they were on vacation.

BTW,you don't want to hook any of your 70's or 80's trucks to my 6.6 turbo-diesel 06 GMC to see who pulls who backwards,and yes it has leather seats,ac,cruise, Allison transmission,AC that will give you a chill,etc,etc,etc. Every time I drive it I want to throw rocks at my 2016 Chevy crew cab 4x4 when I get home. I have pulled 20k loads with it down the highway at 75 mph with the cruise control locked,and forgotten I was towing anything.
I have been through too many boom/bust cycles to get strung out on debt. I have six modest vehicles, a pair of suburbans, a 1 ton van, a Tahoe, a minivan, and a pickup, all old enough to vote, but fully operational (except the ABS on four of them which I disabled because that model block ABS sucks). The house is paid for, and basically no debt.

I'm not making what I was a few years ago, with the drilling end of things pretty much in the crapper around here, but I am making enough to get by.
As for toys, I don't mind calling a friend and chipping in for fuel and bait to go fishing, and I don't camp out much anyway, so I don't need an RV. I really don't care what the neighbors think,

I have friends in lowly places, too, and can get by while others are scrambling to keep their toys.

I have seen it before, I'm just kicking myself for not hanging onto more cash to take advantage of the lower prices, but the boom cycle isn't there yet. There are still a lot of folks making more than they know what to do with, and plenty of others lined up to divest them of it. As long as frac crews are bringing new wells on line, that will persist, just because the landlords can still get the rents they want. I have noticed that there are houses for sale and not moving, and a lot of "now leasing" signs on apartment buildings which used to be full in town.

It's 1984 all over again, here. 'Pubbie in the White House, Dems in Congress, oil down, grain down, and money tightening up...

But with vehicles, there are two schools, one buying the neatest and newest, and others driving pickups from the 70s and 60s, lifted, redone, and sporting pioneer plates (one time fee for vehicles 40 and older). I have a few with those, too. 
« Last Edit: October 03, 2019, 01:42:59 pm by Smokin Joe »
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis