$1,000,000,000,000 in Auto DEBT

turbovan+tdi · Feb 18, 2017

Jetta SS said:
I've seen a couple reports of automakers cutting production. Even with the loose financing things are slowing. Maybe it's time for cash for clunkers part 2.

Err no, one of the biggest jokes Obama pulled. What a total waste of decent auto's, friggin moron.

IndigoBlueWagon · Feb 19, 2017

I think predictable costs and the desire to have a shiny new thing drives auto debt. People are usually ill-prepared to pay for even a moderate repair on most cars. And the increasing cost of maintenance makes having a monthly payment a more desirable alternative to many.

I recently bought a 2011 BMW 335d from a used car dealer. When I called about the car they indicated it needed an adblue tank (part is just under $2K) but I could test drive it. The car also needed tires, and it will need brakes soon. And after purchase I determined both NOX sensors needed replacement. Dealer retail on the sensors is $638 each. There are two.

This is a two owner car: the second owner only had it for 10 months, according to Carfax. I suspect that he or she took it to the dealer when the check engine light came on and was told it needed $4K+ in repairs. And the owner's response was to trade the car. I suspect this is how a lot of debt happens. And I was able to purchase a five year old car with 48K on it for less than 30% of its original MSRP. Someone had to swallow that depreciation.

Oilerlord · Feb 19, 2017

IndigoBlueWagon said:
I think predictable costs and the desire to have a shiny new thing drives auto debt. People are usually ill-prepared to pay for even a moderate repair on most cars. And the increasing cost of maintenance makes having a monthly payment a more desirable alternative to many.

I recently bought a 2011 BMW 335d from a used car dealer. When I called about the car they indicated it needed an adblue tank (part is just under $2K) but I could test drive it. The car also needed tires, and it will need brakes soon. And after purchase I determined both NOX sensors needed replacement. Dealer retail on the sensors is $638 each. There are two.

This is a two owner car: the second owner only had it for 10 months, according to Carfax. I suspect that he or she took it to the dealer when the check engine light came on and was told it needed $4K+ in repairs. And the owner's response was to trade the car. I suspect this is how a lot of debt happens. And I was able to purchase a five year old car with 48K on it for less than 30% of its original MSRP. Someone had to swallow that depreciation.

Nice car, and well done!

Your description about the struggle between having the newest shiny thing vs paying for moderate repairs is something my wife and I discuss frequently.

She drives a 2004 330Xi and loves it, though she had to put $3.5K into it last year on a car with less than 60K miles on it. That freaked her out a little, though not as much as the $50,000 the dealership was asking for the 2016 330e. Even with that big pricetag, she was running the numbers on the 0.9% deal they were offering.

It's amazing how our brains are wired, and how it becomes an emotional decision. Our brain releases endorphins that give us a taste of how happy we'll be in that new car. It's a powerful urge to resist.

In the end, logic thankfully took over when she decided she didn't want a car payment. She would prefer a more fuel efficient car, but to your point, we don't need to pay $50K to get there. A 3-4 year old 335d would fit the bill perfectly.

Mike_04GolfTDI · Feb 19, 2017

^ My brain releases neurotransmitters that give me a little taste of how miserable it would be to part with $30,000 and I run away screaming, wrap myself in a blanket, and cry myself to sleep.

That's why I'm driving a very well maintained 2004 Golf.

Oilerlord · Feb 19, 2017

If the net of selling her 330Xi + cash upgrades her ride to a newer 328xd, no big deal. There's always a compromise.

RabbitGTI · Feb 19, 2017

turbovan+tdi said:
Err no, one of the biggest jokes Obama pulled. What a total waste of decent auto's, friggin moron.

It was formulated and championed by Alan Blinder and passed with heavy bi-partisen support.

IndigoBlueWagon · Feb 19, 2017

328d x-drives coming off lease are in the mid- to high-20s around here. Not bad, since many of them have less than 30K miles on them. I looked at a couple before going for the 335d. I chose the older car more because there's a pretty strong enthusiast community growing for them and we want to understand them. So I justify owning another car as market research.

Also, I didn't want AWD, and I'd have to travel to find a RWD 328d. All the ones around here are x-drive.

Here's a photo. The selling dealer wanted to put three tires on it (!). So I convinced them to put on new non-run flat snows instead. Yesterday I ordered summer wheels and tires.

I bought this car for the same money as I sold my '12 Golf for two years ago. BMWs depreciate!

RabbitGTI · Feb 19, 2017

^^^ that is sweet.

turbobrick240 · Feb 19, 2017

Very nice! I may find myself in a 335d before too long.

gearheadgrrrl · Feb 19, 2017

Cash4Clunkers was formulated before Obama took office. Not a bad concept, but the final product had too many cooks and had a lot of unanticipated effect.

turbovan+tdi · Feb 19, 2017

Mike_04GolfTDI said:
^ My brain releases neurotransmitters that give me a little taste of how miserable it would be to part with $30,000 and I run away screaming, wrap myself in a blanket, and cry myself to sleep.

That's why I'm driving a very well maintained 2004 Golf.

Ditto, waking up in a cold sweat wouldn't be easy to get used too.

RabbitGTI said:
It was formulated and championed by Alan Blinder and passed with heavy bi-partisen support.

gearheadgrrrl said:
Cash4Clunkers was formulated before Obama took office. Not a bad concept, but the final product had too many cooks and had a lot of unanticipated effect.

Maybe so but Obama pushed it thru

Destroying perfectly good cars is a terrible concept!! Not sure how in the world you would agree with a program like that.

2015vwgolfdiesel · Feb 20, 2017

turbovan+tdi said:
Maybe so but Obama pushed it thru
Destroying perfectly good cars is a terrible concept!! Not sure how in the world you would agree with a program like that.

Time to drain the swamp

VeeDubTDI · Feb 20, 2017

compu_85 said:
We made the last payment on our Passat this last Tuesday

-J

And it feels good! The Touareg will be paid off by the end of the summer, leaving us car-loan-free... until the Model 3 shows up.

El Dobro · Feb 20, 2017

turbovan+tdi said:
Ditto, waking up in a cold sweat wouldn't be easy to get used too.
Maybe so but Obama pushed it thru
Destroying perfectly good cars is a terrible concept!! Not sure how in the world you would agree with a program like that.

$3,000,000,000 and increased the average fuel economy .6 mpg. Money well spent.

turbovan+tdi · Feb 20, 2017

2015vwgolfdiesel said:
Time to drain the swamp

Sorry, not sure what you mean?

El Dobro · Feb 20, 2017

turbovan+tdi said:
Sorry, not sure what you mean?

http://www.oxfordeagle.com/2016/11/09/what-does-drain-the-swamp-mean-donald-trumps-battle-cry/

turbovan+tdi · Feb 20, 2017

El Dobro said:
http://www.oxfordeagle.com/2016/11/09/what-does-drain-the-swamp-mean-donald-trumps-battle-cry/

Thanks.

bbarbulo · Feb 25, 2017

My newest car is an 02 currently. And I do buy crap cars sometimes and rehabilitate them to be good again, so I'm part of the solution

I run like an animal shelter for cars over here LOL

2015vwgolfdiesel · Feb 27, 2017

Jetta SS said:
With a number like that everyone wanting a new vehicle has bought.

Yes we have a $1,000,000,000,000 car debt situation.

But.......

Has anyone noticed we have $3,000,000,000,000 in "new wealth" just created out of the "Trump Bump" market rally ?

I see a lot more car buying ~~~ (and car debt.)

VeeDubTDI · Feb 27, 2017

A young female friend of mine just got herself into a predatory loan on a 2017 Jeep Patriot. She has no credit history and doesn't really have a concept of financing or banking. Unfortunately, she decided to replace her aging Explorer with a brand new vehicle rather than consulting with anyone about what the best course of action was. She went down to the Jeep dealer and signed her life away on what is one of the worst loans I've ever seen. $600/month for 72 months at 27% APR.

She's going to end up paying $43,000 for that turd if they don't repossess it first. She's also going to be so upside-down that she'll never be able to get rid of it. It's frustrating.

Oh - to add insult to injury, they talked her into a $2,200 maintenance plan that covers oil changes and tire rotations for 2 years or 24,000 miles.

RabbitGTI · Feb 27, 2017

Convince her to sell that ****box at a small loss before it breaks. Damn.

2015vwgolfdiesel · Feb 27, 2017

RabbitGTI said:
Convince her to sell that ****box at a small loss before it breaks. Damn.

She is beyond up-side-down

Doomed

Jetta SS · Feb 27, 2017

2015vwgolfdiesel said:
Yes we have a $1,000,000,000,000 car debt situation.

But.......

Has anyone noticed we have $3,000,000,000,000 in "new wealth" just created out of the "Trump Bump" market rally ?

I see a lot more car buying ~~~ (and car debt.)

The average person doesn't have much skin in the game. Could be a win for the Luxury car market though.

IndigoBlueWagon · Feb 27, 2017

VeeDubTDI said:
A young female friend of mine just got herself into a predatory loan on a 2017 Jeep Patriot. She has no credit history and doesn't really have a concept of financing or banking. Unfortunately, she decided to replace her aging Explorer with a brand new vehicle rather than consulting with anyone about what the best course of action was. She went down to the Jeep dealer and signed her life away on what is one of the worst loans I've ever seen. $600/month for 72 months at 27% APR. She's going to end up paying $43,000 for that turd if they don't repossess it first. She's also going to be so upside-down that she'll never be able to get rid of it. It's frustrating.

Oh - to add insult to injury, they talked her into a $2,200 maintenance plan that covers oil changes and tire rotations for 2 years or 24,000 miles.

That's unfortunate. It's going to take years to recover from that. Wonder if there's a way to void the loan and start over, or refinance to something more favorable.

And I don't think people who are in the stock market are going to cash out to buy a luxury car. I certainly wouldn't. But I suppose you never know.

2015vwgolfdiesel · Feb 27, 2017

IndigoBlueWagon said:
And I don't think people who are in the stock market are going to cash out to buy a luxury car. I certainly wouldn't. But I suppose you never know.

Nature ~~ there is a "wealth effect" with the market up swing.

Remember when Home ownership was going through the roof. Folks just felt "richer" and spent (debt) like there was no tomorrow.

RabbitGTI · Feb 27, 2017

^^^ a moron who lived by me spent the entire tech bubble telling me how rich he was getting. He leveraged an addition to his house, boat, new cars, etc.... I told him you ain't rich till you sell your portfolio. He didn't sell. Ooooops. Lost his ass.

IndigoBlueWagon · Feb 27, 2017

And he didn't have to lose his ass either. I was in tech mutual funds in '00 when the market crashed. I was back to par within 18 months, IIRC.

RabbitGTI · Feb 27, 2017

^^^ if you leverage paper profits on the way up and ride it all the way down all the money is gone. All you are left with is a home equity loan and payments on a bunch of stuff you couldn't afford.

2015vwgolfdiesel · Feb 27, 2017

RabbitGTI said:
^^^ if you leverage paper profits on the way up and ride it all the way down all the money is gone. All you are left with is a home equity loan and payments on a bunch of stuff you couldn't afford.

^^^^^^^^^^^^^^^

RabbitGTI · Feb 27, 2017

^^^ buy side analysts and retail brokers do a good job of selling fictional returns and ignoring risk. Lots of people swallow the hook.

$1,000,000,000,000 in Auto DEBT

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