Auto Loans Are Going To DESTROY The ECONOMY
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- Опубліковано 8 вер 2024
- Auto Loans Are Going To DESTROY The ECONOMY
In this video, we're talking about how the auto loan default crisis could destroy the economy. Dealers charged too much and banks allowed too many bad auto loans.
Repossessions are spiking so much that there are not enough recovery tow truck drivers to service them.
My name is Brandon and I am a used car dealer. I created Car Questions Answered to share the ins and outs of the used car market from my perspective. I share with you updates on car prices, what's happening at the dealer auctions, and what it's like being a dealer. My goal is to share information to help you make the best decisions while buying a car to save you money. I do not want car dealers taking advantage of you.
Thanks for watching and please feel free to leave any comments you may have in the section below!
And make sure you don't forget to LIKE, SHARE AND SUBSCRIBE FOR MORE!!
*None of this is meant to be construed as financial advice, it's for entertainment purposes only.
#UsedCarMarket #CarPrices #carmarket #usedcarprices
What kills me is that dealerships would rather send to auction than lower their prices.
Comment for the algorithm. Love your content
And dealers make a lot of their money selling the debt but not at an auction.
They need too much work.
The reason they send to auction is because if they lower the price on the lot it will cause other prices to lower. They want to keep prices high and would rather lose to other dealers than to regular customers, because lower prices would set a precedent that prices are lowering.
Because "Ego" is one thing that stealership would pay for and mark the sale as a "loss" when they file their tax return.
Driving a 2003 Camry. No monthly payments, able to go from point A to B with zero problems. Love it!
What? Are you saying that you live within your means and don’t have a “greedy “ car dealer to blame your continual poor decisions on? Weird. 🤣
I also drive an older vehicle. No payments, no stress, it does the job.
Add a Miata, throw the top down and have a blast!
Still in my 07 maxima won’t be changing any time soon
05 ES330 pretty much the same thing. Got it from a very old man, looks like a frog but best car I’ve owned.
If people would stop paying these outrageous prices then the dealers would have to bring prices down.
The government is mandating too much gadgerty like the rear view cameras on every car and high mpg and other safety features. They could build cheap cars but govt mandates expensive ones
@@brent4073 Government is enslavement.
True, but as P.T. Barnum observed, "There's a sucker born every minute." There's a group of people out there that can't think beyond the first couple of $1,000 car payments......
I mean if you add up the government mandates of cameras, abs, airbags, tpms, how much is it really costing the oems? 1k at most? Government mandates are not the reason the average new vehicle costs 48k.
It's consumers willing to spend that much.
The Market suggest the price the dealer sets them within the market. It's not just the dealers fault. Most people over purchase.
That's sad it's obvious with the state of the economy people can hardly keep up with the cost of living add that to the greed of these car down payment sales, I'm a chef so I also know how it feels most times we chefs are under-appreciated and some even under paid haha. The efforts you put into your videos are second to none, definitely worth my time
This is so true and not talked about enough,I'm in my mid 50's now. Been working as a chef for 27 years now and I can say we don't get paid enough, still can't set up a restaurant of my own, it's crazy the work we put into it but I guess we do it cause we love it don't we ?
@@ChefDiegoDelgadoPerezWith every trade there are only a few masters the rest are students. Not "trashing" just trying to make a point, if I have a dish executed perfectly I will hunt down the chef so I can thank he/she face to face for that delightful meal. I'm happy they're happy.... Win win Be kind , we all need love and respect.
@@ChefDiegoDelgadoPerezDefinitely
@@ChefDiegoDelgadoPerezHaha, yes we keep doing it cause we love our job, it's our lifestyle now
@@ChefDiegoDelgadoPerezWell this is why most chefs have multiple income streams, my salary doesn't bother me much as a chef, that's because I picked a habit in online trading and exploring the stock market, unfortunately most people don't have such information and I don't really blame them,but lack of information can be a big hurdle.
As a small automotive locksmith company in Texas, we are cutting keys for 150-200 repossessed vehicles per week. Repossessions are up drastically and it started about six weeks ago. These vehicles are being repossessed with significantly higher miles than normal. They are also in very rough condition compared to previous years.
Thanks for the insight. At least the repos are helping your business.
Because people know they aren’t going to pay for their car, they never planned to, and so they wrecking before it gets repoed
That's incredible. 150-200 a WEEK. And you're just one company. I wonder how many more spread among the other similar companies.
While I know credit exception as the thing they have dealerships put on the vehicles so that when they default on their payments the won't start
@@danielhartin7680 and we are a SMALL operation. What we do weekly doesn’t even scratch the surface.
It's important to buy cars when interest rates and prices are low. My financial advisor also gave me the same advice. When rates and prices are low, it can save you money on financing and make the overall cost more affordable.
My financial advisor advises buying cars when interest rates and prices are low. However, he also cautions against it right now due to the hidden costs of car ownership, like insurance and maintenance. He helps me plan for these expenses and manages my portfolio to ensure financial stability. It's all about making strategic decisions and having a well-rounded financial plan.
Having a well-diversified portfolio is essential for financial success. A financial advisor can provide expert guidance, minimize risks, and offer insights on profitable investments. They bring experience and expertise, ensuring your portfolio is optimized for success. It's like having a trusted ally by your side, helping you achieve your financial goals..
Please how can I reach out to your advisor, if you don't mind me asking?
My Financial Advisor is Samuel Peter Descovich. I found him on a CNBC interview where he was featured and reached out to him afterwards. He has since provide entry and exit points on the securities I focus on. You can run a quick online research with his name if you care for
supervision. I basically follow his market moves and haven't regretted doing so.
He appears to be well-educated and well-read. I ran a Google search on his name and came across his website and messaged him directly; thank you for sharing.
I'm recovering from a life event and a bankruptcy. My car was repo'd, so for now, I'm on foot. I'll tell you what I've learned: you CAN get blood out of a turnip, nobody in power gives a tinker's damn about the tax-payers, and credit is a shell game. I used to think credit was okay; I know better now. From now on, if I don't have the cash for it, I don't buy it. That's how we used to be, and that's what we need to go back to.
Amen.
There's always been the concept and practice of credit
Yes, live below your means!
That’s impossible for cars. Some city layouts depend on car transportation and if you don’t have a car you don’t have a job. So your car is your job. I think better decisions in affordability is the answer.
@@PatrickGotHands....or better decisions in life, school and career choices. Most dudes driving this crap live with Mom. Borrow her crown vic.
I don't buy cars on credit anymore. I will always live within my means. These dealerships are killing the car business.
Consumers lack intelligence in 99% of cases
I realized that buying a vehicle (truck) on credit didn't make any sense when I started a towing company in California. If you are making money with the vehicle, it makes more sense, but as a daily driver it's just an overpriced toy.
I had to buy on credit this year, last year my Jeep was totaled and the insurance company didn't give me enough money to replace what I had with the exact same vehicle. So it's forced me into taking a loan on a newer vehicle.
to add insult to injury... there are a lot of dealerships now not taking cash/certified checks anymore. either you finance or they won't deal with you. dealerships and lenders make bank any way they can while a - say - 30k vehicle ends up costing you 45k with the financing.
Oh yeah l sold cars and l know how they are. No dealership for me!
Yep, A CAR LOAN is now what a Mortgage was 25 years ago man!!!! ridiculous!
Many people are paying much more in car payments than their mortgage Now. Really dumb!!
i own a 1995 dodge ram diesel truck and it's got 350k miles on it. it's a rusty piece of crap but it's fully payed off and The thing never breaks I do all the maintenance on it myself. It's got no computers or sensors on it it's all mechanical and parts are cheap. It's cheaper to repair the truck than buy a new one. I'm still on the original engine. I had to replace the transmission 4 years ago and it only cost 3500 dollars.
What’s crazy is most of these cars are 5+ years old on this specific lot and that just tells you how bad things really are right now.
They buy a junk high mileage car .. then get hit with repairs.
It’s obvious that a nasty recession is coming. Best of luck to everyone.
It was overdue for a correction ( recession) before covid . Buckle up , this is a perfect storm to be closer to a depression than recession
Bruv, if you believe that you are already behind the eight-ball. We have been in a Hyper-inflationary Depression for the past 18 months!
@@frozentundra7446 Yes, we're there, & it's going to get worse, all by design.
@@billya3628 Agreed!
@@frozentundra7446 inflation is obviously high, however GDP and employment numbers are still strong. We are heading towards a massive spike in unemployment, that is when the recession will officially be declared. And with inflation still high the possibility of 1970s style stagflation is also in the cards. That is when things will get really nasty.
One of the topics you mentioned was exactly the position i was in. Back in late 2019 i bought a 2017 Mustang GT premium. $27k and after interest around $31k for the loan. Gas was super cheap, insurance was cheap, and the payment was $480. Inflation has gotten so bad that i had to sell the car (positive equity thank god) and move into a car i paid for in cash from a private party.
In California, not only are repos huge, the car insurance is downright ridiculous. Some companies are not taking new clients and some are not insuring certain vehicles at all. A lot of people who buy a new car often have an insurance premium that matches the car payment
or is even higher. FYI. I appreciate your intel and want to give some back.
It is bad in a lot of places. Like in Florida my friends homeowners insurance has doubled in past YEAR. I am happy in northern Wisconsin where it is cold, but at least I can afford to live.
Someone has to pay for all those stolen cars.
Funny you talk about insurance... State Farm is dragging their feet on paying out my daughter for a totalled car. It's been a couple of months now. I'm really starting to think it's intentional.
I know what you mean...my 4 vehicles (04 Acura TL, 14 Kawasaki ninja300, 00 Excursion diesel) like 120 full cover everything....my 2016 mustang whole explosion in insurance price, 260 for that car alone!!!
I seen a jump 35% in premiums from one company. I think theyre trying to reduce their customer base.
Manufacturers, dealers, buyers, banks...they're all complicit in this mess. No more bailouts--let them all lay in the bed they've made for themselves.
It's the subprime mortgage mentality.
I agree. No bailouts. Prices do need to come down on everything. Companies need to fail if they make reckless decisions.
No bailouts!
Yeah but they are not really in trouble. Its a few people who over borrowed who are in trouble. The banks, manufacturers, dealers, they are fine. Maybe a bit slower for them but they arent going bankrupt
Absolutely. The Auto strike that recently ended ( big win for the auto workers ) means auto manufacturers will tack on another couple thousand to the price of a new vehicle.
Best way to get back on your feet, Miss a car payment! GOLD!!
lol, life sucks.
😂😂😂
and pay your student loan or do you skip that too?
The system seems about to crack! We just had an ER Dr. tell all the students at a CPR seminar that they don’t need to pay their hospital bills when you visit the ER.
@@WeknowhoUR he’s not lying. You don’t technically “have to” 💀😂
i have 8 payments left then I will never have to fear the repo man!!! im so stoked
I agree with what you said here. I went through a rough time in my life that caused me to be a repo myself. It's hard when you lose your income due to a health condition.
I drive 2010 Toyota Matrix with 160k on it and my wife drives 2012 Honda Accord with 98k on it. We wanted to buy a Camry or Venza but car is way too expensive now. Both of us are working full time!
You have at least another 100,000 miles before these cars will give you problems...
I hear you, everything was fine for me for 2 years never missed a payment then I had a heart attack and EDD took forever to get me my disability so I fell way behind. Not to mention the price of everything else. I unfortunately had to let her go. I loved my car but the reality is I could no longer afford it. I won’t make that mistake again.
I've been there recently it does get better trust me it does suck but we push through
you would be an exception and thus not a rule .
This was expected as soon as they started raising prices and interest rates.
The dealership lobby pays off politicians so they don't regulate their business. So they can just add $30,000 to msrp
There are no used cars, there are too many repos.
Just keep the vehicle you got , it's a lot cheaper than buying a new vehicle, better even if you current vehicle is paid off.
My cars got 190 on the clock and the brakes Ill be putting on it are probably worth more than the car itself hahaha. but at least it doesn't leak a drop of oil... that's nice I guess
This is like the housing market in 08. Banks gave mortgages to people they knew couldn't afford it. And we bailed the banks out for their horrible business practices. I say if banks crash because of the same loan practice but now in the car market were not bailing them out. They need to take a loss a force them to stop these practices.
You KNOW it’ll happen anyway because it’s happened before.
Happiness isn't limited to subprime mortgages, eh? And who says we don't need more K-12 economic education?
Please don't try to understand US economy - if you americans did, then tomorrow morning there will be a civil war. Wanna bet?
It's interesting; when I was just getting started, my wife and I newly married, I had a little beater that I drove and was perfectly happy with it. Then got my first big pay raise and wanted a new car - got a Nissan Sentra but it had some options on it. Meantime, kids came along which meant a bigger house with a bigger mortgage and spent some years buying family trucksters from Carmax. Now my kids are grown and gone and I drive a 2015 Silverado that we use to pull our travel trailer - it's paid for and as far as I am concerned, I'd be happy if it is the last vehicle I ever own. Just funny how my priorities have changed so much from when I was a young man versus a middle-aged guy and the importance I used to put on having a new car. Now I just want something that is reliable and where everything works. I wish I could tell some of these younger guys who are going to spread themselves thin trying to get a flashy ride that they would do better to save that money and go make some nice memories with their family on vacation or something. Those memories with their family will mean a lot more to them than any memories of cruising around in a flashy car without any money to even get drive thru LOL
The same car I used in college to get myself to minimum wage jobs, I now use to get to my 6 figure job.
Runs just fine. Dealers can keep their new cars.
I’m happy with my 12 year old vehicle that has 188,000 miles. Instead of a huge car payment I’m putting $1200 a month away in a Roth and 403b. I’ll be able to drive a new car when I retire
I hear you man. I have a 2013 Silverado and I did an engine overhaul to keep it running as long as I can given the price of vehicles right now. I do all my own maintenance and repairs so I also save on labor. I did all the work at 194,000 miles and I’m at 203,000 right now. I’ll drive it until the frame rots in half before I by a new vehicle.
"paid for"
Yes, but the price of a car is only around 25-35% of the total cost of owning a car!
Gas and insurance both cost me more than depreciation on a Toyota.
My first car was a Pinto. The aluminum collar & base that held the stick shift had stripped. Made for interesting shifting when it fell out. The gas tank wasn't the only hazard.
You’re absolutely right as a person that’s been a repo man for the last 17 years I’m averaging 70 hours a week on a positive note, I’m on a pace To make 50% more this year 🤑👍🏾 ( 20% of my repos or chargers)
How does one get into the business? Any resources. Thanks
Are u dealing with a lot of illegals or is it mostly natives?
@@googlemail7934 thanks
@@googlemail7934 sorry for the late response I started with AAA and that experience allowed me to work for a tow yard
@@BigL718 not sure what you mean by illegals?
Funny how the media is not even addressing this problem. The problem is due to higher insurance rates, higher registration fees, and higher interest rates. This problem will get worse by December 31st
They are trying to keep everyone calm and keep em delusional there is no recession 💀
Not to mention the price of maintenance and car repairs have gone up too! Its getting ridiculous!
I've been saying this for a couple years. This will be like the housing market collapse, but I think it will be worse. Stop paying these ridiculous prices. You don't NEED a new car
i asked my shop what's the difficulty getting relatively common parts? mechanic said with money as is now most people are repairing old beaters or older vehicles and keeping them cuz car loans are so expensive. also, with chips in kinda short supply you buy a brand new ford f250 with the idiot bells and whistles and it can take up to a year plus to get the truck cuz the makers don't have the chips - US vehicles are built with so many computer chips for very common things. But you are still making payments on a new truck you won't get for likely a year or more.
i drive a 2010 ford ranger with a rumble seat, no 4x4. needs some rust work on the bottoms/undersides of the doors. I paid way to effin much but this three months I have had three offers to buy it. sorry... it's too easy to fix.
Most people are not wise. I don’t think my own child has the right judgement. They ridicule me for driving 8 year-old Honda.
Unless you can afford to pay cash...
Don’t tell that to Mexicans here in L.A. Their too dumb. They will buy it anyway and they did with their above minimum wage job.
@@thystaff742How so???
Reminds me of my cousin. He ran the numbers on his phone until he convinced himself he could afford a $900 car payment. Like this guy said of a similar situation: "he couldn't". I think the car dealerships bear some responsibility. They know better than anyone if someone is over reaching on a car purchase. I purchased a new Toyota Corolla back in 2020 and my payment is $289 a month. I'll have it paid for in about 2 years but I plan on driving the wheels off it.
oil and filter changes when the oil is dark brown. air, fuel filters. grease. keep on rust. alignments, tire rotations. check your air pressure every two weeks - $10 tire pressure guage from sprawl-mart does it perfectly. check your coolant. don't know any of this? LEARN.
Your Corolla could last easily 20 to 25 yrs plus. Best wishes! 😁😁
dealers don't care, they get their money from the bank. it's on the bank.
Dealers are there is sell cars, not be financial councilors.
Had some women get upset when they brought their dad in to do a voluntary turn in.
They were upset with me for selling him the Mark LT truck.
I knew when I sold it to him that he was stupid, and his wife was the only paycheck and then she died.
And you know what, NONE OF MY BUSINESS!
He was a grown man and his wife went along with it.
The only people responsible for these repos are the people buying the cars.
@@tomb7942 I agree, mostly. Governments demand that your customers finances be your business. It shouldnt. However, I do disagree where banks are concerned. They (in the US and Canada) are only superficially more than just branches of the federal government. They have a vested interest in brainwashing customers into buying shit they cant afford. They, banks and government, and the customer; share the blame.
Nevermind the expensive car maint, and expensive car insurance!
Muscle car repos were also an issue when I was in sales, back at the turn of the century. I did have a Camaro customer who used his parole officer for a reference. For some reason, the bank wasn't interested in giving him a loan.
I just had a repo after life hit me hard. We had twins(4 kids total), then my wife got cancer, I lost my job, and we had to move across the country to live with family. My wife is now cancer free and I got a job again but I make a third of what I was. I’m saving up for a bankruptcy attorney now.
My old car finally went to auction and sold for $7k. They want the $11k negative equity I owe but I simply don’t make enough money. We struggle to get by even having food stamps and wic. Hopefully I can get the attorneys fees together before they take me to court. I don’t make enough money and have too many dependents for a judgment against me so that’s good but this whole situation is so stressful. Videos like this make me feel like I’m not alone and lots of people are having a hard time in this situation which is sadly comforting.
This is caused by the "I want mine too" attitude buyers who simply don't do the math when buying a car. If you think you can afford a $600-800 car payment, try putting that much money aside for a few months BEFORE you sign that contract. If you can't do that for 2-3 months then you sure as heck wont be able to do it for 72 months!
I bought a repoed 15 Expedition with 110k mi this summer for $18k. Dude had it listed for 20 but I haggled him down since it was pretty rough. Get the paperwork and it has a repo document that shows the previous owner took a 58k loan on the vehicle in early 2021. I was gobsmacked.
Rough and you still shelled out $18,000 for it? 🤷🏻♂️
@@pmscalisi If it's in great shape he'll probably get another 110K out of it easily. It's a ford expedition not a ford ecosport lol.
That's crazy... 58K for a 2015. I wouldn't pay that for a 2023 model.
@@StevenGarnsky yes maybe, but that’s still a lot of money for such an old car. 🤷🏻♂️
@@pmscalisi I'd been looking for 3 months. Anything drivable in our area was 30-40k for similar miles. I was sick of it. It was mechanically sound. I'd rather live with a few scratches and dings for $10k+ in savings.
Probably a good idea to avoid a Hemi repo. Back in 2008 when gas hit $4.00 a gallon I knew someone who bought a used Chrysler 300 Hemi. They stopped by my house and were so proud of it. It was difficult for me to not laugh considering the high gas prices. They drove the crap out of it and never changed the oil. Of course they fell behind on the payments. They did not want the neighbors to see it towed away so they arranged for the repo guy to pick it up at a nearby strip mall.
Were they Black?
@louseybarber Did they at least make it to the sideshow?
@@jjthefedI’ve only seen white guys drive these vehicles
@@jjthefed😂
@@theskyizblue2day431really? I guess it depends where you live.
No one can afford a new car. They're outrageous price!
My oldest son did some security alarm work for a local towing and recovery company. They said business is booming in repossessions! Their holding lot was full. Most of the repossessions are for pickup trucks.
I miss the good old days when credit was really hard to get. It taught me to be responsible and treat it with respect! The whole economy is terrifying and built on a house of cards!
We need to go back on the gold standard. QE and pandemic helicoptor money has made it get ridiculous.
It also taught people to buy quality. You wanted something that would outlast the loan.
Amen.
Did you see the jobs report from the liars in chief? Claiming 346,000 ‘new’ jobs last month? If this failing economy is producing so many jobs, why have repo’s skyrocketed? People are losing income for whatever reason. Since you watch this guy, I think you look into things for yourself. Keep it up, we need informed voters right now, more than ever.
Comment of the day. Agree 100%. I grew up in the 80s and went thru the same thing. Lenders saved me from myself. Today if you can fog a mirror and sign your name you get whatever credit you want it seems.
Spot on! Would like you to speak about how banks amortize a loan. Good example would be a 60K car financed over 5 years at 10-12%. If the consumer purchased a car a year ago I think a lot of folks would be shocked at how much they paid in interest versus how little was applied to the principal amount. Given depreciation, this will keep a lot of folks upside down until the last year or two they have the car under financing.
They load all the interest onto the front end of the payment plans that's why
The banks want thier money back first.
That's all loans
If they couldn't make monthly payments, would you really expect them to have preformed maintenance or have comprehensive insurance?
I know I don't.. That's why I pay for good insurance because here in the Atlanta area some 25% of the drivers have no insurance and most of the rest have the absolute minimum the law allows.. Its also why I pay monthly to keep a lawyer firm on retainer.
And with the higher costs of cars this only makes car insurance premiums go up for every one
...or know how to spell the word performed?
He knows that these ppl don’t take care of it. Most repos have been neglected.
@@saleens330If they dont or barely have money for the payments, they wont have money to spend on maintenance- at $50 per oil change I can only afford to keep my oil changed and thats it.
The car market is a drop in the bucket compared to the real estate crisis that is coming.
Small dominoes fall first, the bigger dominoes are to come.
The banks have people that have over appraised the homes Let them eat dirt when it all collapses
Banks brought this all onto themselves...AGAIN
I went to a dealer looking to buy new car. The issue is that they are used to the old car market and won't sell their cars or at least for a huge profit. Even had a trade in and they wanted to buy it for pennies. Frustrated. Waiting for it to crash
Check around and don't limit your self to dealerships in your city or even your state. Those selling at MSRP or lower are out there, especially if the car is not a rare, highly desired model. And you are right that dealerships typically offer thousands less that what you can get if selling the vehicle, yourself.
It's more than auto loans that will destroy the econ. It also commercial real estate, rising food and energy costs, the Fed and the dollar. Auto loans are just one part of many larger macro econ problems.
Gold is on sale right now, but not for long.
Worked for banks in auto lending in Austin Tx. Can confirm, 120-140% LTV was common and everyone was an “influencer” using bank statements as poi. People were trying to expedite financing to secure vehicles for 20-40% over sticker. Those cars are getting repo’d for sure. People started getting angry when we began asking for down payments. Just be happy with the beater you’ve got, don’t be a Fish.
Our dealership was often able to get over 200% and even over 500% approved with our local credit union. You don't have to be the brightess bulb to understand the potential problem when rates increased.
I think this whole repo issue is going to explode. Banks approving loans for over wholesale value. Lending to below average credit individuals. Inflation destroying the 60% who live paycheck to paycheck. Banks will be looking at massive losses.
Yup, similar to 2008 when banks were lending billions in mortgage’s to ppl who could not afford them
@@cadman9615
Mostly middle class and wealthy people buying investment properties. The sub prime loan default rate remained fairly steady the whole time.
The day after Biden was elected, I asked my brother if he was old enough to remember President Jimmy Carter. My parting shot: Biden will make Carter look like a financial genius.
@@Shalmaneser1Unless things have changed POTUS has nothing to do with interest rates. That is set by the Federal Reserve. AND the Fed doesn’t want you people buying stuff. I haven’t bought any high ticket items and as a lifetime member of the .1%, we actually borrow money from ourselves through corporations we’ve setup. My financial people have taken the excess funds and bought bonds for a hell of a return these days. We win both ways. We drift between stocks and bonds depending on the market☺️ AND the “interest” we pay is a tax deduction on one side and profit taxed at a much lower rate.
It's the real estate bubble of 2007 all over again, in a different sector.
I wish all the luck to the repo drivers in Chicago, Philly and Detroit. May God protect you, because cops will not.
Omg whats happening in those city?
@@nganvuong3167Hilarious!
Hum…not a peep about repo people being assaulted or killed in Philly anyway.
Chicago, the other day a repo guy got blasted several times. I would definitely repo any car in several locations. It's simply common sense. Not worth the money.
I grew up on the Southside of Chicago. Back in the 1970s when I was a poor college student I did repos. Easier technology then and almost no alarms. Many people just are incompetent at managing money and buy more than they can afford. Screw them and the lender.
I always felt bad about repoing a working man’s car. In my day so many factories were closing and so many good blue collar men lost their jobs.
It was a dangerous job! Some would destroy the vehicle if they knew you were coming to repo the vehicle.
The evil banks giving out loans when they should not are the big cause of the problem.
The funniest joke I’ve heard recently is that the 392 on the side of a hemi is the owner’s credit score.
What's worse I've learned, some people don't realize how the repo destroys their credit. Some just think it's taken from them, end of story. They didn't think that when they over paid the last two years they they would still be liable when they realized they can't afford the payment. It'll be worse, when and if prices plummet, and the vehicle they purchased is worth half, and can be bought for half.
Some fools don't realize they will owe the balance minus what the bank gets at auction. They destroy their own car, then owe more money.
@@mitchhedberg4415I'm sure there was lots of GAP insurance sold, with torched cars recently.
I'm in the process of having both my vehicles repo'd I'm 25 and overpayed during covid. I can pay for them but I just don't want to. I already have another vehicle that's fully payed off. I can care less about credit. I don't use credit cards and will never finance a vehicle ever again. They can send it to collections but good luck getting any money out of me.
On a trip this weekend I drove past many small car lots with overflowing inventory. There are a lot of cars nobody wants.
Or they’re charging too much and won’t budge.
I just paid off mine and my wifes vehicles,both our cars have low miles,we will ride out the storm and see where everything is at in a year or two😊
You hit the nail on the head and I don't believe a bank should be able to loan more than 80% of the Blue Book value of a used vehicle or even a new vehicle MSRP less 20%
My credit union has always required minimum 20% down on the total value of the loan. This needs to be the case for all loans. And financing negative equity on your next car loan needs to be made Illegal in the US. No more upside down loans period. Banks need to be forced to tighten up
I put 20% down on my Honda and Acura and was pretty much NEVER upside down on my loans. These days MOST buyers are upside down on their trades, sometimes by tens of thousands.
I agree with your Assessment and would also like to add that the amount of private sales have also gone up in the last several years. Which is also a struggle for the used car lots
Yep. Last car I bought from a dealership/used car lot was 2006. Everything since has been person to person cash for keys...
Another aspect on repos: When the repo is sold for less than is owed and a deficiency balance results for the Borrower to repay, the Lender does an analysis. That is, are we likely to collect this deficiency balance from this Borrower or not, and how much will that effort cost? They're calculating a point of diminishing returns. If they decide to pursue collection themselves, things progress with that Lender's efforts. But the original Lender may also, in some cases, decide to sell the Note with the deficiency balance to a Collection Agency (CA). The Note is sold at a deep discount (pennies on the dollar), but the Lender gets something out of a bad situation. For the Borrower it's whole new world of collection activity. The CAs are driven people because they bought something for almost nothing that still has value and they pursue the Borrower relentlessly. Good luck.
Hold the line people…..don’t buy anything right now
You are right. I go to 3 car auctions a week, and the vehicles that are in good shape and have low miles are almost bringing retail prices.
My car was completely totaled, and the bank covered my entire car loan. Initially, I felt sad about the situation, but when I realized how much money this freed up, I felt happy. I used to spend $1,200 a month, including insurance, on my car. Now, that money stays in my pocket every month. It has allowed me to invest and concentrate on my life's purpose with reduced stress. I even purchased a $56 bus pass, and I'm content with it.
If I wasnt a complete car fanatic, I would do the same. Maybe treat myself to the occasional limo ride, invite my bros. Driving in cities is a nightmare, luckly I live in a small town.
But I grew up with Fast and Furious, I love my cars.
I'm glad that worked out for you! Unfortunately, a significant portion of the US doesn't have public transportation that is worth anything, if it exists at all. A car is a necessary (financial) evil in our country for so many of us. Does that necessarily mean you have to take out a loan? No, but it's tough finding good deals and saving cash for a car in this day and age.
@@tenhundredkills Dayton, OH had a county wide bus system that ran hourly. They are back to commute times & 4-hour intervals outside downtown. Bussing has a specific economic model. Fun fact: if you added up all the passengers to EVER set foot on Dayton's bus system, and divide it by the expense, they could have given each passenger a midsized sedan. More: the transportation model that works (economically) is a dispatched passenger car system. (AkA Uber, Luft, etc) But the optics of politicians funding door-to-door service ain't gonna happen.
I've been a able to go to Football games, take trip and invest in my personal goals in small business and if I need to go somewhere I plan ahead or Uber. No stress over accidents and unexpected car repairs. I didn't realize how much economical weight a car can have on life.@@felixwankel3989
Including if someone has a family, children, it's necessary.@@tenhundredkills
Brandon I like to buy what you can afford in one payment so I drive a $2500.oo dollar 2004 Volvo V70 I fix it my self and own it out right no payment no interest . And I have a great car
Ironically enough, I went to walk my dog last night and saw two cars get repoed from a parking lot across from me. One flatbed and one tow truck. It was interesting to see both in action and like clockwork. One car was a Kia and looked like it wasn’t used for awhile spare tire on and bald etc, the other was a compact suv that looked like it was used on the daily…
50 grand for a truck that’s crazy
Yes
Madness!
Absolutely correct
Try $80k.
50k for midsize now
I always buy used, and pay cash. The problem these days is the economy is so bad, that saving money is next to impossible.
The other issue is the prices of used cars has gone up, and the availability of used cars has gone down. Something has to change, because this is unsustainable.
My daughter and hubby needed a car badly after getting screwed over multiple times by mechanics on an old Subaru. I hit a jackpot last Dec and surprised them with $4k thinking it would buy them a used vehicle. A pipe dream in PA! They FINALLY found a vehicle out of state in Sept. but the $4k was merely a down payment on $10k. They got a 2013 Toyota RAV 4 with 132,000 miles. One owner, garage kept in mint condition. Now I worry that they can pay the loan off ASAP.
The vast majority of people are completely irresponsible when it comes to $$…. many couldn’t even calculate simple interest if their life depended upon it. Not surprising.
I drive a 98 Sentra with manual transmission and my family are trying to make me get a newer car, NO WAY! If I am going to make a monthly payment, it will be on property, not a car.
My previous vehicle insurance company, whom I had been with for 8 years, has been raising rates every six months the last year. I carry 100/300/100 w/ uninsured, towing, and roadside so I spend a little more on insurance than others. In Georgia, metro area, some 25% of the drivers on the road are running with no insurance and most of the rest with the absolute minimum the state allows. My new insurance agent has been aggressive about getting me options to help reduce my insurance costs. So much so my insurance is now $400+ cheaper per 6 months with the same coverages. And there are defensive driving classes available for free and adding dash cams to my vehicles will reduce my rates even more.
New car prices rise forcing people to buy used. Crisis averted.
Normal people are being priced out of the new car market
Repo drivers need to double check.
My daughter's CX5 was stolen by a repo driver then abandoned 4 blocks away yesterday in Nashville.
Her car has been paid for for 18 months. A 2020 CX5 with 20k miles on it.
Trying to get video of the theft.
Her vehicle is also damaged from the heist.
It's a feast or famine economy. I was unemployed for 4+ months this year, but thankfully got a 15% raise when I found a job. Lots of people are struggling with debt, but a CNN article from Oct 3rd says GM saw a 21% jump in sales from the same quarter last year (q3). Ideally, I'm two or three years out from buying another car and this insanity will have ended.
Local chevy dealer wants 31k for a 2019 silverado lt with about 60k ish miles that they got during the pandemic and now a new silverado goes for about 30k for a custom and lt about 36k-v4 and 39k-v8
People fell for the fake luxury and the banks were more than willing to give out bad loans. It took years to get here and it will take even longer to get back again.
My house is paid off (bought a HUD house and fixed it), my cars are paid off (bought used for my wife and spoiled myself), and now I'm sitting here trying to find a way to take advantage. Perceived obsolescence is a hell of a drug.
The government says the economy is doing great...Surely they wouldn't lie...Would they ?
Everything the government says is a lie, & everything they have, is stolen.
That's bidenomics
@@raiden031 Bothe parties run & controlled by the same billionaires. The L vs. R is just divide & conquer, & it's working very well.
When FJB was elected, I told my brother (he is a closet conservative who married liberal) that Biden will make President Jimmy Carter look like a financial genius.
@@Shalmaneser1Sorry but there is a large group of us who couldn’t stand to be embarrassed by the prior president any more. We live “outside” the government…don’t need anything, don’t need a social warrior or hero to stand up for us. Don’t need a president tweeting conspiracy theories to the delight of the poorly educated. And cars? Stop buying them. The Fed has raised the rates to stop you people from buying stuff but you’re not listening so we don’t care.
This is one of the big reasons why I hate bills and the thought of losing something I've paid into is something I just can't accept. Ended up skipping the dealer and bought from an auction for a third what most dealers would have wanted.
I learned a lot from this video. I appreciate the behind the scenes look at the used car market.
Student loan payment freeze is the reason inflation has lasted so long. Economies don’t last with outrageous debt levels
@@SHUB281 It really started when anti-petroleum exec orders caused uncertainty and drove energy prices up. Nothing affects the baseline price of goods as much as energy, since everything of any value needs energy to be created or transported.
This should have been happening much sooner, the signs have been there for so long now.
I currently live in Germany. The used car market is amazingly great out here. I have a 2010 BMW 116 D. I paid 3500. Six speed manual and diseal. Runs like a champ. I left texas last years as i saw the writing on the wall with food prices, car prices, and services. Its crazy to see what has been allowed to transpire in the states.
Love your content bro, right on the money. I agree the banks should have never lended 150% value to these people, HOWEVER the American consumer does not get a free pass. At any point, did any of the buyers way overpaying over the last 3 years, have a moment that said to them “should i really be buying this for this price?”
Some people had their cars totaled, needed another car, and dealers wouldn’t budge on prices.
@@EMichaelBall such an small percentage of the total, i know plenty of people who paid 15k over list for something like a Telluride. And if you wreck you car and need to purchase a new car, that gives a free pass to throw away conventional thinking and simple budgeting?
I honestly think alot of people that would have never been able to buy some of these car used those 3 stimulus checks to finally have a down payment and were able to get that loan they would not have qualified for with now down payment
@@JaYBLaZe45
It would have been better to overpay $3-$4k for an older Buick 3.8 or a Camry, than overpay $10-20k for a new car. Drive it for a few years, then sell it when the market corrects.
I can not wait. All the people that have been living outside their means and yet my family has been driving the same old cars, saving my money for the dream cars.
The bank is willing to lend because they know the government will eventually bail them out
Big business literally writes the laws in some cases these days. Car insurance costs me more than depreciation on the car, and I am in the low risk group with a clean record.
I saw an ad for a keep rubicon here in Canada. Think it said $318 biweekly with $2500 down. Five year lease did the math. It was just over $40g. Who in there right minds would want that. Five years of $640 a more before interest. And you don’t own it after. Nothing to resell. Crazy
Simple solution: Auto manufacturers need to make affordable & reliable cars - Bare bones vehicles minus all the fancy electronics that inflate prices. Cars serve one purpose: Transportation. By making payments reasonable again it stops the negative, spiraling down, chain reaction precipitating the current auto loan banking problems.
Keeping up with the proverbial Jones, or trying to impress people who could careless about you, or your ego interfered in your decision making. It all comes back to living beyond ones means. I had one guy tell me he financed a car he can't afford. I asked why did you purchase it? He said he'd look good driving it before it was repossessed. There are those amongst as well.
They did the exact same thing with home loans pre 2008. Banks don’t care they will get bailed out with the Americans people money. Once the crash happens people are gonna have issues getting cars when they get strict again with loans.
I bought a 2014 Chevy Traverse LS, V6 AWD at auction. All it needed was to be cleaned, serviced and tires all the way around. When the title arrived, the previous owner purchased the vehicle in March 2021. She paid on it for 2 years then walked away owing $31,680! Talk about completely underwater..... ATB
I wonder if she was facing a huge engine repair that the bank paid for?
Brandon always posts great content and accurately reflects the financial position we consumers need to consider
@@notfiveoI went to their website. They have auto loans through the dealership network, about 11,000 dealerships according to the website
He keeps making the same video
@@mitchhedberg4415same theme but different details of content
ACCURATE??? 😂😂😂 This clown, for some reason (yeah, we know the reason) always seems to reference Dodge Chargers and Challengers as the car that gets repo'd most because the owner couldn't/wouldn't pay for it. WHICH IS NOT TRUE! Go look at the list of most repo'd vehicles, those two cars are not even in the Top 5. Again, gee, wonder why he uses those two cars for his examples. Cue the banjo.
I'm happy that I paid off both my loans in the last three months.
So glad I paid off my car loans
Me too
I just bought an 05 Tahoe, low miles, great condition top to bottom… 4k cash. Cash talks all the time but especially now.
As someone who was in the car business for over 35 years, I saw a lot of irresponsible buyers and lenders. It is on a whole different level now. Seems as if people can't grasp the simple math of a monthly budget and lenders have forgotten that debt to income ratio is one of the primary determiners in granting a loan. Responsible individuals know better than to finance 120-150% of an automobile's value as well, so who is left? It ain't rocket science.
Yes it the buyers fault end of the day no one holds a gun to their head making them buy how embarrassing for them some people never learn you always got think about inflation. not hard to figure out its simple math
I work for a bhph. All our repos go straight to auction, these are 7-12 year old vehicles with high mileage. Plus, majority of the customers do not maintain the vehicle at all.. just gas and go.
As hard as it is to stomach, we NEED a small recession to deal with what's been happening over the last few years.
I agree but will a small recession be enough
Do you think that will bring prices down?
@user-nb8tg3xf3u yes, and if you're one of the people that was actually financially responsible and saved money through it all while everybody else was trying to keep up with the joneses you'll be like a kid in a candy store when it comes.
We're not getting a small recession. We are edging toward depression territory.
@@gcanaday1 proof?
What’s terrifying to me is the auto loans that are defaulting are huge they’re into the thousands of dollars a month and there’s many more of them then they were mortgages in 2008 that defaulted. This could have a much bigger impact on the US economy then we can possibly imagine.
30% of student loan borborrowers went and got car loans during payments pause. Now they have to pay both.
Wait until the real estate market defaults hit the system. It's always about a year behind the car market. Commercial real estate will be the trigger. Those are loans that have to be refinanced every 5 years. Investors can't make their commercial properties work at these interest rates, so most will simply walk away. We are over due for a major recession and it's going to be a big one.
I heard that from you 3 months ago. I am in Phoenix Arizona prices for cars going up August and September is high and so far October is not cheap so far.
The student loan thing as well as backrent in cities that had rent moratoriums from the lockdowns are going to destroy autos and mortgages...
It's going to become a vicious circle because these used car dealers run their repos at auction and their going to lose money but with this economy there will be a point of mostly no sales because the economy is getting worse and it will get to a point that even buy here pay here dealers can't sell and it's a joke that banks auction of someones vehicle now that owner is supposed to pay the difference now is their vehicle is repoed they won't have money to pay the difference and with Brandon he sells vehicles for five thousand and under which puts him ahead of the pack and I look at these used car dealers at auction paying ten thousand or better sooo who's buying these and what few that are will dry up probably next year
That’s nice and all but it is not reflecting in consumer prices. I just went car shopping this weekend for my son didn’t find anything I would consider a bargain. When I asked the car dealership manager about it, he said everything was fine. Vehicle demand was high and show her the prices and we’re not going to discount anything. Saw a Dodge charger we really liked and they were asking $10,000 over the listed price so where are the bargains? Where are the deals? Where is the collapse? It just isn’t there!
Chargers are embarrassing at this point
Yeah Nigga cars
Chargers and Challengers haven't been redesigned since 2011. They are completely outdated and obsolete.
@@brianmarshall636 Yes, agree. I was given one as a recent car rental and did not like and realized how badly it aged, drove and pain to park. The interior seemed cheap, and the seats were uncomfortable. I had a 2010 Challenger R/T in 2010 and enjoyed...odd how our tastes change.
About damn time, around 20-21 I watched everyone and their grandma driving in chargers/camaros, i knew something bad was brewing...
We need to improve Grade School Education so more People Learn to apply elementary School Mathematics to every Day America.
We have an outbreak of Stupid.
I’m so glad I sold my 2020 vehicle last year and paid cash for a used vehicle private party. I’m so glad I don’t have a car payment anymore. Tough times if you need a car or a home right now. It’s insanity.
Student loans should have been paid off before people purchased new cars.
Kind of tough for new grads to get to their jobs without a car, at least of them.
Those considerations should be made before taking out a student loan. You're still responsible for your own debt.@@mitchhedberg4415
The rates on those went up, too. That was even set by Congress, not the banks.
@@mitchhedberg4415 Even tougher when they got a degree in some useless fluff field that only qualifies them for Starbucks. Engineering grads don't really seem to ever have this problem.
Very good video. Only thing I would disagree on is that people will put going out to eat and vacations over their house and cars these days as well. A good repo company I do business with told me that the best spot to pick up cars is checking out the parking lots of the Texas Roadhouses, Longhorn Steakhouses, Olive Gardens, etc. and they will pluck 2 to 3 cars out of these establishments a shot. Too many people want all the nice things in life and never work for them and their misplaced priorities and the banks catering to this bad behavior is only hurting our economy even more.
I appreciate the content, but we seem to be blaming banks and dealers for all of this but i think alot of these repos, the people who are irresponsible with their money need to be blamed.
I love the irony of record high repos while also having record high dealer mark ups. The car buying public is broke while also rich.
Brandon, I absolutely love watching your videos. I will have my car paid off on December 13th. It's a 2010 dodge journey with 148000 miles but I take good care of it. Keep up the great work!!
On your Dodge Journey, have your transmission fluid flushed and change oil every 3k miles to make your vehicle last.
@gobbler1957 I had the transmission flushed last year. I have always had my vehicles serviced every 3000 miles religiously. Thanks for the Information.