Ray suggested that people who are upside down to pay off their loans, then start fresh. I would recommend paying off your loan, and not starting fresh, but to enjoy your paid-off car for the next 15+ years.
Parent bought their first family car back in 05. It’s a 03 Camry fresh off lease with 15k miles. I now drive it with 325k on the dash. I completely agree. I’ll get another car, but I’ll never get rid of the Camry
You got it brother, stop buying these stupid cars. Keep the one you have and fix it. Screw the manufactures and dealers. Make them make cars that people can buy and not cars that people have to finance for years!
True, if you own a car keep it maintained, if you have a loan with a low interest rate count yourself lucky and pay it off. I had to buy a car for my son in 2021 and I'm upside down on that car by a few thousand but the interest rate is 4.5% and the payments are less than $500 so that car is going to get paid off and we'll drive it for years to come.
They are in the ‘car-flippin’ business, that’s what they do… Did no one think the car manufacturers would eventually price themselves out of business? Oh what a surprise!?
Their car wont last 15 years. These new cars are not easily fixed and are purposely made with engines with high compression ratios and turbos for fuel efficiancy and super thin oil for fuel efficiancy. These engines wont last like past engines as tjey are stressed to the max for mpg and power.
@DavidWiliams-r1g These companies are in the business of lending you money, not telling you which auto is a good value. My stock margin account let's me leverage my investments in good or bad companies. It is my choice how to use the loaned money.
I was in banking for many years. We sold the bank in 2003. We would have never dreamed of making the loans that were made in the past few years. Buyers just didn't realize what they were doing when they rolled negative equity into the next vehicle. And lenders weren't of my generation. I was on the loan committee in the mid 1980's when Texas had a real estate bust. It got ugly and that is what is going to happen in the car market. Buyers just didn't realize that lenders can attach any asset the buyer has that has positive equity. The only solution is to keep paying the note until it is paid in full. Otherwise, the buyers will wreck their credit. Unfortunately, the vehicle will probably need major repairs until it is paid off. I don't think there is any way to avert a bloodbath like we had in the housing market in 2008. Manufacturers contributed to the mess by thinking everyone needed a $100,000 vehicle, buyers got the idea that starting out with negative equity was ok and I think lenders just just weren't thinking,
I've refused to pay for unproven technology at a premium price. Dealers are paying pittances for used EV's but reselling them at huge markups...I'll wait until the future crop of used EV's prices provide opportunity. CASH - Not negative equity. Thanks folks!
never going to happen. EV's prices are still going to come way down from what they are. New generations and types of batteries and chargers will make sure of that.
In 2014 I bought a used 2013 dodge grand Caravan with 30k mikes for 9k from a car dealership. Fast-forward to today. You can by a 2019 dodge grand Caravan with 80kmiles for 20k for a car dealer…that’s crazy.
Not surprised by negative equity! Been watching the car market since COVID! My cars are old and I would like to "renew" one but I keep patching and repairing my old vehicles. Both are paid off. When will the loan rates come down and the prices come down?
I have said this before, my neighbor bought a 2023 KIA EV6 and a 2022 KIA Telluride EX Prestige AWD, paid $15,000.00 and $12,500.00 over MSRP respectively. He is my former Dentist, keyword former, because of his stupidity. Now, he wants to get rid of both vehicles and is upside down $20,000.00 combined. Neither vehicle has more than 10,000 miles on the odometer, is garaged, and is very well taken care of.
Big companies get away with this when they roll over debt they never pay down. Toyota is around $186 billion underwater but people still keep refinancing them.
@8:36...Good point. If a majority will keep their car until they have gotten back to even, negative equity is less meaningful. If you buy shares of Ford at 12 and it goes down to 10, you only have a loss if you sell. Unrealized losses - or gains- are just that...unreal, until there is a price-to-market event.
I trade every 2-3 yr. On new only autos. I feel so blessed that I'm able to pay cash.I have not had an auto loan in over 30 yr. I always put $$$ in a separate savings account. When I had enough I purchased.
I mean, is it really shocking that a longer loan term where the principle is stretch out will have higher negative equity rates? It's basic common sense.
What am I missing here? Who buys a car for an investment?? It’s transportation and always cost more than alternative transportation. It’s value is in its convenience of having it sitting outside for when YOU NEED IT.
Many people buy a home to live in and have somewhere warm and dry to live in for the rest of their lives. They still don't want to owe more than it's worth in 10 years.
@@PHICEN You asked what you are missing. It seems to only be you, so maybe it is the same. Nobody wants to owe more for something than what it's worth, investment or not.
So you’re saying that my 2004 automobile is worth more today than it was when I purchased it like my home is? WOW!! I wish I was more informed. Fact is your car is worth less as soon as you turn the key for the first time. Always was and always will be. It’s a price we pay for the convenience it offers. When you buy a $100,000 dollar car instead of a $25,000 car it’s a personal choice. You never (NEVER!) see that money again. The fact that people cry over this FACT does not make it any different than the person who loses $50,000 at the tables in Vegas.
20 years ago i used to shock saturn and dodge customers when saw their trade figures..that was bad enough for me when i get one or two a week…i cant imagine all those people who paid over msrp when plan to trade. i was always sick to my stomach when people wanted to add their negative equity onto another loan. i like the fact how this channel tries to educate consumers. if you want to be smart with money buy a new car that will still worth something after 10 years and do your oil change every 5k miles or 6 months….if you are upside with a car and it works suck it up and drive it at least till you can pay it off..rolling over debt to another loan just dumb.
Stop borrowing to buy a vehicle! If you take out a vehicle loan, you are paying interest on something that depreciates immediately and indefinitely. You will always be poor if you borrow money to purchase a vehicle. Pay cash and keep a vehicle for 10-15 years. You will literally save hundreds of thousands over your lifetime if you follow this srategy.
Uh. It depends on how much you finance. If you buy a $60k car, put $30k down and finance the rest at 6% and take that leftover $30k and invest it at 7%, you're ahead overall.
@@kensmart1976 yes! Just bought new, replaced my 20 year old truck. I’m retired. I figure I save 300k by just keeping all cars 10 years at least. I buy Camrys. Gave my last one to my daughter, 220k miles still running.
Pls show an example of the battery adjusted value mentioned earlier. Do see where that's invoked for Teslas & other EV producers. Thank you for the charts!!
I had 8200 equity last year when I bought a new car. Cash baby! In my trade. I put 20 percent down on my new car plus didn’t pay mark ups! My Apr is 5.9. My payment is 342. I financed 20,500. My loan is at 10,700 in 12 months. I’m paying extra principal. So 50 percent paid off. Be me! I only buy Hondas. Slow depreciating brand. I bought a 24 HRV EXL. I paid 29,000. My KBB is at 24,000 now.
One question on the methodology is when the CarEdge team checked retail values. I turned my response in the first day and checked CarEdge/Sell for current value, but if they waited until they gathered all the data to do the comparisons, you would have at least a month and an additional payment or two in the mix.
I bought a 2023 Pacifica PHEV and have had 2 recalls and a major repair and now I'm looking to get out of this by trading it in for a Prime Rav4. I know I'll take the loss but I'm really not confident in this car or Stellantis as it's sounding like they are downsizing, and Chrysler may not be around. It only has 4100 miles on it. I really like the Pacifica for its looks and seating which is very useful but now I'm not so happy with the problems and wonder if I take the loss now and move on wait another 2 years to get out of it.
Negative equity starts with having the lowest down-payment, lowest monthly payment and longest payment schedule, with loans structured to be front-end loaded interest repayment. How can this be a shock? There is no recovery from that until everything is paid off and at that point hope the vehicle is worth more than scrap value...
I just had a friend that treaded in a 3 year old Tesla 3 on a Rivian pickup that was leased. He got $20K trade in, $7500.00 from the taxpayer & combined with the Rivian discount has a lease payment of $53.00 pet month!
I would suggest that in addition to are you planning to buy in the next whatever period of time, if you own an EV would you consider another and vice versa.
. . . in 1990 I rolled my (negative) Mercedes 300E lease into/onto a new 1991 420SEL Merc. Later in the year due to the S&L Crisis, banks refused to loan to the company our father and partner founded 32 years early. We had to fire-sell the business, and I had to turn in the 420SEL to Schumacher Scottsdale. They demanded $20-grand. My vicious lawyers got it down to $10,000, or $22,000 in 2023. They did not celebrate my memo note on the $10,000 check...
These guys are the click-bait kings! Every headline embraces a shock-horror theme! That said, they often do have some interesting data... but you have to wade through a lot of hysteria to find it. I'd also add, they're quite clever marketers, using UA-cam very effectively as the primary promotional strategy for their "Car Edge" brand.
They did a video about this, UA-cam rewards sensational clickbait titles, if they didn't use clickbait titles, it would hurt their ability to make payroll.
I’ve grown so far past caring and remotely giving a shit that I just listen I’m my drives back from class. Sure it’s annoying but there are people that are far worse where they clip a 5 second section of a 15 min vid and it doesn’t show till the end. These guys actually have useful info. Better this than some bs
I don’t recall if the survey when asked how much the vehicle was worth that it was trade-in vs private party value. I answered based on selling it not trade in so I know that was over estimated.
I have tried to buy an SUV since July. I’ve been polite, have done my work, got out the door numbers(like pulling teeth) have been pre-approved with my credit union and have gotten within $1800 of a sale and have even offered to split the difference but still No Sale. It’s like the dealers smell I know too much. I am patiently waiting for the end of the month to try again hoping some manager gets tired of my asking for a no bs sale and just sell me something. What do you recommend for someone who the car dealers have caught on to their games and just wants a deal?
People should always go with vehicles they can afford and stop living in la la land!!! If i'd win the lottery, i would never ever think of buying a Ferrari, Lamborghini etc, i would never pay for a 20 000$ oil change, a 50 000$ service center charge for regular maintenance etc. Buy a car you can afford, do services or repairs you can afford or do yourself, Buy a vehicle that is known to last with minimum repairs, finance or buy cash with no interests, like that no equity needed at all, no interests or loan needed. People are so stupid and buy vehicles they cannot afford at all and even make the payments when their situations changes from a fired from their jobs who they tough was safe, cannot afford their rent anymore or changed partner or go trough a divorce and now have to pay alimony for their kids etc 😞
I just read in Fortune that 6 in 10 companies are already firing 2024 college grads they hired this summer for being unprofessional, unorganized and poor communicators ill prepared for work culture. All I bet have new cars sitting outside their apartments.
It would be helpful if the presenters could be shown on the right of the screen versus the bottom as it covers the X axis of the graphs being shown (I couldn’t see the loan term axis)
The chances of anyone getting out of that negative equity unless they hit the lottery are slim and none. Somehow they have to come up with a cash and what do you think the chances of that are?
I don’t understand the shock. This is basic stuff here. One; Cars cost more than they are actually worth to start. Two ; the Depreciation starts when you take possession. Three; Trading up frequently rolls that cost into new loans. You think that you just got rid of your last car for the newby, but that debt goes with you. What do I do?? I make intelligent choices, never trade and always pay it off.
Gotta remember Tesla has been reducing their prices substantially over the last 2-3 years. Which obviously impacts negative equity substantially. Tesla litterally reduced prices 20-25k on some of their models. Great for new buyers but bad for people who bought when they were high.
Ray Zack Laura Justin great show and God bless you all .like the polite way it was said people need to stop getting into crazy dept prison .blows my mind to 60 percent wild
In 2014 I bought a used 2013 dodge grand Caravan with 30k mikes for 9k from a car dealership. Fast-forward to today. You can by a 2019 dodge grand Caravan with 80kmiles for 20k for a car dealer…that’s crazy.
@@YesYourRight this is why i buy older stuff yes or say a jaguar 208 coup very limited number made easy sa any thing to fix for 10k or so up or down .but folks and tecks are afraid of them and the 4.4l is very reliable as for zf-6 gear box all it need all year all brands dodge bmw etc of cars with them is accumulateor upgrade as oem has rubbers tiped ones that wear and mess shifting timing easy fix before it kill trans
Let's consider, if even half of the folks with negative equity decide to do the right thing and pay off their debt over the next several years, what will that drop in demand for new and used cars do to the market?
The business case for consumers is the Hybrid, not the EV. As more EVs begin tearing up our roads, the registration costs will spike. Power grid instability us bad enough and dangerous enough in winters months where an ICE can still provide warmth. EV still
Vehicles don't last as long as they used to, and repairs are crazy expensive. Small components are not utilized in the newer vehicles, a whole assembly must be replaced rather than a single faulty part. Think about older cars with headlight bulbs for example vs the new vehicles with very complex systems within the headlight assembly. Cars used to last 300,000 miles and people could pay off a car, keep it for several years, with fairly simple maintenance and repairs. This simply is NOT the case any longer, either for repair, or for longevity if the vehicles...planned obsolescence compounds the difficulties of interest rates and income percentages being pulled into other necessary areas due to broad economic crises. I have worked in dealerships and with automotive repair companies, and cars are not what they used to be, also people not being taught to see their vehicle as reliable transportation, but a reflection of personality, extension of lifestyle...and those are usually not 'wise' decisions financially. 😢 It's all very sad for those learning hard lessons the very painful hard way.
This, my friend, is why the auto industry is pushing towards leasing for new cars. Ideally, keep it as long as the warranty is valid and then move it on to be someone else's problem. Cars are built on a cheapest assembled cost basis, explaining why they are becoming more costly and complex to maintain and repair. That's why 'components' are becoming bigger and more 'complete' like larger lego-bricks. Bodies and chassis are galvanised or aluminium with big chunks of plastic and that all lasts for a long time, but the engines, transmissions and electrics die or are killed off much earlier. (Think of airbags/dashboards after an impact and how they make the vehicle uneconomic to repair.)
Hard to believe people are gonna really worry about the value of a depreciating asset like a car. The reality of getting anything out of it when you're done using it whatever it is. But to buy new cars and not to expect to throw a handful of cash in the wind is pretty naive
If you financed anywhere near MSRP on a new vehicle for more than 4 years you are upside down, you are not paying it off fast enough, people need to stop buying new vehicles based upon their egos and start buying vehicles based upon needs and budget.
+ Low ball me That's why I DONT do Trade ins and They DROOL when I drive threw there auto lots just to tease them and They know How much Care that I take with all my auto's
The reality is people are buying to swap in 3-5 years. At the same time, many of these people can't even afford the car they are financing, so they will end up stuck in this endless cycle of negative equity.
Here is a novel concept; only buy a car you can afford .i.e., if you can't pay for it in cash you can't afford it. Paying interest to buy a depreciating asset makes no financial sense.
now the dealers are trying to put their bad choices onto the next customers. Prices on used cars are through the roof and most are high mileage. I'm not paying for other peoples mistakes folks :)
It's simple, pay that loan down when you buy it. Zero down is STUPID. Dont pay for extras including mark ups. And if you ARE under water, pay it down before trading. SIMPLE
@@cageordie no, used cars are usually repos and are junk- not taken care of. People don’t have money for repairs and maintenance. If they are in good shape, the monthly payment is too high. I tried- just bought new and have a warranty- and I got a great deal and 0% interest. It’s a hard decision, but I keep vehicles for 20 years.
@@diegoharo7943 that’s what I did. Got 10 grand off, and zero percent- and a warranty. Used cars are iffy, people don’t have money for repairs and routine maint.
@diegoharo7943 Most Nissans use CVTs, which are not of acceptable quality. The Frontier is possible, but not really something I want. The Titan or Armada might be interesting if the fuel economy wasn't so bad.
i have a 2024 tesla Y and owe 20k @ 1.99% for 72 mo. will pay off in 6 or 7 months and have no plan to sell for at least 4 or 5 years but never say never.
I blame Lobbyists. The consumers are overran with manufacturers and dealership lobbyists and not to mention all of the Wall Street finance giants’ lobbying efforts. I don’t see any way forward without some kind of reset with the customer having more choice and rights.
People buy cars like they buy clothing. It's a personal accessory. You can have a 20yr old vehicle and not be at any disadvantage outside of appearance.
It used to be, if you bought a stock and it went down in value, that was your mistake or bad luck. Now, you sue the company. It sounds like the same thing for paying too much for a car. Come on, take personal responsibility! You made that dumb choice, live with it and learn for next time.
The lenders need to lend according to the real value of the vehicle and stop throwing money at clients, knowing that the client will eventually have to pay up.
Ray suggested that people who are upside down to pay off their loans, then start fresh.
I would recommend paying off your loan, and not starting fresh, but to enjoy your paid-off car for the next 15+ years.
Parent bought their first family car back in 05. It’s a 03 Camry fresh off lease with 15k miles. I now drive it with 325k on the dash. I completely agree. I’ll get another car, but I’ll never get rid of the Camry
You got it brother, stop buying these stupid cars. Keep the one you have and fix it. Screw the manufactures and dealers. Make them make cars that people can buy and not cars that people have to finance for years!
True, if you own a car keep it maintained, if you have a loan with a low interest rate count yourself lucky and pay it off. I had to buy a car for my son in 2021 and I'm upside down on that car by a few thousand but the interest rate is 4.5% and the payments are less than $500 so that car is going to get paid off and we'll drive it for years to come.
They are in the ‘car-flippin’ business, that’s what they do… Did no one think the car manufacturers would eventually price themselves out of business? Oh what a surprise!?
Their car wont last 15 years. These new cars are not easily fixed and are purposely made with engines with high compression ratios and turbos for fuel efficiancy and super thin oil for fuel efficiancy. These engines wont last like past engines as tjey are stressed to the max for mpg and power.
Class action lawsuit? Why are bad financial decisions always someone else's fault?
LMAO so true. When she said, how are "we" going to help people out of this?
well the real question is why did the finance companies fund the contracts? they knew the 'assets' werent worth what the debt was?
The American way 2024.
@DavidWiliams-r1g These companies are in the business of lending you money, not telling you which auto is a good value. My stock margin account let's me leverage my investments in good or bad companies. It is my choice how to use the loaned money.
I was in banking for many years. We sold the bank in 2003. We would have never dreamed of making the loans that were made in the past few years. Buyers just didn't realize what they were doing when they rolled negative equity into the next vehicle. And lenders weren't of my generation. I was on the loan committee in the mid 1980's when Texas had a real estate bust. It got ugly and that is what is going to happen in the car market. Buyers just didn't realize that lenders can attach any asset the buyer has that has positive equity. The only solution is to keep paying the note until it is paid in full. Otherwise, the buyers will wreck their credit. Unfortunately, the vehicle will probably need major repairs until it is paid off. I don't think there is any way to avert a bloodbath like we had in the housing market in 2008. Manufacturers contributed to the mess by thinking everyone needed a $100,000 vehicle, buyers got the idea that starting out with negative equity was ok and I think lenders just just weren't thinking,
I've refused to pay for unproven technology at a premium price. Dealers are paying pittances for used EV's but reselling them at huge markups...I'll wait until the future crop of used EV's prices provide opportunity. CASH - Not negative equity. Thanks folks!
never going to happen. EV's prices are still going to come way down from what they are. New generations and types of batteries and chargers will make sure of that.
If you get into a accident and it is totaled, the insurance company can pay you for the negative equity
Until then, keep driving that 4 cylinder Camry
In 2014 I bought a used 2013 dodge grand Caravan with 30k mikes for 9k from a car dealership. Fast-forward to today. You can by a 2019 dodge grand Caravan with 80kmiles for 20k for a car dealer…that’s crazy.
Nice seeing Justin on the air again
Not surprised by negative equity! Been watching the car market since COVID! My cars are old and I would like to "renew" one but I keep patching and repairing my old vehicles. Both are paid off. When will the loan rates come down and the prices come down?
@@Dave_M44 true. I had to bite the bullet. Got a great deal on a Nissan and zero pct interest.
I just picked up a used 2020 RAV4 XLE HV this week for 5.1% interest.
people just need to keep their cars 10 plus years, the days of free money and cheaper cars are not coming back. just keep the car your still paying.
I have said this before, my neighbor bought a 2023 KIA EV6 and a 2022 KIA Telluride EX Prestige AWD, paid $15,000.00 and $12,500.00 over MSRP respectively. He is my former Dentist, keyword former, because of his stupidity. Now, he wants to get rid of both vehicles and is upside down $20,000.00 combined. Neither vehicle has more than 10,000 miles on the odometer, is garaged, and is very well taken care of.
This can be solved at the financing organizations refused to finance negative equity.
Big companies get away with this when they roll over debt they never pay down. Toyota is around $186 billion underwater but people still keep refinancing them.
@8:36...Good point. If a majority will keep their car until they have gotten back to even, negative equity is less meaningful. If you buy shares of Ford at 12 and it goes down to 10, you only have a loss if you sell. Unrealized losses - or gains- are just that...unreal, until there is a price-to-market event.
I trade every 2-3 yr. On new only autos. I feel so blessed that I'm able to pay cash.I have not had an auto loan in over 30 yr. I always put $$$ in a separate savings account. When I had enough I purchased.
I mean, is it really shocking that a longer loan term where the principle is stretch out will have higher negative equity rates? It's basic common sense.
What am I missing here? Who buys a car for an investment?? It’s transportation and always cost more than alternative transportation. It’s value is in its convenience of having it sitting outside for when YOU NEED IT.
Many people buy a home to live in and have somewhere warm and dry to live in for the rest of their lives. They still don't want to owe more than it's worth in 10 years.
@@my2centsworth not the same thing.
@@PHICEN You asked what you are missing. It seems to only be you, so maybe it is the same. Nobody wants to owe more for something than what it's worth, investment or not.
So you’re saying that my 2004 automobile is worth more today than it was when I purchased it like my home is? WOW!! I wish I was more informed. Fact is your car is worth less as soon as you turn the key for the first time. Always was and always will be. It’s a price we pay for the convenience it offers. When you buy a $100,000 dollar car instead of a $25,000 car it’s a personal choice. You never (NEVER!) see that money again. The fact that people cry over this FACT does not make it any different than the person who loses $50,000 at the tables in Vegas.
@@PHICEN It's worth more than you OWE on it. Big difference.
20 years ago i used to shock saturn and dodge customers when saw their trade figures..that was bad enough for me when i get one or two a week…i cant imagine all those people who paid over msrp when plan to trade. i was always sick to my stomach when people wanted to add their negative equity onto another loan. i like the fact how this channel tries to educate consumers. if you want to be smart with money buy a new car that will still worth something after 10 years and do your oil change every 5k miles or 6 months….if you are upside with a car and it works suck it up and drive it at least till you can pay it off..rolling over debt to another loan just dumb.
Stop borrowing to buy a vehicle! If you take out a vehicle loan, you are paying interest on something that depreciates immediately and indefinitely. You will always be poor if you borrow money to purchase a vehicle. Pay cash and keep a vehicle for 10-15 years. You will literally save hundreds of thousands over your lifetime if you follow this srategy.
Great advise
Exactly, and there are plenty of decent vehicles available for around $10k to $15k.
Uh. It depends on how much you finance. If you buy a $60k car, put $30k down and finance the rest at 6% and take that leftover $30k and invest it at 7%, you're ahead overall.
@@nothingtoseaheardammit that might sound nice but If you have the cash to pay cash, pay cash. Why pay one cent in interest if you don't have to?
@@kensmart1976 yes! Just bought new, replaced my 20 year old truck. I’m retired. I figure I save 300k by just keeping all cars 10 years at least. I buy Camrys. Gave my last one to my daughter, 220k miles still running.
Pls show an example of the battery adjusted value mentioned earlier. Do see where that's invoked for Teslas & other EV producers. Thank you for the charts!!
I kept my first EV (Tesla Model S) for 7 years. The battery had about 5% degradation when I sold it at 100,000 miles.
Love the video, negative equity is a killer and I wish the sales rep would advise people about this when it hey sign up for a 8 year car loan.
I had 8200 equity last year when I bought a new car. Cash baby! In my trade. I put 20 percent down on my new car plus didn’t pay mark ups! My Apr is 5.9. My payment is 342. I financed 20,500. My loan is at 10,700 in 12 months. I’m paying extra principal. So 50 percent paid off. Be me! I only buy Hondas. Slow depreciating brand. I bought a 24 HRV EXL. I paid 29,000. My KBB is at 24,000 now.
One question on the methodology is when the CarEdge team checked retail values. I turned my response in the first day and checked CarEdge/Sell for current value, but if they waited until they gathered all the data to do the comparisons, you would have at least a month and an additional payment or two in the mix.
I bought a 2023 Pacifica PHEV and have had 2 recalls and a major repair and now I'm looking to get out of this by trading it in for a Prime Rav4. I know I'll take the loss but I'm really not confident in this car or Stellantis as it's sounding like they are downsizing, and Chrysler may not be around. It only has 4100 miles on it. I really like the Pacifica for its looks and seating which is very useful but now I'm not so happy with the problems and wonder if I take the loss now and move on wait another 2 years to get out of it.
Negative equity starts with having the lowest down-payment, lowest monthly payment and longest payment schedule, with loans structured to be front-end loaded interest repayment. How can this be a shock? There is no recovery from that until everything is paid off and at that point hope the vehicle is worth more than scrap value...
2020 F350 bought Oct of 2020 and I am plus 20 grand equity :) shortly after that the madness started ..
I just had a friend that treaded in a 3 year old Tesla 3 on a Rivian pickup that was leased. He got $20K trade in, $7500.00 from the taxpayer & combined with the Rivian discount has a lease payment of $53.00 pet month!
I would suggest that in addition to are you planning to buy in the next whatever period of time, if you own an EV would you consider another and vice versa.
. . . in 1990 I rolled my (negative) Mercedes 300E lease into/onto a new 1991 420SEL Merc. Later in the year due to the S&L Crisis, banks refused to loan to the company our father and partner founded 32 years early. We had to fire-sell the business, and I had to turn in the 420SEL to Schumacher Scottsdale. They demanded $20-grand. My vicious lawyers got it down to $10,000, or $22,000 in 2023. They did not celebrate my memo note on the $10,000 check...
They should do a video on wether it is better to lease or buy (using different term of ownership)
These guys are the click-bait kings! Every headline embraces a shock-horror theme! That said, they often do have some interesting data... but you have to wade through a lot of hysteria to find it. I'd also add, they're quite clever marketers, using UA-cam very effectively as the primary promotional strategy for their "Car Edge" brand.
Yes, getting old
Yeah its like they used to be car salesmen
They did a video about this, UA-cam rewards sensational clickbait titles, if they didn't use clickbait titles, it would hurt their ability to make payroll.
To me, car prices also embrace a shock-horror theme.
I’ve grown so far past caring and remotely giving a shit that I just listen I’m my drives back from class. Sure it’s annoying but there are people that are far worse where they clip a 5 second section of a 15 min vid and it doesn’t show till the end. These guys actually have useful info. Better this than some bs
I don’t recall if the survey when asked how much the vehicle was worth that it was trade-in vs private party value. I answered based on selling it not trade in so I know that was over estimated.
I have tried to buy an SUV since July. I’ve been polite, have done my work, got out the door numbers(like pulling teeth) have been pre-approved with my credit union and have gotten within $1800 of a sale and have even offered to split the difference but still No Sale. It’s like the dealers smell I know too much. I am patiently waiting for the end of the month to try again hoping some manager gets tired of my asking for a no bs sale and just sell me something. What do you recommend for someone who the car dealers have caught on to their games and just wants a deal?
Hey I'm near Jones Beach.. Good Luck!!
No EV until infrastructure is better.
Until the laws of physics are changed or every charger is 10 Megawatts, at least.
I have owned an EV for 7 months. Not once I needed to charge on a public charger. For many like me, infrastructure is not an issue.
I don’t know what region you are in, but I suspect you haven’t checked what the situation is? Where I am supercharges are going up gangbusters.
Here's hoping you get electricity supplied to your home some day.
People should always go with vehicles they can afford and stop living in la la land!!! If i'd win the lottery, i would never ever think of buying a Ferrari, Lamborghini etc, i would never pay for a 20 000$ oil change, a 50 000$ service center charge for regular maintenance etc. Buy a car you can afford, do services or repairs you can afford or do yourself, Buy a vehicle that is known to last with minimum repairs, finance or buy cash with no interests, like that no equity needed at all, no interests or loan needed. People are so stupid and buy vehicles they cannot afford at all and even make the payments when their situations changes from a fired from their jobs who they tough was safe, cannot afford their rent anymore or changed partner or go trough a divorce and now have to pay alimony for their kids etc 😞
I just read in Fortune that 6 in 10 companies are already firing 2024 college grads they hired this summer for being unprofessional, unorganized and poor communicators ill prepared for work culture. All I bet have new cars sitting outside their apartments.
Not perpetuating the cycle. I’m understanding that people need to stop buying cars all together, make the dealers panic and drop below msrp
It would be helpful if the presenters could be shown on the right of the screen versus the bottom as it covers the X axis of the graphs being shown (I couldn’t see the loan term axis)
Her sound issues were a big distraction but good information and entertaining as always.
It’s is not education it’s is responsibility!!!
Why not check kbb to look for your vehicles value? FCC in Arizona
I'm waiting for the chinese BYD hybrid truck to get here !! I think I would like to buy one of them !!
Yea finally a lease feature🎉
Negative equity as how do you figure the value, thre real value or the dealers rip you off value?
The chances of anyone getting out of that negative equity unless they hit the lottery are slim and none. Somehow they have to come up with a cash and what do you think the chances of that are?
I don’t understand the shock. This is basic stuff here. One; Cars cost more than they are actually worth to start. Two ; the Depreciation starts when you take possession. Three; Trading up frequently rolls that cost into new loans. You think that you just got rid of your last car for the newby, but that debt goes with you. What do I do?? I make intelligent choices, never trade and always pay it off.
Love u guys
where are all the pops Garages that can build a car in the garage?
Gotta remember Tesla has been reducing their prices substantially over the last 2-3 years. Which obviously impacts negative equity substantially. Tesla litterally reduced prices 20-25k on some of their models. Great for new buyers but bad for people who bought when they were high.
Ray Zack Laura Justin great show and God bless you all .like the polite way it was said people need to stop getting into crazy dept prison .blows my mind to 60 percent wild
In 2014 I bought a used 2013 dodge grand Caravan with 30k mikes for 9k from a car dealership. Fast-forward to today. You can by a 2019 dodge grand Caravan with 80kmiles for 20k for a car dealer…that’s crazy.
@@YesYourRight this is why i buy older stuff yes or say a jaguar 208 coup very limited number made easy sa any thing to fix for 10k or so up or down .but folks and tecks are afraid of them and the 4.4l is very reliable as for zf-6 gear box all it need all year all brands dodge bmw etc of cars with them is accumulateor upgrade as oem has rubbers tiped ones that wear and mess shifting timing easy fix before it kill trans
Ray, better to be the kleenex of car sights than the Charmin of auto sights!
What will happen to 2022 and 2023 vehicle's that do not sell?
Do they wind up at the auction?
They melt them down for vacuum cleaners
@@frankkeel8410 yes I have one, but the power steering doesn't work!
Let's consider, if even half of the folks with negative equity decide to do the right thing and pay off their debt over the next several years, what will that drop in demand for new and used cars do to the market?
honestly surprised 1 in 3 drivers even have car loans any data on what the ratio of cars with no loan is?
That's how people learn
The business case for consumers is the Hybrid, not the EV.
As more EVs begin tearing up our roads, the registration costs will spike.
Power grid instability us bad enough and dangerous enough in winters months where an ICE can still provide warmth.
EV still
The answer is everyone in the world has to stop financing
just not going to happen. New cars are too expensive. People absolutely hate saving money.
Vehicles don't last as long as they used to, and repairs are crazy expensive. Small components are not utilized in the newer vehicles, a whole assembly must be replaced rather than a single faulty part. Think about older cars with headlight bulbs for example vs the new vehicles with very complex systems within the headlight assembly. Cars used to last 300,000 miles and people could pay off a car, keep it for several years, with fairly simple maintenance and repairs. This simply is NOT the case any longer, either for repair, or for longevity if the vehicles...planned obsolescence compounds the difficulties of interest rates and income percentages being pulled into other necessary areas due to broad economic crises. I have worked in dealerships and with automotive repair companies, and cars are not what they used to be, also people not being taught to see their vehicle as reliable transportation, but a reflection of personality, extension of lifestyle...and those are usually not 'wise' decisions financially. 😢 It's all very sad for those learning hard lessons the very painful hard way.
This, my friend, is why the auto industry is pushing towards leasing for new cars. Ideally, keep it as long as the warranty is valid and then move it on to be someone else's problem. Cars are built on a cheapest assembled cost basis, explaining why they are becoming more costly and complex to maintain and repair. That's why 'components' are becoming bigger and more 'complete' like larger lego-bricks.
Bodies and chassis are galvanised or aluminium with big chunks of plastic and that all lasts for a long time, but the engines, transmissions and electrics die or are killed off much earlier. (Think of airbags/dashboards after an impact and how they make the vehicle uneconomic to repair.)
Stellantis needs to bring bank the 1999 Cherokee Sport with in-line 6.
They can't, no way in hell that it would meet current emissions, mileage and safety standards.
@@johnsanford3596 but it would sell. Had mine 20 years.
Ron Paul was always right - the fed isn't federal and it was always about the debt.
I think a certain kind of Lightning may take care of that negative equity.
Hard to believe people are gonna really worry about the value of a depreciating asset like a car. The reality of getting anything out of it when you're done using it whatever it is. But to buy new cars and not to expect to throw a handful of cash in the wind is pretty naive
I must be weird, I have never had a car loan, let alone negative equity.
Great show today! I like how it went smoothly.
You guys shocked the unshockable, I am shocked, you've got to be shocking me.
I am shocked.
If you financed anywhere near MSRP on a new vehicle for more than 4 years you are upside down, you are not paying it off fast enough, people need to stop buying new vehicles based upon their egos and start buying vehicles based upon needs and budget.
I see more ppl going with hybrid models and not full Electric vehicles. Ppl still want gas regardless along with electric but not full electric
MASTER BRAND is what a Kleenex/ziploc/caredge is called
Insurance for a new ev in California is insane
Speak up Ray! You said Always Lease never buy an EV. They depreciate too much to fast. That woman is wrong about ICE vs EV trade in values.
If you paid over MSRP you had negative equity before you left the dealership. That being said negative equity is nothing new.
Was Zach nice to his dad today? 🤣
People love to use asking price to determine value of their assets.
+
Low ball me That's why I DONT do Trade ins and They DROOL when I drive threw there auto lots just to tease them and They know How much Care that I take with all my auto's
The reality is people are buying to swap in 3-5 years. At the same time, many of these people can't even afford the car they are financing, so they will end up stuck in this endless cycle of negative equity.
I put 100 percent down so no negative equity
Here is a novel concept; only buy a car you can afford .i.e., if you can't pay for it in cash you can't afford it. Paying interest to buy a depreciating asset makes no financial sense.
You signed up for it, it's up to you to pay it off and learn a lesson the hard way
now the dealers are trying to put their bad choices onto the next customers. Prices on used cars are through the roof and most are high mileage. I'm not paying for other peoples mistakes folks :)
It's simple, pay that loan down when you buy it. Zero down is STUPID. Dont pay for extras including mark ups. And if you ARE under water, pay it down before trading. SIMPLE
Be careful what you say dad, we don’t want Zach to get upset
hmm be careful could be the TP of the auto industry
If I had to buy today I'd buy a used car for cash.
Or buy a new car in cash, Nissan had great deals.
They were selling UNDER INVOICE!
i wouldn't. I would go find a crazy deal on a stellantis plug in hybrid.
@@cageordie no, used cars are usually repos and are junk- not taken care of. People don’t have money for repairs and maintenance. If they are in good shape, the monthly payment is too high. I tried- just bought new and have a warranty- and I got a great deal and 0% interest. It’s a hard decision, but I keep vehicles for 20 years.
@@diegoharo7943 that’s what I did. Got 10 grand off, and zero percent- and a warranty. Used cars are iffy, people don’t have money for repairs and routine maint.
@diegoharo7943 Most Nissans use CVTs, which are not of acceptable quality. The Frontier is possible, but not really something I want. The Titan or Armada might be interesting if the fuel economy wasn't so bad.
Sibanye Stillwater Mining company just laid off over 700 employees all because of EVs! This mandate will affect everything!!
Looking at new car prices it forces people to over value their used car to try and make the purchase viable.
i have a 2024 tesla Y and owe 20k @ 1.99% for 72 mo. will pay off in 6 or 7 months and have no plan to sell for at least 4 or 5 years but never say never.
You can't sue for your own carelessness.
I blame Lobbyists. The consumers are overran with manufacturers and dealership lobbyists and not to mention all of the Wall Street finance giants’ lobbying efforts. I don’t see any way forward without some kind of reset with the customer having more choice and rights.
When are you going to advertise the winner of the Amazon gift card for completing the survey?
People buy cars like they buy clothing. It's a personal accessory. You can have a 20yr old vehicle and not be at any disadvantage outside of appearance.
And people complain about their student loans .
Car industry keeps ripping off customers. Greed!
It used to be, if you bought a stock and it went down in value, that was your mistake or bad luck. Now, you sue the company. It sounds like the same thing for paying too much for a car. Come on, take personal responsibility! You made that dumb choice, live with it and learn for next time.
Cars are not an investment, I am shocked.
Shoppers didn't do their homework before buying at the inflated prices? Now that's shocking! LOL
. . . library has 2 EV chargers, Ray? Don't they know the homeless typically don't own/drive a vehicle?
The news keep repeating on how great the economy is.
The lenders need to lend according to the real value of the vehicle and stop throwing money at clients, knowing that the client will eventually have to pay up.
My rule is if I can't pay the car off in 48 Months, I can't afford the car.
Shocked? Click bait again. /yawn.
At this point I'll be shocked if they use a non click bait title
get out of here rage watcher, go touch some grass
And did all 1,000 survey participants receive their $100 Amazon gift cards yet?
Wow such a huge data sample. I'm surely going to rest my hat on these conclusions.