You realize most working class Americans spend nearly half of their net income on trash tier housing. Compound that with a used auto market where 2-3 year old vehicles are still around msrp and anything under 10k is typically on its last year of road worthiness or in need of major repairs.. Is it more likely that sales are tombstoned because the market is mostly composed of financially illiterate children, or is it more likely that sales tanked because it's tough out there for average consumers?
@@grizzly311tr I would suggest that people don't buy 2-3 year old vehicles if they can't afford them, it's as simple as that. People have convinced themselves they "need" things that they "want". It's a growing problem with no end in sight. I still drive a 2008 Toyota with 233k miles on it, I bet most folks would never purchase anything with 150k+, suggesting it only has 1 year of life left. To the contrary, it's still running, still hauls my family around. I have the means to buy a brand new car but I choose not to for reasons stated in the video. Would I like a software ride? Sure. New smooth power delivery and a huge screen? Oh yeah...bring it on. But not for the sum of money they want for anything post 2020....it's just not worth it to me. Getting out of negative equity (and other debt) takes time and discipline. Finding happiness in non-material things helps....
@TheCarGuyOnline I get your take on people being better consumers, but you fail to realize your toyota is the exception, not the rule. It would be nice if everybody could find a roadworthy vehicle with over 200k miles, but in most cases your first year in repairs will exceed the price of the vehicle. Even if everyone would find that well maintained 200k toyota, if over 70 percent of the market takes that as their only financially reliable option, it absolutely destroys the new car market. Despite any boycott or unicorn used toyota fiesta, prices will not dramatically drop. Volume will drop and volume can go as far down as "made to order". The only reasonable solution is removing safety/emissions standards and letting manufacturers race to the bottom in hopes of capturing marketshare from responsible consumers
Man!! You’re dead on about not carrying car debt!! There’s something about being in my 40’s and not being a slave to the marketing machine and not “needing” anew car every 3 years. I find joy in seeing how long my vehicles can go before they become unreliable. The pace of mind is incredible!
I work as a salesman. I left the game 2 years ago and I am back again in the industry. This is advice to people that are under water. I would keep the vehicle until the wheels fall off only if you are confident that your car will last. Second option would be to finds a great deal on a vehicle that does not depreciate as quickly and that would absorb some of the negative equity and with a nice down payment. That 20% will quickly increase. A lot of people can’t even get out of their lease.
Why are people trading in cars with negative equity. Take the L and keep what you have. The problem is not economy problem, it’s an ego problem. Champagne taste and beer money .
It seems the younger generation only want the fast sports cars, or luxury cars. The problem is they can't afford them. When it comes down to paying your rent or making your car payment, you usually pay your rent.
Ok, so just spent the weekend shopping for a new truck. I'm in west/central Canada. There is ZERO dealer desperation, no real motivation to make a sale at all; experienced this across 9 dealerships of various brands. They are intentionally keeping new stock low to non-existent (except some ford/gm/dodge dealers), you are encouraged to place an order with a deposit and wait 5-6 months. The dealers are getting away with charging people insane DOC/ADMIN fees and full MSRP. As for gently used...those don't really exist. And if there is one in perfect condition, no accidents, and not an eastern Canada rust transplant...it's only 5-10% off from new price. And yet...the amount of NEW vehicles on the roads here, especially high dollar ones (that are subject to the luxury tax)...is very noticeable. WTH, this world is crazy
I bought a new 24 subaru. My buying price, intrest rate and monthly payment are all bellow average. These people with 1000 a month trucks and hellcats are crazy
Subarus here in Colorado they sell like hotcakes and don't depreciate too much. Not sure about other states but guessing anywhere with good winter weather they hold value.
Dealers decimated their customer base. The people who buy new cars every 3 years represent a small percentage of the car buyer market. However, that small number represented a reliable source of income for dealers. After selling them cars way above MSRP, now that small percentage is further greatly reduced.
People have no one to blame but themselves. I am a FSM and I see people treat their cars like cellphones, constantly upgrading perfectly good vehicles that could last them 10 years but instead they come in after 2 years of a 7 or 8 year loan because they ‘ need to upgrade’. We just roll the negative equity until they finally hit the wall with the bank because the vehicle exceeds their booking limits. I have done many 60k Corollas and 100k Highlanders here in Canada. My wife drives a 7 year old Corolla that is paid for even though I am surrounded by shiny new cars all day long. My 3500 sq ft house is fully paid for. Cars are money pits folks.
Keep your car more than 10 years.......why trading a car!! I keep my cars 20 years......well maintained.......car payment for (4) year .....15 years free payment
My 2008 Sequoia just rolled over 200k this past weekend. I was a dorky kid counting down the miles and trying to time it so I could get a picture of it! 😂😂
The consumer that has been brainwashed into overspending by the marketing department neglects an important financial rule. Every dollar squandered on trendy items when you are young is less money that can generate earnings over the long term. When these people hit retirement age they will be living in a trailer park, or camping out in their overpriced SUV if it has not been repossessed.
I have my 2016 Honda Civic payed off. I'd like to get a new truck, but it doesn't make sense with the interest rates and the prices. Maybe next year, I can do a big down payment and get a better interest rate.
Thank the Lord for the internet. The last new vehicle I bought from a dealership was in 2004. Ill never buy a new car for as long as I live. I buy used and drive them until fixing them is cost prohibitive.
Been driving my 1999 Mirage for years, and life is wonderful without a car payment. 42 bucks for insurance, about 30 bucks a month in gas, and a few hundred a year in DIY maintenance. Use UA-cam as a tool and you can maintain an older car more easily than you think.
You can still get a nice, new sedan for $25-30k. It's just that consumers aren't buying them. Specifically, $60-90k pickup trucks have become the must-have fashion accessory for men.
I agree, there are still some wise folks out there buying Camry's and other reliable vehicles. But nice new sedans didn't used to cost $30k unless they were the flagship top model/top trim, but I suppose that's inflation at work. You are right, the trucks have gotten completely out of hand in the mid to upper tier trims.
It ultimately comes down to responsible parenting and solid education, in my view. No President can solve personal financial issues if someone has poor spending habits. From a young age, my parents taught me to only buy what’s affordable based on your income level and avoid high-interest purchases. Banks can feel like modern-day thief’s in suits, often earning from people’s interest payments. Build enough savings to pay in cash for major purchases instead. Resist the urge to impress others or drive luxury cars if finances are tight. Focus on retirement planning in 10-year increments, rather than living paycheck to paycheck. Now at 40, both my cars and two homes are paid off. I sleep better at night knowing I don’t have any major debts to hold me back. Be wise with your spending, and take control of your financial future. For the record, I don’t make a ton of money. Just an average Joe who works 50hrs a week..
It sucks but people are going to take out loans to get the absolute best car they can get. They can't make decisions themselves. It is the bank that decides for them not their own common sense. Now the banks are starting to say no, or they have blown themselves up so badly with negative equity that they have to hold on to the car they have. Very sad.
Yup that's where it has gotten to the average working person cannot afford a vehicle once your underwater it just keeps on snowballing and snowballing. If you can get another loan. Don't know what people are going to do it's not looking good at all.
Issue, people really don't understand the value of walking away. There are tons of videos on negotiating for a vehicle on UA-cam. IF you don't have experience negotiating, get a Costco membership and buy through them. At least you'll know you got the best deal without "dealing" that you could get. Honestly, don't go through life being "soft".
Solid advice! Being soft gets you NOTHING in this world. It’s ok to not give in to the pressures of anyone else - you aren’t a dick for doing so. I’ve haggled with car dealerships in the past and it was actually kind of fun to bust their balls for the price I wanted. Now I just save up for the cars I want, and I have an affinity to older vehicles anyway, so I’m always on top and avoid the negative equity scenario.
@@northwesttoyotas509 Tip, if you have to buy or want to buy. After you've done all the research on what you want i.e prices/test drive. Walk in on them cold 3 hrs on a Sat before they close. I've done so well that way. Closer to the end of the month the better. Cheers
The numbers from Edmunds are misleading. Only covers trade-ins. For everyone with vehicle loans, other sources have ~40% as $10K+ underwater. It's a doom loop for new vehicle sales moving forward.
It would help if Americans would live within their means, despite economic conditions.
Yeah that doesn't seem to be happening much anymore. Entitlement is at an all time high.
You realize most working class Americans spend nearly half of their net income on trash tier housing. Compound that with a used auto market where 2-3 year old vehicles are still around msrp and anything under 10k is typically on its last year of road worthiness or in need of major repairs..
Is it more likely that sales are tombstoned because the market is mostly composed of financially illiterate children, or is it more likely that sales tanked because it's tough out there for average consumers?
@@grizzly311tr I would suggest that people don't buy 2-3 year old vehicles if they can't afford them, it's as simple as that. People have convinced themselves they "need" things that they "want". It's a growing problem with no end in sight. I still drive a 2008 Toyota with 233k miles on it, I bet most folks would never purchase anything with 150k+, suggesting it only has 1 year of life left. To the contrary, it's still running, still hauls my family around. I have the means to buy a brand new car but I choose not to for reasons stated in the video. Would I like a software ride? Sure. New smooth power delivery and a huge screen? Oh yeah...bring it on. But not for the sum of money they want for anything post 2020....it's just not worth it to me. Getting out of negative equity (and other debt) takes time and discipline. Finding happiness in non-material things helps....
You’re 💯 correct!
@TheCarGuyOnline I get your take on people being better consumers, but you fail to realize your toyota is the exception, not the rule. It would be nice if everybody could find a roadworthy vehicle with over 200k miles, but in most cases your first year in repairs will exceed the price of the vehicle. Even if everyone would find that well maintained 200k toyota, if over 70 percent of the market takes that as their only financially reliable option, it absolutely destroys the new car market.
Despite any boycott or unicorn used toyota fiesta, prices will not dramatically drop. Volume will drop and volume can go as far down as "made to order".
The only reasonable solution is removing safety/emissions standards and letting manufacturers race to the bottom in hopes of capturing marketshare from responsible consumers
Man!! You’re dead on about not carrying car debt!! There’s something about being in my 40’s and not being a slave to the marketing machine and not “needing” anew car every 3 years. I find joy in seeing how long my vehicles can go before they become unreliable. The pace of mind is incredible!
I work as a salesman. I left the game 2 years ago and I am back again in the industry. This is advice to people that are under water. I would keep the vehicle until the wheels fall off only if you are confident that your car will last. Second option would be to finds a great deal on a vehicle that does not depreciate as quickly and that would absorb some of the negative equity and with a nice down payment. That 20% will quickly increase. A lot of people can’t even get out of their lease.
Why are people trading in cars with negative equity. Take the L and keep what you have. The problem is not economy problem, it’s an ego problem. Champagne taste and beer money .
It seems the younger generation only want the fast sports cars, or luxury cars. The problem is they can't afford them. When it comes down to paying your rent or making your car payment, you usually pay your rent.
@@davcuts2897 I see most people getting buried by trucks and suvs. The prices of anything with a third row make me feel better about being ugly
Ok, so just spent the weekend shopping for a new truck. I'm in west/central Canada. There is ZERO dealer desperation, no real motivation to make a sale at all; experienced this across 9 dealerships of various brands. They are intentionally keeping new stock low to non-existent (except some ford/gm/dodge dealers), you are encouraged to place an order with a deposit and wait 5-6 months. The dealers are getting away with charging people insane DOC/ADMIN fees and full MSRP. As for gently used...those don't really exist. And if there is one in perfect condition, no accidents, and not an eastern Canada rust transplant...it's only 5-10% off from new price. And yet...the amount of NEW vehicles on the roads here, especially high dollar ones (that are subject to the luxury tax)...is very noticeable. WTH, this world is crazy
I bought a new 24 subaru. My buying price, intrest rate and monthly payment are all bellow average. These people with 1000 a month trucks and hellcats are crazy
Subarus here in Colorado they sell like hotcakes and don't depreciate too much. Not sure about other states but guessing anywhere with good winter weather they hold value.
@@TheCarGuyOnline- In WA, Subaru’s hold their value too.
Dealers decimated their customer base. The people who buy new cars every 3 years represent a small percentage of the car buyer market. However, that small number represented a reliable source of income for dealers. After selling them cars way above MSRP, now that small percentage is further greatly reduced.
People are financially illiterate.
People have no one to blame but themselves. I am a FSM and I see people treat their cars like cellphones, constantly upgrading perfectly good vehicles that could last them 10 years but instead they come in after 2 years of a 7 or 8 year loan because they ‘ need to upgrade’. We just roll the negative equity until they finally hit the wall with the bank because the vehicle exceeds their booking limits. I have done many 60k Corollas and 100k Highlanders here in Canada.
My wife drives a 7 year old Corolla that is paid for even though I am surrounded by shiny new cars all day long. My 3500 sq ft house is fully paid for. Cars are money pits folks.
Keep your car more than 10 years.......why trading a car!!
I keep my cars 20 years......well maintained.......car payment for (4) year .....15 years free payment
Most people do not think like this....they hate money :).
I'm still driving the new car I factory-ordered 15 years ago.
My 2008 Sequoia just rolled over 200k this past weekend. I was a dorky kid counting down the miles and trying to time it so I could get a picture of it! 😂😂
@@northwesttoyotas509 I think I did the same thing with my 2008 Sequoia, still have the pic somewhere in icloud :). Rolling at 233k now.
The consumer that has been brainwashed into overspending by the marketing department neglects an important financial rule. Every dollar squandered on trendy items when you are young is less money that can generate earnings over the long term. When these people hit retirement age they will be living in a trailer park, or camping out in their overpriced SUV if it has not been repossessed.
The sad thing is, they'll probably just wait for the windfall of their parents who actually saved money and didn't buy everything they wanted....
@@TheCarGuyOnlinethey will squander that inheritance money. A leopard doesn’t change its spots.
I have my 2016 Honda Civic payed off. I'd like to get a new truck, but it doesn't make sense with the interest rates and the prices. Maybe next year, I can do a big down payment and get a better interest rate.
Thank the Lord for the internet. The last new vehicle I bought from a dealership was in 2004. Ill never buy a new car for as long as I live. I buy used and drive them until fixing them is cost prohibitive.
Been driving my 1999 Mirage for years, and life is wonderful without a car payment. 42 bucks for insurance, about 30 bucks a month in gas, and a few hundred a year in DIY maintenance. Use UA-cam as a tool and you can maintain an older car more easily than you think.
Absolutely agree.
You can still get a nice, new sedan for $25-30k. It's just that consumers aren't buying them. Specifically, $60-90k pickup trucks have become the must-have fashion accessory for men.
I agree, there are still some wise folks out there buying Camry's and other reliable vehicles. But nice new sedans didn't used to cost $30k unless they were the flagship top model/top trim, but I suppose that's inflation at work. You are right, the trucks have gotten completely out of hand in the mid to upper tier trims.
People are idiots. Drive what you can afford
It ultimately comes down to responsible parenting and solid education, in my view. No President can solve personal financial issues if someone has poor spending habits. From a young age, my parents taught me to only buy what’s affordable based on your income level and avoid high-interest purchases. Banks can feel like modern-day thief’s in suits, often earning from people’s interest payments. Build enough savings to pay in cash for major purchases instead. Resist the urge to impress others or drive luxury cars if finances are tight. Focus on retirement planning in 10-year increments, rather than living paycheck to paycheck. Now at 40, both my cars and two homes are paid off. I sleep better at night knowing I don’t have any major debts to hold me back. Be wise with your spending, and take control of your financial future. For the record, I don’t make a ton of money. Just an average Joe who works 50hrs a week..
People need to grow up and purchase what they need and afford
It sucks but people are going to take out loans to get the absolute best car they can get. They can't make decisions themselves. It is the bank that decides for them not their own common sense. Now the banks are starting to say no, or they have blown themselves up so badly with negative equity that they have to hold on to the car they have. Very sad.
Yup that's where it has gotten to the average working person cannot afford a vehicle once your underwater it just keeps on snowballing and snowballing. If you can get another loan. Don't know what people are going to do it's not looking good at all.
Bought a f150 for $2,995 in 2018. Still have it today, has a lot of life left. Car payments are optional
The car crunch worked out perfect for me. I was able to dump a year and a half old Camry with 18k miles I hated for almost what I paid for the car.
People buy trucks and SUVs like crazy snd automakers are happy to oblige.
Could be some age 70 plus pay cash.
Saw this coming. People will go underwater as long as they looked cool posting a pic of their $100k on the internet.
Issue, people really don't understand the value of walking away. There are tons of videos on negotiating for a vehicle on UA-cam. IF you don't have experience negotiating, get a Costco membership and buy through them. At least you'll know you got the best deal without "dealing" that you could get. Honestly, don't go through life being "soft".
Solid advice! Being soft gets you NOTHING in this world. It’s ok to not give in to the pressures of anyone else - you aren’t a dick for doing so. I’ve haggled with car dealerships in the past and it was actually kind of fun to bust their balls for the price I wanted. Now I just save up for the cars I want, and I have an affinity to older vehicles anyway, so I’m always on top and avoid the negative equity scenario.
@@northwesttoyotas509 Tip, if you have to buy or want to buy. After you've done all the research on what you want i.e prices/test drive. Walk in on them cold 3 hrs on a Sat before they close. I've done so well that way. Closer to the end of the month the better. Cheers
Trade in values are also down report says…
Debt, as American as apple pie.
Donald Trump will make it better again🎉🎊✨️
Agreed 👍👍
Sure he will.
💯
The numbers from Edmunds are misleading. Only covers trade-ins. For everyone with vehicle loans, other sources have ~40% as $10K+ underwater. It's a doom loop for new vehicle sales moving forward.
Yeah and I thought Edmunds numbers were bad enough...sad days ahead I think.