Go Back   EcoModder Forum > Off-Topic > The Lounge
Register Now
 Register Now
 


Reply  Post New Thread
 
Submit Tools LinkBack Thread Tools
Old 03-24-2017, 12:01 PM   #1 (permalink)
Batman Junior
 
MetroMPG's Avatar
 
Join Date: Nov 2007
Location: 1000 Islands, Ontario, Canada
Posts: 22,527

Blackfly - '98 Geo Metro
Team Metro
Last 3: 70.09 mpg (US)

MPGiata - '90 Mazda Miata
90 day: 54.46 mpg (US)

Even Fancier Metro - '14 Mitsubishi Mirage top spec
90 day: 70.75 mpg (US)

Appliance car Mirage - '14 Mitsubishi Mirage ES (base)
90 day: 62.14 mpg (US)
Thanks: 4,078
Thanked 6,976 Times in 3,612 Posts
Record number of car buyers underwater on their trades; loan lengths increasing


Flickr img: by State Farm

Things in the new-car purchasing world are getting scary:

Quote:
According to a study conducted by Edmunds this year, a record 32 percent, or nearly one-third, of all vehicles offered for trade-ins at U.S. dealerships have negative equity.

[...]

To put that number into perspective, the lowest percentage of underwater trades was in 2009, the peak of the Great Recession, at 13.9 percent.
Jalopnik: A Record 32 Percent Of Car Buyers Are Underwater On Their Trades: Report

This situation coincides with (1) increasing new vehicle prices, (2) increasing loan lengths, and arguably (3) decreasing financial literacy.

A recent spate of articles on this side of the border point out that the problem is hardly restricted to the U.S.

In Canada, loan lengths have also been going off the deep end too...

Quote:
Nearly three-quarters – 72 per cent – of new-vehicle loans taken out in Canada last year were for six years or longer

[...]

  • From 2011 to 2016, seven-year vehicle loans, as a share of all new-vehicle loans issued, jumped to 44 per cent from 31.7 per cent.
  • Eight-year loans? They rose to more than 10 per cent from 2.2 per cent.
  • Conversely, the good ol’ five-year car loan dropped in share to 18.7 per cent from 29.9 per cent.
Globe and Mail: The rise of longer car loans, a major risk to household finances

Automakers have been pushing longer term loans hard as a way to keep increasing record year-over-year sales. That keeps the buyers' monthly payments down, but the downside is obvious to anyone who thinks about it for more than 2 seconds (before the next shiny new thing distracts their attention).

The result is more and more people being deeper in debt when they can't resist the siren call of their next new car:

Quote:
... the average amount of negative equity rolled over into a new car loan stood at $6,659 in 2016 according to Canadian data from J.D. Power. To clarify, that data only refers to those who are underwater at time of trade-in.
The solution? The Globe's writer suggests people try living within their means, and not taking out massive loans on depreciating baubles. Pay cash for used cars. Or if you must borrow, buy a significantly less expensive vehicle and sock away the difference between what you're paying and what you would otherwise be spending each month into your "next vehicle fund".

What a quaint idea. Likely to be heeded? Not if you look at where the stats are going.

Attached Thumbnails
Click image for larger version

Name:	underwater-cavalier.jpg
Views:	340
Size:	70.3 KB
ID:	21406  
__________________
Project MPGiata! Mods for getting 50+ MPG from a 1990 Miata
Honda mods: Ecomodding my $800 Honda Fit 5-speed beater
Mitsu mods: 70 MPG in my ecomodded, dirt cheap, 3-cylinder Mirage.
Ecodriving test: Manual vs. automatic transmission MPG showdown



EcoModder
has launched a forum for the efficient new Mitsubishi Mirage
www.MetroMPG.com - fuel efficiency info for Geo Metro owners
www.ForkenSwift.com - electric car conversion on a beer budget
  Reply With Quote
The Following 8 Users Say Thank You to MetroMPG For This Useful Post:
BabyDiesel (03-31-2017), darcane (09-18-2017), Daschicken (03-31-2017), Frank Lee (03-24-2017), Gasoline Fumes (03-25-2017), roflwaffle (03-25-2017), turbothrush (03-25-2017), Xist (09-18-2017)
Alt Today
Popular topics

Other popular topics in this forum...

   
Old 03-24-2017, 01:02 PM   #2 (permalink)
Batman Junior
 
MetroMPG's Avatar
 
Join Date: Nov 2007
Location: 1000 Islands, Ontario, Canada
Posts: 22,527

Blackfly - '98 Geo Metro
Team Metro
Last 3: 70.09 mpg (US)

MPGiata - '90 Mazda Miata
90 day: 54.46 mpg (US)

Even Fancier Metro - '14 Mitsubishi Mirage top spec
90 day: 70.75 mpg (US)

Appliance car Mirage - '14 Mitsubishi Mirage ES (base)
90 day: 62.14 mpg (US)
Thanks: 4,078
Thanked 6,976 Times in 3,612 Posts
And a diamond engagement ring should only cost 3x your monthly haul!
__________________
Project MPGiata! Mods for getting 50+ MPG from a 1990 Miata
Honda mods: Ecomodding my $800 Honda Fit 5-speed beater
Mitsu mods: 70 MPG in my ecomodded, dirt cheap, 3-cylinder Mirage.
Ecodriving test: Manual vs. automatic transmission MPG showdown



EcoModder
has launched a forum for the efficient new Mitsubishi Mirage
www.MetroMPG.com - fuel efficiency info for Geo Metro owners
www.ForkenSwift.com - electric car conversion on a beer budget
  Reply With Quote
The Following User Says Thank You to MetroMPG For This Useful Post:
Xist (09-18-2017)
Old 03-24-2017, 01:31 PM   #3 (permalink)
(:
 
Frank Lee's Avatar
 
Join Date: Jan 2008
Location: up north
Posts: 12,762

Blue - '93 Ford Tempo
Last 3: 27.29 mpg (US)

F150 - '94 Ford F150 XLT 4x4
90 day: 18.5 mpg (US)

Sport Coupe - '92 Ford Tempo GL
Last 3: 69.62 mpg (US)

ShWing! - '82 honda gold wing Interstate
90 day: 33.65 mpg (US)

Moon Unit - '98 Mercury Sable LX Wagon
90 day: 21.24 mpg (US)
Thanks: 1,585
Thanked 3,555 Times in 2,218 Posts
Quote:
Originally Posted by MetroMPG View Post
And a diamond engagement ring should only cost 3x your monthly haul!
Now THERE is money down the drain.

This is wonderful! It is precisely this stupid "oooooo shiny!!!" instant gratification consumer over reliance on credit BS that creates all sorts of havoc including bubbles and increased prices for those few of us that don't abuse credit.

Is this also why the media is perpetually whining about "how bad the economy is" all when people actually have it good- they're simply spending beyond their means as Standard Operating Procedure?

Go down in flames, idiots. I'll be laughing all the way.
__________________


  Reply With Quote
The Following 3 Users Say Thank You to Frank Lee For This Useful Post:
Daschicken (03-31-2017), Gasoline Fumes (03-25-2017), oil pan 4 (03-24-2017)
Old 03-24-2017, 01:51 PM   #4 (permalink)
Batman Junior
 
MetroMPG's Avatar
 
Join Date: Nov 2007
Location: 1000 Islands, Ontario, Canada
Posts: 22,527

Blackfly - '98 Geo Metro
Team Metro
Last 3: 70.09 mpg (US)

MPGiata - '90 Mazda Miata
90 day: 54.46 mpg (US)

Even Fancier Metro - '14 Mitsubishi Mirage top spec
90 day: 70.75 mpg (US)

Appliance car Mirage - '14 Mitsubishi Mirage ES (base)
90 day: 62.14 mpg (US)
Thanks: 4,078
Thanked 6,976 Times in 3,612 Posts
I wonder how many people view "car payment" as a normal part of their monthly expenses and don't think about it beyond that, not realizing it doesn't need to be a life-long hamster wheel.

As long as the number fits the budget, good enough!
__________________
Project MPGiata! Mods for getting 50+ MPG from a 1990 Miata
Honda mods: Ecomodding my $800 Honda Fit 5-speed beater
Mitsu mods: 70 MPG in my ecomodded, dirt cheap, 3-cylinder Mirage.
Ecodriving test: Manual vs. automatic transmission MPG showdown



EcoModder
has launched a forum for the efficient new Mitsubishi Mirage
www.MetroMPG.com - fuel efficiency info for Geo Metro owners
www.ForkenSwift.com - electric car conversion on a beer budget
  Reply With Quote
Old 03-24-2017, 02:01 PM   #5 (permalink)
マット
 
M_a_t_t's Avatar
 
Join Date: Nov 2015
Location: Indiana
Posts: 718

The Van - '95 Chevy Astro Cl V8 Swapped
Team Chevy
90 day: 7.84 mpg (US)

The new bike - '17 Kawasaki Versys X 300 abs
Motorcycle
90 day: 71.94 mpg (US)

The Mercury - '95 Mercury Tracer Trio
Team Ford
90 day: 34.35 mpg (US)

Toyota - '22 Toyota Corolla Hatchback
90 day: 40.11 mpg (US)
Thanks: 131
Thanked 258 Times in 188 Posts
I grew up where my parents never had a car payment. Always bought used and in cash. I definitely view a car payment as an extra/unneeded expense. Could it be this sprouted from "keeping up with the joneses"?
__________________
1973 Fiat 124 Special
1975 Honda Civic CVCC 4spd
1981 Kawasaki KZ750E
1981 Kawasaki KZ650 CSR
1983 Kawasaki KZ1100-A3
1986 Nissan 300zx Turbo 5 spd
1995 Chevy Astro RWD (current project)
1995 Mercury Tracer
2017 Kawasaki VersysX 300
2022 Corolla Hatchback 6MT

https://www.youtube.com/channel/UC6s...LulDUQ8HMj5VKA
  Reply With Quote
Old 03-24-2017, 02:17 PM   #6 (permalink)
Batman Junior
 
MetroMPG's Avatar
 
Join Date: Nov 2007
Location: 1000 Islands, Ontario, Canada
Posts: 22,527

Blackfly - '98 Geo Metro
Team Metro
Last 3: 70.09 mpg (US)

MPGiata - '90 Mazda Miata
90 day: 54.46 mpg (US)

Even Fancier Metro - '14 Mitsubishi Mirage top spec
90 day: 70.75 mpg (US)

Appliance car Mirage - '14 Mitsubishi Mirage ES (base)
90 day: 62.14 mpg (US)
Thanks: 4,078
Thanked 6,976 Times in 3,612 Posts
I remember my dad once telling me: debt is good because it lets you lead the life you want, as long as you can make the payments.

I'm happy to say that was several decades ago, and he fortunately no longer follows his old advice.
__________________
Project MPGiata! Mods for getting 50+ MPG from a 1990 Miata
Honda mods: Ecomodding my $800 Honda Fit 5-speed beater
Mitsu mods: 70 MPG in my ecomodded, dirt cheap, 3-cylinder Mirage.
Ecodriving test: Manual vs. automatic transmission MPG showdown



EcoModder
has launched a forum for the efficient new Mitsubishi Mirage
www.MetroMPG.com - fuel efficiency info for Geo Metro owners
www.ForkenSwift.com - electric car conversion on a beer budget
  Reply With Quote
Old 03-24-2017, 02:17 PM   #7 (permalink)
Master EcoModder
 
Join Date: Jun 2008
Location: Earth
Posts: 5,209
Thanks: 225
Thanked 811 Times in 594 Posts
Quote:
Originally Posted by Old Tele man View Post
Car should cost no more than 1/3 of your annual salary...period.
Glad I don't live by that old adage. Car should cost no more than I have handy, in cash. Going on 14 years for the current car. Only about 8 for the truck, but it was well-used when I bought it. And just last weekend, I had a guy stop and ask if I wanted to sell it :-)
  Reply With Quote
Old 03-24-2017, 02:58 PM   #8 (permalink)
ScanGauge <3
 
ThermionicScott's Avatar
 
Join Date: Dec 2016
Location: CID
Posts: 364
Thanks: 226
Thanked 129 Times in 91 Posts
Quote:
Originally Posted by jamesqf View Post
Glad I don't live by that old adage. Car should cost no more than I have handy, in cash. Going on 14 years for the current car. Only about 8 for the truck, but it was well-used when I bought it. And just last weekend, I had a guy stop and ask if I wanted to sell it :-)
Ah, but you do -- OTM said "no more than" and you (and I) are just coming in well under that.
__________________



Best tank (so far): 32 MPG

Last edited by ThermionicScott; 03-24-2017 at 03:07 PM..
  Reply With Quote
Old 03-24-2017, 03:07 PM   #9 (permalink)
ScanGauge <3
 
ThermionicScott's Avatar
 
Join Date: Dec 2016
Location: CID
Posts: 364
Thanks: 226
Thanked 129 Times in 91 Posts
Quote:
Originally Posted by MetroMPG View Post
I wonder how many people view "car payment" as a normal part of their monthly expenses and don't think about it beyond that, not realizing it doesn't need to be a life-long hamster wheel.

As long as the number fits the budget, good enough!
That's the thought that came to my mind when reading the article. The "I'll always have a car payment" mentality that shields people from the reality of how much money they're forking out over a lifetime.
__________________



Best tank (so far): 32 MPG
  Reply With Quote
Old 03-24-2017, 08:51 PM   #10 (permalink)
Corporate imperialist
 
oil pan 4's Avatar
 
Join Date: Jul 2011
Location: NewMexico (USA)
Posts: 11,265

Sub - '84 Chevy Diesel Suburban C10
SUV
90 day: 19.5 mpg (US)

camaro - '85 Chevy Camaro Z28

Riot - '03 Kia Rio POS
Team Hyundai
90 day: 30.21 mpg (US)

Bug - '01 VW Beetle GLSturbo
90 day: 26.43 mpg (US)

Sub2500 - '86 GMC Suburban C2500
90 day: 11.95 mpg (US)

Snow flake - '11 Nissan Leaf SL
SUV
90 day: 141.63 mpg (US)
Thanks: 273
Thanked 3,568 Times in 2,832 Posts
I have never had a car payment.
House is paid off too.
People like me are very dangerous to banks, not spending most of my life paying 1/2 to 3/4 of my take home to the banks.

__________________
1984 chevy suburban, custom made 6.5L diesel turbocharged with a Garrett T76 and Holset HE351VE, 22:1 compression 13psi of intercooled boost.
1989 firebird mostly stock. Aside from the 6-speed manual trans, corvette gen 5 front brakes, 1LE drive shaft, 4th Gen disc brake fbody rear end.
2011 leaf SL, white, portable 240v CHAdeMO, trailer hitch, new batt as of 2014.
  Reply With Quote
Reply  Post New Thread


Thread Tools




Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2024, vBulletin Solutions Inc.
Content Relevant URLs by vBSEO 3.5.2
All content copyright EcoModder.com