Posted on 03/04/2014 10:36:58 AM PST by Red in Blue PA
A combination of higher prices for new cars and relatively low rates for auto loans means Americans are borrowing a record amount to pay for their new rides.
According to Experian Automotive, which tracks millions of auto loans written each quarter, the average amount borrowed by car buyers last quarter climbed above $27,000 for the first time ever.
"It's not surprising buyers are borrowing more," said Melinda Zabritski, Experian's senior director of automotive credit. "If you look at the most popular segments, they are full-size pickups and SUVs. It's hard to find one of those models new and fully loaded for under $30,000."
(Excerpt) Read more at cnbc.com ...
Twice what I paid for my first 3 br. home in Texas in the 60’s. Inflation? Nah!
Before Obama’s CAFE standards leave me only with a choice between an East German Trabant and a golf cart.
Uh-oh.
Car bubble ahead?
I predict a surge in the repo business.
This is clear evidence that the economy is booming like never before!
Thank You Mr FED!
Another bubble looms...
If you ever sold cars, people do not buy a car they buy a payment>
Car ads don’t even mention sticker prices anymore. They only advertise the monthly payments. Credit can be deceptive. Even at zero percent interest, we’re talking about substantial amounts of money here. It’s difficult for most people to accumulate $27,000 free and clear after taxes, and many probably wouldn’t buy a new car if they had to accumulate that much money up front (hence the advertisements for low monthly payments).
I bought a certain type of pick-up in 1995 to pull horse trailers and paid $21,000. That same type truck today is $60,000. $39,000 of inflation in 19 years. BS.
The FED can never raise interest rates again without absolutely destroying the economy - so it won’t happen.
Government, consumers, students - are all up to their ears in debt. Any major increase in rates would be deadly for all.
That’s funny. We bought our first home in Kansas in 1965. Brand new split level, 3 bedroom, 2 baths, double car garage with a basement and half an acre lot for $17,500. Wish I still had it.
My wife drives less than 15K miler per year. We’ve been leasing Toyota Camry’s for her. Runs ~$250/mo and she always has a new car. Everyone is happy.
For mine, I shop internet sales, find holdovers and pay cash for mine. Most recently, bought an ‘09 GMC Duramax in ‘11 for $27K new. At the time I bought it, the dealer had used trucks with high mileage that were priced higher. I drove it for <2 years, sold it for $30K in ‘13. An ‘09 with 25K miles is attractive to a lot of buyers when new ones are $50K or more.
Aren’t auto sales down?
If so, it would have to be the prices that have raised the loan amounts.
If you take the average EITC recipient baby momma and put that $6000 check in her hands, she’ll more than likely take some of the cash (maybe $500-$1000 depending on the luxury of the hoopty) and put it down on a ‘ride’. She’ll be thinking she has maybe 6 months of payments if things get tight - maybe more if she puts back the rest of the cash.
It don’t work out like that. The cash she put back gets gone real, real fast. After all, it ain’t hers. She didn’t work for it. Free money - more just like it coming next year....spend a little here, a little there and it be gone suddently.
Gots that hoopty to get to the government office for this and that. One month’s cheap insurance paid and drive like a real worker for a couple of months.
Next six months are games about hiding the car from repo, making excuses about payments, indignation about questions and the whole nine yards and so on.
We give them the means for this every year.
Got four rides. Three paid for.
The fourth is a loaded KIA Sportage we got used with under 10K miles. Got it for $21,000. Wife is a bear at driving a deal.
I would never pay 27K for a car. What a waste of money. You can get a very nice car between 15-20K. And for God’s sake pay cash. The last time I took out a loan for a car was when I was 22 years old...yep stupid even then. I should have saved up until I could pay cash. Why we insist on giving banks additional money for free is beyond me.
Seen this before; can’t afford a home so buy a better car.
Another way to live beyond their means and it is not a wise move.
Since then, I've always saved ahead of time and bought cars cash. I drive a small car, so the price isn't even close to "average". I can't imagine being burdened by a car payment again.
Just another page from living life pretty well and being "upper poor". <^..^>
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