Posted on 08/02/2024 5:54:47 AM PDT by delta7
The private debt crisis is becoming apparent in America after car repossessions jumped 23% during the first half of 2024. Data shows that 1.6 million Americans will have their car repossessed by the bank before the end of the year, a slight increase from the 1.5 million autos repossessed in 2023 and a drastic upturn from the 1.1 million in 2021.
Obviously, the cost of purchasing a car have drastically risen with inflation, interest hikes, and supply chain shortages. Americans simply cannot afford new autos and car dealerships can do nothing to entice purchases.
New car inventory in the US rose 36% this year, close to February 2021 levels before the supply chain crisis put a dent in imports. Yet, the average list price of a new car is $49,096 and far more than the average American can afford. The average new vehicle will sit in a dealer’s lot for 65 days, a 41% annual increase.
Dealerships are hardly asking for a downpayment these days unless someone has horrid credit. Even putting a few grand down will only take off about $20 per monthly payment. The average new car costs about $735 monthly based on data from Experian, and $523 monthly on used models.
The average American simply is not educated in finance. Autos are behind mortgages in the largest share of personal household debt and there is a portion of the population who do not understand what they can actually afford.
The average American now borrows around $40,634 for new vehicles and $26,073 for used vehicles. About 9.2% of all consumer debt is through autos alone.
There was that viral story from April of a woman purchasing a Chevy Tahoe for $80,000 – without factoring in the interest on all household vehicles. Her husband purchased 2020 GMC Sierra 1500 AT4 for $78,000 in August 2022 and she simply could not understand why the payments on the truck were more than on the Tahoe. Well, the husband’s 14% rate on the vehicle placed their monthly payment or the truck $1,600. I recalled reading comments suggesting the family simply let the bank repo one of the cars as if that could be a valid option for personal finance.
Cox Automotive believes the trend of repossessing cars will increase into 2025 when they anticipate. 1.7 million cars being repossessed. As of Q1 2024, US household debt stood at $1.77 trillion; $12.44 trillion held in mortgage debt, $1.62 trillion in autos, $1.12 trillion in credit card debt, and $543 billion in other forms. Bank of America, Citigroup, Goldman Sachs, and others recently reported a stunning $4,139,000,000 loss in unrecoverable debt.
The banks will come after their assets if a payment is missed, with some only waiting 30 days after a missed payment to seize property. They may then ask for full payment to return the car which is simply not happening in these situations. While there are some who cannot compute their monthly payment, others are now living paycheck-to-paycheck and are one large bill or missed paycheck away from losing their shirts.
Then we have agencies telling the public across Build Back Better nations that they will soon need to purchase an EV to adhere to the climate emergency. Cheaper alternatives from China have been slapped with 100% tariffs, and there are no alternatives. Governments are doing nothing to assist this growing problem as the ultimate goal is to eliminate private car ownership under the premise of the Great Reset.
Which is why I'm postponing any new car purchases, not going to take a 15 year loan on a car that might last less than that.
See my tagline...
“ WEF Seeks to End Private Car Ownership by 2050….
“Goodbye car ownership, hello clean air: welcome to the future of transport,” the WEF published on its website back in December 2016. The first step is to transition cars to electric under the guise of climate change. This will cause all vehicles to be dependent on the electrical grid, which the government controls. Yet, they never planned to stop at electric vehicles.
They want full control over you and where you go. It was announced at the Summer Davos that the ultimate goal is to end 75% of ALL car ownership, including electric vehicles, by the year 2050….”
This means discounts.
None of this matters to many Americans. Their cell phones still work, and Kamala is a woman of color! Yay!
This means discounts.
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Of course, but if the manufacturer of your new car goes bankrupt and closes it’s doors and dealerships, good luck in keeping it running.
Don’t understand the goal of ending car ownership. People where there is little or no public transportation have to get around to get groceries,etc. A more sensible solution would be to pursue a program of doing away with Davos & Communist-aligned politicians. Leave people alone & let them live their lives!
Yet, the average list price of a new car is $49,096 and far more than the average American can afford.
The only reason a new car costs this much is that it is loaded with features that most customers don't want. Many of which are added to these vehicles to comply with government regulations that are imposed for the sole purpose of inflating the price of the vehicle and indirectly subsidizing the auto manufacturers.
Nowadays, the repo man needs someone riding shotgun.
Hello! Invest in things which increase in value or yield a return, not buy expensive autos which depreciate the moment you drive off the lot! Also drive that car for years or longer, once a car is paid off does not mean go buy a new one, get off that car payment train. Save that payment in an account and pay cash for the next car!
I believe rising car repos are one of the front most leading indicators to an economic downturn.
The canary in the coal mine so to speak.
The auto industry…..
The auto industry started dying in the 1970s when the government started trying to run the car companies.
The government’s bumbling resulted in awful cars with increased production costs.
The Japanese took advantage of this and made fortunes.
The unions demanded large wage increases even though their companies were getting rocked and the Japanese were taking market share.
The union workers sold the future of good paying auto jobs to give themselves pay raises.
They felt that politicians would protect them.
Auto executives felt that their hands were being tied and decided to make as much money for themselves as possible as the companies they no longer controlled, died.
Young people without college educations could get a job working for the car companies and have a good life.
Now, there is just frustration and despondency.
Good job Democrats.
Used Car & Truck Prices Spiral Down Further in Historic Plunge, Surrender 60% of Stunning 2-year Spike
by Wolf Richter • Jul 9, 2024
https://wolfstreet.com/2024/07/09/used-car-truck-prices-spiral-down-further-in-historic-plunge-surrender-60-of-stunning-2-year-spike/
Like many things, Spectrum cable for instance, has 100 channels I don't use and don't want to pay for.
People where there is little or no public transportation have to get around to get groceries,etc.
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The goal of WEF and socialists is to herd the population into “ planned” urban centers.
I can see these already being developed in my state. Huge stacked apartments/condo developments springing up and advertising their communities have everything within walking distance.
Control, pure and simple.
I paid $22K cash for my 2002 V8 Tundra, still driving it every day, nothing but gas, oil and tire changes in 20 years.
It was made in Japan, take that auto dealers
Yes the 70s and 80s were the dark ages of the auto industry. Years of crappy ugly cars.
Innumeracy is a burden for many. They simply can't comprehend.
Greatest economy in the world.
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