Author Topic: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars  (Read 16794 times)

neo von retorch

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #100 on: November 25, 2019, 09:17:01 AM »
In the USA, Model 3 is outselling all other EVs combined.

Which is to say, not that many ;) EVs just aren't selling in the U.S.

Vehicles selling more than the Model 3 in Q3 2019:

Five models of pickups (4 full-size)
Nine models of SUVs
Five models of sedans

And that was with 400-500k $1000 pre-orders. 200k $100 refundable pre-orders on a $50k truck doesn't tell us much. Between now and when the Cybertruck is actually delivered, over a million each of the Ford F-150, RAM pickup and Chevrolet Silverado will be purchased.

I put about 98% of the blame on massive auto manufacturers, of course. My opinion is that the Ford Mach-E is one of the first "real" efforts to sell EVs in large quantities, and even that is just an announcement of a future product. Only Tesla has invested enough in charging networks to ease the car buying public's concerns, and ultimately, EVs have to be sitting the dealership with knowledgeable sales folk on staff, with competitive price, features and palatable looks. Most people buy trucks and SUVs and sedans that largely look "alike", but are still clearly the make or specific model that suits them as an individual. And some individuals want really funky vehicles like the Cybertruck - but weird vehicles rarely get very popular. (The VW Beetle was about as funky as you could get away with, and that was dirt cheap!)

(For the record, it's certainly impressive that Tesla, born in this millennium, has a sedan that is the 20th best selling vehicle in America.)

JLee

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #101 on: November 25, 2019, 09:22:25 AM »
I wonder how many people are going to try and buy the new truck from Tesla.  I think this one might be a miss.

https://www.tesla.com/en_ca/cybertruck

Apparently it got ~200k* preorders in the first 24 hours. The answer seems to be "A lot."

Remember all the moaning and whining about the minimalist interior of the Model 3 at the reveal event? That Tesla would "have to" add knobs or a HUD, or something - else nobody would buy it.

In the USA, Model 3 is outselling all other EVs combined.

There's a market for a car or truck which looks different.  Which takes a leap on design.

Without the logos, I couldn't tell you whether a truck is an F150 or a RAM.

*Based on people comparing reservation numbers online.

They had a $100 refundable deposit for a pre-order. I have a friend who pre-ordered one just in case it becomes something attractive before release...he has no intention of buying it, but it's a cheap way to get in line just in case.  Those numbers are not realistic sales.

PrairieBeardstache

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #102 on: November 25, 2019, 09:40:20 AM »
I wonder how many people are going to try and buy the new truck from Tesla.  I think this one might be a miss.

https://www.tesla.com/en_ca/cybertruck

There is a lot to like about that Cybertruck. Looking forward to seeing how it progresses.

Put that chassis under something a little more traditional and I'll be interested. How about that chassis under a Honda Ridgeline without any sci-fi movie looks.

You can do electric conversions with the Tesla motors and batteries for relatively cheap. I _may_ go this route. Take an older chassis that I like and convert to an electric. Perhaps an 1969 GMC Sierra Grande. But at the same time, a 2JZ in one of those could be cool...

Boofinator

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #103 on: November 25, 2019, 09:47:18 AM »
I was never taught personal finance, but (1) such books are widely available at libraries, (2) it's common sense not to spend more than you earn, (3) even loan contracts spell out the interest rate in big type. At some stage it is no longer a matter of education, but of stupidity and bad judgment.

But at what point did you learn the mathematics behind interest? Because I learned as a freshman in college.

It had to have been before high school when I learned you multiplied the interest rate by the loan amount to calculate the interest. Perhaps some of the formulas relating to the cost over the life of the loan waited until high school.

TomTX

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #104 on: November 25, 2019, 09:50:06 AM »
In the USA, Model 3 is outselling all other EVs combined.

Which is to say, not that many ;) EVs just aren't selling in the U.S.


Sure, it's a small amount today. The growth rate of sales percentagewise is tremendous. Most people don't even get the concept (not helped by the traditional automakers pushing weak hybrids as "electrified")

neo von retorch

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #105 on: November 25, 2019, 10:09:42 AM »
In the USA, Model 3 is outselling all other EVs combined.

Which is to say, not that many ;) EVs just aren't selling in the U.S.


Sure, it's a small amount today. The growth rate of sales percentagewise is tremendous. Most people don't even get the concept (not helped by the traditional automakers pushing weak hybrids as "electrified")

I'm not following. "sales percentage-wise" of what is tremendous growth?

https://www.goodcarbadcar.net/tesla-model-3-sales-figures-usa-canada/

Tesla Model 3 sales in the U.S. grew rapidly through September of 2018, peaking in December 2018, dropping in Q1 of 2019 and recovering somewhat in June 2019. 

17.3 million vehicles sold in the U.S. last year.
https://www.goodcarbadcar.net/usa-auto-industry-total-sales-figures/

Just Joe

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #106 on: November 27, 2019, 09:20:02 AM »
I wonder how many people are going to try and buy the new truck from Tesla.  I think this one might be a miss.

https://www.tesla.com/en_ca/cybertruck

There is a lot to like about that Cybertruck. Looking forward to seeing how it progresses.

Put that chassis under something a little more traditional and I'll be interested. How about that chassis under a Honda Ridgeline without any sci-fi movie looks.

You can do electric conversions with the Tesla motors and batteries for relatively cheap. I _may_ go this route. Take an older chassis that I like and convert to an electric. Perhaps an 1969 GMC Sierra Grande. But at the same time, a 2JZ in one of those could be cool...

I've considered doing that with a vintage vehicle as well. Would be a very fun project.

Goldielocks

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #107 on: November 27, 2019, 11:37:20 AM »
Okay the Model 3 is the 20th best selling vehicle...  That's pretty impressive for a car with so many barriers to purchasing (very long wait list, limited ability to return a car, unknown mechanical shop options, very high price tag, unique technology).

Plus, the format does not compete with the use of trucks and other better selling vehicles on th.e list.

I think the real reason that EV's are not selling as well is the value / price is not quite there yet.  You need to drive a lot of miles to justify an EV as a value choice, not an environmental choice.  Many don't have the same options / features as similarly priced gas cars.
Once the cost of EV's declines, sales will spike.

Ownership lifecycle cost = lifcecycloe cost of gas vehicle to spike sales.

SwordGuy

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #108 on: November 27, 2019, 12:05:25 PM »
I was seriously interested in a Volt to replace my old car until I sat in it.    I'm 5'11" and the windshield was too short for my comfort.  I would have had to scrunch down to see traffic lights when 1st at the light.  Having suffered thru that with my wife's last car (Chev HHR), it was a deal breaker.

I was really interested in a good hybrid.

PrairieBeardstache

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #109 on: November 27, 2019, 01:31:03 PM »
I wonder how many people are going to try and buy the new truck from Tesla.  I think this one might be a miss.

https://www.tesla.com/en_ca/cybertruck

There is a lot to like about that Cybertruck. Looking forward to seeing how it progresses.

Put that chassis under something a little more traditional and I'll be interested. How about that chassis under a Honda Ridgeline without any sci-fi movie looks.

You can do electric conversions with the Tesla motors and batteries for relatively cheap. I _may_ go this route. Take an older chassis that I like and convert to an electric. Perhaps an 1969 GMC Sierra Grande. But at the same time, a 2JZ in one of those could be cool...

I've considered doing that with a vintage vehicle as well. Would be a very fun project.

https://www.thedrive.com/news/27744/homebuilt-electric-e30-bmw-3-series-with-a-tesla-gm-powertrain-is-the-future-of-hot-rods

PrairieBeardstache

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #110 on: November 27, 2019, 01:35:51 PM »
Okay the Model 3 is the 20th best selling vehicle...  That's pretty impressive for a car with so many barriers to purchasing (very long wait list, limited ability to return a car, unknown mechanical shop options, very high price tag, unique technology).

Plus, the format does not compete with the use of trucks and other better selling vehicles on th.e list.

I think the real reason that EV's are not selling as well is the value / price is not quite there yet.  You need to drive a lot of miles to justify an EV as a value choice, not an environmental choice.  Many don't have the same options / features as similarly priced gas cars.
Once the cost of EV's declines, sales will spike.

Ownership lifecycle cost = lifcecycloe cost of gas vehicle to spike sales.

It seems to me to be less about price and more about the design of the other electric cars. They're pretty shitty. The "mustang" Mach E might do reasonably well. The coming Volvo XC40 Recharge likely will as well. If Honda brings the Honda E to North America (especially if sold like the concept) I'm sure that would do well, in fact I wanted to buy one of those.

Luap595

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #111 on: November 27, 2019, 02:05:39 PM »
Had no idea that people were rolling debt into another loan for another stupid car they can't afford. That's even more absurd than the 7-yr. loan to me.

nyxst

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #112 on: December 04, 2019, 05:59:01 AM »
I'm in year 4 of paying off my 7 year auto loan..... It is 0 % interest.... I sort of feel like I screwed THEM over considering inflation... :)  I am often tempted to pay it off (I am debt averse) but then I talk myself down off of that ledge. It's a little Jetta stick-shift that I'll most likely be passing down to my youngest at driving age. Definitely a win. The insurance is slightly higher, by maybe $80 per year. I make much more than that keeping the $ in VTSAX.

The_Big_H

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #113 on: December 11, 2019, 11:30:45 PM »
I'm in year 4 of paying off my 7 year auto loan..... It is 0 % interest.... I sort of feel like I screwed THEM over considering inflation... :)  I am often tempted to pay it off (I am debt averse) but then I talk myself down off of that ledge. It's a little Jetta stick-shift that I'll most likely be passing down to my youngest at driving age. Definitely a win. The insurance is slightly higher, by maybe $80 per year. I make much more than that keeping the $ in VTSAX.

You really sure they, a multinational corporation and a local car dealer (who've been selling and financing cars professionally for decades), are being screwed by you, John Q. Consumer?    Don't worry you paid "interest" on it, either in the form of giving up a discount/rebate or front loaded into the price of the car.  I mean, you think they are loaning out money, for free (or at a loss w/ inflation), plus paying the dealer a fee for the loan, plus overhead... yet they don't seem to be going out of business doing that.


ColoAndy

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #114 on: December 13, 2019, 02:44:05 PM »
And another from the WSJ. A $45,000 Loan for a $27,000 Ride: More Borrowers Are Going Underwater on Car Loans
Good grief.  What a complete moron.  Hard to believe the way some adults think.

PDXTabs

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #115 on: December 13, 2019, 07:05:40 PM »
You really sure they, a multinational corporation and a local car dealer (who've been selling and financing cars professionally for decades), are being screwed by you, John Q. Consumer?    Don't worry you paid "interest" on it, either in the form of giving up a discount/rebate or front loaded into the price of the car.  I mean, you think they are loaning out money, for free (or at a loss w/ inflation), plus paying the dealer a fee for the loan, plus overhead... yet they don't seem to be going out of business doing that.

Please see the discussion further up in the thread that details how car companies have frequently lost money on cars, either to meet quarterly revenue numbers or to make their CAFE quotas.

nnls

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #116 on: December 13, 2019, 08:18:03 PM »
I was never taught personal finance, but (1) such books are widely available at libraries, (2) it's common sense not to spend more than you earn, (3) even loan contracts spell out the interest rate in big type. At some stage it is no longer a matter of education, but of stupidity and bad judgment.

But at what point did you learn the mathematics behind interest? Because I learned as a freshman in college.

I learnt about interest in primary school.

PDXTabs

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #117 on: December 16, 2019, 11:15:08 AM »
I learnt about interest in primary school.

You should thank your elected officials. In the USA exponential funtions aren't covered until "Algebra 2" in high school or first year college algebra, neither of which you are required to take to graduate high school or even some four year college degrees.

Bloop Bloop

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #118 on: December 16, 2019, 11:53:29 AM »
The only understanding you need to understand basic interest is the concept of a percentage. Which is what, 10-year-old maths?

Compounding interest is a little harder to calculate but conceptually just simple interest over time. In fact even if you had no concept of the exponential function, just understanding simple interest bit would get you into sound financial decisions.

A lack of understanding of "interest" is not due to poor education. It's due to a lack of intelligence. If you get a loan contract that specifies a certain "%" and you don't think to ask about it or use one of many free resources to understand it, you're just not very clever.

PDXTabs

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #119 on: December 16, 2019, 01:22:15 PM »
The only understanding you need to understand basic interest is the concept of a percentage. Which is what, 10-year-old maths?
...
A lack of understanding of "interest" is not due to poor education. It's due to a lack of intelligence.

By your own argument, your lack of understanding of exponential functions is not due to a poor education, but a lack of intelligence.

Bloop Bloop

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #120 on: December 16, 2019, 01:54:04 PM »
Where did I display a lack of understanding of exponential functions?

Boofinator

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Re: WSJ: The Seven-Year Auto Loan: Americaís Middle Class Canít Afford Its Cars
« Reply #121 on: December 16, 2019, 01:58:43 PM »
I learnt about interest in primary school.

You should thank your elected officials. In the USA exponential funtions aren't covered until "Algebra 2" in high school or first year college algebra, neither of which you are required to take to graduate high school or even some four year college degrees.

It's funny how you tend to point the finger at "government" for some perceived slight to equality.

The only understanding you need to understand basic interest is the concept of a percentage. Which is what, 10-year-old maths?
...
A lack of understanding of "interest" is not due to poor education. It's due to a lack of intelligence.

By your own argument, your lack of understanding of exponential functions is not due to a poor education, but a lack of intelligence.

I am going to assume that you mis-phrased this comment, in that it wasn't meant as a direct insult but rather as a generality. As bloop bloop said, percentages and interest aren't that difficult to understand, and except for the extremely mentally challenged, I assume most people figure them out by the time they complete their education. I think the reason most people get into debt is not a misunderstanding of compound interest, but rather a desire to maximize present "happiness" and an ignorance for how their current choices affect their future happiness.