Home Topics in Depth Economics American car buyers are borrowing like never before

  • N2Doc (3372 posts)
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    American car buyers are borrowing like never before

    Last year, Americans bought more new cars than ever before. Given that auto sales make up around a fifth of all retail spending, 2016’s banner year is being hailed as a sign of burgeoning consumer confidence across the country.

    But something else is revving up, too: auto loans.

     

    The US closed out 2016 with just shy of $1.2 trillion in outstanding auto loan debt, a rise of 9% from the previous year and 13% above the pre-crisis peak in 2005, in inflation-adjusted terms. The number of cars and trucks on the road, meanwhile, rose by only 1.5% last year, and 9% since 2005, according to US transportation department data. Total household debt levels are now a hair under their 2008 peak, with some of the fastest growth in recent years down to auto loans.

    If America’s car-buying bonanza is being fueled by cheap credit, is consumer sentiment really as robust as it might seem? And is it sustainable?

     

    more

    https://qz.com/913093/car-loans-in-the-us-have-hit-record-levels-and-delinquencies-are-rising-fast-too/

     

    Another warning light on the economic dashboard. Beep Beep Beep…..

     

     

    PADemD, Downwinder, canoeist52 and 5 othersdlegendary1, NV Wino, xynthee, sonofspy777, zoolook67 like this
    "But nothing ever changes unless there's some pain" - Tears For Fears "Goodnight Song"

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  • dlegendary1 (891 posts)
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    1. The bubble reinflated?

    Say it ain’t so!

  • pokercat (505 posts)
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    2. Car dealers love leasing….89% of consumers don't realize they

    are actually able to negotiate the price the lease company pays for the car thus affecting their payment! Leases allow consumers to “buy” (rent) much “more” car for the same payment as an actual purchase. Never shop payment, only lease if you have logical reasons that make financial sense.

    With so many cars coming back off leases this year and next it should be a great time to buy a two or three year low mileage vehicle for a great price as the dealer lots get flooded with cars. Look in late 2017 or hold off till 2018 if you can.

     

    Just my opinion.

    There isn't a problem that can't be solved by simply lowering your standards. I get more cynical everyday but I just can't keep up.
    • westerebus (137 posts)
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      3. That's how I buy mine.

      Off lease, low miles, dealer certified. Save thousands and still get the warranty coverage that came with the car.

    • FanBoy (7985 posts)
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      5. thanks for the tip, helpful

      and for the comments on bubbleation, also helpful

  • FanBoy (7985 posts)
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    4. sure noticed that around here — so many shiny new cars on the road

    funny thing is, they all seem to come in a very limited color palette — black, white, gray, and occasionally dark blue and dark red.  henry ford revisited (“they can have any color they want as long as it’s black”)