In the history of data from The Fed, this has never happened before…
Aggregate Auto Loan volume actually fell last week… And less loans means one simple thing… less sales (because prices have never been higher and no one is paying cash)…
Which is a major problem since motor vehicle production continues to rise as management is blindly belieiving the Hillbama narrative that everything is (and will be) awesome.
The problem is… inventories are already at near record highs relative to sales (which are anything but plateauing)…
In fact, the last time inventories were this high relative to sales, GM went bankrupt and was bailed out by Obama.
The big picture here is simple… US Automakers face a plunge in auto loans for the first time in this ‘recovery’, and with sales plunging and inventories near record highs, production (i.e. labor) will have to take a hit… and that plays right into Trump’s wheelhouse and crushes Hillbama’s narrative just weeks before the election.
Personally I do not have a desire for “new” car…
made with ticky-tacky and all sorts of computer
technology. Miserable to repair and costly to maintain.
The tracking technology is also an unwanted burden.
Car loans for 60 months are for those unable to afford the car.
Or consider it leasing, lol.
Older car “refreshing” is an upcoming, grass roots growth segment.
We have another shop that opened this Summer. Its not big. Just two guys. The other bigger shop has five guys. Some call them “custom” car shops, but increasingly the majority of their business is refreshing older models. Depending on what the owner wants and how much their budget is.
Talked to one older guy who was looking in on the progress of his 1978 four door Ford sedan. He has owned it from new and decided against buying new because of the high prices. For roughly 30% of the cost of new, he will have his “old gal” (as he called it), back good as new and that it would last him the rest of his days.
Another vehicle that was there belongs to a plumber. A heavy duty 1986 GMC van that is there for a complete mechanical refresh. The mechanic said the owner would have to spend three times what the refresh will cost to buy new. And would still face the additional cost of outfitting the new van, which is not as robust as the older one. So there are still quite a few older models that made it past the “cash for clunkers” fiasco.
Yep.
1) I just bought a “little old lady” 2002 Camry with 22,000 miles on it for $2,400. I had to put in another $1,500. Total $3,900.
1) I found a used 1999 Cadillac Eldorado for $14,999. 28,000 miles. It looks brand new.
When Fomoco announced that they were no longer going to make the Crown Vic police model, several outfits did the same thing – refurbish/rebuild for substantially less than any of the proposed replacements – most of which just didn’t meet the needs. Of course many departments went ahead and bought new anyway, after all it wasn’t ‘their’ money being spent.
I’ll have to really think hard about buying a new vehicle – if I need one…………………
Do they sell new cars in South America?
Hmm, maybe you are in South Africa.
If you can pay cash, there are great deals. Most people have to finance even a small amount like $3,000. The buyer pool on cars 5 years old or older is small since banks won’t finance anything over 5 years old.
I can say the auto suppliers we work for, are slowing down, somewhat drastically.
One company in Montague said they did $17 million in sales last month to GM and Ford, they were supposed to have $21 million.
So a lot of the work I’m quoting is doubtful as they see continued sales declines, but the engineers I work for saw this over a year ago.
Well I guess we will just make it a law that everyone must buy a new car like health insurance ya that’s it
@ Boat Guy….I wouldn’t put anything past them. They could offer 100% financing guaranteed by the .gov with forever to pay it off.
another taxpayer bailout coming soon ?
Remain calm, all is well.