Will Vehicle Prices Ever Decrease?

[Yoder]

Once prices go up they don't come down.. buckle up...

I paid $155k for my house in 2005. It was worth $80k two years later.

 

[Forestryguy]

Yes, $85k for a vehicle sounds totally reasonable.

That is insanity. I bet the payments are pushing my house payment. This is why I have vowed to not buy new vehicles any longer, and the ones I do buy will be driven till they rusty dust. At least old vehicles I can work on, for the most part, with very little computers.

 

[Coldtrail]

It would be interesting to know the percentage of vehicles that actually get paid for and owned vs financed & traded for another every few yrs.

I have plenty of friends that have never actually owned a vehicle during their adult life, they just always factor a high payment into their budget. Many dealers now don't even advertise the price of the vehicles on the lot, just the lowest monthly payment they can get you.

Only in America......

 

[NDGuy]

That is insanity. I bet the payments are pushing my house payment. This is why I have vowed to not buy new vehicles any longer, and the ones I do buy will be driven till they rusty dust. At least old vehicles I can work on, for the most part, with very little computers.

There’s already 10 year auto loans. Soon I’m sure 12-15-20 year loans are coming to afford that new 120k pickup!

 

[WyoBowhunter21]

I think what we are looking at for the future of new cars is leasing. As mentioned above, many people are just allocating the car loan into their budgets. I can’t justify an $85k truck. Where is the room to put tires on it? They put light duty low ply tires on them off the lot. To my point, I think we are going to see more people lease vehicles in order to get to that new one. It will bring more used to market, hopefully. With all of the electronic components in these new vehicles I don’t see the prices going down. Maybe a little but not thousands of dollars. I hate to be a Debbie downer but i think we may be stuck with these prices for the foreseeable future.

 

[Fry]

I think what we are looking at for the future of new cars is leasing. As mentioned above, many people are just allocating the car loan into their budgets. I can’t justify an $85k truck. Where is the room to put tires on it? They put light duty low ply tires on them off the lot. To my point, I think we are going to see more people lease vehicles in order to get to that new one. It will bring more used to market, hopefully. With all of the electronic components in these new vehicles I don’t see the prices going down. Maybe a little but not thousands of dollars. I hate to be a Debbie downer but i think we may be stuck with these prices for the foreseeable future.

Interesting point. People are basically leasing now Id agree. And youre right they are so full of electronics they will stay expensive. Government regs as I understand are to blame for that. They require back up cameras blind spot monitoring auto braking etc. iv also noticed wvery vehicle now has an ipad on the dash. I hate that crap. Whats wrong with dials. If only barrier to entry for vehicles wasnt so high (tariffs limited a lot of awesome Euro and Asian light trucks to compete)…

I bought a forester when the pandemic first hit. Be greedy when people are fearful. Paid 13k cash for it and its KBBis now 15k and ive put 20k miles on it. Be fearful when people are greedy. I think Ill ebike before i buy an 80k car.

 

[ODB]

I paid $155k for my house in 2005. It was worth $80k two years later.

What’s it worth now?

 

[ODB]

I think what we are looking at for the future of new cars is leasing. As mentioned above, many people are just allocating the car loan into their budgets. I can’t justify an $85k truck. Where is the room to put tires on it? They put light duty low ply tires on them off the lot. To my point, I think we are going to see more people lease vehicles in order to get to that new one. It will bring more used to market, hopefully. With all of the electronic components in these new vehicles I don’t see the prices going down. Maybe a little but not thousands of dollars. I hate to be a Debbie downer but i think we may be stuck with these prices for the foreseeable future.

Yes on leasing. The world is moving to rent/lease model. People don’t want to own anything anymore, just pay for it by month. Think Spotify, Netflix, Adobe, Pro Tools, etc.

I know a couple who have never owned a car. Currently have two Porsches and a tundra. Just pay by the month. I bought a tundra for cash not long ago. Saved 20 years for it. The ability to buy a needed item and not have it affect monthly outflow is good.

 

[Baddog]

12-18 months and you will be able to pick new today vehicles up for pennies. The free money has run out, the little savings people had are depleted. People are playing the "I'll work a day" game to get back on unemployment. Wages are going to go back down. There will be a glut of products, and people that are sitting at home are going to want to get a job. But they are going to be unemployable for decent wages since they sat around and did nothing for the past 2-3 years. Banks are going to be repoing more than they ever have.

Save your pennies and be ready to buy things cheap in a few months.

Lot of doom and gloom in this post, but I don’t think the numbers show this is going to happen. I’d be interested to know if you’ve looked at data that led you to this decision or just your gut feeling? Time will tell I suppose.

 

[Graybush]

Auto defaults ( most end in repossession but not all due to lenders working out repayment terms with debtors) were analyzed by Cox Automotive and they predict that repossession rates will drop in 22 and 23. Less than .5% of auto loans go into default on average and lenders know this and price accordingly. There aren’t going to be a glut of vehicles selling for pennies any time soon.

 

[Forestryguy]

There’s already 10 year auto loans. Soon I’m sure 12-15-20 year loans are coming to afford that new 120k pickup!

Hopefully by then I will be old enough to not need a vehicle at that price point. That would lead to a lot more home delivery of goods. At the worst I could see a class war breaking out at or before that point. What would a standard 3 bedroom ranch house cost at that point? It would be the unattainable for 75-80% of the country.

 

[Forestryguy]

Lot of doom and gloom in this post, but I don’t think the numbers show this is going to happen. I’d be interested to know if you’ve looked at data that led you to this decision or just your gut feeling? Time will tell I suppose.

I would hope that my statements do not come true. I am of the thought that I plan for the worst and hope for the best. I have not looked at number, especially those that are put out by the feds. They are saying the economy grew last year, people have more savings right now than ever. Those statements make zero sense today. Every place is looking for workers. People literally go to work for a day or two and quite, get back on unemployment somehow. Apparently some are making a killing off of crypto, not sure how. It is completely volatile, even in stable markets. I just see 2008 on a bigger scale, not just housing but auto, small Buisness, healthcare, and education both primary and higher.

 

[william schmaltz]

It would be interesting to know the percentage of vehicles that actually get paid for and owned vs financed & traded for another every few yrs.

I have plenty of friends that have never actually owned a vehicle during their adult life, they just always factor a high payment into their budget. Many dealers now don't even advertise the price of the vehicles on the lot, just the lowest monthly payment they can get you.

Only in America......

I have two different buddies now that bugged me to come moose hunting so I swung it for them to come moose hunting with me at an extreme discount. They both have new houses, $80K+ pickups, and new ATVs but neither of them could swing saving $3K over 12 months for a moose hunt. They were almost offended at the price. It blew my mind and opened up my eyes even more to the way most Americans live.

What the Jones' have has never held much appeal for me and I'm very grateful for it; the Jones' are obviously broke. I really think the chickens will come home to roost on all this stuff just like in 2008.

 

[MattB]

A buddy of mine is a car guy (usually owns at least 4 at any given time) and spends a ton of time researching and trying to find "the next one". He said that prices on used vehicles are already coming down and deals can be had today that he has not seen since early in the pandemic.

Perhaps the sky is not falling?

 

[Coldtrail]

I would hope that my statements do not come true. I am of the thought that I plan for the worst and hope for the best. I have not looked at number, especially those that are put out by the feds. They are saying the economy grew last year, people have more savings right now than ever. Those statements make zero sense today. Every place is looking for workers. People literally go to work for a day or two and quite, get back on unemployment somehow. Apparently some are making a killing off of crypto, not sure how. It is completely volatile, even in stable markets. I just see 2008 on a bigger scale, not just housing but auto, small Buisness, healthcare, and education both primary and higher.

Its gotta happen, I say this not being a math and economics guy, but I'm always perplexed that "economy" is considered good when people rush out to spend money they don't currently have?! The banks make buying high priced items with ridiculously high depreciation much easier so more people bought them like crazy these past couple years and the vast majority are owned by banks....hard to convince me we are on a good road. People don't own anything and are all about the payment, repairs are not even on the radar

Example, person buying a vehicle, maxed out monthly payment, vehicle needs tires & brake pads, let's say $1500, they can't afford either....solution: trade in for new vehicle, $600mo. This happens, alot!

 

[Graybush]

Every time a vehicle gets purchased the state collects sales tax, a dealer pays at least 5 employees ( salesperson, sales manager, finance manager, service tech, title clerk, etc) and we all pay taxes too. Cars are a crucial part of the economy, and people love owning and driving them. They have always been expensive in relation to average income, and they’ve never been safer and better built than they are right now. In the 70’s we traded cars before they hit 100k because we knew they would fail us. That doesn’t happen today. The sky is not falling. And honestly, I pencil a few hundred quotes per month and can count on one hand the number of times a payment exceeds $1k per month- and this is in N.J.

 

[Baddog]

Also the people running the banks aren’t stupid. They don’t want to repo vehicles. And the government isn’t forcing them to give out loans to people who can’t make the payment, like they did with houses in the early 2000’s

 

[fmyth]

I have two different buddies now that bugged me to come moose hunting so I swung it for them to come moose hunting with me at an extreme discount. They both have new houses, $80K+ pickups, and new ATVs but neither of them could swing saving $3K over 12 months for a moose hunt. They were almost offended at the price. It blew my mind and opened up my eyes even more to the way most Americans live.

What the Jones' have has never held much appeal for me and I'm very grateful for it; the Jones' are obviously broke. I really think the chickens will come home to roost on all this stuff just like in 2008.

If you need a new hunting buddy I'd love to go moose hunting if I could do it for 3k.

 

[Coldtrail]

What the Jones' have has never held much appeal for me and I'm very grateful for it; the Jones' are obviously broke. I really think the chickens will come home to roost on all this stuff just like in 2008.

The Jones's have everything but own nothing, have no savings, no retirement, and prob forgot about the fact that the entire automotive industry had to be bailed out with federal money in 2008

 

[Gwchem]

I paid $155k for my house in 2005. It was worth $80k two years later.

My house was built for $200k in 2002. Sold again at $400k in 2005. We bought it as a short sale at $315 in 2013, with some weird second mortgage on it, and today is worth $500k. It's been a wild ride.