It doesn’t take too hard a look to realize the automotive industry in the United States is in a bit of a weird place. Not only are product plans and regulations seemingly in a state of constant flux, but the price of a new car has never been harder to swallow. In fact, according to a new report from the Consumer Federation of America, U.S. buyers currently owe more than $1.66 trillion in auto-related debts.
The auto debt situation is nothing new, as Americans on the whole are generally dependent on vehicles that are too expensive for most people to buy outright. Combine that with the fact that the average prices of both new and used cars are higher than they’ve ever been, and it’s no surprise people are forced into borrowing large sums. That said, this recent report points out some concerning trends.
According to the report, the average car payment in the States is now around $745, with average loan amounts totaling over $41,000; nearly 20 percent of buyers have found themselves with payments of more than $1000 a month. Loan terms are also creeping back to rates similar to those before the Great Recession, with one in five buyers stretched out on a seven-year term. We’ve even seen the return of the eight-year loan, which all but disappeared following the sub-prime lending crisis.
Speaking of the Great Recession, auto buyers are also defaulting in their payments in ways we haven’t seen since 2008. Delinquencies on payments are almost on par with pre-crisis figures, and have dramatically outpaced the rates experienced during COVID. An analysis of the New York Fed’s consumer credit panel found that buyers in 2024 with an above-average credit score (620-679) were twice as likely to fall behind on payments than they were prior to the pandemic. That’s particularly true of buyers aged 18-29, who, according to the report, are falling into serious delinquency (90 days late or longer) more than older generations. Repossessions were also up 43 percent from 2022 to 2024, representing the highest rates since 2009.
Things aren’t much better on the used car side of things. Prices were up 6.3 percent year-over-year as of June, continuing the trend started during the supply constraints of the pandemic. Furthermore, one-in-four trade-in vehicles have negative equity attached, meaning that people are upside down on a large portion of the cars on sale today.
This one’s actually at least a little bit Obama’s fault.
The cash for clunkers program devastated the secondary market for vehicles in the United States. Great for the auto companies short term, but long term it removed so much secondary inventory that the market was eviscerated, leaving regular ass Americans in the lurch without a pool of cheap, relatively reliable vehicles.
But hey, it generated net growth for the shareholders for at least a couple quarters, so ultimately it was worth it right?
According to the report, the average car payment in the States is now around $745, with average loan amounts totaling over $41,000;
I need some yankee doodle dandies to weigh in here with some real life experiences as to whether this is anywhere near typical or whether that skews heavily upward statistically because it includes 19 year old marines financing a hellcat at 25% APR for 300k
The numbers seem high. I usually pay around $15k for a car. You have to be wealthy to qualify for financing on anything over $30k, IMO.
Last year I priced our a mid tier 2025 Prius, which is supposed to be a sensible, somewhat stripped down sedan (compared to a Camry) and it would be just under $40k USD after tax, title, and fees.
So new, right? Gotta be honest even my non broke friends in the EU tend to drive new cars, that’s rich people shit
Yeah, new. After the test drive, I went out and bought a ten year old Mazda for $8k. I love it and the $32k I didn’t spend
A big part of the problem is that it’s not just young dumbasses financing big trucks, it’s most people.
I don’t think so. 40k is now standard for a new car. You’ll have some cheap ones offset by some expensive ones, but 40 seems right.
Not a Honda on the list
If that merger with Nissan didn’t fall through, though lol
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COVID absolutely fucked the new car market by disrupting supply chains, which in turn absolutely fucked the used car market because there weren’t enough new cars to buy, and not enough new cars becoming used cars. And then retailers decided that since the price was forced higher there was no reason to lower it later when chains normalized again.
Also there are bigger margins on bigger cars and they all just kind of suspiciously decided to stop selling smaller cars in the US at the same time, so the budget options all disappeared.
mine is about half that for both, a little less for loan amount a little more for monthly payment
I bought a reasonably irresponsible car (stupid, I know, but I felt secure enough to play with a little risk) and ended up with a loan ~$30k and payments in the low $500s. That was with a generous down payment, a paid off trade in that I recently touched up a little bit, and good credit to get decent APR. I did a lot of things “right” and still feel a little guilt over such a big purchase (the car is a joy to drive, though lol).
I think a lot of people are rolling over debt from their previous car and landing themselves in serious trouble there. That, and buying super expensive SUVs/trucks.
Bugatti Georg strikes again
I have decent credit but don’t buy new cars. got two outstanding auto loans. a little under $400/mo for a car that was <$20k a little under $300/mo for a car that was <$15k these were bought in the last 3 years or so.
$745/mo being average is wild to me.
About six months ago I went to go look at a 2025 Ranger XLT. Ive never owned a new vehicle before, and I was mostly willing to bite the bullet and just get a new vehicle. Ill be getting my Master Plumbing license soon and need something I can work out of. Since Im just starting out, I dont need something large, hence the mid size.
2025 Ranger XLT with 11 miles on it was 42k, plus a fucking 8K dealer markup.
Fifty fucking thousand dollars for a ‘mid sized’ pickup. After factoring in financing, it would have been about 55-56k. I did not buy it. Instead I got a used 2022 Ranger with 40k miles on it for less than half the price. Im making payments on it thru my credit onion, 350 a month. Ill likely never buy a new vehicle if thats how they all are now.
Someone who actually does “need it for work” and they’re a
poster, hell yeah.
Alsocredit onion
heh
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Ill be getting my Master Plumbing license soon
Congratulations btw!
Thank you!
18,000 hours (9 yrs of 40 hours weekly, 51 weeks a year) on the job and a couple hundred hours on continuing ed. It’s about time.
I was curious, and it looks about the same for their vans (not that I know how practical they would be for someone - I’m a dumb email job guy), too. They killed off the smaller Transit Connect, and the full size van costs compare to the Ranger you mention.
The shop I’m at right now I have three trucks I rotate out depending on what I’m doing. A transit 250 van for smaller service stuff, a transit 350 HD with a traditional styled bed but boxes on all sides for utility and dirt work, and a Chevy Express 1 ton for when it’s raining,or I’m running copper or threading iron pipe, or I have things left over from a job I need to keep prying eyes off of. I carry joints of copper pipe (joint is 20 foot) of varying size, 1" up to 6 or even 8 in sometimes. 20 foot of 6" copper runs about 1,100 USD so it’s a very high theft high profit item.
I like the transit connect but it’s just a bit too small, and the transit vans in my area have too much of a markup even at the fleet sales places. They’re in demand here, and the price shows. A truck was the affordable, maneuverable but not so small I can’t carry anything compromise.
It’s what it is, I can schedule delivery of materials for big jobs and my truck will hold all the smaller service items like shower valves, cartridges n whatnot.
Just gonna add on to this post if you own a car made within the last 5 years or so go check and see if it has a GPS tracker on it. Apparently dealerships are adding them on. https://www.youtube.com/watch?v=a2JxKA7WcVc
Video talks about it. Just saw it earlier today.
dealerships are adding them on
the best part is they charge you out the ass for it too, like $1300-$1700 dollars unless you are willing to walk away
I found a YouTube link in your comment. Here are links to the same video on alternative frontends that protect your privacy:
Place your bets! Place your bets! Who or which company will be the first to use the line ‘freedom isn’t free’ to justify the costs incurred by a car-centric infrastructure/existence?
I think I’m putting my money on Jeep
always gotta bet on ford, personally
President of Ford drives a Xiaomi
GM for sure.
Stellantis probably wouldn’t pull that card, maybe one of their managers of the us brands maybe, but Stellantis themselves wouldn’t.
Ford kinda has their small car maker in Mazda, so I don’t think they’d pull that card, but I wouldn’t be surprised if they did.
GM is so thoroughly still american that they would absolutely do that.
I remember this being a fear 4-5 years ago… I’m still wondering when the bottom is going to fall out.
I dont drive but I always wondered how possible it was to buy some shit bucket off ebay and drive it till jt explodes then buy another one
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Me in the middle of the Nevada desert driving to my day job 18 hours away listening to LIFE A HIIGGHHWAAAAYY I WANNA DRIVE IT AAWWLL NIGHT LLAAWWNNG while the engine light is on and my 1 stroke engine is knocking.
I’m a gambling Owl, I gamble my wheels dont fall off
Still possible but harder and more expensive now than its ever been.
The problem is that the shitbox doesn’t explode, it withers away, and you have to make the difficult decision of when to ignore, when to repair, and when to cut and run
you have to make the difficult decision of when to ignore, when to repair, and when to cut and run
It’s the car version of The Gambler by Kenny Rogers
You do learn a lot about auto mechanics along the way, but yeah the proposition ends up that you’re trading a lot of time for a chunk of money that you might not have, I would have had a much harder time getting by but I always feel like there’s not enough time.
The Cash for Clunkers program took a great many of those shit buckets off the market forever.
Probably chips away at the available spare parts too
At the very least, all the engines of those cars were killed by running a seizing agent in them
Back when you could get a Corolla or Civic with 200k miles for $1,000 and get another 50k to 100k miles out of it, it was pretty feasible. I’ve never spent more than 1,500 on a car (Craigslist, though, not eBay, cause you gotta be able to test drive it first)
I moved somewhere I didn’t need a car so I’ve been out of the market for a hot minute, but it seems a lot harder now. The 1k cars are now 3k. The relative age has shifted to where 10-20 year old cars are over-engineered and difficult to work on, and much less likely to last past 200k miles.
But yeah that was my strategy for a long time. When I had the space I’d have two cars that cost me $500-$1,000 each, so that if one exploded I could still get to work. And I always had a shitbox I could lend to a friend if needed.
I have no idea how to exist in a $5,000+ car market lol, so buses and bikes for me I guess.
This is how I’ve gotten by but it’s not without drawbacks. Ive spent more than a few weekends working on my shitboxes just to keep them rolling for a few more months. Better off financially for it, but not knowing if I’ll actually make it to work until i get a chance to fix something is very stressful
Bigger issue is the shitboxes got more expensive too. What used to be a $500 beater is now $2000+
Half-dead cars can be very expensive (and dangerous) to drive.
depends how you view a car. status symbol or thing that gets you from A to B?
thing that gets you from a to b still needs to pass inspection which means maintenance which is often more expensive than a clunker is worth
maintenance which is often more expensive than a clunker is worth
there’s a distinction and tension between “use value” and “exchange value” that marxists recognize. a car that operates reliably but doesn’t extract fees for debt servicing or depreciate its exchange value still has a real, tangible, material value to its user, despite the fact that if someone t-boned it over a ravine, the insurance payout would be small.
if you own a car that is “worth” a lot in actuarial/replacement exchange, you’ve been played because literally the only way to recover that value is to set the shit on fire before your paid insurance premiums overtake the asset valuation.
or just use it? the value is because they usually have more life left in them and likely more safety and comfort.
imagine still thinking financial sector valuation is tethered to material reality in the US in 2025. i suppose you think the US military is the most capable and useful military force too. because it’s so expensive, it must be, right?
this is literally Capital Vol 1, Chapter 1 material.
I’m talking about used cars in real life
so go buy a cybertruck. they are crazy expensive and no amount of repairs will ever exceed the “value” of the vehicle. must be a sound financial decision to own one, right?
i drive a 25 year old honda. it rules. in the real world. the maintenance schedule is completely reasonable.
ever wonder why dealerships offer warranties of free repairs for the first X thousand miles? because the depreciation on newer cars far exceeds the cost of repairs across the board, though when you look at service bays, they are frequently full of newer cars.
newer cars are legit garbage. they have more unsecured tracking and recording devices than cellphones, they are far more locked out from non proprietary repair processes, and they are designed to extract the maximum amount of value from the buyer over the shortest amount of time until the buyer can be talked into a trade-in so they are constantly scraping together monthly payments and being forced to pay premiums for bundled insurance.
its yet another example of how the financial services sector and industry have conspired to make people fully dependent on their schemes and extract the maximum wealth from customers who are indoctrinated to think such an exploitative system of constant monthly payments is normal.
this entire article is about how the exploitation of people from subprime autoloans is metastisizing across the broader economy, because it has been a cash cow for capital formations. it has been signaled for over a decade that this was the new party after the housing market collapse. tremendous value has extracted from millions of people, accepting the lie of actuarial valuation, and funneled to a handful of formations… the same formations that issue those valuations you are defending!
youre making me realize both states i lived in didnt do annual inspections or emissions checks.
This is what I do, my main driver is a 90s shitbox, its very feasible if you’re mechanically inclined and ever get time for repairs or have high bullshit tolerance. Its also sort of amusing if there’s ever an antique car show near you and people keep telling you about it.
Outstanding
CPO EVs are like 50% off with 15k-30k miles. Can still be expensive but running costs are minimal compared to ICE cars aside from tires. I saw 2022 and 2023 ioniq5 models for $20k to 25k. Even old Nissan Leafs can be had for a huge discount
I must have gotten a used car right before the spike, as I managed to get a (at the time) 2 year old hybrid car with 11k miles on it from a reliable manufacturer for under 20k.
I ended up paying it off early, but I thiiiiink after downpayment with a good credit score I was paying ~$250 a month before insurance and gas. Tbf gas costs are barely anything in this bad boy.
It’s crazy. I had to get a Genesis as my fall car instead of an Alfa Romeo.
