WORSE Than The GREAT RECESSION (AUTO LOAN BUBBLE)

[@BigEd1001]

But there is nothing affordable today. My first new car was $3,500, the next was $9,000, next was $10,000, then $18,000, then $20,000 then $36,000 and the latest was $47,000. The latest purchase wasn't significantly more upscale than prior vehicles.

[@mathteacherplusmore4533]

What were the time periods that you purchased?

[@Lee-qp6gf]

When I was young and a carpenter, I made sure I had three months of living expenses saved at all times and would not touch it and I still have.

[@davidstanko5836]

Ive been hearing this for almost 7 years. Still waiting.

[@tamarm_funkycoldmedina]

I hope it's bursting, but I've been hearing this for the last two years.

[@shaehatfield1899]

I have 18-20 months saved and fear it's still not enough

[@666dynomax]

You mean like 18 months of expenses?

[@shaehatfield1899]

@ correct

[@Lee-qp6gf]

A lot of this is on the manufactures for not making a basic model. Chev used to make what the called the Biscane and it was a very moderate priced car at the time. Meanwhile the Impala was high end for Chevrolet.

[@JWelk92]

I would Love that calculator! Im also trying to become a sales rep at one of my local dealers to help people get cars they can afford

[@FrankFernandez-l8t]

It’s the perfect storm it’s been in the making for years. Higher vehicle prices, higher taxes, higher tag prices, higher, title, registering fees, and ultimately higher dealer fees, and junk fees. The state of Florida is abusive in allowing dealerships to pretty much charge, whatever they want With no caps whatsoever! easy fix to all this mess. Banks should not lend more than 80% of MSRP and should cap the amount of fees/junk add on fees from dealerships. This will force dealerships to move units as they will not be selling as many vehicles! That will even out the playing field. It should be a very simple transaction. MSRP minus whatever factory incentives plus a capped dealership fee and that’s it. Taxes and other government fees are not financeable. This will lower the banks risks! If the buyer has no money down, then it leaves the dealership, no choice, but to continue to discount the vehicle if they want to move the unit. Problem solved!

[@michaeldoherty5423]

Vehicle sale price is $990 after $20,000 down payment.

[@margaretmcnamara2717]

Your insurance is based on the MSRP here in Nevada not the sales price of the car

[@brianchung9876]

Zack needs an ‘89 Ford Escort Pony manual. If he can drive that, he can drive anything!!!

[@kendu52]

Zack, your idea of a complete fiscal plan is brilliant.

[@grandpadre8811]

Lease payments for EVS and PHEVs will be HIGHER in the future since leasing companies are losing large amounts of money.

[@laser31415]

chart at 5:32 it looks to me if covid hadn't happened the trend line would have put us exactly at the same point we are now. The cycle might get shifted, but the cycle never stops.

[@michaeldoherty5423]

Closing fee? I’ll close the door behind me and go to another dealer.

[@whodat90]

I think what that lease equity report really means is that the person who leased the electric vehicle paid $7500 less than they would have otherwise. Great time to lease an electric vehicle.

[@davidcave5426]

I'd LOVE to see the reverse calculator to show what you can afford!

[@MrUMENTAL]

Please make that calculator!!

[@margaretmcnamara2717]

Thank you Zack I love your ideas. But you know I have a 2015 Altima 114,000 Mi on it and I pay $250 a month for car insurance here in Nevada no accidents no tickets I'm 70 years old they rate you by your ZIP code and who knows how else and the price is like within $10 a month so I think all these insurance companies talk to one another and that's how they keep these insurance rates high. Plus the governor just approved that certain insurance companies can raise their rates 14% this year because of all the uninsured and underinsured drivers we have here in Nevada

[@Harvb04]

Zach it’s a great idea! People would use the tool!!! Showing the criteria you are eligible for would be beneficial

[@stephsjamn]

Was at the car show today, these new vehicles (I don’t look at EV) are so costly and so much plastic. I’m driving a 2012 Hyundai Tuscon Limited 105k has more room than the few SUV I looked at. Called my insurance company before I went gave a vin # of a Mazda CX30 for a price and still keeping my Tuscon - $1500 more CRAZY!!! Insurance is sky rocketing also. Guess who is not buying a new vehicle - Me!

[@cunninghamster1954]

Come on, Zach!!! You want older? My now wife (then fiance) taught me how to drive a stick in 1977 using her 1974 AMC Gremlin (mustard yellow w/brown racing stripe), with a 258 cu. in. in-line 6 with a 3 speed on the floor. That care was more fun than you could imagine. 🤪

[@mathteacherplusmore4533]

I really like the idea of that tool. I would use that. I would make sure to allow options like 3 row and sedan. I would be the first person to use it.

[@michaeldoherty5423]

Chrysler owned Maserati at the time.

[@111mbailey]

That calculator sounds great 👍🏽 👌🏽

[@sloweboy4473]

I’ve been shopping for 3 months now, these dealers add 3-6k over advertised price and are not willing to be within 2-3k the advertised price.

[@Mike-bi7kb]

You buy an old manual car with lots of miles on it, and it will have a partially worn out clutch and then you use it to try and teach someone how to drive a manual, and you will probably end up having to put a new clutch into it, finish wearing it out learning to drive it. That could get very expensive, especially on a foreign brand, and even reselling it with a new clutch, you will under water.

[@idioticsavant1]

That calculator would be great!

[@dallenwade]

Don't buy an EV but lease it. Got it. However is that because the starting price is so high and lack of demand causes increased depreciation? What if the starting price was more around 25,000 instead of 45 or 50,000? Would it then make more sense to purchase and finance? Some dealers are advertising some select EVs in this range. There's no way there would be runaway depreciation then, correct?

[@Lee-qp6gf]

Good idea on the calculator. However, most people that watch Car Edge are smarter people.

[@huntersrc9865]

I think the calculator would be great. Some people don’t know what they can afford. It would probably be eye opening for a lot of people. People would be shocked at what they could afford, and probably not happy.

[@speedee7508]

I think the calculator is a great idea!

[@arthurhill365]

From a CPA/MBA Econ: We haven't gone thru this cycle ever unless there were subprime loans before the great depression!

[@joedyer1785]

Thanks

[@matthewsocal2540]

It is stupidity. Though not on the customer. The stupidity is on those selling the cars. If I owned a restaurant and seated college students to feed my $100 steak dinner to, I'd be stupid to think I have a viable consumer base for $100 steaks. Keep building cars that are $100 steaks and there will not be an auto industry in the US in very short order. It's a Boomer problem, once again. The people making decisions on what cars are progressively priced are too old to adapt to change, and they're still in charge of things progressive.

[@actualfacts1055]

People borrow too much money and can't afford to pay it back, unheard of.

[@111mbailey]

Great idea 💡

[@cunninghamster1954]

Ray, I agree that people shouldn't be borrowing more money than they can afford, and I think that banks shouldn't be allowed to offer loans for more than 100% LTV. Fact of the matter is, banks WOULDN'T offer these loans of 125% or 140% of LTV if they were forced to hold them. These banks operate on a totally fraudulent basis - they write these "bound to fail" loans, bundle them as Asset Based Securities (often misrepresenting how fragile/poorly rated they are) and then leave the investors holding the bag. The investors SHOULD know better after watching the mortgage bubble burst in 2008, but no, they can't resist. Once the bubble bursts, Wall Street comes crying to the Feds to bail them out. Who pays for that!??? We taxpayers.

[@Zpringnitz]

It’s usually things like pensions buying these… people “investing” other people’s money. People spending their own money know better.

[@isaacgolden3338]

That tool may help people avoid making a costly mistake! Do it guys make it happen.

[@tinyhauslife]

It's not all stupidity, it's ignorance-- the lack of education.

[@AndreasPenninger-oc8sw]

Of course it’s not all. Maybe 15% is ignorance. 85% is now definitely something else.

[@tinyhauslife]

@@AndreasPenninger-oc8sw I say lack of education because the Average American has the reading level of a 7th grader. Asking a 7th grader to decipher the money factor of lease contact (for example) is well...unfair if you don't educate them on how it actually works! It doesn't automatically mean they are stupid. Of course there are stupid people everywhere!

[@wawalker1]

Zach, don’t forget to get a PPI on that manual transmission cars. Get a VW Bug. 🐞

[@jasperwright9237]

Where are the $10 trucks? I can’t find one! Not one!

[@john_nip_nop]

When you build the calculator, don't be too simplistic. What do you take home and what do you want? - is not enough. Calc needs to know all the living expenses, like number of dependents, zip code (for local cost of living and taxes), housing cost including insurance and utilities, etc. Maybe better to ask "At the end of the month, how much leftover cash do you have?"

[@JakeKumar]

One day I'm going to look up where the hell Ventner city NJ is. I only know Newark.

[@CarEdgeLive]

Just south of Atlantic City, so if you can find Atlantic City you can find Ventnor since they share a border. All the best, Ray

[@professionalelectronics3158]

Time to sit and wait so we can buy an SUV for the price of bubblegum.

[@henrymatthews9365]

I agree, i got approved for 70k for a 40k car . Lol i was like why would i need and extra 30grand?

[@13kingofbattle47]

Good idea it might make people fuss if the car they want is not in the line up because of their money

[@richdiana3663]

I've got a bad feeling about all this. I hope it's just thhe usual indigestion.

[@jasonbaxter5502]

You can say it will be considered . But i don't think the 20s had car loans bigger than a farm

[@workoutwithrob1700]

Aren't the Leases on EVs about $500 off then? Did it factor that all EV leases put the $7,500 tax credit on the residual side?

[@LHoop]

Zach, ask Brandon at CQA to keep his eyes open for a cheap manual car for you to learn on. They if you still want one then buy a better car.

[@michaelmorgan939]

I started driving a stick at 11 years old.

[@splurb5000]

I think Zackh should learn on a 63 Chevy truck with a three-on-the-tree. After that, everything else will be easy.

[@captindan5460]

S2000 are nice but there are skyrocketing in price.

[@jayvanwyck4717]

Yes, it would great!

[@1stgentree18]

I would also recommend stop trading your car every 3 years. You can dive it into 6 to 8 years. There is nothing wrong with it. Same go with the phone, why does it need to be update every 2 years. I normally put 100K plus before letting it go, my phone is 6 years old. It is still working just fine.

[@mariaescobar4692]

What is equity on a car. Please elaborate.

[@CarEdgeLive]

Positive equity is when the value of your car exceeds the loan balance remaining, negative equity is when your remaining loan balance exceeds your car's value. All the best, Ray

[@jasonbaxter5502]

This is what you get having a kid growing up on the phone. And computers, not going outside. If the internet doesn't say it, it's not true. No intuition or seeing around the box. I fill bad really.

[@patrickmcgowan7826]

N.B. Zach. disinterested means objective or impartial. Not the same as uninterested, meaning not interested.

[@MikeSTGL]

Ray rule is kind of like "The Money Guy show " rule . 20/3/8 - 20% down for 3 years and no more than 8% of income ( And have to invest more that the month payment ) .

[@jasonbaxter5502]

You are making it up

[@snowrocket]

Zach needs to learn on something that has an easy, progressive clutch and a fair bit of low-end torque. Many of the cars you two are looking at are NOT like that and will be frustrating for him to drive. Maybe a Chevy S-10 4.3 V6 5-speed would be cheap and easy.

[@edwardkrochmal8268]

Please get GAP INSURANCE to protect you if vehicle manufacturers lower prices leave you stuck. You vehicle is totaled and the Insurance Companies pay only 80% of the value and not what you owe on the loan. GAP INSURANCE COVERS THE DIFFERENCE OF paying the total balance of the loan

[@jasperwright9237]

I’ve got 2 old cars, retired and, thankfully, don’t need a new car. I would not buy now for 3 reasons, 1. I don’t need one! 2. Most new cars are garbage, for various reasons. 3. The interest rate is too high. Talk to mechanics. The new “rubber band” transmissions are junk! Some car makers have put plastic parts inside the engines, junk! Turbos run hot, hot kills engines, turbos on tiny engines are a disaster waiting to happen! Has the whole world gone stupid?

[@jesserevilla992]

What are you two talking about ! I’m in the business of lending / underwriting. And no issues; if anything we see better things to come this year! Things are moving quickly for better funding and lower interest rates!

[@jasonbaxter5502]

He should get a standard with a bad clutch. 😅😅😅😅

[@patrickmcgowan7826]

S2000 is an excellent choice. Easy gear change for a learner.

[@capnkirk5528]

Another channel analyzed this and claimed - and I AGREE - that it's the impact of EV subsidies. Hmm - ~$7500 under water with a $7500 subsidy? Imagine that! LSubsidies dramatically affect depreciation? WHO KNEW? (Well actually, pretty much anybody with a brain ...).

[@margaretmcnamara2717]

By the way I need a good mechanic here in Henderson Nevada

[@edwardkrochmal8268]

People the first 2 years goes mostly to interest

[@JohnBlackburn-h8v]

8000.00$ a month !!!😮

[@workoutwithrob1700]

Exactly, who is only making $8k? 😂

[@Oldcarnut63]

I will never buy another new car NEVER !!😡

[@Omar-nd6lh]

This is worse than the GFC? You aint seen nothing yet.

[@charleswidmore5458]

Just grab a little honda or toyota and drive the thing. If you are not gonna keep it why sweat it?

[@wesleyruble1516]

Naivety + Ignorance = Sucker.

[@talisikid1618]

The American capitalist system is based on debt, wages and spending. When you save, you take money out circulation. Spending keeps everyone employed. That’s just the way it is.

[@actualfacts1055]

You don't get rich by borrowing money to pay for a depreciating asset.

[@skipmason8747]

Get a Miata to learn on

[@nathans3523]

Doc fee pays for personal info perfection contract we have with a 3rd party company in Wisconsin

[@simon359]

My advice is to save a huge down payment so that your monthly payments are a lot smaller. That means if you have to save for a year or two to get 15 to $20k together - do so!

[@deanmitchell9568]

I will give you the 1st one to do. I bring home 700 a week and could do 1k down. Find me a car.

[@john_nip_nop]

Check with Brandon. Will need to save a little more, because the down payment is the Out-the-Door. ($5k & under.)

[@workoutwithrob1700]

What is your cash flow at the end of each month?

[@rpent84654]

Okay we got Ray God blessing it says one thing that I could give you for your best advice in 2025 is know what you can afford to buy before you go look for a car and make sure you don't try to purchase something this more expensive than you might fall in love with okay great advice but where is it 40 ability of the car that you can afford that's what I'm asking Ray where is it Ray don't exist if you want to get an ordinary car power windows power door locks air conditioning power steering you're going to be looking at over 60 65,000 okay Ray so who's going to buy that not only when they do to close by it and they drive it off a lot they're paying with the sky high but the depreciation is going to kill them because if they wanted extended warranty either they're only going to be able to get extended warranty what the car is worth cuz that's all the repairs are going to pay for more than likely My advice to anybody even you Ray then if you want people to buy the car in 2025 and then if you want to make sure they know what they can afford before they're going by well I would say they need to get a vehicle just like they used to like in 2007 I got my Toyota Yaris power steering power brakes nice doormats nice interior I paid almost $3,000 less for that Toyota Yaris than I did my Cavalier would you like around $21,000 for a Toyota Yaris sedan they don't make them anymore four door very nice so show me Ray that's your best advice take my advice you're not going to find a car or a vehicle that's going to be to where I can even afford it because the average price of any vehicles can have 50 to 65,000 I mean come on just ridiculous so there I go again telling you doesn't do it again to use a car wipes service let them go to a dealer but I want to do dinner I'd say I like that car this is what I'm going to pay for if they say no you walk that's what you do anyway that's my take of it all

[@CarEdgeLive]

Apparently you are allergic to punctuation. Quite the interesting screed there, my friend. All the best, Ray