And, when someone does not pay as agreed to a significant degree, the more efficient that a repossession can happen, the better a deal can be offered to borrowers who do pay as agreed.
Japanese car dealerships have been this way recently, before the pandemic hit we tried to buy a new Honda Fit and had to buy a used one because they had none in inventory because, allegedly, the factory had washed away in a flood but they had a row of 50 CR-Vs made in the same factory. The dealer tried to push us into one of those.
The automotive press uncritically reports that American consumers are crazy about huge vehicles but what I've observed is that dealers are crazy about selling huge vehicles. Before the pandemic you would frequently see small cars were selling out as fast they arrived on the lot but dealers would have a sea of huge and expensive vehicles and be offering $8000 or so in incentives to sell them. If small vehicles were really unpopular it would be the other way around.
There are rumors that Toyota and Honda would love to kill the Corolla and Civic but the quality of those vehicles is so legendary and the attachment of owners is so fanatical that they know people aren't going to "trade up" but will be paying new car prices for high mileage vehicles.
No I'm not making this up: https://www.news-leader.com/story/news/business/2014/10/02/w...
Very true. Same for houses. A lot of people probably would prefer a small house over not being able to afford a big house and renting eternally. But big houses are more profitable, so that's what's being built. That's why in a lot of markets supply and demand don't really work if the supply can be restricted.
"The market will bear" a consumer paying 5 to 10 times as much for the largest fanciest SUV or pickup truck vs the smallest cheapest commuter car. Therefore the profit is VASTLY higher on larger cars and there's an immense motivation to get as many customers as possible into the biggest cars. If you can get a customer to pay 6 times as much for a SUV that costs 3 times as much to make, that's a huge profit lost if the customer is permitted to buy the commuter car.
Another way to phrase it is if almost all your profit comes from selling giant cars, then the customer experience of buying a small car is always going to be awful.
The people buying the largest vehicles are not concerned by cost, so increasing the cost of large vehicles via taxes or fees or regulation only makes the situation worse. You'd like to think that a 20% surcharge on large cars would result in fewer large cars sold, but the guy buying them is a general contractor and he needs the pickup truck to make money so he's just going to pass the cost on to real estate inflation and the extra 20% is going to motivate the dealership even harder to only sell expensive cars.
I'd personally much prefer to make public transit that is so good that everyone uses it.