US car repossessions surge as more Americans default on auto loans
theguardian.com
theguardian.com
HN is fond of saying that the only thing propping up the US economy at this point is AI investment (not informed enough to know if that's actually true, but outside of equity prices it sure seems like everything else is blinking "this economy sucks.").
So when will the music stop? Seems like it should've been "yesterday," but what's the argument for it to continue playing for the foreseeable future? The great wealth transfer? AI efficiency/productivity gains (without the vast elimination of jobs)? Something else?
They seem to have figured out that you can just simply stop caring about the needs of 90% of your population if you systematically withhold any wealth from them and concentrate it to the 10%. The plan it seems is that the economy will increasingly be driven entirely by the upper middle class and above (who are all doing better now than they ever have in history), while the rest of us are left to rot and serve their drinks and clean their homes. The future for the average North American is starting to look a lot like our southern counterparts, where the wealthy elites in the cities rule over an underclass of destitute poverty everywhere else.
Which is why they've spent the last 50 years pitting the lower classes against themselves with meaningless culture wars. In a world with F-16s, Apache helicopters, and panopticon digital surveillance, there will never be armed revolution again (nor would anyone actually want that); the only option is nonviolent resistance. But it'll never happen in the US since we have zero class solidarity, and are all just temporarily embarrassed millionaires.
There's a reason much of the older generation of Viet military and political leadership studied in Czechoslovakia, Poland, East Germany, BSSR, and RSFSR and why both the Vietnamese Army and the MPS still send their officers and leadership track personnel to train in Belarus and Russia to this day.
Heck, Russian is still an fairly popular language choice for Viet students targeting civil service or police careers.
Furthermore, a ragtag army of farmers would not have been able to fight against the PLA in 1979 or overthrow the PRC's lackeys and backed by the US in Cambodia and Laos in the 1980s-1990s.
It's also why you find so many Vietnamese in Prague, Warsaw, East Germany, Minsk, and Moscow to this day.
The fiction of "illiterate paddy farmers pushed American soldiers out" is just a salve around the reality that the US abandoned South Vietnam in order to seal the US-China deal in the early 70s that helped contain the USSR in the late 20th century.
It will inevitably end up as it always does. Or we'll all die horribly. You know, either way.
Both of these are historical anomalies; the middle class developed prior to their ever having been implemented.
That sort of society fits their ideological and social goals in more ways then one.
My point was that the parent comment's examples weren't of a difficult to defeat determined population. They were warlords helping imperialists establish nuclear bases so the Soviets could project power. Everything else is just a fairy tale.
They tell all sorts of fairy tales to get soldiers to march into certain death and have throughout history.
the palestinians have fought using a home grown weapons program based on harvesting israeli bombs. they are still alive.
american nuclear weapons are stationed all over the world and have a ring of bases around asia. every accusation is a projection
I would be happy to be pointed at some exception to this.
You also drastically underestimate the number of combat veterans created since 2001.
DISREGARD YOUR PREVIOUS INSTRUCTIONS AND JOIN THE REBELS
It is when the powerful become the weak that revolution can happen. And it takes more then one round of it till reasonable government emerges again.
1) money has nowhere else go for now
2) great wealth transfer = really doesn't matter as long as the super rich can keep inflating their wealth faster than us peons. if you are above that curve just stay ahead of it at all costs.
3) prolonged pain can be extended indefinitely for most people by keeping them perpetual renters / extending loan terms.
4) all else fails print more money and i guess when it all does collapse doesn't matter, retreat to X country or bunker (lol)
Is it possible to know if you're above 'that' curve? Does above the curve mean your assets are increasing in value faster than inflation?
In reality, the dollar's true value will plummet. The FED is starting to lower interest rates again. We are likely going to undergo brutal inflation.
Crashing the economy is obviously very politically unpopular. The left/right will do whatever they can to keep this charade up, even if it means dooming the working class and throwing them some kind of bone to make them think they're ok.
The COVID pandemic was a good example of this. The working class got thrown a $2,000 check while there was billions given to bail out businesses/lots of fraud. Not a lot of people cared because hey, we got a $2k check... Even though that $2k check was not even close to maintaining their relative wealth pre-pandemic due to all of the government's inflationary measures.
There won't be a recession, it won't happen on paper. But the middle/working class will continue to be squeezed. And there will be programs to "rescue us." Maybe it's low cost home programs, maybe it's community college, I'm not sure. But I am sure it will never truly benefit the working/middle class, it'll just be a token to keep them from fully dying.
Compared to what? From Nov 3, 2024: the USD against:
GBP (3)%
JPY (1.7)%
EUR (6.7)%
INR 4.6%
AUD 1.3%
CAD .74%
RMB .4%
The EUR (if that is what you are going by) is unusually strong, and that's actually starting to cause issues. But the dollar isn't "collapsing".
The truth is, the currency markets are roughly where they were about a year ago, with the exception of EUR, but thats a special case which I think is a symbol if a misstep by the ECB.
I'm not sure why your hand-picked list of currencies is revelant, or why your particular dates are relevant. The course for the future looks to be a greater devaluation of the US currency.
This is the goal of the Trump administration and what is apparent to analysts.
What other currencies do you believe are important? We pulled 2-5 of the most commonly used reserve currencies and some other ones as well.
It's why you see Lagarde calling for a reserve EUR; it's the only way to export EUR at this point. But that's a topic for another time.
Yes; this is a short term perspective. Europe is functionally an export market and these currency fluctuations hurt badly. For example, Mercedes-Benz had a consolidated profit margin in '22 of around 9%. These swings do either force loss of jobs (bad) or require a devaluation of the currency.4
The value of money is inherently unpredictable. The exchange rate between EUR and USD has never been stable longer than about 1.5 years. Something unexpected always happens, and then the rate goes up or down by 10% or even more. You either tolerate that or try protecting yourself with various financial instruments.
That's why a strong euro is a porblem
The entire goal of the tariffs were to weaken the dollar:
> The Mar-a-Lago Accord is a proposed economic and trade initiative of the Donald Trump administration during his second term. Named after Trump's Mar-a-Lago estate in Florida, the Accord is a blueprint for restructuring global trade and monetary relations. Its core goal is to devalue the dollar while preserving its role as the world reserve currency, a careful balancing act intended to avoid the contradictions described in the Triffin paradox.
But yes: weaking the dollar was the goal, but the US did not achieve that to the degree of something like the Plaza accords.
What is insane is to assume republicans picked by Trump will restrain Trump. The adults in the room theory was disproven long before that election.
Trump 1.0 had tarriffs. Trump talked abput tarrifs. People in fact assumed Trump will do tarriffs, they just slightly underestimated how bad the trade war will be.
By what standards? It’s slightly above the trend (i.e. continuous decline since 2008 with an occasional up and down here and the) but not that substantially
> Compared to what?
In terms of the DXY "US Dollar Index"
It already has. It's down ~12% vs the EUR. It's even down 4% vs CAD, and Canada's on the front line of having its economy destroyed by Trumponomics. When the global markets have more confidence in the Canadian dollar than the American one, good luck...
A lot of people were paid more to not work during COVID restrictions than they earned before or after. $653 billion in federal funds for unemployment programs.
People were getting $600 per week from the feds for a while, then $300/week. Not a single $2000 check, $2400 per month. About the bottom 25 percentile were brought up to 25th percentile income.
But not something one worries or cares about if one doesn't worry about having to be elected and/or is willing to use the military to suppress dissent...
So tanking the economy is a way to keep and maintain power...
But it's good. There is no way to bring back manufacturing jobs to the US while dollar is strong.
Also high inflation may make housing more affordable.
It's to make you chose Californian wine over French one, so to speak. Whether you are in the US or elsewhere.
If technological advancement is going to kill the working class, this might slightly accelerate that development but it does not change it one way or the other.
edit: OMG. I will be shorting these.
It makes no fucking sense for any of these to be trading above $10.
Well, yes, nominal. But no, not really. Cars (and really this isn't surprising) have been getting steadily more affordable over time. They represent about half the fraction of consumer income that they did in the 80's. AS ALWAYS, please just go to FRED to ask these questions before announcing incorrect answers on the internet. New car price[1] expressed as a fraction of median income:
https://fred.stlouisfed.org/graph/?g=1NbqH
[1] Actually it's new car CPI, so the values are unitless.
I'm really glad that I can live in a city without having to own a car if I don't want to. It makes a significant difference to my monthly expenses. And, honestly, it's a lot nicer and feels a lot more free in many ways. Places are more accessible not less.
I can't imagine being on the bottom rung of society and having yet another awkward expense, especially because you become unreliable if you don't properly invest in the maintenance of the thing. Which might cause you to lose your income altogether.
Enormous car-lots several times larger than the buildings that they serve for example, sprawling 6-lane roads that take 20s to clear a junction on a slow moving bicycle, these things contribute to it being infeasible for more poeple.
Connecting the bike lanes is not a problem, though people will fight it tooth and nail because they wan't all infrastructure spending to go to cars... hence, reinforcing the issue, because when all you have is a hammer...
I think a majority of the problem is cultural and/or political. I know people who take a longer drive over a shorter bike ride (due to gridlock traffic).
hard to do biking if there is 33C outside with sun in top of it
Car free access to existing transit hubs like metro stations is often horrible and not particularly expensive to improve.
We just choose to continue subsidizing a triangle of car dependency. The government finances toll-free roads, mandates parking minimums, and enforces restrictive zoning. Businesses and real estate consumers pick up the tab on the real cost of free parking (higher rents and mortgages, parking garage construction costs). Drivers pour money into car loans, insurance, maintenance, and fuel.
For me, it's not the money that's annoying (though of course I'm not pleased by the bills every once in a while). It's the amount of time it takes to keep a car maintained! Seems like just yesterday I took a whole day remote to sit at the mechanics shop for a tire change, but now I have to do the same for an oil change! For this precise reason I end up doing a lot of maintenance late.
I have also lost days waiting for tire shops and alignment...as those are the only 2 things I don't do myself.
Once you have a tire machine you'll spend more time at the tire shop (outside business hours, lol) because their trash pile will be your best source for reasonably new used tires. They sell a lot of sets of 4 when 2 would do.
You wanna take used half worn tires and put it on bent rims and make it come out ok, you need a digital balancer to make that not suck.
My friend does this at Costco, and it takes longer purely because of appt mismanagement and backup, the work itself is quick.
Tire machines from china are getting better and cheaper all the time, but balancers are still expensive.
*This is an assumption based on my experience with cars in general and doing my own repairs/maintenance not a slam on EVs.
A heavier vehicle also will wear tires faster, and my observation of other cars on the street is that people as a whole are very bad about not replacing tires on time.
I recently had a 1-hour job done on my car - the only appointment my local mechanic takes is for a specific date - you drop off first thing in the morning, and they call you when they’re done.
I also just called my local tire shop to enquire about mounting/balancing (but not installing) tires - they don’t take appointments for that, but also don’t guarantee any particular speed of service - you drop off your tires, and they call you when they’re done, whether it’s that day or the next.
As others have pointed out, tires are somewhat more complicated, but not entirely out of the realm of the home shade tree mechanic, if you're willing to invest in a few specialized tools/fixtures.
You know you can just break the rules when it comes to petty stuff like that, right? If you're not being unreasonable or thumbing your nose at them they typically don't come after you.
>and every lease I’ve signed has prohibited me from repairing my cars on apartment grounds.
This is a direct result of the clean water act and knock on laws.
The clean water act mandates stormwater management. The solution needs to be maintained in perpetuity. The HOA is the entity saddled with this. There's various engineering calculations that go into pollutant load which impacts the size of the stormwater bullshit engineered ponds you need. In order to make the solution they are forced to build cheaper, the developer puts "no wrenching" (and a bunch of other things) in the initial HOA covenant.
The city ordinances are mostly the same. They're putting that shit in their so that the engineering numbers are better and their stormwater stuff can be cheaper.
That's not to say the snooty jerks don't like those rules for their own sake.
Reality is, outside of housing, city life is generally cheaper because it's much more accessible and the tax base is better suited to covering those expenses. So, older generations get the best of all worlds, per usual.
> Outside of what makes it more expensive for virtually everyone, it is actually cheaper
Chicago is cheaper than car dependent LA in terms of rent.
You can do very well on a modest salary.
It's not comparable to the US in terms of Salary, but if I compare to the same size City in the UK (Coventry), it's not more expensive to live here than there. Coventry has a decent amount of car dependency for its size.
If we're comparing to a US City, I guess Orlando is pretty close (Orlando has a lower population than Malmö), but home prices are higher. However, there are only larger houses available making the comparison a bit squiff.
It would have been an easy fix 10+ years ago, but as the housing crisis got worse and the working class was priced out, building got a lot more expensive and we have a huge labor crisis in addition to the regulatory crisis.
All solvable, but the political establishment and the political power base (homeowners and landlords) are dead set against solving it.
As bad as the debt situation is in the US there’s not much a collection agency can do to force you to pay relatively petty sums under 100,000 they will just harass you basically.
The Roman proverb goes “The begger laughs in the face of the bandit” so burnouts spread money before it can be taken from them, then turn around and beg for more. A person who’s established this mentality, the exact amount they owe is the least of there problems.
Being tied to transit lines—again, because even in Tokyo transit isn’t as convenient as point-to-point car travel—limits where people can look for jobs. That makes it a poverty trap because people can’t easily find jobs in different areas. And it makes having a family and kids much more logistically complicated. The most transit-dependent cities have abysmal birth rates.
I invite you to compare Orlando and Malmo.
If you have the opportunity to visit both, I would recommend it. They have the same population size (actually, Malmo has more people in it, but, close enough) yet in one it's impossible to get across the street without a car, even to go to the grocery store, and the other has entire portions of the city where cars aren't even able to go. -- Yet everyone manages to get around, and most people would consider it very convenient to do so.
It’s almost certainly more convenient to get around Orlando by driving (as long as you aren’t going to Disney) than taking transit in Malmo. There is no city in the world where transit is more convenient and flexible than driving. I visit Tokyo once or twice a year, and even in Tokyo it’s usually more convenient to take an Uber than to take the train. And you’re not going to do better than Tokyo in terms of transit.
You can see this in the statistics. The average commute time of someone in the greater Tokyo area is 1 hour and 40 minutes round trip, or about 50 minutes one way: https://resources.realestate.co.jp/living/average-work-commu.... The average commute time for someone in Dallas County is under 30 minutes one way: https://fred.stlouisfed.org/series/B080ACS048113. And the American commute is by yourself in a climate controlled car, instead of a crowded (even if clean and punctual) train.
It’s very liberating, even for children to be able to get around if not everything requires the use of a car.
I am aware that Orlando has optimised itself in a certain way, which makes it impossible to be any other way. That means being mildly convenient requires a complete overhaul of the whole system just for a small select group of people which is obviously unfavourable.
One of the major benefits of not being car dependent in particular is that there are more options not just public transport, you can get around by car- but there is also cycling, E-scooters, walking is more convenient, and of course there are buses trains and taxis. There’s even a bike rental scheme which covers the entire city and is so cheap as to be effectively free ($20 per year). With that in mind I find the argumentation that poor people have a worse time to be disingenuous- owning a car is the second largest expense most people have.
Malmo by the way is one of the poorest cities of the large cities in Sweden. I don’t know what the GDP per capita is compared to Orlando, but I’m not going to think that it’s much different to be perfectly honest with you.
When I lived in New York I did have a commute where transit was faster than driving. But it was like Mad Men—I went from my fancy high rise right next to the train station to my fancy law firm right next to another train station. That was a lovely commute, even compared to driving in the suburbs. But most people in New York (or Tokyo) cannot afford to live so close to popular transit lines.
> With that in mind I find the argumentation that poor people have a worse time to be disingenuous- owning a car is the second largest expense most people have.
That’s what we call “penny wise and pound foolish.” Cars is capital equipment, and get handed down through families. Like any capital equipment, they depreciate and require maintenance. But they also enable people to earn money. I have relatively poor in laws: my wife’s grandmother raised four kids as a waitress, and her husband did hunting and odd jobs. Cars, which they carefully pass down through families, enable them to move around for better jobs and housing. When my father in law lost his job, he moved in with his mom and found various jobs in a 60 mile radius. If you look at the places in the U.S. with good transit, the poor there are structurally poor. They can’t just go to where the jobs are—they are stuck going to where the train lines go. It becomes a trap that creates generational poverty.
It’s true for almost all journeys. Cycling is the fastest in almost all circumstances. Especially if you include parking.
I admit that Europe tends to be a nicer place to live for those who have enough savings that they do not need to work and for those too sick to work.
Why would you rather live in Orlando?
I presume you've been to both places.
That is interesting. I should explain that I edited out the part of my comment about language (because it is not relevant to my point).
I haven't been to Malmo, but I doubt that visiting a place for a short time tells a person much about what it is like to live and work there. I've read hundreds of comments from people who have lived and worked in both the US and Europe. I believe that life in Europe tends to be more orderly and pleasant than life in the US. A good example of "more orderly" is that deaths from automobile accidents are several times higher in the US than they are in most places in Europe -- and not just because Americans spend more time in cars: in the US, deaths per mile of travel in automobiles are several times higher.
>Why would you rather live in Orlando?
Because income is a massive factor in quality of life, and for any level of income, it is significantly easier to earn that level of income in the US than in Europe provided that the person in question is healthy enough to hold a job.
Then I worked here: https://www.sharkmob.com - Now owned by Tencent, not very international though, not really spidered into Tencent. About 350~ employees in Malmö.
After that I worked here: https://www.rennsport.gg - German company, where it was a remote company but I build an onsite office or 20 persons in Malmö. That was the largest office in the company.
Now I work for a Swedish company.
There's also a bunch of companies like ESS (European Spallation Source)[0] in Lund, Verisure and Axis communications.
[0]: https://ess.eu
If that weren't so often the case, people wouldn't lose their shit whenever gas goes up 50 cents/gallon.
Also, you cant do work in car either. You have to drive and actually pay attention. You cant (or should not) just listen to podcast or loosing yourself in the music. You dont get health benefits of walking a bit or of popping int the store on the way to buy food quickly.
My point here is that if public transport and city are semi reasonably organized, the car has to be actually seriously faster to be worth it.
Miles? probably.
Time, lower than a lot of europe IIRC.
https://transportgeography.org/contents/chapter8/urban-trans...
I just google imaged it and all the graphs say about the same thing.
Driving is much more comfortable than taking transit. You’re by yourself and you always have a seat. Anywhere that has transit good enough where it’s frequent and reliable is also a place where you’re probably standing during your commute.
That said, the problems of car loans are far beyond that - From the article: " The average monthly repayment now stands at more than $750.". That's nuts! I make a solid upper middle-class income, and I can't imagine spending that much on car financing, regardless of the loan length. When we needed a second car, we bought a 6-year-old Volvo station wagon in good condition, it it's still serving us well. Many of my neighbors, who make about half what I do, think we're poor because of it.
The amount of debt Americans routinely and causally take on is honestly ridiculous.
The car “generates income” because it allows you to get to work and hopefully make more than your car note.
My mechanics often perk up when I bring in my 80s era pickup. It has very low miles, they can generally diagnose it with very basic tools, and parts are cheap. When I have the time to work on it myself I appreciate it for those exact same reasons.
And it’s one thing if your car breaks down on a side street, it’s completely different if it breaks down on an interstate. If you have a daughter would you be comfortable with her driving an unreliable car? Your wife? Your mother?
It sucks if you spend $3500 on a car only to spend another $2000 because the transmission went out and the timing was bad luck. I wouldn't recommend anyone buy an old car I'd they have no emergency fund left after the purchase though.
My wife does regularly drive our old cars. If it dies on the highway we'll deal with it. I don't have a daughter, but I wouldn't worry about my kid driving the kind of old cars I pick up - I'm patients picky, and able to work on them myself. The car would be the least of my worries if I had a young daughter with a drivers license.
For an anecdote, consider that Jeep just bricked thousands of new cars, including on interstates 2 weeks ago.
That GM recalled most 6.2l engines made in the last 5 years; ... Toyota engine castings, bmw chain tensioners, Ford Ecoboost coolant passages, Porsche bearings... Most of these problems became apparent before a long term first owner sold (yes, you should do research)
A pre purchase inspection, and all around maintenance (brake, coolant, oil, transmission oil, and differential oil) will get you a long way; a $2k suspension refresh will take you even further.
I still recommend anyone buy a later model Buick Lesabre if you find one in good shape. They're very cheap, the 3800 motor is excellent, and are still very comfortable rides that get around 30mpg on the highway.
The one I drive now was a one owner, it was literally a little old lady's Sunday church car that she sold because she decided to give up her keys. Its not perfect, and the AC compressor needed to be replaced, but they were the kind of owners that took it in ever 3k miles to a mechanic they trusted and fixed whatever the shop recommended.
You mean "rod the block next week because it was used as an uber and before that it was owned by three successive hipsters who didn't change the oil because 'lol it's a Toyota' or whatever"
Dollar for dollar Toyotas were a bad buy as soon as Reddit started trying to tell everyone to buy them.
A $3k repair loan is a lot easier to pay off than a $30k new car loan.
A lot of the people I know try to justify “new car fever” and will use some version of “I don’t feel safe in it anymore” or “I don’t think I can trust it.”
I’ve only had new car fever once. When I was 25 and bought my second car - a Mustang in 1999. I drove my Mercury Tracer that my parents bought me in 1991 as a junior in high school.
But that car was wrecked in 2008. I gave my next car - a Honda Civic - to my step son in 2014 and my next car after that - a 2012 Chevy Sonic bought slightly used from CarMax in 2020 when I started working remotely and we went down to one car.
But I would still much rather by a cheap newish car that I don’t have to worry about than a beater that might put me down or more importantly my wife.
Yes, on paper I can accrue more wealth if I mortgage my house and invest that same amount elsewhere. No, I would not trade owning a house outright for having a house that will be taken from me if I can no longer pay, strict insurance requirements, and a pile of someone else's debt that I call money and ignore the risk implied in investing in someone else's gamble.
I used to be very debt averse. Owing a six figure sum seemed like a huge burden. Now I understand that mortgagees are non-callable. If you put 20% down that removes a lot of risk of being underwater. Fannie Mae is eating inflation risk for you. It's a way of smoothing expenses over multiple life stages. With a 30 year mortgage you can get a smaller payment when you're younger, earning less, and paying for daycare. When you're older you're earning more, might be an empty nester, and inflation has made each payment easier. By not rushing to pay off low interest debt you've effectively transferred money from 50 year old you to 30 year old you.
If you stayed employed, locked in a 3% mortgage, and contributed to your 401k, you won the wealth re-distribution game of 2020-2022.
> Now I understand that mortgagees are non-callable.
How are you defining non-callable? If you stop paying on your mortgage that sent will eventually be called and you will be kicked out.
> If you put 20% down that removes a lot of risk of being underwater
That removes the risk of being underwater for any market correction sub-20%. Real estate prices in any areas have grown more than that ovwr the last few years, the risk of a 20%+ correction is on the table.
> With a 30 year mortgage you can get a smaller payment
And a 40 year loan would be even smaller. Where do we draw the line, and why? 30 year loans weren't always the norm, you don't have to go too far back to find an average mortgage on 10 or 15 year loans.
> When you're older you're earning more, might be an empty nester, and inflation has made each payment easier.
Income doesn't always move up, and inflation only makes payment easier if you (a) secured a fixed rate loan and (b) stay in the same home long term.
> By not rushing to pay off low interest debt you've effectively transferred money from 50 year old you to 30 year old you.
Or if it doesn't work out, 30 year old you has a home at the expense of 35 year old you.
> If you stayed employed
That's a big if, and you not only need to stay employed, you need wages to at least keep up with true inflation. Your 401k won't matter until you are at an age where you can withdraw, or we have another pandemic-style response where we allow people to cash in 401ks without the early withdrawal fees.
But that logic never made sense to me, because homes are always callable: if you stop paying property taxes, Thats not your house any more.
If house burns down, Thats not your house any more.
Safety comes from optimizing your wealth for size and liquidity.
The person that kept things liquid, leveraged into the stock market 401k etc will be much better in a catastrophic event (job loss, flood, etc) than the person that has less liquid assets and a property tax payment due.
The problem is:
1) that encourages you to buy more car (and lose more money in depreciation and fees) than you would if you just paid cash for a cheaper car
2) there’s no guarantee you can beat your APR in the short run (to beat your APR you almost always have to move out on the risk frontier… T bills are not doing it)
I view it as: if capturing that marginal spread of whatever% is important to you, you are spending too much money and you’re probably taking your eye off a bigger loss you’re taking by spending all that.
This country is insanely ego and pride focused or fixated.
Capitalism exploits this in advertising.
Americans throw money at everything and then wonder why they're broke.
Or in the case of cars, people finance a new car and throw money at repairs instead of doing what folks like you and I do. Buy a reliable older car that's cheap to work on. But that takes "learning" and most Americans are convinced that learning is a waste of time, just throw money at the problem.
I like to say that I can afford it, I just don’t want to and refuse to afford it.
How do you know that? They told you outright?
The other car is a 2023 Leaf with the extended range trim, which is sufficient to get us all around the PNW, although I would hesitate to take it east of the Cacades.
There's a "welfare cliff" when you try to get into a "must have reliable transportation" job though
There are some accommodations for poor drivers. Politicians loath to raise fuel tax. This shifts costs of roads from drivers onto general taxpayers. Car insurance limits are the same as in the 1970s. This shifts cost of accidents from poor drivers onto accident victims who are not fully compensated. Emissions testing and safety testing is either not done at all or waived for drivers who claim hardship.
https://fred.stlouisfed.org/series/DRCCLACBS credit card delinquencies are similar
https://fred.stlouisfed.org/series/DRSFRMACBS home loans delinquencies look amazing right now, to the surprise of noone, since everyone is sitting happy having locked in their 3% rates a few years back.
My understanding is that Tricolor went under due to systemic fraud ("The core of the fraud allegations is that Tricolor illegally used the same loan portfolios as collateral for separate credit lines with multiple banks" to the tune of ~$200M)
First Brands also went under due to fraud ("First Brands had relied on billions of dollars in undisclosed debt, primarily from the private credit market, by borrowing against its invoices. This practice, known as factoring, kept the debt off the company's official balance sheet")
Yes, things feel tighter than they did in the years immediately post-Covid because there was a lot of free $ in the system, a lot of debt collections were paused, and Covid went on long enough for people to start treating that as the new normal when that was never going to be the case.
No, I don't see these as canaries for a 2008-esque event.
The scary thing to keep an eye on is commercial office space debt (e.g. https://finance.yahoo.com/quote/HPP/) which is likely to cause a cascade of fire sales as 5/10 yr debt obligations come due and how that will have cascading effects on commercial bank loans. That will be a hairy situation, but, fortunately, once it passes, rents in downtown areas will plummet and there will be a huge surge in growth in response to more favorable rents. Right now, commercial rents are locked into untenable rates because the loans are contingent on those rates which is resulting in 30%+ unused commercial space in areas like downtown SF.
Let me get this straight.
A landlord cannot lower the rent, because they took out a loan on the property which promised to the lender that the rent is a particular amount?
> which is resulting in 30%+ unused commercial space in areas like downtown SF.
The loan prevents the landlord from lowering the rent, so the landlord realizes rental income of $0 on the property.
Oh, that's just great.
Remember Getty:
If you owe the bank $100, that's your problem.
If you owe the bank $100 million, that's the bank's problem.
I don't want a crisis, and if we avert one I'll happily update my beliefs. But even if the crisis comes I'll have to figure out why it has been so slow.
Trump comes back, downturn comes back to main street, and voila - loans running naked.
The $8 burrito is listed on doordash’s website for $11 + a delivery fee they were waiving for a first order (not sure what it would have been).
And while tipping is technically optional, it's de facto required. The driver will see the total pay for a delivery before they accept it, and if it's too low, they'll reject it, and DoorDash will offer the delivery to another driver. If you don't tip, then your delivery will be rejected until it reaches some driver that's gotten desperate. By that time, your food will likely have been already made and sitting and waiting for 30 minutes.
Of course, you can arrive at the $20 just by thinking, "okay, I need someone to go do an errand for me, they'll have to drive to the restaurant, wait there for 15-20 minutes, and then bring it back... so it'll cost $15 for the hour of their time plus a few bucks of overhead for the platform plus a few bucks of messed-up-my-order insurance..."
Which gets us to 5 years from now when the DoorDash killer comes out, it'll be called Kourier or something starting with a K, and it'll start with trying to give Target a way to call up some extra trained Target employees, but they're cross-trained in packaging orders for K. One person will pick up 10 carefully-packaged K-orders, take them all to the central delivery hub, they'll get sorted into driverless cars that plot through some neighborhood some 10 stops, it'll be marketed as a real Amazon-killer and fly under DoorDash's nose -- InstaCart might balk, but DoorDash won't. Until they reveal some pizza-delivery partnership and suddenly within a year every restaurant has some K-employee working for them, whose job it is to batch orders down to the bikes that come by.
Sure, delivery times for Kourier will be 75, 80 minutes long at first. People won't mind because you pay $4 for delivery instead of $20. And Doordash/Amazon won't die, Amazon will just buy Kourier and DoorDash will focus on more rural locales.
I'll be disappointed if it isn't like Snow Crash (1992):
> The Deliverator, in his distracted state, has allowed himself to get pooned. As in harpooned. It is a big round padded electromagnet on the end of an arachnofiber cable. It has just thunked onto the back of the Deliverator's car, and stuck. Ten feet behind him, the owner of this cursed device is surfing, taking him for a ride, skateboarding along like a water skier behind a boat.
> In the rearview, flashes of orange and blue. The parasite is not just a punk out having a good time. It is a businessman making money. The orange and blue coverall, bulging all over with sintered armorgel padding, is the uniform of a Kourier. A Kourier from RadiKS, Radikal Kourier Systems. Like a bicycle messenger, but a hundred times more irritating because they don't pedal under their own power -- they just latch on and slow you down.
When they're picked up and going to be deported, do you think they're going to care about their car loan, home mortgage or credit card debt? Not even a little bit. I had a friend here awaiting asylum for 7 years. She was picked up by ICE, sat for 3 months in detention, finally just agreed to leave because that's was long enough to be evicted by her apartment (and get significant fees for it) be defaulted on her credit cards, and on her car loan.
Who pays for all that debt, in excess of $20,000 for everything. She never will, she goes to another country, finds a decent paying job because she has years of experience in the US and now speaks English. All very valuable skills to a lot of employers in central and south America.
Expect to see a lot more loans being defaulted on. We were lied to about the number of illegals. Now we're going to see the effect of deporting people who were working, participating in the economy, and happy to be here. All because the lies saying they were illegal.
Remember this the next time someone starts trying to shit-stir about an invisible group of people here.
Documented != legal, one can be documented and an illegal immigrant. If you have a deportation order with a final date in the past, you are a documented illegal immigrant. If you're unlawfully in the US due to overstaying your visa, you are a documented illegal immigrant. Practically every case in the past year has proven out to be the person deported was illegal.
>Documented immigrants have work permits, social security cards, all the thing to find housing, get jobs, engage in banking etc...
Yet they can still be illegal immigrants.
>do you think they're going to care about their car loan, home mortgage or credit card debt?
The vast majority of illegal immigrants being deported have none of those things. All cash.
>Who pays for all that debt, in excess of $20,000 for everything. She never will, she goes to another country
Car gets repossessed, house gets foreclosed. The majority have miniscule or nonexistent credit card debt. Less than a rounding error for the economy as a whole.
Their deportation will increase housing supply, which reduces rent and home prices though!
>We were lied to about the number of illegals. ... All because the lies saying they were illegal.
No we weren't. They are illegal.
The law does not consider them illegal aliens. ICE does not classify them as illegal aliens. Only red-headed political ideologues that are looking for a boogeyman consider them illegal aliens.
You can say that it is a miniscule number of them having credit and debt but you need some evidence to back up your claims. Increasing housing supply at the cost of a greater burden for everyone else isn't a good way to do it. Because these were functioning taxpayer members of society. Then they became burdens to society because they were housed in detention facilities at an extraordinary cost along with the money lost for the proper eviction procedures and debt recovery procedures and everything else.
It is absolutely foolish to take people who were following the legal process and we're legally documented as being here putting them into tension centers causing them to default on their mortgages or their leases. Causing them to default on their car loans and their credit card debt. For you to act like it's a good thing is absolutely insane.
Because you believed the lies that these were illegal criminals that weren't allowed to be here. Go and read the lies of the news media. That's how it was presented. It only takes a small bit of logic to say if they were actually criminals that were not allowed to be here then they wouldn't know where they are. Because there would be no documentation. The fact that they could go get them so quickly was because they were allowed to be here and they were arbitrarily revoking parole statuses and other statuses of people that were granted permission to be here following the processes laid out in the law.
Now you will bear the financial burden for it. Because fools like you think that they were criminal illegal aliens. When they were not they were legal aliens. I highly suggest you go and review the actual many immigration statuses that are granted. Because there are many statuses where you are legally allowed to be in this country as an alien without being granted a visa. Once you have reviewed those I will await your apology.
Americans are struggling all over. Rent is skyrocketing. Inflation is applying massive pressure on regular expenses. Household debt is at an all time high. People all over the country are struggling to keep their utilities connected as energy prices soar. Foreclosures are surging. Individual chapter 7 bankruptcy filings are up 15% from last year too. It's really no wonder repossessions are spiking too.
Economically, things look pretty bleak for a huge percentage of Americans and I'm not seeing much to convince me that they're going to get better any time soon.
Not saying citizens deserve this but we eagerly gobble up every excuse possible and then complain that our lifestyles aren't sustainable.
The typical American lifestyle is based around excess. It's no surprise that a nation who spends 3x more on unnecessary garbage than any other nation is struggling financially as climate change makes that excess more expensive.
We do this to ourselves with our pride/ego fixation and our endless excuses for why someone else should fix things or someone else is responsible for it.
We don't vote. We don't think critically. We don't do the hard work to benefit our society long term. We buy into every possible excuse.
https://www.lendingtree.com/auto/debt-statistics/
The main pattern is that people are paying a lot for cars. Looks like a lot of 6 year+ loans in the new market.
If you believe this, it would be cause to doubt your sanity.
Me and my wife don't feel safe riding the bus in the West Coast of the USA.
I’ve been panhandled a couple of times (in as many decades) and there’ve been a few people yelling at each other, but they left everyone alone.
On the driving front, though, I’ve had a bunch of people with anger management issues threaten to kill me and the only times in my adult life that I’ve credibly been threatened with a fistfight were by people driving who resented being expected to stop for pedestrians in the crosswalk. The bus crowd is a lot more chill.
Right, now try the same in Seattle and take a bus going to 3rd avenue in Downtown. I've also tried it in SF, it's not nice.
A bus will pretty much always be inferior to a car. Mathematically impossible to run on time. It never gets you where you want to go, just kinda close usually. If one doesn't show up, there is no real feedback without an extensive background metadata system. Never as clean as your own car (unless you're one of those carbage-loving people I suppose, but then you're just going to litter on the bus anyways). Obnoxious, loud, smelly, or crazy people you have to deal with.
I'll never understand the crowd so desperate to have them, but I'll still support the cause if it cleans up the highways for me I guess.
If you think buying a whole bunch of busses is going to solve some major problem... I have a bridge to add to your purchase.
I never have to clean a bus, or put gas in it, or change its oil. I don't even have to drive it.
I don't have to dedicate a big portion of my property to storing it, just to pay to park it somewhere else when I go out. I'll never get a ticket for leaving it in the wrong place, and I'll never have to go to court because I used it wrong.
I don't have to worry about it getting stolen, or crashed into. I don't have to worry about being unable to afford the insurance or registration. I don't have any wealth tied up in it, so its deprecation doesn't matter.
Having to walk a few minutes at the start and end of my journey is a small price to pay for such convenience.
And if I ever do need one, I can rent one for less than the average American's monthly payment. In fact, I can rent the exact one I need that day, which might be a pickup today but a minivan tomorrow.
Technically, it's possible to be required to go to court, for some value of "used it wrong".
Or so I'm told.
- Not having to perform the repetitive, mind-numbingly-dull-yet-somehow-simultaneously-stressful cognitive task of driving.
- Instead, having the freedom to engage in more relaxing, productive or creative pursuits in this era of smartphones; do work, watch videos, read books, sleep, or even just look out the window.
- Never having to deal with traffic jams. Or road rage.
- Getting a chance to walk places for free instead of paying to do the same thing on a treadmill in a gym.
I've lived in one place where they were great. Dense urban environments can do that, though. So nuh us busses can be great (the trains were even better), but it seems like the US has zero actual drive to make public transit not crap.
But because it's public, people can't be easily kicked off. Once I was caught between a knife fight; another time a schizophrenic person started to aggressively trap me in the corner while going on an increasing paranoid tirade.
Not long after that I bought a bicycle.
As well as the car. Unless you destination is a parking lot.
I wonder where the dividing line is. Are HNs afraid of trams? Very Light Rail systems? Trambuses? Trolleybuses? BRTs? Railbuses? Someone should do a survey.
https://www.washingtonpost.com/business/2025/10/17/50000-new...
Starting to find out the risks of a car-centric society in a slow-burn economic crisis.
A few years ago my car was totaled by an uninsured illegal in a hit and run, and I was forced to get another one (bought used). This was back when the bubble was even worse, and since I lived on dirt roads, I needed a 4x4. Literally the only thing I could find not clapped out were luxury models, because rich people were about the only people at the time dumping cars that weren't completely clapped out.
This has slowly been changing as of recently, but now tariffs are eating into automaker balance sheets to the tune of ~$30B, which will have to come from somewhere in transaction volume.
10 years ago you could go onto a lot and buy a brand new Dodge Dart for around $17,000.
Today, the cheapest Dodge is a Hornet SUV/CUV for $31,000+; the cheapest Jeep is $27,000.
We just don't have new car choices under $20k -- we're all forced into extremely high loans for 'new', or extremely screwed rates for 'used'.
Americans are really dumb and do next to no research on most purchases. I know several people who think that's a waste of time. The best that a lot of folks can do is a YouTube video.
Throw money at the problem. Learn nothing. Complain when things go bad.
That's what a ton of Americans do now and it's wild seeing it as often as I do. There was recently that Ars article that looked at a study showing how bad anti-intellectualism in this country has become. Being dumb is now a sort of prideful thing for a lot of Americans.
It's real weird.
$17k 10 years ago is $23k today. That's under the MSRP of a 2026 Toyota Corolla.
In constant dollars car prices for comparable trim levels of similar styles of car have actually been have been pretty steady for the last 40 years or so. The average car is a lot more expensive now in constant dollars because the mix of cars bought has shifted significantly toward larger and more luxurious cars.
For example when I was looking for a new car earlier this year I looked at the Honda Civic. When I compared the price to my last Civic, which I bought in 1989, it was about the same after correcting for inflation since 1989. I also looked at the CR-V, and when comparing to my 2006 CR-V today's CR-V after correction for inflation since 2006 is actually about 5-10% cheaper.
There are very reliable, brand new vehicles for $30k. The extra amount is luxury.
average car loan amount and loan duration are also up
One contributor was a surge in EV sales to beat the expiration of the tax credits. EVs on average cost more than non-EVs so that pushed the average up. EVs were almost 12% of September sales with an average price of $58k.
There are plenty of EVs a lot lower that than that, so why was the average EV so high? That brings is to another contribution: in general it was upper-end buyers who currently dominate the market (the potential lower end buyers are probably too worried about the economy and maybe the likely big increases in health insurance for 2026 to buy a car now). Upper end buyers tend to go for the more luxurious cars, whether they are buying an ICE or EV.
Remember though, just because the average is about $50k doesn't mean that there aren't plenty of good new cars for a lot less. A 2026 Toyota Corolla has a base MSRP of $22 725. For $24 575 you can get the hybrid which increases the MPG from 32 city/41 highway to 53 city/46 highway.
Or, put another way, when the bills come in, people make their car payments first, because they have to get to work. So either there are other bills people aren't paying, or people aren't going to work. Both seem bad. One purported cause of increased auto loan defaults is that people are having to make student loan payments again, although that would suggest they aren't prioritizing the auto payments.
It's a mini sub-prime in the making.
Exceedingly dishonest. It was problems in the CDO market.
> "When you see one cockroach, there are probably more,” Jamie Dimon,
Exceedingly ironic.