My experience is that the base price for a car hasn't increased as much as all the mandatory dealer add-ons they force on you. I'm currently trying to buy a new car and the dealer refuses to sell me one without a Pulse brake light, paint protection, ceramic glaze, wheel & tire protection, floor mats, and prepaid maintenance, and I must trade in my current vehicle. Other dealers in the area all do the same thing. I walked out the door and they never called me back so I suppose this strategy works for them. Dealers have gone from adding zero value to adding negative value, and thanks to their lobbying it is impossible to buy a car without them.
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mikestew · 2h ago
Even TFA points out that this is nothing new, as I was thinking "we bought a new car 20 years ago, and 84 month loans were an option". It was an option that few took, but it was there. Now, apparently, 21% of new car loans are 84 months.
While we're on the subject, here's one for you: if you buy an RV, you can get a 20 year loan. We technically have one at the moment (it'll be paid off after having held the loan for a few months). You think cars depreciate fast? Go buy an RV. I can't imagine carrying a 20 year loan on something that will be nearly impossible to sell before the loan is paid off.
evilduck · 1h ago
Isn't the 20 year RV loan for folks who make them their permanent residence? I think they would view it analogous to paying rent for an apartment instead of paying on a depreciating asset.
gentooflux · 2h ago
Marine loans for boats also appear to carry 10-20 year terms. Value being subjective and all, if you find the juice tasty enough then it must be worth the squeeze.
Car loans have a bit more of an inherent predatory bent since most Americans need a car to get by. That's not to say we all need a car which costs so much that an 84 month term becomes worth considering...
chung8123 · 1h ago
Do RVs have a deprecation cliff since you cannot take old RVs to many campsites?
MisterTea · 1h ago
I just looked that up and apparently there are 10 or 15 year rules enforced by some but not all parks. If the RV is older than 10 or 15 years it will be barred from entry.
Apparently the rule is to deter people who do not maintain their clunker of an RV which might break down, leak various fluids or catch fire. The given advice is to keep your rig in good shape and call the RV park and explain the situation. They may request pictures as proof e.g. a well maintained conversion of an old city bus would be fine if your pictures show as much. Some parks might inspect on arrival.
chung8123 · 58m ago
It seems like that would zap a lot of value. Just going through the uncertainty if your RV makes the grade after a certain time.
madcaptenor · 1h ago
Cars last longer now, so this may not be as bad as it sounds. The real issue is whether people are ending up underwater on their vehicles - that is, are loan lengths increasing faster than depreciation curves are flattening.
But is there any study that says the components or designs are needing less repairs or are getting cheaper to maintain over that 12.8 year period as opposed to, say, an econobox sedan from 2005?
Is a modern family car with GDI, CVT, plastic oil pan, infotainment system, and litany of safety sensors going to last as long without bankrupting its owner as an equivalent product from a comparable market segment 20 years ago?
betaby · 1h ago
> Cars last longer now
Honda from 2005 could last 10 years in Quebec and Honda from 2015 could last 10 years. I don't have huge stats, but it seems that cars are about as reliable today as they were 20 years ago. I didn't notice them to be more reliable.
riku_iki · 46m ago
particularly honda hybrids are simpler and more reliable than ice versions, so probably will last longer.
MrResearcher · 1h ago
The powertrain warranty is usually 5 years or 60K miles. Bumper-to-bumper warranty is around 3 years, I think. I would be OK with the loan for as long as powertrain is covered, at the very least. The modern day turbo engines have exceptionally low reliability, it will blow while you still owe quite a bit for the car.
4MOAisgoodenuf · 58m ago
Given the current state of many car companies (Nissan, Stellantis, Mitsubishi) a 7-year loan may be a bit over-optimistic about the future of the car and the manufacturer
nicbou · 1h ago
In 2020 I bought a "disposable" Renault Kangoo to schlepp things around and go on road trips. It broke beyond repair last week and I started looking for a replacement.
Even a 3 year old Dacia Dokker - basically the same exact car with newer trim - is pushing €15k. A new Kangoo is around €30k. That's a lot for an economy car that does nothing significantly better than the 2007 version.
Since I only drive 1-3 times per month, I decided to stop owning a car. The cost of ownership is just way too high.
taylodl · 2h ago
The real news is Harley Davidson motorcycles are so expensive people are getting 8 year loans at over 10% APR - and that's with good credit! Prices today are insane!
Figs · 1h ago
Meanwhile, China is making EVs in the $5~$10K (USD) range like Lingbox, BAIC’s Arcfox, etc...
chung8123 · 57m ago
I wonder if we shift to a more ebike infrastructure in the future.
htrp · 1h ago
96 and 120 are the next places, where you can roll your loan balance as part of your trade-in
So expensive.. or so profitable that the payments need to be lowered to look palatable over 7+ years.
hnpolicestate · 2h ago
You will own nothing and be happy basically.
ericmcer · 2h ago
Eh cars are one of the few areas that haven't been crushed by inflation unless you buy some stupid giant SUV. Honda civic costs less than it did in the 90s/00s (adjusted for inflation). Tons of affordable sedans out there, people just like getting giant $50k+ cars, I have no clue why.
betaby · 1h ago
> Honda civic costs less than it did in the 90s/00s (adjusted for inflation)
Adjusted to inflation Honda Civic costs slightly more today in Canada than it costed on 2015. I'm not sure that the median salaries grew at the same rate.
pojzon · 1h ago
In Poland I bought new Toyota Corolla fpr 127k pln after promotions (that was 2021).
Three years later I sold the car for 142k.
Adjusting car value, a 3years decrease, it should cost around 70k. But it doubled in price.
So at least here inflation on new / few years used cars is around 100%.
Its a terrible moment to buy used cars. You are way better off buyin a new car for 150-200k. Coz promos you get will drop its price by almost 30%.
carlosjobim · 1h ago
Motorcycles are a great option for those who live in suitable climate and don't have to text and play Candy Crush while they're driving. You can complement with a cheap car for when you need four wheels, instead of going into years of debt for a decent vehicle.
hoosier2gator · 1h ago
I don't trust other drivers enough to be riding a motorcycle..
No comments yet
While we're on the subject, here's one for you: if you buy an RV, you can get a 20 year loan. We technically have one at the moment (it'll be paid off after having held the loan for a few months). You think cars depreciate fast? Go buy an RV. I can't imagine carrying a 20 year loan on something that will be nearly impossible to sell before the loan is paid off.
Car loans have a bit more of an inherent predatory bent since most Americans need a car to get by. That's not to say we all need a car which costs so much that an 84 month term becomes worth considering...
Apparently the rule is to deter people who do not maintain their clunker of an RV which might break down, leak various fluids or catch fire. The given advice is to keep your rig in good shape and call the RV park and explain the situation. They may request pictures as proof e.g. a well maintained conversion of an old city bus would be fine if your pictures show as much. Some parks might inspect on arrival.
But is there any study that says the components or designs are needing less repairs or are getting cheaper to maintain over that 12.8 year period as opposed to, say, an econobox sedan from 2005?
Is a modern family car with GDI, CVT, plastic oil pan, infotainment system, and litany of safety sensors going to last as long without bankrupting its owner as an equivalent product from a comparable market segment 20 years ago?
Honda from 2005 could last 10 years in Quebec and Honda from 2015 could last 10 years. I don't have huge stats, but it seems that cars are about as reliable today as they were 20 years ago. I didn't notice them to be more reliable.
Even a 3 year old Dacia Dokker - basically the same exact car with newer trim - is pushing €15k. A new Kangoo is around €30k. That's a lot for an economy car that does nothing significantly better than the 2007 version.
Since I only drive 1-3 times per month, I decided to stop owning a car. The cost of ownership is just way too high.
Adjusted to inflation Honda Civic costs slightly more today in Canada than it costed on 2015. I'm not sure that the median salaries grew at the same rate.
Three years later I sold the car for 142k.
Adjusting car value, a 3years decrease, it should cost around 70k. But it doubled in price.
So at least here inflation on new / few years used cars is around 100%.
Its a terrible moment to buy used cars. You are way better off buyin a new car for 150-200k. Coz promos you get will drop its price by almost 30%.