So many non pay cancellations but customers are still buying expensive cars. What gives?

[WinoBlues]

From Todays WSJ in an article titled Car Prices are Becoming Unsustainable:

"Seasonalized rates of severe delinquency for auto loans are the highest since at least 2006..."

I wonder what the average origination date of these loans are? 3, 2, 1 year ago?

 

[marindependent]

What do you think the reason is for this?

Increase Car Prices X Higher Interest Rates X Higher Compliance, Taxes, Fees all Around X more and more folks being laid off or being hit by inflation

 

[Markthebroker]

Increase Car Prices X Higher Interest Rates X Higher Compliance, Taxes, Fees all Around X more and more folks being laid off or being hit by inflation

Makes sense.

That's one of the reasons I only finance things that grow in value, not shrink.

If I have to finance it, then I can't afford it.

But what do I know.

 

[DonP]

Makes sense.

That's one of the reasons I only finance things that grow in value, not shrink.

If I have to finance it, then I can't afford it.

But what do I know.

Not correct . I just bought a Toyota Camry . I financed 100% . I took their 4 yrs at 2.75% . I’m making 5.5% on cd’s .That nets me about $4 k plus over 4 yrs making 2.75% net spread on the borrowed money .

 

[Yagents]

Not correct . I just bought a Toyota Camry . I financed 100% . I took their 4 yrs at 2.75% . I’m making 5.5% on cd’s .That nets me about $4 k plus over 4 yrs making 2.75% net spread on the borrowed money .

U assume that u will get 5% on your cd's for 4 years. Can't lock in that rate for more then a year

 

[Markthebroker]

Not correct . I just bought a Toyota Camry . I financed 100% . I took their 4 yrs at 2.75% . I’m making 5.5% on cd’s .That nets me about $4 k plus over 4 yrs making 2.75% net spread on the borrowed money .

You may choose to finance. Great. That's not the scenario I laid out.

 

[WinoBlues]

A lot of free money for down payments. That also gave some illusion of prosperity. Many bought cars they could not afford. Then add that stupid "market adjustment" this multi year "transitory inflation", crazy interest rates and under employment.
Smoke and mirrors.

 

[Markthebroker]

A lot of free money for down payments. That also gave some illusion of prosperity. Many bought cars they could not afford. Then add that stupid "market adjustment" this multi year "transitory inflation", crazy interest rates and under employment.
Smoke and mirrors.

Be greedy when others are fearful, and fearful when others are greedy.

 

[DonP]

A lot of free money for down payments. That also gave some illusion of prosperity. Many bought cars they could not afford. Then add that stupid "market adjustment" this multi year "transitory inflation", crazy interest rates and under employment.
Smoke and mirrors.

Correct mkt adjustments $2 k to $10 k most places . Read a story about how there’s no shortage of cars but manufacturers cutting production to keep profits high and an illusion of shortage .

 

[DonP]

U assume that u will get 5% on your cd's for 4 years. Can't lock in that rate for more then a year

Best rates . 5.63% on 1 yr , 2 yr 5%, 4 yr 4.83% . Vanguard Federal money mkt 7 day yield 5.27% . All levels of t bills to bonds hitting 15 yr highs right now . So really no reason to lock just yet. Irregardless the fed won’t be lowering rates in 2023 . It’s about using other peoples money when they loan it cheap . I had 2 $50 k credit card lines . They offered me 3% fee and 0% interest rate for 21 months . That’s effectively a 1.7% yearly rate . I took it and put it in 5.2% 18 month cd. Free money