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Auto loan delinquencies in the fourth quarter hit their highest level since the financial crisis, a report out Thursday revealed.
About $23.27 billion in loans were 30 days or more late as of Dec. 31 — a whopping 14 percent increase from the year earlier and the most since the $23.46 billion in the third quarter of 2008, according to the New York Federal Reserve.
Delinquencies have moved up as the credit quality of the loans has deteriorated and the length of the auto loans has increased — sometimes to 84 months. [...] Delinquencies are the canary in the coal mine when it comes to losses for carmakers.
[...] The average monthly car payment in the fourth quarter rose above $500 for the first time, according to the credit-rating agency Experian.
(Score: 3, Touché) by hemocyanin on Saturday February 18 2017, @04:31PM
I think there are some other factors to look at, but first off, I'm probably on the frugal end of the car buying public -- I buy cars used with low miles and then drive them till they're done, but there does come a point when the repairs and maintenance end up costing the same as a reasonable car loan, it's just that instead of being $200/mo or so, they come in at a $1500 chunk, then six months later $900. Sure -- it _might_ be the last repair you have to do for 50k miles, but my experience has not been like that -- when I get to the point I'm averaging $200/mo on mechanic bills, I get a different car. Reliability has a value too.
And no, I don't have the time to become a mechanic nor do I want to buy the tools, some of which are very specialized and I'd probably only use the one time for the specific job on the specific car.
(Score: 2, Interesting) by anubi on Sunday February 19 2017, @07:54AM
I went through all that when I settled on paying right at $4000 for my 1994 Ford E-350 Diesel van. 7.3L IDI engine, E4OD transmission.
Originally, I had my heart set on one of those Mercedes-Benz "Sprinter" vans.
I did a lot of internet research. Turns out it seems like there are scores of very unhappy people out there beset with problems - most of which appear to stem from hastily designed emission control systems and electrical system ( all sorts of sensors and what-not ) complexity.
What I wanted was something to haul my stuff around, be extremely reliable, and cheap to own.
I talked to my mechanic about this, as he was advising me to ditch my 40 year old Toyota, as he could no longer get parts for it, and what he could get was either from the junkyard or "new old stock", which was already brittle from age, and at 200,000 miles, the engine is in need of new valves and stem bushings ( its beginning to burn oil - resulting in excessive emissions - taboo in California.).
I had enjoyed the reliability of that Toyota for 40 years, and it lived through several episodes of various failures of support systems ( mechanical failure of spark plug, several water pump failures, and thermostat stuck closed ) that should have done it in decades ago. Its 2TC engine was completely mechanical.. all gears, cams, shafts, no timing belt to break, 5 main bearings on a 4 cylinder inline engine. Manual transmission. Paid $4500 for it NEW back in 1977. Yes, I took out a car loan for it, and paid it off as soon as I could, as I had just moved and now completely on my own... I needed to give the car I had been using to my younger brother for him to go to school on, just as Dad had let me use it to go to school on and get started on my first job.
That car loan I had was NOT a good deal. Flat usurious... I think 13% or so. But I was making good money at the time, so it was one of my top priorities to pay that thing off - as far as I was concerned, that car WAS the start of my retirement account. Nothing else I could invest in would come even close to the usurious amount I was being charged.
Now, skip 40 years to today. I paid the same money for the van, despite it being 20 years old. What was most important to me was its design. There is a diesel shop in town my mechanic sent me to - and they told me what to look for. With all their experience working with these things, they knew which designs were robust, and which were rolling moneypits. He specifically mentioned certain engines were extremely robust ( but wasn't the most powerful beast in the herd ), and replacement parts were plentiful and inexpensive. He also told me how some of the engines were designed from the get-go to be maintainable - specifically mentioning the really simple 7.3L IDI ( actually manufactured by International Harvester for all sorts of farm and industrial applications ) as being highly reliable with only one known problem - cavitation - which he told me was not that much of a problem in the non-turbo engines which weren't consistently heavily loaded.... so my finding a van with this engine in it was a delight for me.
So, I ended up finding this van on Craigslist... I took it to the diesel guy to go over it with a fine tooth comb, replace the fluids and filters, replace the leaking fuel pump with an electric one, fix various little odds and ends, and ended up paying him $500. So I had right at the same numerical dollars in this as I had in my Toyota forty years ago.
Well, do the math:
Toyota: I got 40 years of service for $10,000. Right $250/year for the capital cost of the car itself + maintenance. Almost nothing when compared against costs of fuel, ,oil, insurance, and registration. In all that time I had that Toyota, I had less than 5000 worth of repair in it. Major costs were two complete replacements of braking system, three water pump replacements, and maybe five tire changeouts. Minor stuff like coolant and oil changes, I did myself.
Ford Van ( So far ): I paid $4500 for the van + servicing. I have had it for a little over a year now. I have put and additional $100 worth of oil and service into it. Another $100 for registration. Just say, for round numbers... $4800 for 12 months. That's $400 per month. And the van is paid for.
No, I do not have any women to try to impress... but if the women are impressed more by my being in debt, I don't really need that kind in my life anyway. I believe a lot of this belief that one won't attract the ladies if one does not spend haphazardly is only an illusion promoted by those who stand to profit if people will take their televised and amplified claptrap seriously. Since my childhood, I have been taunted by advertisers constantly hounding me that no-one will like me unless I buy their thing, and eventually began to see them for what they were... using psychological warfare techniques to make a buck, to persuade others to agree to buy stuff they otherwise would forego. The trail of woe I see today is mostly comprised of those who actually paid attention to the men with the cameras and microphones - constantly pounding in their message that they were the trendsetters, and we were out of the loop if we failed to buy what they tell us to. The men who fall for it constantly face the calls of the collection agents, and the women who fall for men who fall for this find themselves with men awash in past-due notes and collection calls.
No Fun.