Yet more evidence that the marginal consumer, in this case the marginal car buyer, simply can’t afford that shiny metal anymore.
Scott Terrio, manager of consumer insolvency at Hoyes, Michalos & Associates, says that in his 17 years on the job, this is the first year he’s seen people contacting the firm with the intention of returning their vehicles.
“It’s very non-typical,” he said. “They’ve recognized that their car is killing them financially.”
Not to worry. I’m sure that tweaking EV mandates from 100% of new car sales to 90% will fix all of that.
I’d be nice to have an idea which cars are unaffordable. Are these the German cars and SUVs I see parked in front of townhouses in my area? A good friend of mine bought a Porches SUV and is finding out keeping the thing on the road is very expensive if you follow the maintenance schedule.
Few car makers are immune from making lemons, though some are far worse than others, in repeating their mistakes across the spectrum of their models.
Do your research, mostly identifying the problems and lemon models/engines/ gearboxes. There’s a lot of info at your fingertips to avoid very expensive mistakes.
Avoid CVTs, avoid small displacement/turbo motors.
Avoid Fiat, StellantisDodge, Bow ties, Hyundai, and the English/German automakers unless you can burn thousands of bucks just for fun. RR, Bimmers, MB, VW, Audi, should only be “owned” on lease, then promptly returned, quickly.
Even Toyota is not immune, their new 3.6 V6 Turbo is a junk motor. What was the wrong with the ol reliable V8 that it replaced?
Honda? Nissan? Who wants to trust a vehicle with a tiny turbo motor and a craptastic CVT tranny? $40k? $50k for a self-imploding heap? Lease and return seems to be the safest option for new cars.
Otherwise, keep and repair your older wheels as you go.
Fords Ecoboosts are not known for longevity.
Chevvies LS truck motors are CRAP, imploding at will.
And don’t get me started on EVs.
Scotty Kilmer, despite his arm waving and screeching, knows his cars.
There are many experienced YT personalities that can steer people away from the crap.
Car Wizard from Kansas is another, low key, smart mechanic, probably the best source without getting annoyed at Kilmer’s antics.
All of the small engines in vehicles that need bigger ones are a result of CAFE.
I bought a 5 year old used car with 62K September last year: VW Jetta , 1.4L with turbo, lol.
I’ve got 30,000 kms on it so far so I guess I should keep my fingers cross.
Consumer debt sucks.
A mortgage is often unavoidable. Education debt is justifiable. Avoid all else like the plague.
“Education debt is justifiable”
Depends on your definition of what constitutes “education”.
https://www.yorku.ca/laps/gsws/gwst/degree-options-requirements/
I said education. I didn’t say political indoctrination.
A solid STEM degree is generally an excellent investment, even if your career takes a different path. Law, medicine, business, and so on all make sense. I can’t even criticize the choice to go to university because you love history or literature, if you can avoid the political claptrap they throw your way.
Education debt is less justifiable these days than an overpriced car loan. There is no AI bubble, there is a University bubble. I work for a largish professional services firm, every group in the firm is figuring out how to use AI to be more efficient and hire less. It’s already hitting engineering and accounting firms. It hit software companies last year. BA’s have always been useless, now STEM jobs are going that way as well.
I suspect that the demise of STEM jobs due to AI is greatly exaggerated.
It’ll change the nature of many technical jobs for sure, but companies that are in a hurry to fire en masse will likey regret it.
I am always amused by car buyers who actually listen to the sales pitch which emphasizes the “affordable monthly payment” … and never question the total inflated cost, term, or rate of the Auto financing. Yeah, you’re MARRIED to your money pit for 10 years … she’s the engagement ring you bought with 120 months of your salary (apologies, not really, to DeBeers ad men).
The “three months’ salary” guideline for engagement rings originated from a marketing campaign by De Beers in the 1930s, which suggested that a man should spend one month’s salary on a ring, later evolving to two and then three months. This concept was designed to boost diamond sales and has since been viewed as an outdated tradition by many.
I didn’t buy a ring for my ex after we reconciled.
Math is racist hard.
The City of Ottawa is finding it expedient to remind the local tax-slaves that the expiration dates on packaged food are “a guide, not a goodbye.”
If food were that precious a commodity, you’d think that the City fathers would consider stealing less money, but that’s probably too much to hope for.
I realized a long time ago that I am an “anomaly” in that I actually save to buy things, and live on a strict budget. So many people seem to lack the “D” word – discipline. I was in the “glamourous” profession of interior design for restaurants and hotels and most of the clients would NEVER pay their final bill. I learned to live with the “peaks and valleys” as a self-employed woman. I saved to buy my first home, a fixer-upper, drove old cars, and only took a vacation once every 18 months. I DID get some very good deals on quality custom designed furniture because of my profession.
A good friend of mine has a son and daughter-in-law who were in computer animation for over 10 years and made excellent money. They were able to buy a 2 bedroom plus den condo on the lakeshore in Mimico and take 5 (!) vacations a year and eat in 2 star Michelin restaurants at least twice a month. They are now unemployed and still carry a lot of student debt. They did not save or pay down their debt in the good times and now I should feel sorry for them?
“I am an “anomaly” in that I actually save to buy things, and live on a strict budget.”
Yup. There’s still a few of us weirdos around….
We live in an older house in a rural community with zero debt and expenses well below our income. Watching how inflation is eating into our pension and how our savings are being slowly eaten away, I am so glad we did this. Meanwhile the price of a new truck is so shocking I can’t get over it. The price of a house in the city is far beyond our means. and my favourite fruit juice just went from $1.99 to $2.25. I had to have two teeth fixed this month so I will be putting nothing aside this month. Dental care has now gone up to costing as much a truck loan. And I am supposedly too rich to qualify for the federal dental care program. That’s the thanks I get for living frugally and not being a burden to society.
I had a deep molar disintegrate on me … so the oral surgeon $$$ chipped the rest of it away and I’ve done nothing more about it. I don’t LOOK like a toothless old rube … so I’ve not bothered with a bridge, false tooth or anything. Meh. I’m getting along fine.
My husband and I bought into the whole “Compound” Interest thing in the 80s, so every spare dime went into RRSPs. Big mistake, try getting money out when you retire, the goberment controls every penny one way or the other. Our car was 15 years old and a money pit, so being old and retired we had two choices –cash in enough of the RRSP money and pay Revenue Canada demand payments for two years or go into debt. We chose debt, for a used two year old SUV 45 thousand dollars, it’s insane what a used vehicle cost these day and it’s only going to get worse. My advice, buy an antique chair and stuff it full of spare cash and never invest in RRSPs, it really isn’t your money it’s the goberment controlled money.
” …so every spare dime went into RRSPs. Big mistake, try getting money out when you retire, the goberment controls every penny one way or the other.”
You’d better get it out – because when you die the remainder gets added as untaxed income to whatever pensions and other income you had for that for that year and they tax the shit out of your estate.
Everybody’s goal should be to die broke and owing the government millions.
Except if you have a surviving spouse. The remaining RRSP of the deceased spouse can be transferred to the surviving spouse tax-free (a form needs to be completed within 30 days of death). The RRSP ‘deemed disposition on death’ is included on the deceased spouse’s return, but there is an offsetting deduction (I know because I did my parents’ tax returns).
But you are correct when the remaining spouse dies.
Average price for a new car in the US is now above $50,000.
They turned it from a transport tool into an income/fashion/political statement. So now you HAVE TO spend that kind of money. To prove your value to society. To shame your rival. To get the hot chick.
But now, people have figured out that that’s not true – that we are, in fact, doing the stupid diamond buying tricks laid out by the marketers, but with cars. Wasting our money to prove our worth to other idiots
If someone can come out with a nice $18,000 city car – and cancel many of the dumb government regs that make cars so expensive – I think they’ll start selling.
“Wasting our money to prove our worth to other idiots.” And this is the problem with the vast majority of people!
2008 all over again. Millions of unpaid notes. Repos. And the govn’mnt will just start making the bailouts rain.
Funny thing about car buying. People look at a $30,000 car, then add leather seats, fancy wheels, sun roof, navigation, satellite radio and colored floor mats, walking out with a $50,000 car and hitting the roof 2 months later when they realize the monthly $1,100 payment arrives … every month.
We are not expected to have private transportation.