The Core

This is one of those bombs waiting to go off.  We have  $1.1 trillion in car loans.  Once the recession is realized by the average American we'll have a food of near-new vehicles hitting the market with people just asking payment take-overs.  The problem will be that no one is going to want the bulk of them.

Auto Loans Stretch To Eight Years To Accommodate Irresponsible Car Buyers 

>contractor trucks are over $50K

Most around here are hitting near $65k, I'd say.

>one of those bombs waiting to go off

And when it does, it's going to wipe out/reset the auto finance sector.

As EG points out, we're at a point in the auto industry where disruption is going to happen.  EVs are likely to could be cheaper to produce --perhaps far cheaper.

>>radical opinion

Not so radical. Dave Ramsey has been saying this as loud as he can for decades. So has Buckworks :-)

Much of the auto debt is driven by insecurity. And if I'm honest, I would say that I sometimes feel it too when I give someone a ride in one of my ratty old cars and sometimes almost feel a bit apologetic.

Rationally, I know that feeling is wrong, but a massive industry spends a huge amount of money trying to make you feel that your worth as a human is reflected by your clothes, your car and the fancy vacations you take. And with respect to the last part of that, I am culpable I must admit.

In our current society, you have to be strong to avoid debt, because so many people are selling it to you.

We need more nose jobs
We need more hair relaxers
More magazines telling us
There's something wrong with your face

  -- Dan Bern, "Rolling Away"

I've just returned from a local county fair.  A local auto dealer had lined up some new vehicles on display near the entrance.  Thinking about this thread, I went over and read the sticker on the big, black pickup truck ....$91k!!!!

>$91k

::head shake::

A ratty old car might actually be a financial badge of honor.

Actually, Theresa once said it was one of the things that attracted her to me. She took it as a sign that our basic values were in sync. Buckworks has been shopping with her in Vegas and knows this well. Given my wife, my family, my friends, my in-laws, I'm reasonably inoculated against affluenza.

But the forces arrayed against you are powerful and sophisticated. Many people are not inoculated. Maybe they grew up poor and were always made to feel like less of a person, so they dreamed of being able to drive a nice car.

Then you take this massive, sophisticated sales and marketing machine and point it at them with both barrels. The car salesman doesn't ask "How much can you afford?" He almost always asks, "What kind of monthly payment are you looking for?" He's thrilled to set you up with eight years of financing. He's going to try every trick to hide the true cost. He's going to play to your fears, your insecurities, your vanity.

I understand why they are not able to resist. They lack the mental, financial and emotional tools. They lack a friend like Buckworks whispering in their ear. They are outgunned. And voilą! 1.1 trillion dollars in auto debt. Sad, but not hard for me to understand and empathize with.

At his old company, my brother used to run a workshop where he started by having people go through a magazine and estimate the percentage of space devoted to ads. Then he asked people to answer one question: "What is the kind of person these ads are telling you to be?"

They would discuss that for a while, and then he would ask a second question: "Is that the kind of person you WANT to be?" Just that one exercise was a powerful, life-changing tool for some people.