By on July 30, 2019

We’re now in the seventh month of declining automotive sales in the United States. However, global sales haven’t fared any better. China posted its worst-ever monthly decline more than once this year with specific brands claiming as much as 70-percent slump in sales through the first half of 2019. Things are also going badly in Europe and have been for quite some time, with June playing host to some exceedingly bad metrics.

In fact, North America has had it comparatively good since its troubles hadn’t become truly persistent until the start of this year and the monthly dip rate has been been less severe. That does not, however, make the situation in the U.S. sunshine and roses.

Automotive News rounded up the usual suspects to see what the sales forecast looks like and the prognosis could be better. TrueCar/ALG and J.D. Power/LMC predicted light-vehicle deliveries would decline 2.9 percent and 1.8 percent, respectively. Cox Automotive and Edmunds had a cheerier outlook, proposing slight gains averaging around 0.5 percent vs this time last year.

Considering how poorly the industry seems to be doing as a whole, we’re not quite as optimistic. But nobody has a crystal ball and there are both good and bad examples to draw from. While Nissan is the poster child for a bleak outlook, Hyundai had a strong June with sales creeping up by 6.2 percent. In fact, most outlets presumed Hyundai would continue performing well throughout 2019 while Nissan begins its recovery efforts.

We’ll have some clarification when most automakers post their July sales results on Thursday. But premonitions for July are largely mixed, with a touch of melancholy.

From Automotive News:

Edmunds forecasts declines for all but two automakers: General Motors, which it says will post a 5.6 percent gain, and Hyundai/Kia, which it says will have a 9.9 percent gain.

Cox is more optimistic, predicting sales increases at GM (3 percent), Nissan (1.1 percent), Hyundai/Kia (4.9 percent), Volkswagen (2.3 percent) and Subaru (2.6 percent). If the prediction comes true, it would be Subaru’s 92nd consecutive monthly gain.

ALG, which splits Hyundai and Kia, forecasts gains for BMW (up 0.6 percent), Daimler (1.7 percent), Hyundai (6.2 percent) and Kia (3.4 percent). It also forecasts a 67.5 percent gain for Tesla, although other forecasters do not include the electric-vehicle maker in their estimates.

Incentive spending is also looking to be all over the place, with some brands looking to abandon them to stabilized profits while others dump them atop high-margin vehicles to whet consumer appetites.

“Despite buoyant market fundamentals, auto sales are being pulled back by lower incentives,” said Oliver Strauss, Chief Economist for ALG. “SAAR (seasonally adjusted annual rate) however has fluctuated in 2019 more than in previous years, pointing to some uncertainty about the remainder of the year.”

While decreasing incentive spending is likely a wise move for overstretched manufacturers, affordability has become a deciding factor in terms of overall sales — even though the demand to buy is there.

“Strong consumer confidence and employment gains are supporting stable demand for light vehicles,” said Charlie Chesbrough, senior economist, Cox Automotive. “However, affordability issues continue to weigh on the market. The estimated average transaction price for a new light vehicle in the U.S. is $37,285 in the most recent Kelley Blue Book report, and we do not see this number coming down.”

For the sake of comparison, the average transaction price for a car in 1980 would be somewhere in the neighborhood of $22,000 after being adjusted for inflation. While the U.S. Bureau of Economic Analysis cites the cost the typical modern-day car as decidedly lower, the math still works out to today’s vehicles costing consumers more overall.

Even if things do improve in July, most agree it’ll be down to the month having an extra day in it this year and warned not to automatically assume it means a national turnaround — not that you really need to bother getting your hopes up. “A lot of people are enjoying vacations and family time in July, so it’s generally not a strong month for auto sales. The fact that automakers could eke out a slight gain is encouraging but not necessarily indicative of a positive trend,” said Jeremy Acevedo, Edmunds’ senior manager for insights. “The extra selling day makes things look a little better than they really are, and we still believe sales will continue to trend downward through the back half of the year.”

 

[Image: Bell Ka Pang/Shutterstock]

 

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66 Comments on “U.S. Auto Sales Continue to Decline, July Outlook Dim...”


  • avatar
    Jon

    “However, affordability issues continue to weigh on the market.”

    This

    Why buy a new RAV4 for 25k when i can get another 100-150k miles out of a 2013 RAV4 for 10k?

    • 0 avatar
      jmo

      A quick search has 2013 RAV4s with +100k miles selling for $15k not $10k.

      • 0 avatar
        Jon

        I meant 2012 (darn fat fingers) but not that it makes a big of difference.

        In Phoenix and surrounding areas, a thorough search (and a little patience) on craigslist and autotrader might reveal a few 2012+ RAV4’s and CRV’s with 80k-120k for $9,000-$12,000. Supply of these little machines is high here. Bargaining for a lower price is possible.

        Anything with less than 60k may fetch $15,000. But that is still significantly less than a new commuter box.

        A few local estate sales and auctions also had low mileage compact SUV’s and midsize cars selling for around $10,000.

      • 0 avatar
        Dan

        This. There aren’t enough widows next door to go around and retail used pricing is just as silly as new.

        • 0 avatar
          Jon

          Boomers aren’t getting any younger and I live in a popular retirement city.

          Agree on the used car pricing for higher quality models.

        • 0 avatar
          highdesertcat

          Retail used pricing is even more giddy than retail new. In the past a buyer could get a pretty good deal from a rental co like Hertz, National, Enterprise, Budget or Avis.

          Not so today. Retired rentals are morphed into “Program Cars” along with “Certified Leased” turn-ins.

          People who cannot afford the premium cost to buy new won’t find “good deals” on used cars any more.

  • avatar
    JoeBrick

    GREAT RECESSION 2.0 coming. Everybody get out of the way ! It’s going to be a DOOZEY !

  • avatar
    APaGttH

    …For the sake of comparison, the average transaction price for a car in 1980 would be somewhere in the neighborhood of $22,000 after being adjusted for inflation. While the U.S. Bureau of Economic Analysis cites the cost the typical modern-day car as decidedly lower, the math still works out to today’s vehicles costing consumers more overall…

    I think this is a key issue. For giggles I ran some numbers through an inflation calculator.

    My 1985 Isuzu Impulse stickered for $9998 new – in inflation-adjusted dollars that would be $23,800 today. The closest thing I could use as a “benchmark” is the FR-S. 2+2, RWD, manual, 4-wheel disc brakes, 4-banger under the hood, full gauges, climate control (seriously, full climate control), power locks, windows, cruise, hatchback, etc. etc. etc.

    The FR-S is a solid value and would destroy the Impulse by any performance metric, and I hold no delusions on my survival chance is an F150 Raptor attempted to drive through the Impulse – slim to none come to mind.

    I ran the numbers on my 2002 Chevy Avalanche, which with every option box checked on 1/2 ton, Z71 trim was $38,500 sticker (roughly). Using the inflation calculator that would be about $55,800 today. An equivalent “High Country” trim Silverado crew cab with cargo covers (and admittedly upgrading to the 6.2L under the hood) would be close to $68,000!

    • 0 avatar
      jmo

      Also keep in mind that pretty much every car was a rust bucket at 100k miles in 1985. At least in the snow/salt belt.

      • 0 avatar
        gtem

        Go to the true salt-belt of Western/Upstate NY and parts of PA/Ohio and by 100k/10 years, even newer cars can suffer some serious corrosion related issues. Sad but true.

    • 0 avatar
      quaquaqua

      The average age of a car now is, what, 11 years? Wonder what that was in 1980. Probably something like 5 and that’s being generous.

      • 0 avatar
        APaGttH

        Another good point.

        In 1980 if you bought a domestic the mechanicals fell out. If you bought Asian the body rotted away in five years while the mechanicals were fine. If you bought German it just ran forever, unless it was one of the cheaper VWs. If you bought British, French, or Italian the mechanicals fell out AND the body rotted away. ;-)

  • avatar
    danio3834

    Price creep has been substantial, much of it due to mandates that require additional equipment.

    The good news: When adjusted for the content you’re getting, new cars are a pretty good deal.

    The bad news: You don’t have the choice of a lesser equipped vehicle to get a “real” price advantage.

    https://wolfstreet.com/2019/02/13/sticker-shock-prices-of-new-cars-trucks-flat-for-22-years-says-cpi-even-as-the-price-of-a-taurus-jumps-55/

    • 0 avatar
      tomLU86

      Price creep has been substantial. A lot of it is due to the mix of vehicles–people who buy new cars are more affluent now than new car buyers were, and want “more”

      And if it wasn’t for the fact that many of the parts going into cars built in the US and Canada (including domestic and transplant) are made in Mexico or China, and many “North American” cars are made in Mexico, the prices would be even higher.

      • 0 avatar
        FreedMike

        No, tom, you’re wrong – the fact that people are buying more trucks and SUVs, which are more expensive to begin with, has nothing to do with the price creep problem. It’s all the big bad gubmint. Get with the program, man!

      • 0 avatar
        danio3834

        It all rolls into the same ball of wax. The article mentions hedonic adjustments in price.

        Note that in the short period since 2017, the price surge has been 6%. This is largely accounted for by increased costs of CAFE readiness which increased substantially after 2016.

        The massive shift in the market toward trucks and SUVs is no accident or mere whim of the market. These are the vehicles automakers need to sell because of they’re held to a lower regulatory standard and have the ability to carry higher content levels. Low content car options are refreshed less or phased out, and buyers have fewer compelling choices in that space.

        • 0 avatar
          FreedMike

          Let’s assume that automakers were somehow “forced” to sell bigger, more expensive vehicles due to regulations (a silly assumption, since the same folks who usually blame regulations for everything say it’s being done to put us all in electric transportation pods, and a F-150 is about as far from that as you can get…but let’s run with the “blame regulations” assumption).

          The fact of the matter is that buyers could care less about whether they think automakers are “forced” to build anything. They could care less ideologically about regulations. They just want what they want, and right now, customers want CUVs and trucks. No one forced automakers to sell them, and no one forced customers to buy them.

          And automakers like building them because they can make more money off them. That’s why they’re devoting their productive capacity to larger vehicles – they make more money. Capitalism in action.

          I know it flies in the face of a particular political viewpoint to “blame the market.” But there you have it.

          • 0 avatar
            danio3834

            You might not realize it, but I’m not disagreeing with you. You just don’t have the understanding of the complexities of the industry to understand that.

          • 0 avatar
            FreedMike

            The car business isn’t rocket science, danio – people want bigger, more expensive vehicles, and automakers make more money making them. It’s not hard to predict where things go from there, you know?

            Do regulations have something to do with it? Perhaps, but in the end it’s simple supply and demand, combined with the potential for more profits. Sometimes the smartest answer is the simplest one.

          • 0 avatar
            thegamper

            You are all wrong. The crossover craze and truck frenzy buyers are on right now can all be traced back to the pickup truck. Once the exclusive province of contractors and farmers, it somehow became acceptable as a commuter vehicle. I personally attribute it’s growth in popularity to societal stunting of masculinity. Masculinity bad, feelings good. So what do the emasculated do to feel like a man if but for only an hour a day, drive a giant truck. Go figure, the pi$$ing match as to whose was bigger was just what the doctor ordered for the insecure and the automakers have been obliging ever since. Bigger, more obnoxious, more obscene sells in droves to those who need the affirmation. This began the cycle of bloat where we find ourselves now. As trucks increasingly populated our roads, the joy of driving has been sucked like marrow from the bone of life. Giant lumbering barges tower over and block views from every direction. What was once an unobstructed view of freedom and the world around us was now obscured by a tailgate. Parking spots desecrated, left lanes plugged, and so on and so on. Such is the horror that the selfish man-boys bestowed on our society that all that was left was to fight back with larger taller vehicles we now know as crossovers. The new normal in a supersized narcissistic truck world. It was all we could do see over them and around them and…..we are willing to pay for the privilege as much or moreso than the sociopaths that buy the scourge of our roads that drove us to this madness in the first place……and so the cycle of bloat and gouge continues.

          • 0 avatar
            Arthur Dailey

            The Law of Unintended Consequences, which is too often the response to government intervention also gave rise to the SUV/pick-up phenomena.

            The tax rules that the US government introduced were influential. Taken from a tax advice website:
            “When the Tax Relief Act and Jobs Act of 2010 passed, Section 179 was sometimes called the Hummer Tax Loophole, because businesses were able to buy, and write off, oversize SUVs. While changes to the tax code eliminated this abuse, vehicles purchased for use in your business may still qualify.
            Vehicles with a gross vehicle weight rating between 6,000 lbs. and 14,000 lbs. may qualify for the deduction. If the vehicle is not, by its nature, used for personal reasons, it may qualify for the full deduction. A pickup with a full-sized cargo bed, capable of holding an item at least six feet in length, may also qualify.
            Many attractive vehicles have GVWRs above the magic 6,000 pound threshold. Examples include the Chevy Tahoe, Ford Explorer, Jeep Grand Cherokee, Porsche Cayenne, Toyota 4Runner, and many full-size pickups.”

          • 0 avatar
            Greg Hamilton

            CAFE fuel economy rules also forced carmakers into producing more CUVs and trucks as opposed to fuel efficient cars.

        • 0 avatar

          This: we all get stuck in trucks because of CAFE. If the floor is flat, then it is a truck, never mind the ostrich leather and ermine seating. Easier emissions IIRC, too.

          The other issue is our crappy roads. A CUV/SUV is a viable choice over pinching sidewalls on some 19 inch 35 series rims.

          An Altima and a Rogue are the same price….all other things being equal, most people will buy the “bigger one”.

          Best is in some lines, only the top shelf version of the truck hits the magiic GVWR for deduction !!!

    • 0 avatar
      jmo

      “much of it due to mandates that require additional equipment.”

      Is there really a market for death traps? I know the B&B like to imagine there’s a market for brown manual wagons with no roof crush strength but wide open site lines. But the B&B theory of what sells and what people actually pay money for is quite different.

      • 0 avatar
        SPPPP

        Yes, @jmo, all the car salesmen must be just sick and tired of answering questions about roof crush strength.

      • 0 avatar
        danio3834

        “Is there really a market for death traps? I know the B&B like to imagine there’s a market for brown manual wagons with no roof crush strength but wide open site lines. But the B&B theory of what sells and what people actually pay money for is quite different.”

        Straw man.

        Maybe there is a market for death traps, but that’s a different discussion.

      • 0 avatar
        JoeBrick

        @FreepMike- It’s not ROCKET SCIENCE, it’s AEROSPACE ENGINEERING.

    • 0 avatar
      quaquaqua

      You’re right that you don’t have the choice of a lesser equipped vehicle nowadays. But back in 1985 when my aunt bought her Civic, it didn’t have power steering, didn’t have A/C, heck, it didn’t have *any radio*. Cars have far more creature comforts that have driven up the price way more than an ABS module or stability control programming.

    • 0 avatar
      Daniel J

      If you look at sedans, there really isn’t price creep, especially when looking at content/quality when you account for inflation. Looking at the last 3 cars I’ve had:

      2004 Grand Prix GT2 : Msrp 25K, 2019: 33K
      2010 Mazda 6 Touring Plus: Msrp: 25K, 2019: 29K
      2018 Mazda 6 Grand Touring Reserve: 2019 32.5K

      Just looking at these 3 cars over the years, the 32.5K my Mazda 6 GTR, with taking inflation into account, is a bargain.

      Even a quick sample of a the base model of a CRV:

      2004 Msrp: 20K, 2019 24.5K
      2019 Msrp: 24.5K.

      And there is worlds more content on a base 2019 CRV than there was in 2004.

      https://finance.yahoo.com/news/average-car-prices-more-1-110000010.html

      Just looking at KBB, only a 1.3 percent average increase transaction price on new vehicles from 2017 to 2018.

      The problem is that hourly wage earners in the last year have only increase about .5 percent salary wage earners around 3 percent in that same year.

      Add a dose of increased interest rates for the average buyer, and we can see that its not really the increase in cost of cars, but the cost of loans and wage stagnation.

      The problem with this so called price creep is more of an issue with SUVs and trucks. SUV/CUVs

  • avatar
    thejohnnycanuck

    Off topic but today we saw the end of an automotive forum that I had personally been a part of for about 14 years. I know some of the contributors here have made their way over from LeftLaneNews and I look forward to getting reacquainted with them and also making new internet buddies.

    LLN was on the Disqus comment format (like GCBC) and while chatting with another regular I said it felt like my dog had died. I’ve been on TTAC in the past as well but I guess this is my new ‘home’ now. Anyway, just wanted to say hello and I’ll try my best not to piss anybody off!

  • avatar
    bullnuke

    I recently purchased a ’19 F350 and compared the Monroney stickers with my ’99 F350. Base price (both XL’s) before any options and allowing for inflation shows an increase of around $3k over the 20-year period. Considering the additional standard items on my ’19 (among other things, the a/c and spare tire were options at extra cost on the ’99), it’s pretty much a wash as far as pricing. To me, the two decade “price-creep” for the base vehicle is fairly insignificant. The diesel engine is another story – the $4550 ($6995 adjusted for inflation) for my 7.3 back in ’99 is now a $9120 option which is a 25% increase over 20 years (for this and other reasons I declined the diesel on my new one). This diesel option moves from “price creep” to “price leap”.

    • 0 avatar
      jack4x

      All that DPF and EGR equipment isn’t free!

      • 0 avatar
        bullnuke

        You got that right, @jack4x. Clogged EGR coolers, leaky radiators and turbo issues down the road aren’t cheap either.

        • 0 avatar
          jack4x

          Exactly why I bought a 6.2 in my F350 as well.

          • 0 avatar
            87 Morgan

            I have 100% confidence that in 8 years, the two of you will be giggling at your foresight when you are sitting in the pleasant lounge of some Ford dealer for some basic maintenance item talking to someone who is, resting his head in his hands after speaking to the service writer about the bill for his clogged injectors, injection pump, and fouled DEF system wondering where he is going to come up with the 10k necessary to get his rig back on the road.

            Big Block Gassers FTW!

  • avatar
    ToddAtlasF1

    Isn’t it possible that a few percent of new car buyers, who are already cut of different stuff economically than most, are smart enough not to get into debt for six or more years for something with a turbo-direct-injection engine connected to a transmission made out of watch parts? The vast majority of new cars are garbage. That could well be hurting their sales a little. The smartest 5% of the most successful 20% are putting off new vehicle purchases. This is a market where one percent of the public not being stupid makes a difference.

    • 0 avatar
      hubcap

      “The smartest 5% of the most successful 20% are putting off new vehicle purchases.”

      Are they leasing, sticking with what they’ve got, or purchasing 2-3 year old used vehicles?

    • 0 avatar
      Cactuar

      Our two cars are 20 years old on average (1992 and 2006).
      We are enjoying the debt-free lifestyle so much, someone would have to PAY US to get into another car note. Never again, no matter how much Android CarPlay and safety nannies you throw at us.

      500$ unexpected repair on a car? No problem. Still way cheaper than a payment.

      • 0 avatar
        Tele Vision

        @ Cactuar

        That’s kinda where we are, too. Herself’s 2013 Equinox is off warranty now, so I can wrench on it as I do on my 2010 F-150 and 2007 CTS-V. Parts are cheap; beer is cheaper; and my time is free. It’s also fun. No CarPlay ( whatever that is ) in any vehicle of ours. Bluetooth in two; touchscreens in none. I doubt that we’ll get further into the mire of new cars until more money is around. That said, the Herself wants a Sixties convertible and I want a NA Miata, so any new car money will likely go to even older cars. I’m fine with that.

    • 0 avatar
      jmo2

      Do you have any data to back up your nonsensical claims? All the data I’ve seen says cars have never been more reliable and the issues that do exist are mainly related to things like screen lag or Bluetooth not staying connected etc. not leaving an owner stranded.

      • 0 avatar
        Jon

        Mechanical system – yes they can be reliable when maintained properly. If not maintained properly, there are a lot more (moving) parts that could fail. The potential for component failure is greater due to the greater complexity of the new systems.

        Trim and Electronic Systems – not so much. The complexity of the electronic systems in modern vehicles is a source of many repairs. Lets take a head unit for example. Twenty years ago no programming was required to install a factory radio or head unit. Now almost all new vehicles require the head unit to be programed with the vin or to the vehicle. Good luck finding this repair for under $600 on a five year old vehicle.

        You are right about not leaving an owner stranded on the side of the road. But that isnt the point. The point is repairs cost in general. I could have a vehicle that never leaves me stranded on the side of the road, requires little maintenance, runs on recycled soybean oil and does not have a functioning radio or AC system. But if any vehicle gives me bi-annual $300-600 repair bills in the form of trim and electronics repair, it is not cost effective to own.

        Sometimes data is not required. Just simple observation.

  • avatar
    SCE to AUX

    The average car may be 11 years old, but the average consumer isn’t keeping anything that long.

    Those who can afford it the least end up lured into a new ride by the latest 4-square scam, and then they either tire of it or default on it after a couple years – only to repeat the cycle.

    My math tell me that 6.7% of US adults buy a new car every year, while another 15.6% of US adults buy a used car. With total auto debt over $1.2 trillion, the mfrs only seek to make it higher. The urge to offer incentives will be irresistible, margins will fall, and we could be facing 2009 all over again.

    • 0 avatar
      JoeBrick

      @SCE to AUX- We are much more likely to have a repeat of 2009 if the automakers DO NOT start putting heavy incentives on their bloated stock of unsold cars.

  • avatar
    thejohnnycanuck

    I’m doing my part having bought two new cars in the last 3 months. And the most shocking part about this is that both of them have manual transmissions.

    So are we all saving the manuals here or have most just thrown in the towel?

    • 0 avatar
      JoeBrick

      Thank you, TheJohnnyCanuck ! Thank you for doing your part. I could only afford to take ONE car off of the automakers’ hands- and I leased. YOU went above and beyond ! Attawaytogo !

      And on the subject of manuals, two of my on/off-road vehicles are manuals.

  • avatar
    DenverMike

    Auto sales have been flirting with ‘flat’ for years.

    Yet the ‘aftermarket’ has been exploding exponentially since then, it a huge story, and auto sites/rags refuse to cover it. Used classics (Wranglers, IROCs, Corvettes, Cherokees, Mustangs, Supras, Miatas, etc, etc) are too enticing, especially when you already own it, or someone hoarded it for you, and literally pennies on the dollar vs “new”.

    And there a lot of backlash against corporate greed, forced bundling of options, built in obsolescence and whatnot. Others just want to get off the leasing merrygoround.

    In 1980 many were paying in cash and interest was frickin’ 13%! Yeah roll it yourself windows a no AC were the norm.

    Today $22K autos are available if you know where to look.

    • 0 avatar
      JoeBrick

      @DenverMike- you are correct, Sir ! In 1980, dealers were getting customers into the showrooms by advertising 12.9% loans. A SCREAMING DEAL on the loan. Some auto loans were going for 18%. It worked on me- I bought a Camaro.Of course, back then in the Malaise Days, inflation was so rampant that where I worked, we received MONTHLY cost-of-living raises.

  • avatar
    33873

    I never thought the day would come that I would be repulsed by the thought of buying a new car. Cars are just generic looking appliances now days engineered to within an inch of their life for efficiency at the cost of reliability and excitement i.e. puny turbos, blob-like body design, start/stop tech, cheap parts/materials etc

    • 0 avatar
      gtem

      Count me in as one of those that is incredibly lukewarm on the current automotive landscape. There isn’t a single car that I really lust after, okay, maybe a Challenger or Charger in that interesting green color. These days I daydream about all the older cars that look better by the day, even stuff that I used to poke fun at when it was newer now seems very handsome and attractive. I’ve found myself window shopping Chevy Berettas on facebook marketplace, no joke. No by the numbers and in terms of quality these things were quite mediocre… but the styling is so crisp and refreshing to look at. I’m convinced there are a number of 80s/90s cars like this that will be looked back on fondly by more people in another decade or so.

    • 0 avatar
      DenverMike

      It’s taboo to write about, but they all know it. Demand for depreciating assets is dwindling all the time. Partly consumers are smarter, but there’s never been so many alternatives to new autos. And they really don’t do much to “build credit”.

    • 0 avatar
      JoeBrick

      @33873- Don’t give up yet. There is a car out there for everyone. You just have not FOUND it yet.
      Some enchanted evening
      You may see a strangecar,
      you may see a strangecar
      Across a crowded showroom
      And somehow you know,
      You know even then
      That somewhere you’ll see her
      Again and again.
      (signed) Miss Lonelyhearts

  • avatar
    highdesertcat

    “I never thought the day would come that I would be repulsed by the thought of buying a new car.”

    The exact sentiments of my best friend who is replacing a 30yo midsize sedan and a 27yo truck with a new Silverado CrewCab Shortbed.

    His main complaint is very much like yours in that he cannot see the value for the money. The start/stop tech sucks as bad as the styling and the cheap plastic parts/materials are a turn-off once you sit inside.

    • 0 avatar
      HotPotato

      Then he shouldn’t buy it. JFC, with the Internet he can find the EXACT car he wants, no matter how old, no matter how obscure the configuration, somewhere in America. He can have it inspected by a local and shipped to him for maybe a grand more in total. No need to settle.

  • avatar
    Jeff S

    I feel that way about many of the vehicles. Although my 2008 Isuzu I-370 4×4 crew cab is a more expensive and nicer than my 99 S10 extended cab it is not as good quality wise as the 99 S10–cheaper interior, carpet is not as good, plastic door handles, and overall just not as solid. I like my wife’s 2013 CRV but even it has the thin cheap carpet and not as nice of an interior that our previous vehicles had. Add the higher prices along with more technology than I care to use and it takes away the desire to replace my vehicles with newer ones. Not saying I will never buy another new vehicle but it is a lot less tempting to me than in the past.

    • 0 avatar
      gtem

      I agree Jeff, this to me has been the most noticeable element of cheapening across the board with ALL manufacturers and across different classes of cars. I guess I’m less familiar with the Germans, from what I see in reviews Audi still makes a high quality looking/feeling interior. But in the mainstream, the domestic and Asian manufacturers have really downgraded things.

  • avatar
    DedBull

    I wonder what percentage of new vehicle sales are insurance replacements? We bought a new vehicle (Tiguan) this year after the insurance totaled my wife’s 2015 Outlander Sport due to cosmetic hail damage. We wanted to move up in size slightly, and the offer was too good to refuse. My Jetta on the other hand, was bought back and I pocketed nearly $6k.

  • avatar
    Jeff S

    @DedBull–Doesn’t take much damage for an insurance company to total a vehicle especially if that vehicle has some years and mileage on it. Even if the vehicle is old and is still driveable it will still be totaled and in many states if you want to still keep it you will get a salvage title and insurance will be more expensive. It is one thing if you want a newer vehicle anyway but if you don’t then too bad. Much less expensive in many cases for the insurance companies to total a vehicle than to repair it. I would be interested as well on what percentage of new vehicle sales are insurance replacements. I myself would not want a vehicle repaired that was flood damaged or that had severe structural damage.

    • 0 avatar
      Felix Hoenikker

      Jeff,
      Last May, the 2006 Ford Fusion V6 that I bought for my youngest son was damaged in a nasty hail storm while he was at work. The insurance adjuster said that she could total the car for the hail damage. I told her I wanted to keep the car since it was a rare Ford that didn’t need a lot of work after 80k miles. We ended up agreeing to a $2400 payment for the damage with no change to the title. Given that you don’t see the 200 small dents in the horizontal surfaces until you get within 20 ft of the car, I was happy with the deal, It still runs well.
      I paid $4k for the car with 85k miles and great maintenance records a year ago. The only non routine expense was for a new inside door lever. My new cost basis is $1600 which I could easily get for the car and break even if I wanted to. The small dents don’t bother my son at all. I just wish that hail storm had hit my roof so I could get a new one on my homeowner’s policy. I have been with the same insurance company for 24 years and never filed a claim on the homeowner policy so even a $10K new roof would be a lot less than the premiums I paid since moving in. Ain’t insurance grand!

  • avatar
    DeadWeight

    The U.S. & global economy is about to hit a wall…we’ve been decelerating in real terms (not fake nominal terms) since approx EOY 2017/very early 2018.

    No amount of interest rate cuts nor quantitative easing is going to stave off what is a colossal, you unprecedented debt orgy that’s occurred over the last 10 years, with the most leveraged publicly traded and private corporate balance sheets in history, and the most indebted sovereign balance sheets since WW2.

    The marginal utility of each dollar/yen/yuan/euro now printed, in terms of producing additional return, is less than 0 (thanks record corporate buybacks instead of smart CapEx expenditures and thanks record gov’t debt gorging/money printing!).

    • 0 avatar
      JoeBrick

      @Dead Weight- You are absolutely right on all of your points. If you will permit me, I will state it the WAY THAT I SEE IT.

      The U.S. & global economy is about to hit a wall…we’ve been decelerating in real terms (not fake nominal terms) since approx 1971 when Nixon closed the Gold window and made possible this unlimited deficit spending spree.

      No amount of interest rate cuts nor quantitative easing is going to stave off what is a colossal, yet unprecedented debt orgy that’s occurred over the last 50 years, with the most leveraged publicly traded and private corporate balance sheets in history (plus quadrillions in derivatives), and the most indebted sovereign balance sheets since ever. ($22Trillion debt+hundreds of trillions in unfunded liabillities)

      The marginal utility of each dollar/yen/yuan/euro now printed, in terms of producing additional return, is less than 0 (thanks record corporate buybacks instead of smart CapEx expenditures and thanks record gov’t debt gorging/money printing!).

      You are absolutely correct. The amount of debt that EVERYONE has can NEVER be paid back. WHEN China has fully in place a way to pay for oil imports and sell its exports overseas without having to accept U.S. Treasury Bills, the U.S. Dollar is over. Also every other currency in the world, because we are the strongest patient in the emergency ward.

      It is coming.

  • avatar
    Jeff S

    @Felix Hoenikker–You were lucky. In Ohio the insurance company would have totaled your car. Recently on one of the TV stations in Cincinnati a guy who had a 2002 Impala with less the 100k miles had his car damaged in a parking lot damaging a rear door but the car was still driveable with no other damage. The other persons insurance paid him for the totalled vehicle after they would not pay him for any damages and said if he kept the vehicle Ohio would reissue a new title as a salvaged car which would basically make his car an insurance risk.

  • avatar
    HotPotato

    I read “One World, Ready or Not” in the 1990s and Greider talked a lot about massive global overcapacity in autos. Here we are in 2019 and the situation is the same. A couple of brands that totaled about as much as a rounding error in sales have been killed off, that’s it. Still too many units chasing too few buyers.

    So automakers like Ford and GM are chasing higher margins: killing low-profit cars, cutting back fleet sales, building high-profit CUVs.

    But after 35+ years of wages not increasing in lockstep with productivity as they used to, people don’t have the dough for a new car, especially if one is a good chunk more expensive than it used to be. Lucky for them, cars don’t suck nearly as much as they once did, and a used one will last them as long as a new one used to, but still: fewer new-car sales.

    The business cycle still exists, and we’re due for a recession. The tax cut aimed at fat-cats might have staved things off for a little bit, but it’s a fake boom: the percentage bump in growth matches almost dollar for dollar with the cost; that is, it’s not working out like an investment, it’s just working out like taking a cash advance on your credit card and depositing it in your checking account, only your kids have to pay the card. Supply-side stimulus just doesn’t work very well, especially in times of political uncertainty, like we have now with tariffs and nationalism threatening free trade across the globe.

    So…sooner or later, that recession is coming. And since our dear leaders used the tools of stimulative tax cuts and (arguably) Fed rate cuts irresponsibly to get a political boost during an already-strong economy, those tools won’t be be available to help us alleviate the pain much during a weak economy.

    So as my friend used to say…”buckle up, chuckleheads, it’s gonna get worse.”

    Unless it doesn’t. Who the hell knows anymore. Markets and political systems seem really bad at following the models lately.

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