Strongest Pillar of Shaky US Economy has Cracked

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“Car Recession” now expected to spread to 2017.

A “car recession,” as the industry is calling it, or the “so-called car recession,” as Ford called it on July 28 in its 10-Q filing, is taking hold. The more politically correct term that Ford also used is the “plateauing” of industry volume. Which means, after six boom years, sales are going down.

They’re not crashing, for the moment. They’re facing tough headwinds, and so they’re drifting lower, despite enormous industry efforts to prevent it, and they’re now expected to drift lower next year as well.

Steven Szakaly, chief economist of the National Automobile Dealers Association (NADA), which represents about 16,500 new vehicle dealers in the US, forecast that sales of new cars and light trucks in 2017 will drop to 17.1 million.

“We are headed toward a stable market for US auto sales, not a growing market,” he said. “The industry has achieved record sales, and pent-up demand is effectively spent.”

In 2016, sales are likely to be around 17.4 million vehicles, down from 2015, when a record 17.5 million vehicles were sold.

NADA forecasts have been over-optimistic before. Industry insiders are not good at predicting a downturn. No insider wants to predict it. And everyone is doing what they can to prevent a downturn. But if 2017 sales come in at 17.1 million, it would be the second year in a row of declining sales.

This chart by Trading Economics shows new vehicle sales per month, at the Seasonally Adjusted Annual Rate (SAAR), which in October was 18 million, which means that at this rate, there would be 18 million vehicles sold in the year:

us-auto-sales2016-10

The auto industry is crucial to the US economy. It has large complex design, manufacturing, and supply-chain operations in the US. There is finance and insurance and service involved. Railroads, trucking, port installations, and many other sectors feed off it. The booming auto sector has been one of the most important props under the otherwise shaky economy.




But even that sales decline in 2017 to 17.1 million vehicles would require some big assumptions to come true, according to Szakaly:

  • GDP growth of 2.6%, a rate it reached only twice over the past ten years, in 2015 and in 2006.
  • Employment growth between 150,000 and 180,000 jobs per month.
  • And a price for regular gasoline of less than $2 per gallon, despite the oil industry’s belief that the price of oil is going to rise.

But there are some big headwinds.

Interest rates are rising. The NADA hopes that the incentives the manufactures pay out to stimulate sales and trim down inventories for their brands will instead compensate for rising interest rates.

Auto debt is soaring. Given higher transaction prices, ever longer loan terms, and higher loan-to-value ratios, total auto loans and leases outstanding have shot up $30 billion in the third quarter, the largest quarterly increase ever, even as sales have been flat. Soaring debt levels on flat unit sales is not a sustainable condition:

us-auto-loans-2016-q3

Subprime auto-loan delinquencies are ballooning. Delinquencies of 60 days and higher among subprime auto-loan backed securities jumped to 4.9% of outstanding balances in August, Fitch Ratings reported last month. Subprime annualized losses reached nearly 9% of the outstanding balances of auto ABS. Fitch expects them “to pierce 10% by year-end.”

A glut of used vehicles. The industry has seen this coming for a while. It works on a schedule: a wave of vehicles from lease turn-ins and rental car companies is flooding the market and is putting pressure on used car prices, and thus trade-in values and lease residuals. High trade-in values and residuals since the cash-for-clunker program have made a lot of deals possible that wouldn’t otherwise have happened.

And this wave of late-model used cars also competes with new car sales, and if priced right, will take some additional share. So it’s going to get tough.

The NADA sees the market as “maturing,” which is an industry euphemism. Inventories are ballooning. Sales are drifting lower despite massive incentives by manufacturers, and are expected to drift lower next year as well, if the economy holds up. What happens if the economy doesn’t hold up, if it falls into a recession, can be seen in the chart at the top.

Manufacturers are already reacting. Ford put it this way: “We continue to match production with demand.” It Starts: Shutdowns, Production Cuts, Layoffs at Auto Plants




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  67 comments for “Strongest Pillar of Shaky US Economy has Cracked

  1. Andrew Kelly
    November 23, 2016 at 12:03 am

    New car sales are traditionally counted as vehicles leaving the factories, rather than those sold at the dealerships, which confuses things.
    I foresee two upsides to the slowdown of new cars. First, we will value our car mechanics and young men (and women) can apprentice for a decent job. Second, our environment may breathe a little sigh of relief, and we may even use bicycles again.

    • November 23, 2016 at 12:33 am

      >>> “New car sales are traditionally counted as vehicles leaving the factories…”

      2 different sales measures:

      – Monthly new vehicle sales in the US have always been counted as sales by dealers to their customers. Other countries (including in the EU) count new vehicle registrations via their registration offices (which is essentially the same thing). These are unit sales, not dollar sales, which is what the article is talking about.

      – Manufacturers also report dollar sales on a quarterly basis in terms of new vehicles they invoiced to their dealers. So when manufacturers load up their dealers with inventories, that doesn’t count as monthly unit sales, but it does count as quarterly dollar sales by the manufacturer (channel stuffing).

      • MC
        November 23, 2016 at 3:39 am

        There are many ways to inflate registrations across the EU, and legally so.
        Germany has long allowed to “fictionally sell” brand new cars to shell companies which immediately export the car abroad as a used vehicle, even if it’s zero mile. The vehicle receives a temporary registration (red or “zoll” license plate) and is considered sold for statistical purposes.
        There’s a great deal of rascality attached to this business (at least among the companies outside of Germany “buying” these cars) and these cars have to be sold at very large discounts, as they effectively have no warranty and large discounts are now the norm all across Europe. Except perhaps Denmark. ;-)
        Italy has long allowed dealerships to register a large part of their unsold stock every six months and write off a large part (albeit not all) of the cost. These cars tend to be those the manufacturers ship to dealerships whatever they like them or not, so they have to be priced accordingly to find a buyer, otherwise they are sold to breakers without having turned a wheel on an open road.

        Lately there are reports of shell companies “leasing” large fleets of cars which mysteriously disappear through the meanders of bureaucracy after being registered.
        A customer of mine reported to the local newspaper he had taken pictures of a large parking lot filled with hundreds of brand new, sequentially registered Nissan’s near the Swiss border which disappeared after a few months.
        As these practices are highly questionable but technically legal, there’s not much interest in the press to bring them to the light, especially given advertisement by car manufacturers and dealerships is now their main source of income.

        • Lune
          November 23, 2016 at 8:43 am

          That’s interesting. Where do they export these gray market cars to? And who is buying them? And why go through all this rigamorole rather than just discount the cars heavily in the first place? Just curious to know more about this practice….

        • MC
          November 23, 2016 at 10:10 am

          I am answering here due to technical limitations.

          1) Where are the cars sold? Chiefly other EU countries. It used to be mostly Western ones but now the practice has shifted to the former Warsaw Pact. Parallel exporting to Japan used to be a major line of business but in the last decade or so the practice has mostly died down.
          2)Who buys these cars? Chiefly people looking to save major money by doing away with a warranty. I know buying a modern car without a warranty is borderline insanity but never underestimate the power of saying “40% off list price”.
          3)Why this rigmarole? The practice is basically a throwback to the days when German car manufacturers imposed quotas upon their own dealerships outside the motherland on several models. While today this is only done with high end and/or limited edition models, back in the days it was basically a way to force foreign customers to buy what the head offices in Wolfsburg or Munchen wanted. As German dealerships were usually not so costrained, a nice side business developed.
          Later it became a way to get rid of unwanted stock, as it basically still is, while recovering as much as possible out of the value of the car.

          The chief problem with this practice is all Western European markets are oversupplied through official channels these days, and more and more Eastern European ones are following suit. This means large rebates are the norm everywhere (except perhaps Scandinavia… but that’s a parallel universe) so these grey imports are less and less appetible and have to either fall a long way in price to find a buyer or are saturating “secondary” markets such as Bulgaria and Romania. The loss of Russia, always a steady buyer of good quantities of grey imports from Germany, has been a serious blow to the practice.

          PS: earlier today I just saw a lorry loaded with grey imports, all high end BMW’s and Audi’s…

        • DV
          November 24, 2016 at 4:59 am

          How would this affect statistics? Even if cars are resold as “used” and end up within the EU, they are still sales of new cars, albeit at much lower price. So the only distortion would be in relation to price and maybe destination. Sales in Germany overtstated and sales elsewhere underreported. So in terms of current statistics I do not see much difference as long as a car is out of factory gate and then sold no matter how. But it maybe important in terms of forecasting demand.

    • Frederick
      November 23, 2016 at 12:34 am

      Andrew they already do that in many places in Europe and its not a bad alternative actually in many aspects

      • Flying Monkey
        November 23, 2016 at 2:18 am

        I live in Germany and ride my bike all the time except when it is raining or the streets are iced over. The towns are more compact than in the states so cycling has at least two benefits. 1. You get in and out of the high traffic areas easier/quicker and you do not have to pay for parking. There is always a lamp pole to lock the bike up.

        The fresh air and a little bit of movement are also good change of pace.

        The weather in Europe is milder than in the states so that also makes riding more conducive. You have wider temperature extremes in the states so it can be too hot and sweaty to ride or too cold.

        Thank the Gulf Stream for tempering Europe’s climate.

        • November 23, 2016 at 9:49 am

          Get a grip, there’s no fresh air. You’re in one of the heaviest geo-engineered countries on the planet. Look up & wise up!

        • Mike B
          November 23, 2016 at 12:33 pm

          “thank the Gulf Stream for tempering Europe’s climate”

          At least until Greenland melts and the North Atlantic Thermo-haline Circulation collapses. Then you are as screwed as the rest of us ;)

        • DanR
          November 23, 2016 at 3:07 pm

          I have been to Germany and Northern Europe and temperatures were more predictable day to day. Closest we have in the US is Seattle and Portland, which are great for outdoor exercise.

        • Earl Smith
          November 26, 2016 at 10:49 pm

          Studies have shown that the Gulf Stream provides very little actual heating effect.

          What does heat Europe are two similar effects.
          1) Europe is very close to a major body of water, so the moderating influence of the water holds a major portion of Europe’s milder weather. Cooler summers and warmer winters compared to a Continental land mass like Russia or the US.

          2) The prevailing pattern of the jet stream is turning south over the US and then northwards over the Atlantic. So you get the air from the Carolinas and Florida instead of Maine. That makes a major difference in the weather. After all, sunny Spain is level with Virginia, not Texas or Florida. Cairo is roughly level with my home in Houston.

          The Gulf Stream has more of and effect on Maine and Labrador. Besides most of the stream moves east from Virginia towards Spain. You only get a little bit from the remnant known as the North Atlantic drift which has lost most of its hear off Newfoundland.

  2. OutLookingIn
    November 23, 2016 at 12:57 am

    “A glut of used vehicles”.

    Maybe south of the border, but with the strength of the USD compared to Canadian dollar, cross border used vehicle sales traffic is way up. Since American’s receive 25% more bang for their buck in Canada.
    Just not vehicle sales are evidence of the exchange rate. Yacht berthing and storage at Canadian marinas is at a premium, along with full work loads at boatyards, taking advantage of a talented Canadian marine workforce.
    Cross border visitors numbers are up also, which portends a shot in the arm for Canadian retailers, at the expense of their American counterparts. As an added incentive, any taxes paid via the goods and services tax (GST) is rebated to the visitors upon request.
    The above circumstances are just more reasons that the “strong” USD carries with it unforeseen consequences, to those who want a strong dollar. Meanwhile, American border retailers are hurting so bad, that some are now offering exchange rates at par!

    • MC
      November 23, 2016 at 3:16 am

      That’s what happened in Switzerland when the BNS was pulling no stops to keep the franc pegged at 1.22 to the euro. Then one morning the BNS was forced to float the franc.
      The malls built near the borders with the EU emptied overnight and the service stations started shutting down. It’s not a rout because those who invested in it generally expected the peg to be short lived and made plans for an orderly retreat, but the border areas are still hurting.
      No problem with losses of job, of course: these operations were largely staffed by French, German and Italian workers. ;-)

  3. Albert E
    November 23, 2016 at 5:05 am

    I could never understand why, armed with cash money to buy a new high end vehicle, the dealer always looked disappointed when we responded to ‘do you need credit’ with the negative. The same goes for banks. We have never thus far needed credit just a safe home for our savings…. Banks cannot provide the latter. A new car should be exchanged for fiat or something realer that we have worked for. And should not be a product of double entry bookkeeping as it is now for most… And thus the debt is money paradigm continues. For now at least…

    • Frederick
      November 23, 2016 at 5:23 am

      If you cant pay cash for it DONT buy it I have paid cash for 8 new vehicles since my first a 1978 Jeep J10 pickup Learned that trick from my father who did the same

    • Kent
      November 23, 2016 at 6:57 am

      If you don’t pay cash, they can charge you a very profitable “loan origination fee”.

      • Bill Roth
        November 29, 2016 at 11:06 am

        I was an F&I manager at a Ford dealer. The dealer gets a discount rate and anything over that is paid to the dealer. He also gets a percentage of the credit life and accident and health ins. sold. Any dealer prep is all his. F&I people are paid a percentage of what they sell Financing is a huge profit center for dealers.

    • November 23, 2016 at 8:27 am

      Car dealers make a TON of money on financing. It’s a special profit center for them, called “F&I.” They often make more in F&I than on the car. The dealer keeps the “spread” between the rate you agree to (yes, it’s negotiable) and the rate from the lender.

      If you say upfront that you will finance the purchase, and then negotiate hard on price, the dealer might give you a better deal on price and then try to make it up on financing. Which is when you pull out your checkbook and pay cash. Dealers hate it.

      Want to know how it really works behind the scene and have a great time (and lots of laughs) finding out? Read my short and funny novel about the salesmen in a dealership, “TESTOSTERONE PIT”

      https://www.amazon.com/gp/product/B009NOFGXA/

      (Free for Amazon Prime customers, $2.99 for everyone else)

      • NotSoSure
        November 23, 2016 at 1:01 pm

        I’ve just noticed the LendingClub now offers an Auto Refinancing, possibly on the hope they can cut out the sweet time that the dealers are having. If that takes off, perhaps more dealer will have a hard time?

      • AlbieOK
        November 23, 2016 at 3:24 pm

        A great read. Highly recommended

    • November 23, 2016 at 11:03 am

      Few years ago i bought the car and expected to get better deal because i was going to pay with cash. It comes out i got 3,000$ off if i did a financing through them. I was allowed to pay off half of the price in first payment and the rest through next 12 months. And i was way ahead on the end. But funnily i was getting letters from the financial company telling me i was ahead with payments and i don’t need to pay payments for quite a while. Lol

  4. November 23, 2016 at 6:04 am

    I never pay cash for a car. Why should I pay cash when I can get financing for 36 months or more at .09% -1.9%. It pays to leave my money working for me in my portfolio rather than take a chunk out for the purpose of buying a depreciating object. BTW, I never buy new. I buy cars 2-3 years old with low miles so I get the rest of the factory warranty plus certification for mileage up to 100,000 from the dealer. I am not rich like the other respondents to Wolf Street.

    • November 23, 2016 at 8:15 am

      Your strategy makes sense. A lot of times, interest rates on new car loans are subsidized by the manufacturer (“0% financing” etc.). Used car rates are usually not subsidized, and they’re usually higher than new car rates, but these days, they’re still low.

    • Frederick
      November 23, 2016 at 8:20 am

      Nice jab there Jack and no Im far from rich just dont sleep well working within the criminal banking system and want one thing in my life that doesnt need constant care I know in your mind it doesnt make sense Sorry about that bubba

    • William
      November 23, 2016 at 12:32 pm

      Having payments on my credit report lowers the amount I can borrow for additional investment properties. Instead of borrowing for a depreciating asset, I prefer to use my borrowing for leverage on an appreciating asset.

      • economicminor
        November 23, 2016 at 6:07 pm

        good luck with that strategy.. i.e. investment properties = ill liquid asset. Its lots of fun on the way up, makes you feel smug and smart but not very fun once the break happens. Try and sell an investment property once the bubble bursts.

        • william
          November 25, 2016 at 3:42 pm

          I will never sell. These are properties providing ongoing income streams. I’ll buy more if prices drop.

  5. michael engel
    November 23, 2016 at 7:46 am

    – Auto sales numbers were pumped up for 2 reasons :
    1) election
    2) CEO & other executives compensation.

  6. Begbie
    November 23, 2016 at 9:09 am

    I live in an affluent neighborhood in an affluent town. I can’t think of any of my neighbors who have new cars. Another thing I have noticed in my area; Car dealers lots are creeping into adjacent properties, including mall parking lots, to park their inventory. The local, biggest mall in the state, literally has hundreds if not thousands of new cars parked there by a nearby dealer. I don’t know who is buying but its not anybody I know

    • Frederick
      November 23, 2016 at 9:58 am

      Well I live in Sag Harbor NY and it seems everybody including the illegals are driving brand new wheels so I dont know

    • Bob
      November 23, 2016 at 10:34 am

      Out here in Seattle it seems everybody has a $50k+ foreign car. Popular brands are Tesla, Audi, BMW, and Range Rover. I’m from the Midwest where you drive a car to the ground, so it’s pretty amazing to me. I guess there’s a reason why Washington Mutual was one of the first banks to fold last time around.

      • Frederick
        November 23, 2016 at 11:06 am

        You forgot Porsche Most are probably leased anyway What I love is the undocumented food stamp family driving around in a new F 350 pickup worth 60 grand Really makes you support Trump oops was that politically incorrect?

        • Ehwak
          November 23, 2016 at 1:07 pm

          I see it all the time out here in California. The Welfare people have the best cars and the best phones.

          Hell, If I had a dollar for every time I’ve seen some welfare people pay for groceries with food stamps, help vouchers, and EBT cards… while checking fakebook on their Iphone 6+ or super Samsung… to then proceed to load their big shiny SUV, Tahoe, 4runner …

          Only in America, where people who buy groceries with government hand outs have the best smart phones and drive super fancy cars…

  7. EVENT HORIZON
    November 23, 2016 at 10:21 am

    Over the decades of my life, I’ve noticed I keep a car a minimum of 10 years. I keep it till it has more problems and becomes unreliable.

    I don’t like driving about having to worry or think about the next mechanical problem, thus I use “tire wear” to decide when to sell/trade.

    I get rid of my car at the end of the life of it’s 3rd set of tires. That usually is 10 to 12 years of ownership…….130,000-150,000 miles.

    AND, I always buy NEW. There is peace of mind. I don’t have to worry nor think about how it was driven, nor cared for. I don’t have to worry about any accidents, floods or foolish driving. In addition, since I know I will keep it till it’s worth nothing, I want the exact features I want since I will be living in it for 10-12 years.

    As for depreciation of the price in those first 2 to 3 years? So? I have no intentions of selling/trading it, as I explained above. So depression is meaningless.

    Peace of mind and less stress is EXTREMELY important to me since I’ve had very serious bouts of Depression/Suicide, and Anxiety/Panic Attacks, in my past and stress is a KEY reason.

    I have no desire to “stress” out because of a stupid car AND I deserve to buy what I want since I work 6 days a week for that right.

    Buy Right and Sleep at Night.

    • economicminor
      November 23, 2016 at 6:11 pm

      I’m still driving a Honda Accord we purchased with cash in 2003.. has 209,000 miles on it and I figure that if it dies, I can just leave it on the side of the road and go buy another new one… but it runs almost as good today as it did when we purchased it with no oil used.

    • robt
      November 30, 2016 at 10:41 am

      Kind of late to reply, but I always buy used. Last purchase was a 5 year old Caddy (8 years ago) with 70,000 miles, a 45,000 dollar car for 5,700 cash. No problems except for window regulators(!) which I did myself for 50 bucks each, and the car still looks and drives like new.

  8. unit472
    November 23, 2016 at 10:46 am

    With ageing populations across the developed world and China the boom in new car sales has another problem. The older you are the less you drive and spending $30,000 plus for a new car makes less and less sense both as a ride and status symbol.

    I bought a new car two and a half years ago. It has less than 8000 miles on it. I’ve got a 6 year old pickup truck with 27,000 miles on it. I’m 64 and retired. At this rate I’ll be dead or unable to drive before my vehicles reach 100,000 miles. I may have to buy new tires but I’m not going to spend $50,000 on flashy new wheels impress young women. I be better off and have more success if I just offered them $500 or a $1000 for a ‘ride’ and skipped the auto insurance, gas and upkeep.

    • nick kelly
      November 23, 2016 at 3:31 pm

      500 to a 1000!!
      Take it easy bucko- are you trying to drive up prices in the teeth of a recession / depression?

    • Flying Monkey
      November 23, 2016 at 3:56 pm

      “I bought a new car two and a half years ago. It has less than 8000 miles on it”

      …I put more miles than that on my bicycles… ;)

    • Chicken
      November 25, 2016 at 3:49 pm

      I’m not sure FlyingMonkey would agree but last I checked peddling Azz was illegal and installing the battery backwards (probably the one device that needs most attention of all) doesn’t convert a clunker into a chick magnet.

      Average age of vehicles on American roads is 12 years, if this article didn’t include that fact it’s not making an honest attempt at presenting the entire story, IMO.

      Objects in mirror may be closer than they appear, and prices don’t trade in a vacuum.

  9. Gerald Stehura
    November 23, 2016 at 10:57 am

    Within the next five years the auto industry will have to switch to electric cars. The Arctic is 36 degrees warmer than normal this time of dark winter. We have 100 million dead trees in California. One hundred million dead trees! Most of the comments seem to think that our happy motoring will never end. We are driving our SUV and Pickup Trucks while our ecosystem collapses. Take a good look at your children… their future is questionable. The Climate Feedback Loops are starting to close the door to our future on Planet Earth.

  10. Bill
    November 23, 2016 at 11:18 am

    Just another “unintended consequence” of government interference in the market. This is the hangover from cash for clunkers. They destroyed a bunch of good used cars in order to pump up new car sales to help the unions, driving up price for used cars (thereby again screwing the less affluent), and feeding this new car bubble that’s bursting now, which will of course require…wait for it…another round of government interference in the market. Is there a way off this rocket sled to hell?

    • Chicken
      November 25, 2016 at 3:58 pm

      Yes, we hypocrites care about the environment which explains why we crush millions of perfectly fine vehicles for the purpose of building an entire new fleet.

      We defeated the EU air travel carbon tax proposal for the same reason, anybody happen to know how much jet fuel is consumed by those guys flying jets to the climate accord?

  11. WorldBLee
    November 23, 2016 at 11:43 am

    I’m a constant disappointment to the US auto industry as my 1985 Civic hatchback with 168K miles is still running strong and my wife and I ride bikes or walk for 90% of our urban transportation. I appreciate the importance of manufacturing jobs in the US but avoiding driving as much as possible does help the world’s environment. I still see a lot of turnover among cars here in California, but have noted steep discounting, especially for sedans as it seems SUVs and trucks have a much better profit margin for dealers.

    • November 23, 2016 at 10:05 pm

      Ha Ha ! – Love it ! Yes I’m happy to also be a disappointment to the auto industry! I like the way you put that. I hate to see a good piece of equipment die a death than can be avoided. I have an ’88 Dakota V6 120K miles crank windows Auto trans and gets 26 mpg. The wife’s ’91 Accord with 430K miles just go new valve job and paint. We inherited a ’97 Chevy express van and it looks like it’ll go another 200K with my care, and an ’86 Prelude with 188K a youngin. I’m 55- set for life on cars thank you…. I guess I’ll never get to experience such silly things as heated seats, heated steering wheel, and some device to tell me I’m not in my lane…… Ha Ha !

      .

      • November 23, 2016 at 10:10 pm

        Dam…. Where’s that edit button…. I also do a few thousand miles/yr. on a 1996 mountain bike. my 1985 mountain bike has about 50K miles on it I think, The new one maybe 12K.

    • Chicken
      November 25, 2016 at 4:03 pm

      Agree, send the manufacturing jobs overseas where they too can appreciate and propagate western culture over the entire planet.

      Ever notice how a tree ever receives a drought of rainfall or an deluge over it’s lifespan, never the perfect amount?

      Fake news is misleading, that’s it’s intent.

  12. LG
    November 23, 2016 at 11:44 am

    I would love to post a picture of the ex drive in that is being used by local dealers for unsold inventory.
    It is almost full!

    • November 23, 2016 at 1:32 pm

      email it to me via “Contact us” tab. I’ll post it for you.

  13. NotSoSure
    November 23, 2016 at 12:50 pm

    I have never owned a car. When I had to drive, I typically rented.

    People buying cars must be the same people who constantly click on Facebook/Google ads. “What me, clicking those ads, never!!!”

    • nick kelly
      November 23, 2016 at 3:27 pm

      A few years back I had to stop driving for EXACTLY 90 days. I gave it up for Lent or something. My transportation costs sky rocketed. I couldn’t even take the bus and break even, and I took taxis a fair bit.
      On the other hand I do live in a city with an iffy bus system. Not all its fault, it has no density.
      But Montevideo, Uruguay- now there is a bus system. All private with at least 4 outfits competing and buses everywhere. It’s how most people get around, middle class etc.

      • thejerkstore
        November 25, 2016 at 10:03 am

        Spent 48 hrs in Montevideo earlier this yr, bus system was competent, taxis fair, no uber or lyft. Seemed dingy to me, didn’t see a lot of motorbikes, people great, women meh….

  14. Nam Marine
    November 23, 2016 at 2:03 pm

    What about the millions of cars sitting at the ports of entry?
    No One will buy them!

    • Frederick
      November 23, 2016 at 2:18 pm

      Sounds bullish nam marine

  15. Space_Cowboy
    November 24, 2016 at 12:25 am

    PDX (Pacific NW) major (ie Broadway) Toyota/Scion store has lots of BRAND NEW ’13, ’14, and ’15 model for sale. NOT lease returns. Invoice’s in window.
    I grew up in the (buy here/pay here) car biz and all I can venture is WTF? What’s the flooring cost per month and what “give-me’s” are being conveyed to this dealer?
    Use to be US mfg were terrible reliability and Japanese/German the best…..that sure has turned around. Worst German brand: Volkswagen (ask any auto parts store who their ‘frequent flyer’ customers are).
    Fiat/Chrysler still bottom of US mfg. for quality/reliability/resale.
    Btw Euro vehicles have religiou$ experience$ when it comes to (off warranty) repairs. Example: Bmw 328i (6cyl) waterpump/thermostate/pulleys & belt service – $1200 [dealer] to $8-900 [independent]
    Porsche Cayman S clutch service: $2300-3000 (flywheel dependent) on avg @ 33-36k miles. Not driven hard either.
    Prices I’ve heard from acquaintances who own them.
    Personal driver: 275k ’01 S10 4.3 & 5pd. Original clutch/rear brakes, However- three sets of oil cooler lines/radiators and three intake reseals (yes they were failing & leaking coolant). One alternator/starter, four sets of ft brake pads & two sets of rotors. Several complete turneups along the way.
    consumes 1/4 qt of oil in 3k, 20-21 mpg city/hwy drive circuit.

    As always, YMMV (your mileage may vary).

    • November 24, 2016 at 1:03 am

      BTW, Toyota’s much hyped Scion brand has died, and its remains have been folded into Toyota.

    • nick kelly
      November 24, 2016 at 3:24 pm

      Everyone has always known that German cars were astronomically expensive to work on. Twenty years ago a alternator for a GTI was over a grand Nephew had a 13K repair on an Audi- then buys another one!

      Other nephew was looking for 1st car ( has money) I said Jap young man- leases a Jetta (TDI0 based on price of 40K!
      How the F does a car with base 17K get to 4O?

  16. Jesse
    November 24, 2016 at 11:04 am

    I’ve been looking for my GF for 2 weeks now. Here in the piedmont of NC, the used car market is tight… 2-3 year old, low mileage used cars are a very hard find and what is available isn’t a good deal at all. Used car inventory is skint while new car inventory is overflowing into off-site holding lots. I’ve seen a few nice units pushing up to their 90 day float limit and the GSM would rather hit that ceiling, ship it to the auction, pay for transport, re-con and auctions fee than sell me that car for $200 under “fair market value”.

    We’re paying cash. I don’t even say anything about how we plan on paying for the vehicle until I get a price I would even consider. Even after telling the dealership were paying cash, they still pressure us for the financing. They even go so far as to start filling out the credit application right in front of us!!

    Rental car returns up for sale are well over the 3/36k warranty, look like hell and they still want absurd dollars for these rough, high mileage units.

    • nick kelly
      November 24, 2016 at 3:35 pm

      Why are you shopping car lots?
      They get most of their cars from individuals. Get it before they do

      If you tell me the type of car, miles, year etc. I can tell you 9 times out of ten if it’s private or on a lot, just from the price being 30- 50 % more.

      If you want to spend 100 -200 on your own inspection you will have info you can trust more than any car lot’s opinion or ‘warranty’

      • jesse
        November 25, 2016 at 12:04 am

        I know.. I know.. I’ve been trying to tell her but she has it in her mind that if doesn’t come from a dealer it’s a turd. I have access to a few large auto auctions around me and she won’t even consider it.

    • Chicken
      November 25, 2016 at 4:18 pm

      Good luck finding your GF. Sharing a little experience I had last new car I bought, I traded in my old car which I regretted after a week or two so I went back to the dealership bought it back and paid them less than they gave me on the trade.

  17. Blank Reg
    November 28, 2016 at 12:36 pm

    I have to reluctantly agree with the analysis behind the new car market’s slide, as I have no faith in my fellow man. It’s not as though people stopped going to the new car lots on the principle that they are against “black boxes” or anything…they aren’t even dimly aware of such, or don’t care that such information collected can be transmitted to 3rd parties (governments, insurance companies, etc.).

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