Wall Street Wakes Up to #Carmageddon

Auto industry faces “Unprecedented Buyer’s Strike”: Morgan Stanley

After five months in a row of year-over-year declines in auto sales, and therefore after five months in a row of sales that fell below already lowered expectations, the big guns on Wall Street are now seeing the writing on the wall, and are trying to come to grips with it.

“A stretched auto consumer, falling used [vehicle] prices, and technological obsolescence of current cars are ingredients for an unprecedented buyer’s strike,” wrote Morgan Stanley’s auto analyst Adam Jonas in a note to clients.

He now sees a “multiyear cyclical decline.” In this environment, he sees an impaired ability by these stretched consumers to buy new vehicles. He sees a declining “willingness of financial institutions to lend as aggressively as in the past.” He’s particularly worried that even the automakers’ captive finance operations – such as Ford Motor Credit, GM Financial, Mercedes-Benz Financial Services, and Toyota Financial Services – which have been doing everything they could to get people into new cars, are at the end of their wits:

Up to this point, we had believed that competitive forces, particularly the ability of the captive finance subs to find new ways to lower the monthly payment and put “money on the hood,” would help extend the US auto volume cycle a few more years to new heights.

But after an eight-year boom, the industry appears “to be hitting a point of diminishing returns where the tactics required to attract the incremental consumer may be putting even more pressure on the second-hand market, leading to adverse conditions for selling new vehicles…”

So not even record incentives, reaching $14,000 for some truck models, have much impact. Those are the “diminishing returns” – when you throw gobs of money at a problem and it doesn’t have much impact.

Lenders, particularly the captives, stepped forward, making loans with very long terms, low and often subsidized interest rates (“0% financing”), sky-high loan-to-value ratios, and leases that gambled on very high residual values that have now gone up in smoke as used vehicle prices are heading south. And much of this even for customers with subprime credit ratings who are now falling behind on their payments in disconcertingly large numbers.

The idea was to get even cash-strapped customers who already spend every dime they make and who are $3,000 upside-down in their trade into that $40,000-vehicle without cash down and without up-front expenses and with the lowest possible monthly payment while generating fat profits for automakers and dealers. The industry has done this for years, pushing sales as far as they could for as long as they could.

Already last year, there were big signs that the boom cycle was beginning to spiral down. Yet, Morgan Stanley’s version of the downturn still cannot shake its optimism entirely. It had been projecting 18.3 million vehicle sales in 2017. That would have meant a 4.2% increase from last year’s 17.55 million total sales. (What were they thinking?!) Now that sales have fallen for five months in a row, and that the goal of 18.3 million vehicle sales has moved ludicrously out of reach even under wildly optimistic scenarios, Morgan Stanley flipped to projecting a 2% decrease, to 17.3 million vehicles.

Theoretically, it could still be possible. Currently, sales are tracking 17.0 million at the Seasonally Adjusted Annual Rate (SAAR). To get to 17.3 million sales by year end would require a sales rate for the rest of the year of 17.5 million every month. Alas, in May, it was 16.7 million, the third month in a row below the 17 million-mark.

How confident is Morgan Stanley in that 17.3-million sales forecast? “It could be worse,” Jonas concedes.

So he lowered the price targets for 15 companies in the industry, including component makers, after their shares have already gotten crushed for a long time. Just look at Ford, whose shares are down about 40% over the past three years and 16% over the past six months. But those downgrades added some more fuel to the ongoing #Carmageddon selloff.

Over the longer term, Jonas gets outright bearish – and with good reason. He expects a slump that will last years. For 2018, he cut his previous estimate of 18.9 million down to 16.4 million, which may still be high. And for 2019 and 2020, he slashed his estimate to 15 million sales.

That would represent a 15% industry-wide sales decline from 2016. But he notes that to maintain sales even at that low level, the government would have to step in and subsidize in some way new car purchases.

Already praying for the next cash-for-clunkers program? Wall Street and automakers just loved that program even though it took a whole generation of affordable and still decent cars off the road, at the expense of taxpayers and of people who needed those cars the most. It never ceases to amaze me how Wall Street is thinking.

But it’s really tough out there for automakers. Read…  Haunting Photos of #Carmageddon: Hyundai Gets Crushed, as GM, Ford, Others Struggle

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  69 comments for “Wall Street Wakes Up to #Carmageddon

  1. RangerOne says:

    If your crazy enough to think buying a $40k car with 0 down for a long term is a good idea then for the love of God just lease…

  2. TJ Martin says:

    And yet once again despite yet another round of what should be at the very least bad news in combination with the question marks now hanging precariously over the UK’s head like Damocles sword after yesterdays vote .. not to mention .. well … you know

    NASDAQ NYSE DOW .. all up … again

    So either the ‘ bots ‘ are having themselves a heyday .. there really is something in the water … or reality distortion is the new norm

    • Rates says:

      I suspect eventually we’ll have a quarter where all GDP growth = growth in the NASDAQ/Dow. If the later is not counted now in GDP, it will be counted soon. In fact it will be the only thing that’s counted. Easier to goose a single number than a variety of numbers.

  3. Glad 2B Gone says:

    From trading economics website, looks like total vehicle sales for the period 1998 to 2008 averaged between 16-18M units per year. There was a big dip from 2008 which took to about 2013 to recover back to the 16M+ SAAR.

    Are we simply near the bottom of the SAAR sales range vs. much more downside from here?


    • Wolf Richter says:

      The low point was 9 million SAAR. And it stayed below 14 million SAAR for over 3 years in a row. That gives you an idea of the downside.

      • Glad 2B Gone says:

        Understood, however that dip to 9M was a result of the financial system meltdown. The global Central Bankers intervened and reflated the financial system and they don’t seem to be removing their accommodation any time soon.

        So while it is possible for auto sales to dip significantly based on some new black swan event, at this point it might be more likely we muddle along between 16-18M SAAR sales rate possibly for years.

        • Wolf Richter says:

          “…we muddle along between 16-18M SAAR sales rate possibly for years.”

          That wouldn’t be “muddling along.” That would be “setting new records along the way.” :-)

          But sure, anything is possible. 16-17 million would be the current status.

          A more likely “muddling-along” scenario would be between 14-16 million, imho, given the credit bloat, the rising delinquencies, the magnitude of negative equity in trades, the still highly inflated used vehicle values, the tsunami of rental cars and lease turn-ins in the pipeline this year and next year, and the long loan terms in recent years. If we get a recession, the scenario could be much harsher still.

    • Jim Graham says:

      Also from Trading Economics…

      The “average” does not tell the story of the boom and bust.

      United States Total Vehicle Sales 1993-2017 | Data | Chart | Calendar

      Total Vehicle Sales in the United States decreased to 16.66 Million in May from 16.88 Million in April of 2017. Total Vehicle Sales in the United States averaged 15.48 Million from 1993 until 2017, >>>> reaching an all time high of 21.77 Million in October of 2001 and a record low of 9.05 Million in February of 2009. <<<<<

  4. Bee says:

    I too read this news via Automotive News. What they didn’t mention was that subprime lending (25% of buyers) is down 9% [deep subprime down 7%] by banks (source: Nightly Business Report). If this continues, sales will continue to fall.
    They still haven’t lowered their prices—my buyer’s strike continues.
    P.S. You are correct that Cash For Clunkers removed good cars from the roads, increasing the price of used for years.

  5. phil m says:

    What do these analysts do all day? The magnitude of their missed forecasts, especially on the monthly Jobs reports is stunning. They get paid big $’s I’m just not sure for what.

  6. Frederick says:

    Bought a new VW Tiguan in 2015 here in Turkey for around 21 thousand US and I plan to have it for 5 or 6 years Used cars are quite expensive here as most buyers pay cash and hence new cars are unaffordable to most Gasoline is around 6 dollars a gallon so be happy Americans

    • Dave says:

      How is the Turkey situation playing out with Erdogan? His actions of late are a bit unnerving with his veering off towards a form of religious totalitarianism.

      At least that is my perception from what I have been reading.

      • kraig says:

        How is he religious? Authoritarian sure.totalitarianism, yes. Fascist? Arguably. Otttomanist, yes but that’s like saying “make America great again” supports are religious right ‘fundies’

  7. rivereddy says:

    Do US sales even matter that much in a global economy? Automakers may not be too worried about this if sales in China, India, Malaysia, etc. are picking up the US slack and then some.

    More worrisome to me is the fact that cars and trucks are increasing in price beyond the ability of non-elite workers to buy them.

    • Jarhead John says:

      Ditto for motorcycles(Wolf, an article for us bikers would be appreciated). A new Harley Ultra Classic now lists for $28,000. Want a trike? Try $38,000. Need a Honda Goldwing? Show up with $28K. Price is before taxes, doc. fees and any accessories. At 64, these machines will no longer fit in to my budget…especially when we have only about 5-6 months worth of decent riding in Pittsburgh…

      • Wolf Richter says:

        I might. Motorcycles are not a huge part of the US economy, but I’ll put them on my list.

        I sold my 750 Yamaha (shaft drive) in 1980. Too many of my friends during my younger years lost their lives riding, but it never sank into me that this could be me. Then I had one incident that I managed to get through, but if I hadn’t, I would have ended up in the shrubs near a Texas farm road where no one might have found me for hours or days. That was a scary thought. I eased the machine home, never again enjoyed riding, and sold it a few months later, promising myself that I’d never ever ride again… a promise I broke in Africa when motorcycle taxis were the only thing to get around on.

      • Kf6vci says:

        It’s even more dramatic for bikes. There is a ton of first hand beauties out there for about 15% of the new price. Cruisers, sports bikes, British Triumphs, BMWs.

        I bought 3 older used ones. Two Honda VFR 800 with gears driven 4 OHC. 1998 and 2000. Paid 1,200 € and 2,500 € (both 1 owner from new and with 72 k / 40 k km). But I saw a dealer listing the same model with 23 k km, new tyres and a 1 year’s warranty for 1,8xx €. WHY BUY NEW?

        Someone mentioned BMW hurting, I’m sorry, we are talking $ 20,000 for loaded R 1200 GS adventure bikes. And they have been way too heavy for offroading, JMHO.

        In SE Asia, little step-through bikes selling for about $ 1000 last long. Semi-automatic clutches, great fuel economy (versus automatic scooters) and here, Hondas do hold their value better. So I bought a Yamaha Spark 115i for about 40% as a 10 months’ old repo with 6 k km.

        The slowdown in new sales is a truly global phenomenon!

    • Wolf Richter says:

      The US is the second largest market. China is #1. Japan is #3 (but US automakers have practically no presence in Japan). The US is still a crucial and very profitable market for all automakers. In China, these non-Chinese automakers have to make and sell their cars via joint ventures with Chinese companies. In the US, they don’t have to share.

      • Kf6vci says:

        Mmm, not sure about the true profitability of some brands. When the German Mark rose against the USD in the 1990s, German makes were certainly hurting!

        TATA in India makes a low cost car for about $ 3,000.

        More and more aged high-end cars are coming up for sale a firesale prices due to the owners being unable to afford repairs. These included Mercedes S-600s with bi-turbo V-12 engines which were offered for 1,000 GBP on http://www.gumtree.com

        Re-selling just those bi-turbos should recoup the purchase price.

        Something’s up and it’s not good for the market, be that used or new, low end or the high end.

  8. Paulo says:

    From the article:

    “A stretched auto consumer, falling used [vehicle] prices, and technological obsolescence of current cars are ingredients for an unprecedented buyer’s strike,” wrote Morgan Stanley’s auto analyst Adam Jonas in a note to clients.

    Technological obsolesence? I don’t think so. How about, ‘needless complexity for a dumbing down consumer’? Plus, this complexity also needlessly increases the sticker price and need for financing to the tipping point for consumers.

    I think people have forgotten, or have been brainwashed into believing vehicles are more than transportation, or in the case of trucks, for a utilitarian purpose and transport. Instead, we have cars that navigate, check maintenance systems, warn drivers, talk to drivers, provide entertainment, produce sexual identity and self-worth, parallel park themselves and use cameras and sensors instead of mirrors; the list is endless, and that’s before the new push for cars that do not even need drivers.

    I have a few friends and family members with newer f-150s. A $30.00 tune-up costs almost $400. If someone forgets a special diff additive, resulting slippage creates a $1500 fix. My son knocked a mirror off and the bill was $1500 to replace and repair. A wing mirror!! Nuts.

    These routine maintenance charges add up to insane levels. And people end up further financing operating and maintenance with even more credit by using plastic.

    Our ‘new car’ is a 2009 Toyota Yaris. We had to order it in special to obtain crank windows. My neighbour has a mercedes SUV. His pax side window motor quit and for months he had to park with taped plastic over the opening. The fix was a couple of thou…. and he didn’t have the cash.

    Oh well, when my wife gets home from swimming I will replace the muffler on the Yaris. Parts cost? Around $150 cdn. Difficulty? One floor jack and two bolts. Time involved? 1/2 hour. Skill level required? Grade 8 middle school, maybe. Special equipment? Ratchet, socket, jack, and level floor.

    I know teenage boys who don’t know how to check a tire for pressure. One lady I know did not understand the difference between front wheel and rear wheel drive, furthermore, did not which drive system her ‘new’ vehicle had? Many people are too stupid to own vehicles as far as I’m concerned. Their world is plug and play, and that even seems to be more than they can handle. Navigation? Hell, I don’t think people even know what a map looks like anymore. Tell me this: if people do not have any idea spatially of where they are in the world, or how to move from point A to B unless a computer tells them when and how, does that make them sheep, or just dumb as dirt?

    They just need a job to pay for it all. :-)

    No, we are long long overdue for a crash and reset, and I’m not just talking crashing auto sales. The automotive business is no longer about transportation. It’s part of the health economy (mental health).


    • Bee says:

      The whole world is stuck on “stupid”.
      Have you ever used Windows 10? Designed by “stupid”—POS.
      Just bought a new washer and dryer—basic units but OMG pain to use. Must babysit both. Buttons not switches. Electronic not mechanical. Swishes not agitates. It will over-ride your selected water level (down). Need to buy the “upgraded” model dryer to be able to turn off the buzzer that goes off twice per load (wouldn’t the basic model have no buzzer?). No way this garbage will last 5+ years.
      Incompetence is rewarded in every sector!

      • Meme Imfurst says:

        The answer is to remember that this company screwed you. Sears screwed me on a tire warranty that had 90% remaining, and they cry that they are going out of business because no one buys there crap. Stupid I am not.

        How is it that these over paid CEOs and the like have no sense that the general public is broke and mad? Stupid or ignorant, or indifferent?

        Every car now has a minimum of 5 equivalent 2005 computers running all the crap on the car. That takes power, a lot of power to run and control. And we think battery power is coming to the ordinary guy anytime soon. Hahahaha. Just wait until these systems get undetected malware installed by the guy ( or competitor!!!) who used to put a tin can in the door of Chevys coming off the line. Just like Boeing workers, these workers can see the future.

        The first company that makes a simple car for $7,500 wins the brass ring.

        • TJ Martin says:

          ” How is it that these over paid CEOs and the like have no sense that the general public is broke and mad? Stupid or ignorant, or indifferent? ”

          None of the above . To put it simply .. they are the ‘ producers ‘ .. they’re making theirs .. their pockets overfloweth … and anything or anyone else including you/me the consumer do not matter . e.g. The Gospel of Ayn Rand chapter and verse

    • TJ Martin says:

      ” …..needless complexity for a dumbing down consumer’? ”

      There is a term for that ;

      Technology for Technology’s sake

      Where additional and/or irrelevant technology is shoved down the consumers throat not for the benefit of the consumer / end user but rather as a marketing tool and to the profit of the manufacture .

      A common ill thru out the ages most prevalent during a Transitional Age which is what we’re in . re; ” At the End of an Age ” John Lukacs

      And if you think Technology for Technology’s sake is bad when it comes to cars , computers etc … have a look at medical care . Where diseases are created in order to sell more pharmaceuticals

      • RD Blakeslee says:

        ” How is it that these over paid CEOs and the like have no sense that the general public is broke and mad? Stupid or ignorant, or indifferent? ”

        None of the above . To put it simply .. they are the ‘ producers ‘ .. they’re making theirs .. their pockets overfloweth … and anything or anyone else including you/me the consumer do not matter . e.g. The Gospel of Ayn Rand chapter and verse – TJ Martin

        Really? The failings of Rand’s contemporary disciples should not be misrepresented as her “Gospel”, IMO.

        “America’s abundance was created not by public sacrifices to the common good, but by the productive genius of free men who pursued their own personal interests and the making of their own private fortunes. They did not starve the people to pay for America’s industrialization. They gave the people better jobs, higher wages, and cheaper goods with every new machine they invented, with every scientific discovery or technological advance- and thus the whole country was moving forward and profiting, not suffering, every step of the way.” – Ayn Rand

    • Dave Kunkel says:

      I’m so old that I not only know how to use a map, I know how to fold one!

      • BradK says:

        While driving!

        And old enough to remember when gas stations gave them away for free. Nowadays you have to pay for air to fill the tires.


      • ft says:

        I’m so old I can handle maps and also shift a crashbox.

        As near as I can tell, people who rely on GPS can always get where they’re going but never know where they are.

    • RangerOne says:

      A lot of people are terrible car owners true. Tech isn’t making them better… and yes too much tech makes repairs a potential surprise nightmare compared to simple older cars we few minor parts that could break. He’ll even new lighter car body materials mean a simple bump in a parking lot can cost thousands to fix….

      Still some of the tech is very useful. Phone navigation integration is useful so you can use navigation more safely when traveling. New lane watch features and auto breaking are the first steps towards protecting us from the human falability of driving.

      For every bad car owner there are 10 bad drivers who will drive crazy or not pay attention. I welcome the day the car can stop them from killing us safe drivers who actually give a shit about other drivers. There of course will be downsides but I’ll tech the ocassioanly tech hiccup over a teenage driver any day.

      Nearly every male who drove a car at 16, myself included, us probably lucky to be alive based on my early testosterone driven driving patterns.

      Don’t totally hate all the tech. But I agree a lot of it translate to matketING bullshit and distarctions.

      • Staysafe says:

        Buy a truck.

      • Kf6vci says:

        True. There is a Porsche Boxster 2002 “S” on http://www.gumtree.com with a few days’ MoT left @ 3,000 GBP. MoTs are online and a check reveals years of ABUSE. Worn brakes etc. => That car driven and not maintained. Wonna buy it?

        I bought another “S” and was shocked to learn the previous owner never had the oil changed. Now I’m ordering the filter for the automatic gearbox and will have that changed as well, with gear box oil.

        These silly keys cost $ 500 when you need them from Porsche. What isn’t there can’t break.

    • IdahoPotato says:

      That was one glorious rant :-)

    • Gary says:

      Absolutely spot on Paulo. I couldn’t have said it better myself.

      I actually hit something while backing up because I was so distracted and annoyed by the “backup warning” buzzer on a Ford Escape (it goes off even if there is nothing behind you). I’ve never hit anything while backing under my own concentration.

  9. mvojy says:

    Want to SELL cars every year? Try making the sticker price much lower in comparison to average household incomes. These days housing, healthcare, childcare and food costs are taking up more of our income so there is less to be spent on cars. Bring back the Yugo and stop adding more buttons and lights to justify charging $30,000 for a base model.

    • Jim Graham says:

      NOT THE YUGO. A Beetle in it’s ’60s form – YES. Maybe a little safer / stronger body to keep folks a bit safer in a crash…

      The best thing about a Yugo was the heated back glass. It helped keep your hands warm while you pushed it in the winter…….

  10. Brently says:

    Just picked up a 2008 Cadillac DTS Luxury 2 with 37k miles. for $9500 cash. Won’t be seeing me at any car lots until at least the middle of the next decade.

  11. Michael says:

    It would seem to me the longer they try to keep sales up this year and do not cut back production, next year is going to be far worse. Its like a Mexican standoff between automakers.

  12. FredB says:

    All car/truck dealers in my hometown have overflow lots to hold vehicles they have no room for on their main lots.

    • Anthony says:

      This os required by the car manufacturer if the dealer lot is not at least a few acres.

  13. Old Farmer says:

    Part of the downward pressure on demand is that cars last longer than they used to. The cars are better, the roads are better, the fuels are better, and particularly the lubricants are better. The 30 weight oil we used back in the sixties was so unrefined it still had leaves and sticks and dinosaur hair in it. A twenty-first century car should easily go 300,000 miles with reasonable care and timely maintenance. For me that means a new car every twenty years, not every seven or eight years the way it used to be.
    That said, I agree with the above commentators that new cars are riddled with spurious complexity. Sometimes I miss my old 1948 Dodge Power Wagon which was a beast to drive, but only had about ten moving parts–easy fix.

    • mynamett says:

      Too much plastic in new cars. Air intake, valve cover, timing chain guide, radiator, water pump impeller are now made of plastic. Plastic becomes after 10 years and break easily. Plastic also shrink with age. I my point of view1995 to 2000 was the era where we had the best quality car. Just enough computer technology and easily to fix and trouble shoot.

      Some new car might have now up to 30 computer. It is getting more and more difficult for hobbyist to fix moderns.

    • Suzie Alcatrez says:

      The new Tesla model 3 will only have 10 moving parts.

    • Gary says:

      What you say may make sense compared to REALLY old cars, but I don’t think a car from 1999 was built bad at all compared to today. And even the roads are better? Really?

    • Les Francis says:

      The mechanics may be better but the technology will crash. Technology that will be obsolete and or more expensive to repair than the car is worth.

      Rather than keep taking my vehicles to a dealership I just invested $1,500.00 in a diagnostic scanner. I was bitten by a dealership after I changed the battery in a car – threw some codes – they wanted $350.00 to update the firmware and cancel the fault codes.

      • Kf6vci says:

        My friend bought a plug and software for 300 € ( $ 340). It let him read out e v e r y t h i n g on my 1999 Porsche Boxster 2.5.

        * airbag hours (verify mileage that way)
        * error codes
        * was the engine over-revved? Stages 1-5
        *cam chain tensioners getting worn out? It will show!

        Use that device when you go shopping for a car. It should pay for itself and YES, $ 340 and an old notebook running XP or Win 7. NOT $ 1,500 necessary.

  14. Jarhead John says:

    I’ll keep my 2014 Scion XB until the fenders fall off…Cruise, tilt wheel, power windows/locks, 4 wheel discs and radio with CD PLAYER all for $17,500 bought new…

  15. Tomjones says:

    Bought a new Ranger in 1985 and drove it for 28 years…still looked great, but could no longer pass Calif. smog. Paid an out the door price of $6,200 for it. Almost to the day, 28 years later sold it to state of Ca for $1500 and same day bought a beautiful used 2003 Dodge Durango from a private party with only 34,000 miles for $6200 cash, plus tax to Ca. So this one may well “see me out.”?

  16. T.J., not the real TJ says:

    Any chance the recalled VWs make it back to the market?

  17. jb says:

    could the consumer be rotating into light truck sales,suv’s and crossovers ? these types of vehicle sales seem to be relatively strong . The reporting saar charts might be more useful if they had a vehicle type breakdown. consumer purchases might be rotating into these categories . Also if monthly saar adjusted data is used maybe for past months will that not distort the yearly total compared to actual ?

  18. Bookdoc says:

    I retired from car sales last summer but still have friends in the business. My store was located in the highest socio-economic trading area in the city. Over 30% of our business was cash deals. Now the every year customer is becoming an every 2-3 year customer and the 2 year is becoming rarer as well. The only salvation is the 38% leasing we were doing as that does provide a steady stream of repeat customers-especially when they see what the monthly payment is on a buy on a nice used car. Buying out the lease means paying far over current value on the vehicle due to the enhanced residuals. With the current downward cascade in the value of used cars, I don’t see the situation improving. Glad I got out when I did.

    • Wolf Richter says:

      Ironically, the high volume of leases over the past few years is part of what is causing the problem today in the new vehicle sector. These lease turn-ins are now going through the auctions in massive numbers, and dealers buy them to sell on their lot in competition with new cars, but for a lot less.

      • Bookdoc says:

        Oh I do know that! That was our best supply of used vehicles. We loved bidding on ones we took in as we knew the condition. Second best was the captive leasing company auctions in general. This was a growing problem even last summer as values, especially on cars, were quite volatile as leasing had kicked back in 3-4 years before. The issue from a sales point of view was trade values. With the current retail pricing nonsense, trades were the only way to make a deal profitable and it was getting difficult to hold anything. I hate to think of how often I “enhanced” the used car manager’s appraisal to get a deal and move a unit. I am sure it is worse now.

  19. mick says:

    “Pulling forward demand” taken to the bitter end. The auto makers have sucked dry demand for a decade using ultra, ultra loose credit.

    What comes next is far worse than most here think.

  20. WTFrogg says:

    My father, who was in the steel industry all his life used to say: ” As goes the auto industry, so goes the rest of the economy. ”
    Still true today.
    Am driving a paid for low miles mint 2003 Mercury Grand Marquis LSE I bought in 2011 with 60,000 miles on it. Paid $ 4000 for it and budget $ 1000/year in repairs and maintenance. Can’t drive much cheaper than that these days.
    Had a problem with the EATC (Electronic Automatic Temperature Control ) unit recently….Dealer new part $900 + labor…..wrecker used $320 +labor. Did some research and found out how to change the “O” rings inside the unit.
    Result: 20 mins of my time and 20 cents for “O” rings…..works like new.

  21. RD Blakeslee says:

    In West Virginia bad times seem to coincide with fires. Right now, auto dealerships are suffering hard times.


    About 35 years ago, we bought a small “colored” schoolhouse which had become surplus following integration. My wife was going to use it as a piano-teaching studio and we attempted to insure it for that purpose.

    Our application was delayed and after several weeks, while we were working on the restoration, an insurance adjuster appeared in the doorway , looked around and left.

    He saw us installing new wiring, insulation, drywall and woodwork I had milled in my woodworking shop. It was apparent, I think, that the last thing we wanted was a fire.

    Our insurance was granted forthwith.

    • Erik M says:

      Per the article attached: It’s interesting how flammable a metal building is, isn’t it?

  22. Erik M says:

    Turned in a car in March 2017 as the lease was up. Was very satisfied with the car and simply got another of the very same car, but new on the same 3 yr. lease through Toyota.

    I’ll never buy again. I’ve owned cars almost all my adult life since 1987.

    I can’t wait to subscribe to self driving car service or start using Uber/Lyft services. Better yet passenger drones.
    Being free of the burden of owning a vehicle: the expense, the maintenance, the insurance, the hassle of driving, parking, the fear of the vehicle being damaged. All I want is to get from place to place.

    I’m so happy to see the whole fossil fuel/automobile farce back firing. LOL. Those who thought car culture was forever more nervous than ever. lol.

    • T.J., not the real TJ says:

      I’m looking forward to automation and self-driving vehicles. I can’t imagine not owning my transportation, at least until the kids are grown.

      • Erik M says:

        One of the great things for parent with self driving cars: parents can send their kids to whatever the kids outing is, or send the family pet for a groom, just by putting the child in the car. No longer do parents have to drive kids all over the place, which will be a big time saver.

        Think of how many older people who live in suburbia or rural, will be able to continue do so even after they can no longer drive.

        • Bee says:

          You have to have a driver’s license to man a self-driving car. You don’t just stick a 10-year old in a car and whisk them off on the highways (child endangerment?). If there’s a glitch, the driver must take over. If old people “can no longer drive”, this would thus apply to them as well.

        • Erik M says:

          Cars with the Autonomous drive feature, RIGHT NOW, you need to be available to guide the vehicle in worst case scenario.

          Once everything is fully functional, none of us will need to be licensed.
          Another burden eliminated.
          Progress is happening quick.


        • Bee says:

          Think what you want. No 10-year old kid will be manning a car without his parents! Put down the hype pipe.

        • Erik M says:

          Cars are not to be “manned”, they are mere transportation appliances.

          Autonomous vehicles are the real thing. Inefficient, noisy, petroleum based vehicles that have high yearly fatalities are on the way OUT. Sooner the better.
          Robots do a MUCH better job of navigating streets than humans. Tests prove it. That’s one reason the trucking industry will very soon be autonomous. Millions of trucking jobs will be gone soon, which is a good thing. Who wants to work that industry anyway. The trucking industry is facing a shortage.

          Yep, I can’t wait to be like those already not owning or renting a car, and enjoying their freedom from that burden.

  23. Coastauto says:

    As shared previously.. the last few years, BMW and particularly MB have been doing pull aheads / call in leases early to make new sales, typically 6-9 months early. Lately I’m seeing these being pulled 9-15 months ahead.

    Whats next…. 2 yr pull aheads? Or yoy records a thing of the past?

  24. Mary says:

    We now have only one car as retired boomers instead of the two we needed when working. Now living in south Florida with close proximity to all shopping, doctors, etc…we average less than 5.000 miles per year and hope to get at least 15 years or more out of our 2011 Honda Accord.

    We are also appalled at the absurd prices for new cars and will never buy new….Automakers are out of their minds!

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