US Auto Sales Sag, Hyundai Meets Carmageddon

So let’s see how we can put a positive spin on this.

Ford, GM, Hyundai and others tried hard to curtail their sales to rental car companies, or whatever. That’s was the theme among analysts on Monday, after automakers reported crummy June new vehicle sales. What really happened?

Rental car companies continued to trim their fleets as they’re traversing their own structural hell, squeezed by ride share companies and falling used car wholesale prices. They’re not buying as many vehicles anymore because they don’t need more, regardless of what automakers are trying to do to sell them more.

Retail customers are switching to used cars that are competing often on the same dealer’s lot with new vehicles. They’re particularly after recent-model year cars that look similar to new cars but sell at much lower prices. Dealers buy them at auctions around the country, where rental car companies and leasing companies are selling them. Used vehicle sales are expected to set a record this year north of 41 million vehicles. This is particularly eating into new car sales, the mainstay of rental car companies (rather than new truck sales).

Consumers do this because they’re stretched to the limit, having maxed out their secured credit cards and other things, and they face new car prices that continue to rise, even as wages cannot keep up. Edmunds reported that in June:

  • The average monthly payment jumped to a record of $517 (up from $510 in May)
  • The length of the average auto loan rose to a record 69.3 months
  • And the average amount financed jumped by $631 from May to $30,945.

The fact that negative equity on trade-ins hobbles from record to record doesn’t help matters. So something has to give.

And this is what gave:

  • Overall car and light truck sales in June fell 3% year-over-year to 1.474 million vehicles, according to Autodata. This is the number of vehicles sold and delivered by dealers to their customers, or delivered by automakers to their large fleet customers.
  • It was the sixth month in a row of year-over-year declines.
  • Truck and SUV sales rose 4.1% to 933,378 units. But car sales plunged 13.2% to 541,982 units.
  • For the first half, sales are down 2.1%. Truck sales up 4.6%; car sales down 11.4%.
  • Sales to fleet customers dropped 7.8% in June, not because automakers refused to sell them, but because fleet customers cut back their orders.
  • Retail deliveries dropped 1% in June.
  • The Seasonally Adjusted Annual Rate of sales (SAAR) in June fell to 16.51 million light cars and trucks, the fourth month in a row below the 17-million mark, and the lowest since February 2015. So regardless of how this is being dressed up, it’s not propitious.




Among the automakers, there were some notables:

GM’s car and truck sales fell 4.8% to 242,873 vehicles. Truck sales rose 11% to 192,067 units and are up 5.8% for the first half. But car sales plunged a stunning 38.2% to just 50,806 units and are down 18.6% for the first half. At this pace, GM car sales are moribund!

GM dealers ended the month with 105 days’ supply! That’s up from the already catastrophic 101 days at the end of May. This is the kind of inventory GM dealers sat on during the Financial Crisis when GM went bust. But no big deal this year, apparently.

Ford car and truck sales fell 5.0% to 227,979 and are now down 3.8% for the first half. Ford truck and SUV sales rose 2.2% in June to 174,435 units, and 3.0% for the first half. But car sales plunged 23% to 52,731 units and are down 20.2% so far this year.

Ford retail sales fell 2.1% in the first half to 864,156 vehicles. But fleet sales in June plunged 14% to 75,583 vehicles. Ford blamed the 7.1% decline in fleet sales so far this year not on its refusal to sell to fleets, as the analysts were trying to make it seem, but because of “the timing of fleet deliveries.”

On the semi-positive side, compared to GM, vehicle inventory at Ford dealers came in at 66 days’ supply, about the same as last year, and not too far above what is considered the OK-line of 60 days’ supply.

Hyundai got crushed again and enters Carmageddon. Among the major automakers, it booked the steepest sales plunge in June: Total unit sales plunged 19.3% year-over-year, after having already plunged 19.1% in May. Even light truck sales, the growing segment in the US, fell 11.6% to 22,586 units. Car sales plummeted 23.9% to 31,921.

This sales deterioration has come fast and furious for Hyundai and is now dragging down the first half, with total sales down 7.4%, as truck sales are still up 11.6%, but car sales are down 14.3%.

These crummy sales – despite record incentives!

Automakers spent an average of $3,550 in incentives per new vehicle sold in June, according to ALG, cited by Automotive News. It was the highest for any June, and up 9.7% from the already high levels a year ago. The average incentives are estimated to have reached 10.8% of the average transaction price.

Biggest incentive spenders per new vehicle sold:

  • Daimler: $4,449
  • FCA: $4,389
  • GM: $4,361
  • BMW: $4,157
  • Ford: $4,157
  • Nissan: $4,148
  • Volkswagen: $3,460
  • Hyundai: $3,259
  • Kia: $3,384
  • Toyota: $2,506
  • Honda: $2,056
  • Subaru: $1,032

Nissan and Kia spent 15% of their average transaction prices on incentives, the highest in the industry. Hyundai, whose sales got crushed the most, spent the second-most on incentives: 14.4% of its average transaction price. GM, Ford, and FCA spent between 12% and 13%.

In other words, automakers spent a record amount of incentives, with Hyundai going all out, as inventories are piling up, and sales still declined. And in Hyundai’s case plunged. For the industry, this has been the case every month so far this year, which, despite the efforts to put a hopeful spin on it, is beginning to jangle some nerves.

Ford’s new CEO, to cut some costs, shifts production of the Focus compact car from plants in Michigan and Mexico to a plant in China, for import to the US. Read…  This Will Whack US Auto Component Manufacturers




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  132 comments for “US Auto Sales Sag, Hyundai Meets Carmageddon

  1. ALBERT CHAMPION
    Jul 4, 2017 at 12:26 am

    recently i have driven a 2017 ford edge and a gmc terrain.

    these are horrible cars. very noisy-lots of road noise. clearly no acoustical insulation.

    and then there is the dashboard nonsense. it would be nice if some manufacturer could offer an analog, bare bones display. something that you could figure out how to operate without a manual.

    personally, i think the auto manufacturers have forgotten how to interpret the demographics. i am in my early ’70’s. i don’t want a digitized dashboard.

    and, it is my guess that the market of my age doesn’t want it either.

    get into a ford edge without a manual and try to figure it all out. nothing is intuitive.

    or try the terrain, where the turn signals sound with a volume that overwhelms conversations, the radio.

    do the individuals who design this shyst ever drive them?

    i don’t think so.

    so, i have tried the new vehicular nonsense. as rentals.

    i shall continue to drive my older vehicles[2006 m-b cl55amg, 2008 porsche cayenne turbo, 1987 m-b 560sec, 1995 m-b e320cabriolet, 1997 m-b s500coupe].

    all of these cars have intuitive controls. and almost all of them similar.

    these new vehicles, absurdly overwhelming in the controls.

    the manufacturers’ error. they forgot the demographics. it is the geezers with the money. not the teenagers.

    • RD Blakeslee
      Jul 4, 2017 at 10:20 am

      “and, it is my guess that the market of my age doesn’t want it either.”

      Right on! I’m 86 and bought a new Subaru Forrester recently.

      I will never pay attention to or use much of the electronic BS in it …

      • Coaster Noster
        Jul 4, 2017 at 10:45 am

        I agree with the sentiments expressed about all the new gizmos. It’s really an arms race between mfrs, with no regard for the customer: “Loook! Ford has a cupholder, where you can adjust the temperature of the drink! We need that too!”
        Last time I rented a car, it took ten minutes of reading the manual, to start the car and put it in drive, and drive. Absurd! Worse than that, I have a close friend, just turned 70, who splurged and bought a Corvette. You have no choice with the transmission (8-speed??). It goes 1,2, then 8th, with the shifting. Total disappointment for my friend…and his new TV on wheels (screen in the middle of the console).

      • TJ Martin
        Jul 4, 2017 at 11:10 am

        ….. the genuine irony being it is those of us of a ‘ certain ‘ age [ e.g. Boomer and older ] that have the money to spend on new cars that are not being aimed towards our demographic .

        In my particular case Mercedes lost the opportunity to lease me a new one once the lease on my previous Benz had come to an end * because all their new cars have increased in footprint and size with dashboards glommed up with infotainment madness including that horrid iPad looking thingy on top of the dash along with increased blind spots etc – et al – ad nauseam …. and I looked at cars like the Forester etc to replace it which were as bad if not worse .. so I broke down and purchased the 2011 Benz I have …, and could not be happier

        But then again … look around .. its not just the automakers .. its everyone from the music business ( whats left of it ) to clothing aiming their products at a Youth Market who neither have the money nor the interest in buying new **.. chasing vapor rather than focusing on attainable goals as our lifespan and levels of activity continue to increase

        Ahhh .. but there I go again .. spouting off Logic and Common Sense in the age of American Collective Stupidity .. sigh … ” More Fool Me ”

        * [ there are financial advantages to leasing for those of us in certain financial strata which Wolf can no doubt explain better than I ]

        ** [ Fact is the majority of todays youth aren’t even interested in attaining a drivers license .. never mind buying a car/truck / motorcycle ]

      • ft
        Jul 4, 2017 at 2:32 pm

        RD, at 68 I too bought a new Forester recently. I got the XT with the turbo engine which makes the car entertaining as well as being high on utility but, like you, will never use much of the electronic BS in it that doesn’t pertain to the operation of the car. However, my stepson and daughter-in-law do use the BS when they drive it, so I guess that stuff has its place.

        • Haus-Targaryen
          Jul 4, 2017 at 3:17 pm

          So as a Millennial (I’m 29) and with enough disposable income to purchase these fancy toys, I have to admit many of these gizmos I do find appealing. Its obvious they are appealing to my generation, and the reason why is pretty obvious.

          Remember Cadillac, Buick or Lincoln of the 90s and 00s? The Great Generation’s favorite brands? These cars were big, soft and floated down the road — easy to use to a fault and from what my grandmother told me — nothing better than a Cadillac.

          The problem is these cars almost killed off all of these brands, in-fact Buick and Lincoln still haven’t completely recovered.

          See, the while your generation has lots of cash … without sounding … crude (no offence implied or intended) … you guys have maybe … one car purchase left, two perhaps?

          Millennials however, even if we cannot afford them new and now, we look at these cars and say “wowwww I want one of those” (similar to the Caddies in the 50s and 60s did to you guys) and if they can get us into the 3 year lease loop, they figure we’ve got 10-15 cars left in us.

          See the car makers learned their lesson from Cadillac and Buick, and I am sorry to say the majority of car markers will continue to focus on the younger customers for the foreseeable future.

          May I recommend the Toyota Avalon? Toyota killed themselves with my generation and haven’t done anything to win us back. I imagine they’re going to capitalize on the boomers and the younger great generation customers still driving.

          All that being said I drive a 2006 Lexus with 180k on the clock. Its paid off, reliable, looks good and its paid off.

    • gary
      Jul 4, 2017 at 11:49 am

      Right on Albert Champion. I am Gen X and a computer programmer, and I can’t stand all the useless tech complexity.

      My take on it is, everyone knows it’s crap, but they need to increase the complexity for the sake of “growth”, so therefore we have gone past the point of diminishing return into negative returns. There is a serious safety issue presented by all this clutter. And those dreaming of autonomous cars are delusional.

      PS try Ford’s “backup” warning buzzer that sounds even if there is nothing behind you.

      • Rg
        Jul 4, 2017 at 8:42 pm

        As I mentioned in a earlier post, I sometimes ferry cars for different dealers. The graphical interfaces on the cars are all different. Even trying to figure out how to scan for radio stations is hard from model to model.

    • nick kelly
      Jul 4, 2017 at 3:27 pm

      No planes?

      As someone who shares your demographic I’m surprised that you don’t know that for marketers of other than retirement villages, we don’t exist.

      Yes the geezers have money, but will they part with it? How easily manipulated are they by status symbol ads?

      Look at your choices of vehicle. Average age about 15 years. How much money should they spend to sell you another?

      • Ethan in Northern VA
        Jul 4, 2017 at 10:37 pm

        I’d say the pharma marketing departments know you exist ;-)

        Don’t forget, it’s medium specific. Fox News isn’t going to have ads targeted at the younger generation, all their marketing spend will be on social media.

        With regards to the tech stuff in cars, those infotainment systems probably cost them $40 at most. Huge/easy mark-up, cheap to build.

        • nick kelly
          Jul 5, 2017 at 11:45 pm

          Good point re: pharma. And remember, it is possible to add a supercharger to a perfectly adequate car.

      • Mary
        Jul 5, 2017 at 10:34 am

        Being a geezer myself, I’ve come to understand that corporate capitalism has very little interest in serving our convenience or creating products that respond to our taste. They have other plans for our money. Big Pharma and the medical services industry wait with hands out.

    • Matt
      Jul 4, 2017 at 4:17 pm

      I’m younger (47) and neither I nor anyone I know (including kids in their 20s) want all that computer stuff in our cars either. I don’t know who wants it. The old saying is: Detroit doesn’t make money by the car, they make it by the pound.

    • Spanky Bernanke
      Jul 4, 2017 at 6:50 pm

      I just hit 50 and I could care 2-turds about the cars that rely on my senses. I would hope that no more Boomers are allowed license renewals, so that they can allow the manufacturers to build “auto”nomous cars for us tech savvy to do actual work, instead of just killing hydrocarbons. Take a bus….

      • alex in san jose
        Jul 4, 2017 at 7:23 pm

        I turn 55 in a few months and my eyesight is marginal enough that I’m always kind of surprised when the DMV renews my license – eye tests there are always fun; my left eye is next to useless and my right can be corrected but eyesight is not one of my strong points.

        I don’t own a car and won’t own a car or van unless I’ve got a damned good reason to.

        The reason I mention my age is that I’m right on the edge between Boomer and X’er. I consider myself an X’er along with my older brother, just one year older. The oldest of us, Boomer all the way. The difference is stark: Elite prep school vs. ghetto schools for the rest of us, new clothes vs. Goodwill, nice jobs vs. literally shoveling (OK hosing down) shit, and on and on and on.

        All my Boomer old sister had to to do was basically exist, and it all got handed to her. Yep, living in a multi-million dollar house in Hawaii, the whole schmeer.

        The rest of us, well, older bro was smart enough to join the Navy and stay in a while, then last heard of worked for Grumman and hopefully has hung onto that job tight. It’s been catch-as-catch-can for us. The youngest married a cop; again, a good highschool diploma gov’t unionized job. That it’s with a spectacularly corrupt police department doesn’t matter, she’s set for life.

        The middle two of us wanted to do more than just exist and so it’s been harder for us. Hardest for me because I actually went to college.

        Before X was X, we were called “slackers”. There’s a reason for this. It’s like being on a down escalator; you can run as hard as you like, you’ll only die tired. Slacking is the smartest tactic in the kind of economy we’re in. That’s what I do now; I’m slacking. Working something like 19 hours a week and paying no rent. I’ll work hard when I see it can do me any actual good.

        But where were we? Oh yeah, cars. Helloooooo, car companies, kids can’t afford cars. Have you noticed the “fixie” bike craze? The 20-somethings starting bike companies, bike bag companies, bike cargo rack companies? Cars are still cool to some kids, the ones who can afford ’em, and you can sell cars to the top 20%, but you’re not going to sell cars to the top 90% like in the 1950s because people just plain can’t afford ’em. Kids are asking themselves, what does a car really do for me? And finding that a bicycle can do that, and when it can’t an Uber or the bus or a taxi or maybe a rental car will do that just fine.

      • Ras Moyag
        Jul 5, 2017 at 10:22 am

        Well there is more tech in one F35 than in all of Detroit or Silicon Valley. So an autonomous 35 should be just about here! – just before the real life autonomous cars. And if you don’t believe me Mr tech savvy, go read your dad’s Popluar Science from 1961 or go back to developing games or dating sites. The boomers did the fundamentals for the tech revolution.

    • Rick Helm
      Jul 4, 2017 at 8:19 pm

      Thanks for raising something that has been driving me crazy for many years now. Digital gizmos are clearly designed by engineers to impress their bosses, but the average buyer is not their concern. I bought a Subaru Forester, which I like, but I spent a fair amount of time trying to understand the digital dashboard, and couldn’t for the life of me understand how to change the time until I tried various options for an hour. That’s insane! I remember the turning point in digital insanity for me was many years ago, when a friend was house sitting a neighbor’s home and invited me and a few other friends over for a new year’s party. They had the newest cat’s meow stereo system, but among 20 intelligent and college educated people at the party, not one of us could figure how to make the thing play music. So I played the piano instead and we had a good time anyway.

    • CrazyCooter
      Jul 4, 2017 at 9:11 pm

      My old man says EXACTLY what you said. He was looking at new cars off/on for years now. He likes to call them “automatics dripping with cheap walmart electronics”.

      He wants a standard shift, manual window, no frills product.

      I am a big fan of old rigs at this point. Both me and the wifey have rigs that are 10+ years old, cared for, working all right.

      My backup plan is a late 70 model highboy. Still have some financial drama to deal with, but watch http://www.rustfreeclassics.com regularly.

      One day I will buy one from ’em!

      Regards,

      Cooter

      • nick kelly
        Jul 5, 2017 at 12:27 am

        I’ve talked to guys who do not much else but fix power windows. They luv them. Buy houses, put kids thru school etc, all cuz folks won’t turn a crank.
        The bitch is not fixing the prob BTW; it’s getting to it and putting it all back. The f%cking things are so unreliable they should have access panels in door.

        • nick kelly
          Jul 5, 2017 at 1:03 am

          PS: a big factor is window clean. If they get dirty, friction rises and motor stresses. So keep clean PW.

          Me. I just crank harder.

    • Jon Dough
      Jul 4, 2017 at 10:24 pm

      You sir, are right on the money………….. Thank you for expressing it so well.
      Of course, all of the “technology” that you would do away with, would reduce the vehicle price considerably!

    • nick kelly
      Jul 5, 2017 at 8:37 am

      Carmageddon could strike fast- much faster than RE crash, but maybe not as fast as stock crash. When those robos all head for the exit…

      It takes months to build a house, years to build a tower. Especially with the latter, once you’ve started pouring concrete after a year of financing, approvals, etc. it usually doesn’t make sense to stop. You’re all in and maybe you’ll hit a miracle card. They are still building in Calgary with 25 % vacancy.

      It takes hours to assemble a car and not much longer to shut a line.
      If this turns as ugly as it looks, they may have to shrink production by 25-50 %.

    • Valuationguy
      Jul 5, 2017 at 10:15 am

      I will leave a comment only because no one is stating the obvious…..that the YOUNG (those first-time buyers) are NOT BUYING because it isn’t affordable (especially compared to the options).

      1) They (or their parents) are crushed with student loan debt.
      2) Student parking at universities has DECREASED due to the increased rate of university building construction and their subsequent development of rapid transit systems around U.S. colleges.
      3) There is the Uber/Car Sharing thing that is used my a much larger percentage of the youngest demographic than the average. (While only 3% of population might use Uber on a weekly basis…it usage by 18-26 demographic is 10%+…. with some estimates going as high as 29%).
      4) Job prospects for the young are comparatively low…compared to most historical periods … and increasingly ENTRY jobs in many professional fields are requesting Masters degrees…leading many of the young to REMAIN in college longer (both increasing debt and delaying the start of any income).
      5) Parents aren’t buying their kids NEW cars anymore…..when a good used car can be had for much less (in both price and insurance).
      6) Basic car quality is better…so used cars are actually lasting longer. Sure…the electronic bells and whistles break regularly…but the engine…drive train and basic mechanics are much more reliable leading to allowing more mileage life per car.
      7) People are generally just driving less (passenger miles peaked in 2007..dropped with the financial crisis and has been slowly recovering since to the 2001 level)….but it costs MORE (even indexed to inflation). In addition, there are 25M more vehicles (approx. 10%) driving the same amount of passenger miles as in 2001.

    • Tim
      Jul 5, 2017 at 11:47 am

      To be fair, the market of your age isn’t usually buying many new cars. Consumption drops dramatically as one enters retirement.

      • Jack
        Jul 5, 2017 at 11:54 am

        Tim, “To be fair, the market of your age isn’t usually buying many new cars. Consumption drops dramatically as one enters retirement.” Well apparently, your gen’s not buying them either.

  2. ALBERT CHAMPION
    Jul 4, 2017 at 12:31 am

    oh, and i forgot, if the sun is behind you, the digital dashboard is wiped out in the sunlight.

    and also, since it has a touch screen display, how much do dirty fingers obsure the screen? almost completely.

    who designs this stuff? do they ever drive with it?

    i don’t think so. everyone should run from modern vehicles as fast as they can. they are a joke.

    • TJ Martin
      Jul 4, 2017 at 11:12 am

      What you’re addressing good sir can be summed up in one simple phrase ;

      Technology for Technology’s Sake with no real or viable benefit

      • Suzie Alcatrez
        Jul 4, 2017 at 12:14 pm

        The car infotainment centers are built to sell cars, not actually be useful. A lot of people can’t see beyond the flash.

      • Coaster Noster
        Jul 4, 2017 at 1:47 pm

        As I said (in so many words) it’s the competition between manufacturers. You read the SAE Journal even twelve years ago, and then it was what was “gee whiz” in engine design, horsepower, camshafts. Now, with electronics and screens, it’s again, “We feature this…we are waaaay ahead of the other guys, in features!”

        Please take them away. Next thing you know, we’ll have backup buzzers on our shoes.

      • 91B20 1st Cav (AUS)
        Jul 6, 2017 at 12:51 am

        old engineering joke: “…if something works really well, it doesn’t have enough features, yet…”.

  3. jan frank
    Jul 4, 2017 at 12:35 am

    Ínteresting, that one sentence of yours “They’re particularly after recent-model year cars that look similar to new cars but sell at much lower prices.” In other words, people do not buy transport but buy a mobile status symbol.

    • Willy2
      Jul 4, 2017 at 12:45 am

      – But for a number of people their car is part of their (wo-)manhood. It confirms their (supposed) status.

        • TJ Martin
          Jul 4, 2017 at 11:21 am

          Yeah well Blakesee ..nothing like a little ( actually a whole lot of ) over generalizing ….not to mention raining on your perception of somehow being on some sort of higher ground … here’s a clue … folks like myself albeit in a extreme minority don’t buy to impress you or anyone else . We buy what suits our needs .

          Fact is I’d of been happier back in 2011 if someone like Ford Chevy JEEP Toyota Honda or Subaru had made a comparable car … but they didn’t ..not even close … so Three Pointed Star on the snout it is .. and the fact is I couldn’t care less what you or anyone else thinks about it … with the fact that my owning one increases Capt. Chaos’s ire coming as an unexpected and enjoyable bonus …

        • RD Blakeslee
          Jul 4, 2017 at 11:36 am

          Mr. Martin,

          What compulsion do you have that causes you to cast your commentary aimed at some of us on Wolfstreet in ad hominem terms?

          If Wolf doesn’t limit it, I’m afraid this forum will degenerate, as so many others on the web have done.

        • No worries
          Jul 4, 2017 at 12:19 pm

          Don’t sweat TJ’s comments RD, he’s just an arrogant blowhard who has nothing better to do than post a bunch of self-aggrandizing BS on this site every day, contrary to his assertion of not caring what other people think. One of the lowest signal-to-noise ratio posters on my blog circuit.

    • Jul 4, 2017 at 8:56 am

      These people might be buying both, but they’re trying to save money doing it.

      But then again, many of the cars in these categories (such as subcompacts from rental car companies) are not really considered status symbols.

  4. Willy2
    Jul 4, 2017 at 12:53 am

    – One other metric that sends a worrying signal is that the average age of a car has gone up and up in the last say 18 years. Don’t have any website/weblink to back this up. I have this been reading this in the newspapers since say 2011

    • Willy2
      Jul 4, 2017 at 12:58 am

      – With the help of GOOGLE I found this:

      http://www.autonews.com/article/20161122/RETAIL05/161129973/average-age-of-vehicles-on-road-hits-11.6-years

      – The article also points to something else that’s hurting the car manufacturers. Improved quality of the cars also means that car manufacturers sell fewer cars.

    • Jul 4, 2017 at 9:02 am

      Yes, Willy2, you’re correct. The average age has been going up … for decades. Back when I was in the business, people were fretting because it had reached 8 years. It’s over 11 years now. The reason is that cars last a lot longer than they used to, and people don’t mind driving them longer.

      • RD Blakeslee
        Jul 4, 2017 at 10:13 am

        My 1999 GMC (built and delivered in 1988) which I thought would last me out, died when its computer failed.

        My 1995 Dodge diesel pickup motors on. 1995: Pre-computer.

        • Boop Gahev
          Jul 4, 2017 at 2:00 pm

          Don’t forget that the buying public are not the only customers that the Auto companies serve.

          Before the wants and needs of the general buying public are met the demands of the EPA and NHTSA must be satisfied first. It’s the law.

        • Jul 6, 2017 at 3:39 pm

          Sorry, Your ’95 Dodge has a computer…… My 88′ Dodge has a computer too….. My ’86 Honda has a computer….. I think computers started to appear as analog comparators back in the Dodge Lean Burn years…. “76? Engine computers came in with the first feedback carburetors, 1978-79.

          Our old cars ’88 Dodge, 91 & 86 Honda are here running mostly because they didn’t rust. My first gen cars 73 72 fords rusted to where they were not fixable. I liked them, and except for gas milage I would still have them. Now at 56 yrs old, and new cars with $30K on the sticker make me think my next car will be a “survivor” they are on CL all the time for $10K or less. After all if they start phasing out gas engines in 3 years at the dealers, what’s going to happen to the new car market then…..?

          Anyone seen AutoZone stock, and the rest since the Volvo announcement….?

          Anyway, I have been watching CL for a nice ’78 Firebird, ’71 Dart, Coronet, or a ’85 Cutlass in the $5K to 8K range, with a stereo that has a knob for the volume, no backup help, and some I think came with only a drivers side rear view mirror…..

          .

      • economicminor
        Jul 4, 2017 at 12:27 pm

        Better oil too… I use synthetic in my 2003 Accord and Tacoma. The Accord has 215,000 with almost no oil used between 15,000 oil changes.

      • Mike Mc
        Jul 5, 2017 at 11:30 am

        My wife and I own late model cars – one bought new and one bought certified used – and will drive them until the wheels fall off, barring major accidents.

        The economics were this: the 2011 Mazda 6 bought new for her new job replaced a 2000 something Mercury Villager van that got her three sons through high school – and held the punk rock trio’s equipment – before starting to crap out at 170K as they are known to do.

        We repaired the 1994 Mazda MX6 and 1999 Mazda B3000 4×4 up to the end, then sold them on consignment through a friend with a used car lot (who I’d bought cars from for 20 years – salvage titles rebuilt by his crew who’ve done this for 30 plus years).

        Late father-in-law’s estate settlement and her new job gave us means and motive to buy the 2011 for cash… despite having the dealership fight like hell to get us into a super low rate loan to pay for the car. She will never do buy another car from this bunch thanks to that.

        House sale and relocation 50 miles up the road to our state’s major metro meant a 100 mile commute for me, so we paid cash for a 2014.5 Toyota Camry Hybrid and a 70K warranty (balance of OEM 100K warranty). Dealer put brand new set of tires on it as well. MPG at Interstate speeds (75 to 85 mph here) from 36 to 41 so a solid deal that still holds five adults plus luggage as needed.

        Wife is a pastor and was a single mom when her boys were middle school/high school so she knows plenty about saving money. My three kids learned similar lessons since my ex was a public school teacher and I was an office worker.

        All six kids consider cars appliances and nothing more. A nicer appliance might be more comfy but if it doesn’t ‘pencil out’ economically, no thanks Frank.

        All of this to say that 1) for most working and middle class families, it takes a nice estate or house sale to allow you to pay cash for a decent ride with a warranty;

        2) Working and middle class families like ours have figured out ways to keep decent 20 + year old vehicles operating until they crap out (i.e. cost more to fix than replace);

        3) Our kids – having grown up seeing their parents do this dance their whole lives – are not interested in playing this stupid game, and prefer their electronics in phone/computer/game console form.

        4) Also, our kids are working off a variety of student loans and the only one contemplating a new ride just paid his off… and makes the most money of any of us, siblings or parents, and has a 20 minute commute in a northern state so a new SUV to replace his 2001 CR-V coming soon.

        Eagerly awaiting better mass transit options nationwide, not sure as working non-retired Boomers the wife and I will live long enough to see actual self-driving cars. (I’m inclined to think JH Kunstler’s right on this sort of thing.)

  5. Alec
    Jul 4, 2017 at 3:47 am

    Probably not as much a problem in the US and other first world markets, but in addition to the ever increasing price tag for a new car there is the fact that the repair costs have gone through the roof, and that local, independent, mechanics are being squeezed out of the equation by the fact that they are computers on wheels that involve a ton of proprietary technology they just can’t service. The end result is that I know quite a few people who can afford a new car, but would rather settle for an older model in good condition… of course, as years go by, these are getting harder and harder to find.

    • intosh
      Jul 4, 2017 at 4:49 am

      Yup. The mechanic I dealt with recently said the same thing. Some parts are impossible to repair and some other parts require expensive new equipment. Cars are becoming more and more like the newer laptop computers, aka ultrabooks — not made to be repaired.

      • Alec
        Jul 4, 2017 at 6:01 am

        Another segment of the population that is likely to be affected by the loss of reparability: those living in rural areas where car dealerships are not financially viable. Let’s face it, while driving a couple of hours to pick up a new car may be feasible, knowing that sooner or later you are going to find yourself with no choice but to tow one to the nearest dealership (in addition to the cost of the repairs themselves) is not an appealing proposition.

        • TJ Martin
          Jul 4, 2017 at 11:26 am

          ” Another segment of the population that is likely to be affected by the loss of reparability: those living in rural areas where car dealerships are not financially viable ”

          Now there’s a fact no one in the automotive industry takes into consideration … Two Thumbs Up ..

          Comment of the day to a factor of ten in my opinion

      • Ethan in Northern VA
        Jul 4, 2017 at 10:45 pm

        Uh, with the internet so much information is shared about repairs it’s unbelievable. I can wake up in the morning, without getting out of bed roll over and watch videos on youtube of all sorts of car repairs. Haynes or Chilton books are probably a thing of the past — one can find most of the information online. Dig real hard and you can get pirated copies of things like the repair-shop-only Alldata, or copies of the real shop manual.

        Sure there are computers, but there is a crazy amount of people working to reverse engineer all of that. Between hacked copies and clone cables of the factory service software to 3rd party forklift upgrades of the car computers/firmware for performance to full community built open-source fuel injection systems like Megasquirt I wouldn’t say DIY car repair is impossible.

        • intosh
          Jul 6, 2017 at 2:17 am

          iFixIt shows you how to disassemble any Apple devices and computers. Doesn’t mean most people will want to do it.

          There is also the warranty concern.

    • Lee
      Jul 4, 2017 at 6:42 pm

      Yeah, just wait until all those fancy electronic gizmos fail after the warranty expires – you are looking at big bucks. Thousands for one of the nifty computers or entertainment centres.

      No doubt that the ‘stealerships’ are salivating just thinking about how much money they rip-off from their loyal customers.

      That along with all the other rip offs going on in the service/repair business for new cars make you want to stick with the lower value cars.

      Yeah those German cars are nice, but with parts prices and service costs out of the world downunder here in Oz, the Toyota Corolla is the best: – runs forever, cheap to run, cheap to fix, anyone can repair one, and you can get parts right away.

      Even good old Honda parts sometimes have to be shipped in from Japan as there are sometimes none in country!

  6. Mark
    Jul 4, 2017 at 5:41 am

    Gotta have a new car – how else can NSA track you thru GPS ?

    Or turn off your new car from Gov. central location to curb “unrest”.

    Or best- testify against you in court re how fast you were going, braking etc. (Ask Kaitlyn about it).

    Love my 2003 CRV, best car I ever owned… totally reliable 30mpg

    • Dave
      Jul 4, 2017 at 7:07 am

      I bought a 2004 CRV new and my daughter inherited it 6 years ago for college. We call her the “destroyer” as she somehow manages to break everything she owns.

      The CRV now has 180,000 miles and I had to replace an O2 sensor about 5 years ago…..

      I do all the brake jobs, oil changes and small maintenance jobs myself.

      And even though there is wear and tear on interior and exterior the thing still drives like a new car, and ZERO rust in the snow belt of east coast, ZERO.

      • Kent
        Jul 4, 2017 at 8:56 am

        Honda in general makes great cars. I’ve only bought one non-Honda in 20 years: a 1994 Dodge Grand Caravan, (hauling kids). Never, ever even thought of buying another Chrysler product since.

        I attribute Honda’s success to their ability to keep a small line of vehicles and make slow incremental changes. You can only do that when your market is a very loyal following of folks who prize reliability and low operating costs over status.

        Because the seats fold down in my Civic, I can even haul a decent load of lumber.

        • Dogstar
          Jul 4, 2017 at 9:38 am

          I too bought a chrysler product once. Once. Roof liner fell off, trunk leaked despite 3 trips to the dealer, leaving a puddle on the back seat floor boards, head gasket failed, multiple trips to dealer to reset computer after the check engine light would come on, and all of this in 3 years. Dodge isnt their name, its more of a suggestion.

        • Jack
          Jul 4, 2017 at 10:24 am

          Re: Dodge, this one blog confirmed for me my decision not buy a Dodge truck when I thought about it a few years ago:
          https://dodgesucks.wordpress.com/2011/08/07/dodge-sucks-why-im-creating-a-blog/

        • nick kelly
          Jul 5, 2017 at 1:27 am

          2001 Civic bought July 2014. 3300 C$
          Mileage 217 K kilos
          Now 270 K

          Repairs: rear brake shoes, battery= 350 C$
          Car has 1.7 motor and fuel economy is like big MC.
          Still looks good too. Very thick original paint.

          Chrysler was fined re: warranty issues 30 years ago. A serial offender.
          Right now consumer reports has a list of 12 don’t buy cars.
          Three are Jeep: Cherokee. Patriot, Liberty.

      • Gene
        Jul 4, 2017 at 10:15 am

        I am an H.D. Tech by trade (old school), however, I do know diagnostics and how to interpret the data given by the various ‘readers’ necessary in order to extract this info. I used to do a lot of work on the automotive side because I could comprehend the data given. I won’t get into the horror stories of what happens all too often to people who try to get their vehicle ‘fixed’, kind of like new doctors today throwing XYZ pills at you to make a soft tissue injury feel better. Doctors today don’t seem to know how to heal anymore, and the same can be said about newer vehicles and the so called ‘factory trained’ technicians of today. Just keep on replacing parts at the owners’ expense until the vehicle finally starts to run properly again.

        The ‘old timers’ who read this will remember when I mention this about how they could bring in their car to a shop or dealership and have it diagnosed for free and then decide if they wanted to book an appt. to get the repair done, the most reputable repair shops and dealerships did not have a problem if you attempted to do the repair yourself. Chances are you became a good client because they usually wound up doing the work for you if the work was too much to take on at home.
        Today, how much do people get soaked, I mean charged to have a head light bulb replaced when half the front end needs to be ripped out to gain access.
        Anyway, to make a long story short, I personally will not drive a vehicle that has a ‘wireless umbilical cord’ connected to a network. I still drive vehicles that are computerized, however, the computer management system is strictly there for the fuel management and efficiency, that’s all.
        I sure as hell will not drive or own a vehicle that does not have a direct mechanical link to the steering and braking system.
        Also, I will not own a vehicle that tells me what to because I am supposed to be the one that is alert and in control when I am behind the wheel. If you need your car to park for you or to tell you that you are wandering all over the highway, you should not be there in the first place.

  7. MC
    Jul 4, 2017 at 5:46 am

    I think the US is at least trying to reduce airspeed before landing, something that cannot be said about Europe.
    In Italy car loans (in number) went up 14.3% in 2016. In Britain the same figure has gone up 12% while value has gone up 15%. In short more people borrowing more money.
    While part of the reason is higher price tags, it should be noted no money down deals, widespread before 2009, are back in style: financing the whole price of the car is once again possible.
    I haven’t got incentive figures but I can tell you in April I bought a brand new BMW motorcycle and it had “progressive” incentives: the more of the price you paid in cash, the bigger the incentive. I paid the whole amount in cash and got two grands off it, plus a decent trade-in for a barely functioning boxer. I have been told BMW would like to favor cash deals now, at least on motorcycles, and the financing options surely looked like it (starting from 5.76% EAPR).

    • Meme Imfurst
      Jul 4, 2017 at 6:16 am

      The lending standard in Europe are a joke, there are none. No Job, No Money, no future, here lets put you into a house and give you some spending money from a mortgage bigger then the value of the house…and we’ll add in a new car of you choice. Heck, make it a Rolls since it is only money.
      Insanity is growing faster that summer weeds after a nice rain.

      • MC
        Jul 4, 2017 at 8:13 am

        At the present VAG is offering 0% financing on most models including, much to my surprise, Audi’s. I learned about it by seeing that every three new cars I see (non-customized, tied to the vehicle license plates help here) two are VAG’s.
        VAG is still not very hot with leases (mostly a BMW thing here), so I can be reasonably sure these cars were bought and not leased.

        As usual interest rates are considerably lower on SUV’s than on ordinary cars so a large percentage of those new cars are big and expensive: even with generous incentives we are looking north of the forty grands mark.

        Honestly I don’t know how people can pull this off.
        I have no problems saying I am well off, but I am well off because I keep expenses, both on the work and in the private life well under control. My equally well off colleagues do the same: they save their money by avoiding needless expenses.
        My reward? I have some money to invest right now, and the best yielding securities available are Pemex bonds with all of a princely 4.25% yield. Investment-grade securities have mostly negative yields. Thank you but I am keeping the cash: I am already invested heavily enough in equities.

        My mother says my temper has taken a decise turn for the worse lately and she would be right: I am here forced to do somersaults to at least earn enough interest to recoup inflation and fees so as to allow some people to play big shots.
        Life isn’t fair, OK, but there’s a limit.

        • RD Blakeslee
          Jul 4, 2017 at 10:07 am

          Smart lifestyle. You make your own life “more fair”.

        • RangerOne
          Jul 4, 2017 at 10:43 am

          A lot of people driving leased expensive cars are living pay check to pay check or worse in debt spiral.

          These are the same people who would look at you confused because you like to keep 6 months emergency savings and refuse to give up a $1500 buffer in your budget.

        • Jack
          Jul 4, 2017 at 10:57 am

          RangerOne, not to be critical but a “$1500 buffer in your budget” but that would last me about a month. I prefer more like a $15,000 buffer.

      • Gershon
        Jul 4, 2017 at 9:30 am

        Loaning cars to people who are manifestly non-creditworthy? What could possibly go wrong?

        http://www.zerohedge.com/news/2017-07-03/undercover-investigation-exposes-deteriorating-auto-lending-standards-europe-no-job-

        • MC
          Jul 4, 2017 at 3:27 pm

          We are still not back to the 2002-2008 excesses but we are getting there faster than last time.
          While I don’t believe much of what’s written in that article, zero money down loans are back and well advertised (I got an email from Ford just last week), jumbo final payments are back, lax background checks are back… this time around we also have loans for interinal and seasonal workers. A three-months job contract is usually enough to get you approved.

          The big difference is this time around trade-in’s are not merely accepted but welcome regardless of age, mileage and condition, and you can get extremely good deals on cash purchases.

      • fajensen
        Jul 5, 2017 at 9:14 am

        Ahh, the grass is always so much Greener over here :)

        Just try defaulting on a loan in Europe. It’s not like in America, where bankruptcy only lasts a few years and one can send that McMansion back to the bank who provided the loan like a sofa bought on credit.

        Here, the lenders want blood. Firstborn sons, that kind of thing.

        The bankruptcy courts will give it to them – you cannot just dump your house keys and clear the debt The Californian Way, no, it will remain and you (or you partner if he, she cosigned) are liable for all of it for at least 20 years into the future if there is a possibility of the money ever being recoverable.

        If you gotta go broke, go BIG, then they *might* award a write-off.

        Of Course lending standards are lax! The Law is fully on the Lending Side, meaning Zero risk and endless fees to stick the defaulter with. There is no back pressure against even the most usurious lenders!

        Since loans, even the SMS loans, are very, very rarely written off they can be safely booked as assets up the the total outstanding debt and used as collateral by the owner (or perhaps fodder for derivatives).

        Making free money with non-existing money *That* is the Game.

        Having said that, there are options and loopholes.

        The “impossible to write-off debt” is one of the main drivers behind the boom in leasing and vendor-financing deals, with leasing one *can* return that car when hard times arrive. Consumer law states that the vendor has to take back the financed purchase on request, clearing the debt (a loophole in “the debt is forever”-rule).

        Most vendors take a hefty charge for that, buying something through Leasy will cost 30% above just paying with cash in a normal shop.

        Car dealerships are competitive with the banks on rates and are often giving much better deals other lenders, provided one can pay 20-30% cash up front.

        Sixt does mini-leases at a reasonable price too, this is car hire for one month at the time. Very convenient for young people. We are moving towards nobody owning anything and yet owing everything.

  8. Meme Imfurst
    Jul 4, 2017 at 6:24 am

    As always Wolf, terrific reporting.

    I can’t help but see that the declining standard of living (at least in America) can have any affect other than sales in the toilet for cars and goods in general. All these reports of manufacturing, consumer, and commodity carnage are a result of 105 million out of work, aggressive automation, the well connected getting the FED bucks, head to toe debt in every segment of the world, and I could list for several hours all the rest, but we all know this. The 99% are the ones who keep these car companies afloat, not the 1%. Everyone is broke, and we all know that too. Everyone except the 1% and they are not spending either.

    • RD Blakeslee
      Jul 4, 2017 at 10:02 am

      Meme,

      It isn’t that bad for savers who have avoided most debt.

  9. unit472
    Jul 4, 2017 at 6:27 am

    Saw a CNBC article yesterday on how states, including California, are now eliminating incentives or even adding fees for electric cars. Looks like the Feds will do the same.

    While this may not affect sales of $100,000 Teslas, though the ‘novelty’ factor could wear off, it most certainly will impact sales of Bolts, Leafs and other electric vehicles

    • MC
      Jul 4, 2017 at 6:39 am

      Denmark completely eliminated subsidies for EV’s starting January 1 2017 after starting to phase them out in 2016.
      Merely phasing out incentives resulted in Tesla sales to go from 2700 units in 2015 to 170 in 2016, far worse than the whole EV average (60.1% drop in sales).
      Morale: ending incentives does hit Tesla sales, and worse than cheaper vehicles.

    • Wilbur58
      Jul 4, 2017 at 5:01 pm

      Unit472,

      Prius still sells despite not having any government support for quite some time.

      It’s the mileage. Same with Civic Hybrid and all the rest.

      And then the rich might get a Highlander Hybrid, for example, despite it making less fiscal sense than the regular gas version.

    • alex in san jose
      Jul 4, 2017 at 7:30 pm

      Unit 472 – the argument is that electrics aren’t paying gas taxes, that pay for the roads. So there’s be some sort of per-mile tax.

      That would not be so hard to implement, just check the odometer when you pay your registration.

      • fajensen
        Jul 5, 2017 at 9:27 am

        The income tax already pays for the roads! Taxes *never* keep their original scope and once created they can never go away either …

        A per-mile tax is just another ever-escalating screw to screw us over with (with 24/7 surveillance dolloped on top because “Cheating”).

        I am considering a Prius myself. Before my current car craps out with one of those 3000 EUR sudden repair bills they engineer into modern cars (the 3000 EUR is better spent on down payment for a new car).

  10. Kevin Beck
    Jul 4, 2017 at 6:43 am

    Due to increasing government rules about on-board vehicle equipment, they are becoming too expensive to both repair and replace.

    Before the stupidity of the Cash for Clunkers program, inexpensive used cars could be found. Cash for Clunkers removed over 2 million road-worthy used vehicles from the supply chain.

    Then there is the issue of “safety” equipment like air bags. If those are deployed in a crash, the cost to repair the car usually exceeds the market value of the car afterwards, so the insurance company will insist on totaling out the car, forcing the owner to buy something else. And the GPS tracking in the vehicle? Does anyone think that adds value to the car itself? Yet when new, it has to be paid for, by someone.

    People are being herded into mobile prisons with these vehicles, since our government keepers weren’t satisfied keeping us locked in our own houses.

    It will get worse before it gets better.

    • Suzie Alcatrez
      Jul 4, 2017 at 12:22 pm

      A grand total of 690,114 cars were turned in during the Cash for Clunkers program. Far less than 2 million.

      The decrease in production from 21 million cars a year in the peak before the Great Recession to just under 9 million a year caused the decline in the number of used cars available on car lots.

      • Bee
        Jul 4, 2017 at 5:50 pm

        He must have been thinking of the cost. $2.8 BILLION.
        If you worked in the used auto industry, you’d know C4C did indeed “cause a huge decline in number of used vehicles available on car lots”.
        From 2011 cars.com article: “I think we’re paying for it now. Prices for used cars are up, and the cheaper stuff was higher now than it was before.”
        That’s not from fewer 2010 models being made—the individual was talking about low-end models becoming scarcer and more expensive.
        The effect was immediate.

        • chris Hauser
          Jul 4, 2017 at 8:09 pm

          yes, used cars for a while were dear, now, well, they’re cheap.

          does seem that people can only buy so many new cars.

          in 2017 i’ve upgraded from a 98 to an 03. hope it’ll last till 22.

        • Bee
          Jul 4, 2017 at 10:31 pm

          Chris – I drove the snot out of my last car too. There were no decent used cars during that time period when I needed one, so I had to buy much newer—I nearly had a panic attack spending that much on a car.
          My former employer was threatening our jobs—“We can fire you at any time”—so I couldn’t risk losing any work (or being 3 minutes late). Note: Karma’s a bitch.
          The last problems were coolant hoses blowing right when I got to work and another time when I was nearly home–not confidence-inspiring on 100-degree or negative-35 degree days.
          Some day I hope to live where I can drive a cheap old car! Not possible with the commutes here.
          I’d love to share more stories about that employer sometime.

  11. John
    Jul 4, 2017 at 7:48 am

    Interesting article Wolf, but odd that you should call those figures the average “incentives”, shouldn’t they rather be the average refund of overcharges? I have a $12,000 kitty cat I’d love to sell, and I would be willing to do a $12.001 rebate on her.

    • Jul 4, 2017 at 9:14 am

      John, the industry has actually acknowledged that price increases have been pushed too far. I’ve heard Ford execs admit that. So now what? They don’t want to cut sticker prices on new models by thousands of dollars (it would crush the values of prior year models in the wholesale market). So they add incentives and hope for the best.

      • Coaster Noster
        Jul 4, 2017 at 10:54 am

        Great column here, Wolf. Loaded with stats, numbers, and commentary…. I wondered if you might take the 4th of July off…no? Thus, I declared to myself that you are

        “The hardest working man in “woe business””.

        Meant as a compliment, as you warn about the negative developments, basically unseen on the surface, that eventually impact us all..!

        • Jul 4, 2017 at 12:21 pm

          Actually, I’m taking the entire 4-day weekend off (so to speak). We’re at Mt. Shasta, hiking, swimming, kayaking. But in between, evenings and early mornings, or when I can get online, I try to get some work done. Right now, we’re loading up the car. Obviously, I’m not loading up the car right now… :-)

          You’re totally right, though. A guy (or gal) gotta pump some fresh air through the brain every now and then. And being out in this beautiful world of ours, surrounded by nature, does an awesome job in that department.

        • IdahoPotato
          Jul 4, 2017 at 2:29 pm

          Happy Holidays, Wolf.
          Mt. Shasta is magical.

        • Jul 5, 2017 at 12:31 am

          It is!! Snow-covered above 8,000 feet, with lots of snow in the woods starting at 6,500 feet…. on 4th of July!!

          But now I’m back.

      • chris Hauser
        Jul 4, 2017 at 8:11 pm

        good point. wholesale market drives the accounting for residual values, which keep up new car values, which, etc etc.

        interesting.

    • RD Blakeslee
      Jul 4, 2017 at 9:56 am
  12. Kf6vci
    Jul 4, 2017 at 8:52 am

    Hear, hear. It will get worse in Fall and Winter. Wolf, do you have data showing the changes in LSVA, labor share of value added per car over the last 2 decades? I fear the labor content has been shrunk…

    When credit dries up, sales will tank much more!

    • Jul 4, 2017 at 9:20 am

      It is certain that the labor content has shrunk due to automation. But the labor content is very hard to determine because automakers use a global supply chain for their components (assemblies of all kinds), and those suppliers source their components globally, and all of it involves increasing automation and decreasing labor somewhere.

  13. Kent
    Jul 4, 2017 at 9:10 am

    I didn’t realize truck and SUV sales were triple car sales for GM and Ford. I must be seen as a freak by most of my fellow Americans. Deriving around in my paid for Civic, pissed off when I have to spend $20 to fill it up.

    It must be wonderful not to even think about spending $500/month with $30k outstanding on a pick up you only use to commute to work in. $4 gas? Blame the government!

    • Frederick
      Jul 4, 2017 at 10:17 am

      Kent I’m with you The only trucked that I’ve owned have been worked to death alongside their owner Can’t wrap my mind around why someone would want to drive a truck for any reason but utility but I’m the strange one I guess

    • Coaster Noster
      Jul 4, 2017 at 11:02 am

      Kent, I may be behind in my tax knowledge, but it used to be, if your business utilized a vehicle with a GVW over 5000 lb, you could deduct the cost of that vehicle, even if you were, say, a title company, or some such “no freight” enterprise. Tax laws and rules form our society.

      Last week I witnessed an enormous Ford truck, incredibly stretched, sawing back and forth trying park on our little main street, stopping traffic in both directions. I pulled my (little!) Ford Ranger in next to it… the bed on that Ford was as clean as a surgical instrument. Mine looks like a largish dust pan.

      • alex in san jose
        Jul 4, 2017 at 7:35 pm

        The guy I work for got a big GM truck hoping he’d be able to write it off under that program. He was not. A $50k mistake.

        I’ve told him he’d be much better off with something like a Ford E250 or even E350 van, but he absolutely will not drive a van, he has to have a truck. The E350 at least may have been able to have been written off, too.

        If I buy anything it will be one of these “business” vans, they come in a range of sizes, no seats, no fancy stuff, you see ’em all over doing deliveries and stuff.

  14. straightfromla
    Jul 4, 2017 at 9:26 am

    …as corporations discover that cutting labor costs is equivalent to eating your own tail…

  15. Gershon
    Jul 4, 2017 at 9:28 am

    The rising costs of housing, especially rents, means less money available for big-ticket purchases like autos.

    Heckova job, Ben Bernanke & Janet Yellen.

    • Rates
      Jul 4, 2017 at 1:32 pm

      It’s not just housing. Prices on outside food, and even public transport tickets are rising. On the later, the SF Muni just raised the price of the monthly pass again and it’s not even been a year since the last one.

    • Frederick
      Jul 4, 2017 at 2:17 pm

      Housing prices in Chicago aren’t going anywhere but down due to all the budget problems and publicity Taxes are going up from already very high levels Just take a look at Zillow and how many sellers have cut their asking prices just to get out while the getting good and I think it’s already too late Ask yourself would anyone be dumb enough to get themselves involved in that quagmire Same for places like Connecticut and Jersey New York and Mass Too to some extent I’m getting the same feelings that I got in 2007 regarding residential RE

  16. nick kelly
    Jul 4, 2017 at 9:33 am

    I thought I knew my autos sort of but I didn’t know Hyundai had a light truck.
    Does this mean its small SUV like Santa Fe?

    Re: this whole truck phenom, it would be interesting to know how often the average truck is hauling or towing something, and how often its just running to the store for a loaf etc. or just being used to transport the humans.
    If I was GM I’d commission a secret study on this cuz ex trucks they are dead.
    BTW: I’ve only ever owned one truck, a Ford Ranger, at the same time a Civic was my daily driver.
    I was quite impressed with it and noted that although it had ZERO room behind the bench seat, the box (i.e. the payload) was almost the same size as the monster half- tons with extended cab.

    I’ve heard it’s not sold in US anymore, but here in Canuck you see lots of apparently new ones.

    • MC
      Jul 4, 2017 at 10:47 am

      Look up Hyundai Santa Cruz: apparently is a brand new model.

      I don’t know about the engines Hyundai offers on the US market but those sold in Europe suffer from the same problem as the Euro Ford Ranger: engines available are simply too small for a work truck, especially one in that class.
      That’s part of the reason the Toyota Hi-Lux still outsells every other truck here despite being the most expensive by a fair margin.

      • Frederick
        Jul 4, 2017 at 11:49 am

        MC You’re correct about the Rangers engine being too small for serious heavy loads I blew a 4 cylinder in a Ranger by hauling loads of sand and brick working masonry My next truck was a V6 F 250

  17. RD Blakeslee
    Jul 4, 2017 at 9:48 am

    “Positive spin” – film a Hyuandi backing up in old-timey analog film and run it.

    The wheels will spin forward.

  18. beadblonde
    Jul 4, 2017 at 9:53 am

    My observation is that credit appears to be infinite. Advertised prices on lease returns of “aspirational” cars haven’t budged much. It’s probably the same syndrome as ten years ago, no problem fobbing the debt off on the yield-starved.

    So perhaps trouble is limited to the unwashed.

  19. Lotz
    Jul 4, 2017 at 9:59 am

    Overlooking the super sized margins that the parts dept at dealerships make ?

  20. Old Farmer
    Jul 4, 2017 at 12:16 pm

    Might there be a connection between the US preference for trucks and SUVs and the epidemic of obesity? Hard to fit a 400 pounder into a Hyundai Elantra.

    • jb
      Jul 5, 2017 at 2:05 pm

      good point , a super sized person has difficulty fitting comfortable in a non truck. I am over 6 feet with a large build, i need truck . I just don’t fit in many other vehicles. Now in the old Detroit iron vehicles , i had no problem. it would be interesting to see just how much driver “space” has been reduced in the past 25 years .

  21. Rates
    Jul 4, 2017 at 1:22 pm

    Just noticed a P2P lender i.e. Lending Club entering the auto refinancing business, perhaps they can help lower the monthly payment?

  22. Realist
    Jul 4, 2017 at 5:05 pm

    Considering all the Urban Assault Veichles that have become so popular, a soothing thought is that the current incredible low oil price is a passing phenomenon and someday in a not too distant future the price of oil has to go up due to the cheap to extract oil running out, well, then it will be interesting to hear people’s complaints when they have to fill up their UAVs. And what will then happen to the market for new or used UAVs ?

    • alex in san jose
      Jul 4, 2017 at 7:37 pm

      Realist – People will live in them. We have millions of homeless people.

    • Frederick
      Jul 5, 2017 at 3:17 am

      Realist Exactly and I will NOT feel sorry for the wasteful idiots

  23. bikeninja
    Jul 4, 2017 at 5:50 pm

    New cars are lasting longer because of improved metalurgy and manufacturing tolerances, but increasingly their usefull lifespan is being limited by part availability and the cost of complex repairs. A car from the early 1990’s might have needed an engine rebuild after 150,000 miles but that could be done locally and parts were available. Now an engine might run mechanically for 230,000 miles but the car might be taken off the road far earlier when the engine management computer fails but new ones are no longer produced. Most of the parts on previous generation cars became generic with time so water pumps, etc could be purchased at the auto parts store. The cars built in the last 8 years or so have many proprietary electronic components that are only manufactured by the OEM so when they stop production of a critical part it might be unobtainable.
    A mechanic friend of mine recently told me about changing the timing chain on a less than 10 year old Audi, that had such complicated access that the fair price for parts and labor was in the ballpark of $9000.

    • fajensen
      Jul 5, 2017 at 9:41 am

      Audi is always a bitch! Only three kinds of people drive Audi: Owners of kebab-shops, salespeople, and mechanical enthusiasts with a workshop.

      A colleague of mine swears to Audi because once they hit the first 3000 EUR repair job they are very cheap to buy used and he has the week or so it takes to remove the front for changing the timing belt or water pump.

      Citroen will be done in by the brakes of all things, those Renault turbo-diesel engines will run forever. Had that happen twice, so now I drive Toyota (which are boring but supposedly reliable)

  24. Jul 4, 2017 at 6:30 pm

    GM apparently has 980,000 cars on the lot.

    I can’t see this becoming a problem until there are at least 1.1 million cars packed up.

    At 17,000 cars a month that should taken another 6-7 months which takes us into early 2018 for this thing to blow!

    So calm down for the moment – look out 2018 when TPSHTF!!!

  25. michael
    Jul 4, 2017 at 7:07 pm

    Your assumption is that demand for and prices of oil will rise. That assumption will be wrong if there is depression, demand and prices would crater.

  26. Curtis
    Jul 4, 2017 at 10:23 pm

    Well as a 29 year old this is what ive been through in cars. Had a 300d Mercedes as my first car(loved) have a Mercedes sl560(love) had a 2007 chevy avalanche (loved) had a 2010 camaro(loved) have 2013 f350 with the emmisons pulled(love) 2013 bmw 320i(love) and 1978 chevy 454 pickup i just restored. Id say ive had a good spread of cars. The tech stuff is nice but needlessly adds cost to a car. Just give me a manual transmission, good stereo and solid mechanicals. Keep your lane departure assist and voice activated controls. Also i wish a new ford f350 didnt break $100,000 now in Canada. Rather just hire people to deliver my stuff at that price.

  27. ALBERT CHAMPION
    Jul 5, 2017 at 12:12 am

    i don’t want you to think that i am a complete luddite.

    the edge had one feature that corrected most of its blindspots. it had sensors in the side mirrors that warned of a car just off the right, left rear quarter panels.

    i thought that was an intelligent feature.

    and i would love it if that kind of sensor could be retrofitted for my older cars. which have distinct blindspots in those locations.

    and then there are the issues of manuals. i have all of those for all my cars. would have been nice had the text been printed in 12pt rather than 6pt type.

    nicer still would have been a manual on a cdrom that could be played in the cd player. i think that hyundai did this, but, so far i can find no other manufacturer that has done that.

    why?

    as i recall, the last daimler sonderklasse manual was 800 pages long. every aspect of the dash had to be programmed. if an owner couldn’t figure it out, the benz dealer would program it for the owner. for a fee, as i recall.

    the pre-2000 benzes all had the same dash. the same analog controls. very user friendly. but then…..

    from 2000-2004 benz electronic/digital controls rendered those model year cars “garage queens”. only in 2005-2006 model year cars were those glitching control systems remedied.

    and then, in 2007, benz dived back into the fire. altering the controls that had been remedied for another round of control mystification.

    oh, i am given a loner when one of my oldsters is in at the dealers. because there really are no indy repair facilities left-the dmca act seems to have wiped them out-but even the service staff at the dealer don’t know enough about the controls to train a loaner-user to operate the controls.

    they can teach me enough to get the loaner to my garage. where i park it. then drive one of my oldsters until i have to return the loaner, picking up one of my older cars.

    as oliver hardy would have said, what a fine kettle of fish you have gotten us into now.

  28. zoomev
    Jul 5, 2017 at 7:11 am

    there she blows…

    Sheehy Hyundai of Waldorf

    New 2017 Hyundai Sonata Sport…$13,977 – MSRP $24,655

    if that’s for real 43% discount

    • zoomev
      Jul 5, 2017 at 7:15 am

      just checked manheim MMR …they are selling these new within $500 of used wholesale

    • beadblonde
      Jul 5, 2017 at 10:10 am

      Wow. The panic is on!

  29. mvojy
    Jul 5, 2017 at 8:46 am

    Car makers got away from basics which is reliability and safety. The lights, bells and whistles are totally unnecessary and don’t justify their increase to car prices. If the old basic Volvo’s were for sale now they could use that Dudley Moore slogan: “Volvo — they’re boxy but they’re good.” and they’d beat Hyundai by a mile.

    • TheDona
      Jul 5, 2017 at 12:10 pm

      And yet Volvo is changing their game to go all electric. https://www.wsj.com/articles/volvo-to-phase-out-conventional-car-engine-1499227202

      • Jack
        Jul 5, 2017 at 12:25 pm

        TheDona, EVs aren’t for everybody. I can just see a family pulling a tent trailer to a campsite, if it gets that far on a single charge, only to find the battery’s dead the next morning and there’s no place to charge the thing. With two or three screaming kids, that should be entertaining (to watch).

  30. RudiProtrudi
    Jul 5, 2017 at 1:12 pm

    What is the definition of “car” and “truck” in the sales data? For example, is a Nissan Murano a car or a truck? The reason I’m asking is that the article said that Hyundai’s “truck sales are still up 11.6%, but car sales are down 14.3%.” Hyundai doesn’t make a “truck” so are SUVs “trucks”?

    • Jul 5, 2017 at 1:22 pm

      Yes, SUVs are considered “trucks.” The category started a long time ago when the term “SUV” didn’t even exist. The Ford Bronco of 1987, for example, was clearly a truck and it was based on the F-150 chassis. Things have gotten a lot more complex since.

      Large SUVs are the size of “trucks,” so it makes sense. But it’s not nearly that obvious when you look at smaller SUVs. But we now live with the two categories of “trucks” and “cars.”

  31. a.hall
    Jul 5, 2017 at 3:49 pm

    Here in the UK, the latest Financial Suicide Bomb is Sub-Prime Car Finance. A young Person looks into the New Car Showroom at a Mercedes, Audi, etc and wanders inside. He tells the Salesman that he doesn`t have a Job or House. The Salesman organises a Personal Contract Purchase PCP Deal; £20,000 ($27,000) is possible, with No Money Up Front, No Job, Bad Credit History. Sound Familiar? If the Loan is Not Paid Off in the Agreed Time, it can be Rolled Over or to agree to another Brand New Car.
    This Racket is running Unchecked by Any Government Regulator.
    As the UK Slavishly Copy any US Get Rich Quick Scheme; are there similar Frauds running in the US ? Is this the Next US/ UK Bubble?

  32. intosh
    Jul 5, 2017 at 4:56 pm

    Up North, things are quite different, at least for now.

    http://www.autonews.com/article/20170704/COPY01/307049936

    “for the second time in a row – and only the third time ever – sales topped 200,000 units in June.”

    Canadians feel financially invincible with their ever surging RE wealth I guess…

  33. dave
    Jul 6, 2017 at 5:46 am

    Heading to the dealership soon. Gonna get myself a new Hyundai, the last one was a champ. See what the sales guy can do for me.

    • Bee
      Jul 6, 2017 at 9:28 am

      Let us know how it works out. I see a second Hyundai dealer here finally lowered their price on a Sonata to ~$15500. Not the $13000 in MD so not quite ready..

      • Jul 6, 2017 at 12:31 pm

        Try the last few days of the months. Dealers get pretty desperate at that time.

        • Bee
          Jul 6, 2017 at 9:32 pm

          I did just that at a “no-haggle” GM dealership—got 6% off a used car. An example of dealerships being shady, which is why I haven’t looked at new cars in years…I’ll never trust ’em.

  34. dave
    Jul 6, 2017 at 7:05 pm

    im in canada so prices for cars are like alcohol, more expensive. but i am gonna buy the car. fully loaded car except the turbo. including my underwater basic high kilometer car. for basically the same price of my old car. so new car will be pretty much same price as my older but it is way nicer prettier fancier sportier and more fuel efficient. little less cargo space though. so i am much happy with my purchase. cant wait to drive it.

    • nick kelly
      Jul 8, 2017 at 9:09 am

      Avoid turbo anyway, unless accel is yr thing. There are outfits that de-turbo vehicles. Expensive.

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