Average Age of Cars & Trucks on the Road Sets Record, Will Jump During Pandemic as New-Vehicle Sales Plunge to 1970s Level

For automakers, this was a tough market before the Pandemic: decades of stagnation in unit sales, carved up by more competitors, with industry revenue growth by jacking up prices. Then came the Pandemic.

By Wolf Richter for WOLF STREET.

The average age of passenger cars and trucks on the road in the US – light “vehicles in operation” or VIO – rose to another record of 11.9 years in 2020, according to IHS Markit. But this doesn’t yet include the effects of the Pandemic on the auto industry. We’ll get to that in a moment:

The rising average age of VIO is a mix of factors. One factor is that vehicles are lasting longer, and consumers feel less urge to replace them. Finicky, astute, and demanding customers relentlessly pressure automakers to out-do each other in order to survive and thrive in an ultra-competitive market that has been a zero-sum wild-ride, with slow ups and furious downs, and ultimately with no growth in unit sales for over two decades.

The impact of 2020 New vehicle sales.

New vehicle sales represent the inflow into the US fleet of vehicles in operation. Scrappage and exports of used vehicles represent the outflow.

New car and truck sales in 2020 through the first half were down about 24% compared to last year. But 2019 wasn’t a banner year. It was already the third year below the peak in 2016 and was below sales in 2000 – twenty years ago. So how does the whole year 2020 look?

Retail sales were still down in June compared to June last year, but were up from the dismal levels in April and May. I expect them to tick up further off those lows during the remainder of the year but remain significantly below where they’d been last year in the second half.

Fleet sales to rental fleets – huge customers – have collapsed during the pandemic, and rental fleets are in an existential crisis. Two have filed for bankruptcy: Hertz Corporation, which includes Hertz, Dollar, Thrifty, Firefly) and Advantage. Sales to rental fleets will remain in collapse-mode in 2020.

So I estimate that for the year overall, total new vehicle sales will be down 20%, give or take a couple of percentage points (red column). This is less than the drop during the Financial Crisis — which may turn out to be wishful thinking. By the green line, you see where this is going – namely back to the sales levels of the 1970s. And for automakers, this chart is a nightmare:

A big reason why there has been no growth over two decades is the increasing age of vehicles in operation.

From 1985 to 2020, the average age of VIO has risen by four years, from 7.8 years to 11.9 years. Back in 1985, as I was cutting my teeth in the car business, there was a lot of hand-wringing over the rising age of vehicles, and folks thought that the trend would have to reverse soon because Americans would get tired driving these old clunkers, and they would soon swarm dealerships to trade them in, and everyone would sell more and make more and be happy. And for a few years this happened, though very modestly. But in the 1990s, the trend turned around with a vengeance, with the average age going from record to record.

And sales in 2020 will be back where they’d been in the 1970s, and that this long-term stagnant market is being carved up by more automakers: The major new entrants since 1985 include Hyundai and Kia, both of which have eaten up a lot of share from other automakers, Mitsubishi as a franchised brand (though Chrysler had sold rebadged Mitsubishis for years), and Tesla. It’s hard to imagine a tougher industry.

Average age of vehicles in operation makes a huge difference in terms of how many new vehicles the industry can sell into this market, even if the size of the national fleet grows. And the fleet has grown. Americans operate more vehicles than ever. There are now 253 million cars, SUVs, vans, and pickups in operation in the US, according to the Bureau of Transportation Statistics. This does not include motorcycles, medium-duty and heavy trucks, and buses:

But note how the fleet-size dropped in the two years around the Great Recession, as new vehicle sales collapsed, and people drove what they had, drove less, or lost their cars and stopped driving.

During the Pandemic, at least in 2020, new vehicle sales have also plunged, and this is slowing the inflow of vehicles into the national fleet. And this has an impact next year and in future years on the average age of vehicles in operation: That inflow of new vehicles has drastically slowed, and the vehicles that are in operation are going to get driven longer before they’re scrapped. And that raises the average age.

Total miles driven in the US has a lot to do with commutes. If a lot of people are working, there are more commuting miles being driven. During an unemployment crisis, such as during the Great Recession or currently, fewer miles are driven – and vehicles last longer when they’re driven less, which further puts downward pressure on new-vehicle sales.

The chart below shows total miles driven per year, based on estimates from the Federal Highway Administration. It does not yet include the impact of the Pandemic – we’ll get to that in a moment:

The pandemic, the lockdowns, and the unemployment crisis had a large impact on miles driven: In April they were down 40% compared to April last year. In May, the latest data available from the FHWA, they bounced off these lows, but were still down 25% year-over-year:

In May, there were 30 million people claiming state or federal unemployment insurance – and this was still the case in July. So, in terms of commuting, there won’t be much of a recovery in June and July. But people are driving to go on vacation, instead of flying – another one of those big shifts due to the Pandemic – and this will counterbalance to some extent the lost commuting miles driven over the summer.

For automakers, this was a very tough market before the Pandemic, with structural stagnation in unit sales, carved up by more competitors, where the only revenue increases come from jacking up prices. And they have done this exceedingly well.

I will update my F-150 XLT and Camry price indexes when the 2021 models go on sale later this year. But my Camry LE price index says that from 1990 through the 2020 model year, prices increased by 70%. And my F-150 price index says that from 1990 through the 2020 model year, prices soared by 163%. So yes, automakers have figured out what to do in this market: Constantly improve the product to stay alive and jack up prices by a whole lot.

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  269 comments for “Average Age of Cars & Trucks on the Road Sets Record, Will Jump During Pandemic as New-Vehicle Sales Plunge to 1970s Level

  1. 2banana says:

    A few random thoughts.

    I have worked in industries where zero profit was made on the initial sale. All profit was made on parts and services.

    Autos are there too. Everyone knows invoice prices and easy to get that price with the internet sales.

    How much of future sales have be pulled in so there are no sales when the future gets here?

    Zero interest rates, no down payment and low standards for lending…who was left to buy?

    “And sales in 2020 will be back where they’d been in the 1970s, and that this long-term stagnant market is being carved up by more automakers:

    • Meremortal says:

      My new car dealer friend said 15 years ago that the dealership profit centers were parts and repairs, selling cars was just a way to acquire future part and repair work. I’m in good financial shape and the wife and I can drive what we like. She got a new Honda last year, after driving a Nissan for 15 years. I’m still driving my 2008 Nissan pickup and love it. We kept her old car for now as an extra, plan to donate it soon. Buying un-needed cars the largest waste of money experienced by most Americans. When I was working all my friends drove newer cars and had larger houses than mine. Then they were shocked when we retired when I was 60 and my wife was 53. They all kept working to pay for those expense cars and houses.

      • Joe Saba says:

        I have 2001 Ford Truck – been keeping it running great
        JUST PULLED TRAILER with TRACTOR ON IT down mountains
        Pulls like dream
        sure I’d like newer truck – but REFUSE TO PAY WHAT THEIR asking
        cheaper to FIX my truck – only have 252,000 on it
        OH – IT’S A DIESEL

        • Joe Saba says:

          forgot to add
          TAXES, TAGS and INSURANCE are a lot cheaper also
          everyone forgets to ADD THOSE INTO cost of newer vehicles
          son pays $500+ year for TAGS on 2015 F150

        • Show me says:

          I think you have it broken in.
          A relative of mine had his own shop and did a lot of welding work, but I think he had about 450 thousand on his tow truck.
          I’m not sure what ever happened to it.

      • tommer says:

        reality,they don’t teach that in school anymore.

      • Tony22 says:

        Same situation here. Running 12 year old plus Japanese cars. We could buy new cars and might do so again some day. However, that ain’t gonna happen until the new vehicles have knobs and manual controls—no touch screens, have a means to prevent tracking by insurance companies and cops, and are maintable with simple tools, rather than a proprietary dealer software monopoly.

      • Mr. House says:

        Yes that was the trend, when the automakers S($% the bed in 2008 they went full on parts and repair. But that doesn’t mean they were doing well, it just means they were stealing business from the people who were already in that line of work. Pie is still shrinking, everyone can’t win.

        • Thomas Roberts says:

          Yep,

          At a certain point, I think some of the new GM cars actually started to become more faulty and need more repairs, that are also more difficult. I think this was around 2014.

          A bigger issue with new cars though, is that newest 2020 cars, especially sedan/coupes aren’t really any better than the 2010 cars. All of the car makers have been putting in useless expensive extras. Like self-opening truck doors or partial “self-driving/Driver Assist” features. This stuff becomes outdated and VERY expensive to fix. I wouldn’t get a car with any of that. Either the car fully drives itself or it should have none of that, XM radio good, complicated radio that gets outdated (some features will eventually stop working) and overlaps with other car systems like GPS bad.

          What I want is a sedan built like a truck, that handles great year round in all weather. With XM radio, all electronics like radio, gps, and backup camera simple and neatly separated. And it either drives itself completely “or eventually will” or has none of that at all. I don’t want any useless extras that are super expensive to upgrade or fix.

          With alot of those “Driver Assist” features, I won’t be surprised if the parts for them, soon become permanently out of stock. Meaning you have a non-fully functioning car (Time to get a new one), I bet they are hoping some become dependent on those features and have to depend on them going forward.

      • Nick says:

        Yeah? And those expensive cars and houses are what pad your wife’s and yours retirement. I highly doubt you and her retired with enough cash and precious metals to fund your lives. I’m sure like every holier than thou boomer who walked to school and back uphill in 10 feet of snow you don’t rely on the bubble stock market, bond market, real estate market for your retirement? 70% of our economy is based on conspicuous consumption so criticize away your fellow Americans and neighbors. Our economy is so skewed and frankly f’d up no one is innocent in any of it.

    • Bert17 says:

      Funny, thinking on “future demand”. WHAT “demand”? EV’s + “autonomous” vehicles + Uber & Lyft all together? What manner of fool (how MANY!) would actually “buy” a vehicle solely for occasional personal use? WHY? And who would have that kind of “cash”? – or willingly go into 5-figure debt in homage to the nearly obsolete “car ownership” paradigm? I just turned 65. I remain employed full-time and aniticpate that I will necessarily need to continue to work full-time until age 70 before I can even consider “retiring.” My current “owned” vehicle is a 2004 USA-brand 4-door sedan model with 118k on it, possessed of far more “size” and “horses” than I need or want (but the “price was right” at-the-time.) My round-trip “commute” is 5 miles. I remarked to my sister recently that this is likely the last car I will ever “own”; I’ll use exisiting and developing “alternatives” instead should THIS vehicle “fail” … I’ll take the “shifting gears” inconvenience of CHANGING MY WAYS over the ever-increasing cash costs of fuel + maintenance and the ever-rising taxes of “ownership.” Demographics, and on-rushing crises in the arenas of politics, finance/money, economics and geo-politics, will soon turn the USA upside-down and inside-out. The “Auto Industry” is about to go (essentially) extinct. TESLA will be proved to be a wealth-detroyer of unprecedented magnitude – “hopium” of the worst sort, “delusional thinking” at its best. [Alternatively – with DEMS in the White House, Senate and House come next January – will the U.S. TREASURY simply notify The Federal Reserve Board that “all qualifying citizens” are to be issued “stimulus checks” that will enable them to purchase outright a TESLA Model S? …]

      • Anthony A. says:

        I’d even take a Model 3 if the Treasury wants to send me a check!

      • 2banana says:

        EV’s – expensive niche vehicle. Call me when they have a range of 350 miles in a Michigan winter. And, FYI, EVs are being made by all the major auto companies.

        “autonomous” vehicles – they currently don’t exist for the public.

        Uber & Lyft – so, a vehicle. That someone purchased and is maintaining. That is getting lots of wear and tear. For short run trips.

        And there is still a bunch of folks who commute way more than 5 miles. Consider yourself lucky and not the average.

        So…still lots of demand.

        “Funny, thinking on “future demand”. WHAT “demand”? EV’s + “autonomous” vehicles + Uber & Lyft all together?”

        • Wolf Richter says:

          2banana,

          Well, if you live in Michigan and you have to drive 300 miles every day in the winter, don’t buy an EV. There are plenty of other options out there.

          But most Americans live somewhere else, mostly somewhere not too far from the coasts, along the Pacific, the Gulf, or the Atlantic, or inland in the South and Southwest, and they need a car to commute to work. And for them, your statement would seem idiotic. Why the heck would they go to Michigan in the winter and drive 300 miles every day? That would never even occur to them.

        • Gary says:

          2banana never said you needed 300mi MI range in winter. The ranges EV list are garbage numbers on so many levels, If you live in a cold part of the country EV range are severely reduced with cold + heating of car.

        • Wolf Richter says:

          Gary,

          Reread my comment. The point was: Then DON’T BUY an EV in the parts of the country where it gets this cold and if you need more range than the battery offers. I listed the parts of the country where the majority of Americans live, and EVs work just fine there — believe me, I see them ALL THE TIME, and they do work just fine. There are plenty of other options if you live in Fairbanks, Alaska.

        • Phillip says:

          I find these such statements about ev’s a bit ridiculous. I live even further north than you on Georgian Bay in Ontario and have driven a Tesla Model S since 2015, and it has been great. Sure it gets less mileage in the winter, so I have to plug it in a bit more often, big deal. The really nice thing is that I don’t have to get out of my warm car and stand out in the cold blowing snow while I stand beside the car filling it up. And with good snow tires it drives like a dream in the snow. And cheaper, by far, to run. Now, if you want to argue that ev’s are too much capital up front to buy, then ok. Otherwise, in reality, I have found it more convenient, less expensive to fill up (I estimate to the tune of more $10,000 since 2015), and less costly in maintenance than my previous gas vehicles.

      • Sparky says:

        Whats with all the quotation marks? We can figure out what you’re trying to say just fine. You insult people who read your comments.

    • Trinacria says:

      more random thoughts: so, I guess all “cash for clunkers” program did then was to at least get rid of certain political bumper stickers….we won’t mention any names….

      • Joe Saba says:

        Dukakis

      • 2banana says:

        cash for clunkers pulled in future demand.

        Perfectly usable and safe vehicles, with lots of life still in them, were destroyed so that folks could buy a new vehicle with a taxpayer subsidize credit.

        • Apple says:

          They were crap autos.

          Ford Explorer was the top vehicle traded in. And they received a whopping $3,500.

        • 2banana says:

          670,000 used cars destroyed

          $3 billion cost to the taxpayers

        • Trinacria says:

          And, we won’t even talk about “shovel ready projects” ???!!!

        • MarMar says:

          The point of cash for clunkers was to replace old cars with newer models that polluted less and were more efficient, right? In that case, the money was buying something: cleaner air and saving money (and reduced dependence on oil). One can argue the specifics over whether the price was good, but the money was buying something.

      • Dave says:

        Bush?

    • Kent says:

      To your point, this true story will show how desperate car dealers are to make sales, how easy the industry has made it, and how fragile the whole industry is financially – or already WAS 3 years ago! In early 2017 one of my daughters’ friends (now 31) literally had had 5 -10 jobs a year for years. She’d start a job already setting up interviews for new jobs. Never had any money. She used payday loans and borrowed from friends to pay those off. She changed residences several times a year because she’d get kicked out for non-payment of rent. She had no bank account as no bank would accept her. She went to Florida for about 6 months and rented a storage locker to live in with her boyfriend to avoid being homeless. Florida in July. All her cell phones were burner phones, which changed regularly. She never paid more than $500 for a car, getting the expected result. Finally one day she’d found a car for $800 and went to see it. I cautioned her against it – a ‘too expensive’ rust bucket – but I told her I’d help with $300 if it was a decent car and she could pay the rest. She finally called and had bought a car. Not the one she went to see. – a BRAND NEW 2017 [import] car – dealer financed!! By what I could tell, the car might have been worth $16,000. It was stripped, down but padded with warranties (which, on review, covered virtually no mechanicals at all!) and GAP protection and free oil changes and all sorts of goodies – making the final price somewhere around $28,000, 7 years at $572 a month, a 17% interest rate, and a first payment due some 3 months down the road. Wolf, this is how auto sales are “growing.”

  2. Rudolf says:

    I was reading an article 2 weeks ago on electric cars in the local paper. Apparently, Tesla has introduced a new battery with a range of 400 miles for the Model S, with plans to introduce a battery with a range of 500 miles in the near future. If true, so much for range anxiety. Moreover, these cars are expected to be in service for a million miles. End game for ICE powered vehicles and their makers?

    • Anthony A. says:

      To my knowledge, Tesla has not introduced any batteries that have that range yet. ICE powered cars, trucks, construction vehicles, aircraft, watercraft, etc will be around in high numbers for the next 20+ years, and I don’t believe they will totally be eliminated in my remaining lifetime.

      • Thomas Roberts says:

        That’s currently true, but, I expect better electric cars in about 5 to 10 years and then, they will replace most ICE cars over the 10 years after that. Passenger cars are the bulk of America’s oil use and pollution from vehicles, switching as many of them over to EV’s once possible, will greatly solve many issues. Construction trucks, Semis, boats, and Airplanes will likely never be fully electric, but, we can worry about those after dealing with passenger cars. The vehicles that cannot be electrified will eventually have to use some sort of bio-fuel. But, passenger cars are the thing to focus on right now.

    • c1ue says:

      The problem is that a theoretical 400 mile range on an electric car is highly variably less than that in practice. Especially in cold climates.
      Throw in the long charge time – range anxiety isn’t going away anytime soon.

      • MCH says:

        Temperature variation is the greatest threat to EV range.

        The problem for EV is always about energy density and portability and finally standardization. Musk can work on portability and energy density, it is actually almost the same problem. His biggest advantage is that the current standards means he has a static target, gasoline formulation will have a known energy density that is fairly immutable due to economics.

        If he solves the density/portability problem, he owns whatever slice of the market he picks. Forget the BS around self driving and such. Make it so that you can stop at a Tesla station, pop open the hood, pull out a roller case sized battery, give it to someone and they return another one of the same that you can pop in like a AA. And it’s a swipe of a credit card for $50 and your car is good to go for 300 to 400 miles. Then he is good to go, instant printer cartridge model.

        He would have a huge advantage too until the government forces standardization, and all the batteries are interchangeable. Musk knows this, he only has to overcome physics and chemistry to make it work. The business case after that is easy.

        • Realist says:

          At least one EV manufacturer in China has been doing this already, ie drop by the change station, swap a charged battery into the veichle, keep driving.

        • Max Power says:

          Shai Agassi’s “Better Place“ tried the battery switching concept in Israel but it didn’t work out, although supposedly a lot of the failure was due to mismanagement.

          In any case, “range anxiety” will probably be alleviated over time with greater and wider availability of high-output DC fast chargers.

        • MCH says:

          I think the problem with both of these companies comes back down to energy density, which is why they are absolutely unworkable right now.

          For comparison purposes, Tesla’s model S battery pack weighs 1200 lbs for 85 kWh, and just over 1000 lbs for what they have in the model 3. You get between 300 to 400 miles or so depending on conditions.

          A Toyota Camry gets about 400 to 450 miles, with about 30 mpg, and a tank that holds about 15 to 16 gallons, (or equivalently, about 90 lbs to 96 lbs). This doesn’t add in the convenience of fact that gas is liquid, and can be transferred easily.

          So, if you look at it from raw energy terms, you’d have to improve Tesla’s battery energy density by slightly more than a factor of ten to get to what you can from conversion terms to be comparable to gasoline.

          Yes, there are all sorts of other externalities involved, for example, a Tesla only has a battery pack, and electric motors, not an entire ICE that needs to be serviced, and oiled, etc.

          But where as it might be remotely feasible to hot swap a 100 lb battery, doing so with something that weight 10x requires a significant more degree of automation and complexity. In other words, you need something a whole lot more than a pump that moves liquid from one place to the next. So, the current model with a Better Place, etc, just doesn’t make sense.

          Charging at home works for the moment, because it’s the only viable alternative compared to charging at the supercharger for however long, and people can get away with it if they can pay for the infrastructure. If not, well, that’s why EV adaptation is limited at this point.

        • Thomas Roberts says:

          MCH,

          It’s important to note the reason most rechargeable batteries have trouble in cold weather, is because, part of their chemistry involves water. This causes a higher freezing temperature and has issues, when it’s cold. Most rechargeable battery chemistries were intended for inside use and this wasn’t an issue. Non-rechargeable Lithium batteries and one rechargeable battery chemistry, I cannot remember the name of, doesn’t involve water and performs perfectly, with no issues at -30F and below.

          It might be possible for electric vehicles to develop a non-water based chemistry and those cold weather issues go away. Of course parts of Alaska and some very cold areas in the Arctic and elsewhere, might still not be ideal for EV’s, but, Very few live there.

    • Wolf Richter says:

      Rudolf,

      As long as there is demand for ICE vehicles, automakers will make them. For now, EVs are just a tiny percentage of overall sales though every automaker is now offering EVs.

      • Endeavor says:

        As long as there is demand for ICE vehicles, automakers will make them. For now, EVs are just a tiny percentage of overall sales though every automaker is now offering EVs.
        I differ a little with you Wolf. There is a big political component to EV’s and there insertion into the auto market. GM is supposed to introduce 20 EV’s into the market by 2023 and we will get a good idea soon after of the desires of the driving public.

        • Jax says:

          By mid decade the public’s desire will be the bicycle, electric or the usual human powered one. Only those will be driving cars who had the foresight to prepare for the greater depression. The average person will not be able to afford one.

      • Trinacria says:

        Wolf, you mention in the article that in the mid 80’s you worked in the auto industry; did you own a dealership? In the early to mid 80’s – as a young CPA – I worked for a national accounting firm who had many auto dealerships groups as clients. So, I got a glimpse from the inside; an “interesting” business to say the least !

        • Wolf Richter says:

          Trinacria,

          Didn’t own but ran a big Ford dealership and its subsidiaries, which included an auto-parts WD with 8-state reach and an industrial engine company.

    • happy_man says:

      Rudolf do these new batteries claiming 400 – 500 miles of range catch on fire more or less than the existing batteries?

      Also, my 1981 vehicle is on track for 1 million miles. Should I be excited that almost 40 years later we finally have an ICE than can claim a million miles? Let’s see if they can actually do it.

      I’m actually interested in an electric, I have shopped for one many times, but every time so far the price premium you have to pay for a new or used electric has not been worth it. Also I don’t want my family to burn up in an electric battery fire.

      • 91B20 1stCav (AUS) says:

        Happy-you bring up an interesting point with trucks-many don’t seriously use their cargo capacity, many do. For someone (like me) who has rural acreage in a very hilly area, i need that capacity at the best $/mile/range/reliability i can afford. Electric in a high-geographic relief area still doesn’t pencil in terms of energy density/range/all up weight when fuelled (battery-weight still there when depleted vs. liquid fuel). If i lived in a Central Valley location, where things are relatively flat, then EV trucks would doubtlessly have a better shot at meeting my needs. (And, am not anti-electric, our home has been offgrid solar since settling in 1990-even with the REA subsidies still in effect, grid-tie cost to PG&E was too prohibitive).

        Despite what i see as a pretty constant desire for a ‘one size fits all’ propulsion solution to our myriad transportation needs, one still needs to consider that there ARE myriad needs-your town and geography is not mine, nor mine yours…Wolf’s words that ICE vehicles will be made as long as there’s demand ring true-they’re still the best answer for some of us.

        May we all find a better day.

    • Cashboy says:

      Have you seen how fast a Tesla depreciates.
      That would put anyone with a financial head off buying a new one.

      • Max Power says:

        Not sure where you are getting your info. from.

        Teslas are some of the slowest depreciating cars around.

        • Kent says:

          Wouldn’t shock me to see big time depreciation. How’d you like to be selling one about 7 years in, with the original batteries?!

          Tic toc, tic toc.

    • Meremortal says:

      No, given their price point and the fact that range decreases fast at higher elevations and colder temperatures. Those ranges are found under ideal conditions only. And they need to charge in 5 minutes to compete also.

      • Zantetsu says:

        What are you talking about? EV battery ranges do not change with elevation. Sure you get fewer miles if you go up and down hills but it’s got nothing to do with elevation.

        Did you mis-speak or do you actually believe that batteries are less efficient at higher elevations?

        • 91B20 1stCav (AUS) says:

          Zan-I think Mere misspoke-ref: my comment above, range/payload in high-relief areas areas are still not an EV strong point barring much more progress in battery technology. It’s a diverse world, our solutions not ideal and raggedly hybrid (in the macro-sense), at best.

          We will just have to keep working on the eternal&existential tech-fuelling an expanding population-which hammers the natural resource base that supports that expanding population-issues. Successful responses have never been, and never will be, utopian or easy.

          Again, may we all find a better day.

    • A lot of them will be underwater, literally

    • nuthinmuffin says:

      it’s all rainbows and unicorns until the power goes out…in florida with a power outage during a hurricane, where the hell will you go? certainly not out. and where is all of this additional power going to come from. electric cars are great, but the progressive crowd who loves these cars supports power generation that is woefully insufficient to supply their green crazed demand. you should think of this while sitting in line for your fossil fuel generated recharge on a holiday weekend

      • Wolf Richter says:

        nuthinmuffin,

        Yeah, when the power goes out, your gas station doesn’t work either, and payment systems are down, and you cannot use your credit card, and soon your cellphone goes out, and your laptops and most everything else that you do stops. Politicizing everything causes your brain to malfunction.

        And in terms of power generation, read this, which I posted here earlier, but you might not have seen it:

        ALL electric utilities love EVs. In the US, the problem that electric utilities have is two-fold:

        1. The long-term stagnation of electricity sales, which started in 2008, and the continued increase in capacity and capital expenditures:
        https://wolfstreet.com/2020/01/15/us-demand-for-electricity-declined-in-2019-stagnated-for-a-decade-but-2020-capacity-additions-are-wild/

        2. An enormous amount of idle capacity in the middle of the night – all this infrastructure and equipment, that is not used in the middle of the night because electricity demand in the middle of the night is minuscule, compared to the peak demand during the day. And the system is built to handle the peaks. Idle capacity is very expensive for utilities – and rate payers are paying for it.

        EVs are going to solve both of those problems for electric utilities: they will increase demand, and they will increase demand in the middle of the night when people charge up their cars in their garages, and thus they’re reducing this enormous and costly idle capacity at night.

        IN ADDITION, utilities would LOVE nothing more than the scenario you outlined – more demand than the current system can handle so that they could build out their system. Because that’s how utilities operate: they make a big capital investment that produces a steady revenue and income stream for decades. They build whole power plants on that model. That’s how utilities operate. That’s their business model: make big investments and get a return from it over the next few decades.

        • Spyder says:

          Our power went out last night here in Carlsbad, CA and it is amazing how quickly everything breaks down. It was only for 12 hours this time, but I remember a few years ago when a large chunk of SoCal went down due to some tech in Yuma pulling a board from a transformer station. Chaos ensued and society was breaking down quickly within a few hours. the biggest issue was everything in the fridge, steaks, eggs, milk etc will spoil in a short period. Without solar and battery backup you are screwed.

          Society is fragile. If your transportation is tied to the grid you are at risk. Ultimately lots of people will have their own localized power, but not for quite some time. Plus when you hit the road to escape, good luck finding a functioning charger.

        • Wolf Richter says:

          Good luck finding a functioning gas station. NorCal fires, power went out, gas stations went out. And your ICE vehicle is out of fuel and cannot go.

        • PowerWorker says:

          Except when you live in places where electric heat is prominent, then the middle of the night / early morning IS the peak, as a cold snap hits and all the peoples heat strips kick in to keep their houses at 84 or whatever ‘comfy’ temperature they like their house at, until that first months heating bill kicks in. It isn’t just the generation that is the problem. Communities are / were built with pretty specific electrical specs. Ok, this neighborhood will take 400 amps to run on a high load day. Now you double that because you are charging cars that will easily suck up what a house uses on an average day / load That means bigger lines need to be run in, bigger transformers, or higher voltages which mean change out of a LOT of equipment to handle it etc etc.

          The fix is not just a simple build another power plant as you suggest, it’s much more complicated than that. All of this costs a lot of money too.

        • DawnsEarlyLight says:

          That’s why I love my Rav4 Hybrid. Great Mileage and no fear of being dependent on just the ‘plug in’ recharge!

    • Show me says:

      Autonomous or self driving cars or vehicles will need to be electric. The internal combustion engine would add a lot of complexity and unreliability to an autonomous vehicle, so that’s probably what this is all about, getting an autonomous vehicle which can drive itself on the road.
      Probably that will also require a 5G telephone network so that location of a vehicle can be determined to within a few millimeters, which will be necessary for a car to be autonomous on the road, and probably cars with drivers won’t be allowed on the same road net as the road net for autonomous vehicles. Autonomous vehicles probably will be on the road in numbers, perhaps in some large cities, I think probably in ten years, perhaps in five in some localities. In large cities where owning a vehicle is prohibitive such as New York as well as likely most European cities, autonomous vehicles will probably be the main type of vehicle as soon as they’re practical.
      They likely will become standard in China and possibly some places in Japan even before that.

    • andy says:

      Does the odometer have enough digits for million miles? Or is this another Y2K crisis in the making.

      • Anthony A. says:

        When my 2002 VW diesel turned 625,000 miles it rolled to 000000 next. That mile amount equalled 1,000,000 km. German stuff

    • SiT23 says:

      I think you probably mean Panasonic is introducing Tesla to a new battery that does 400 miles. Then when all sold, 500 miles. Smells like cellphone camera megapixels.

  3. noname says:

    This week I got the chance to look at an early 1960s GM car that was nearly identical to the one my grandpa bought new and stayed in the family until 10-15 years ago. It was truly a work of art and an emotional experience. That cannot be said of the plastic blobs of today. Who wants to update when all cars are the same?

    • M says:

      That will happen with tens of thousands or millions of Americans: less use means less mileage and fewer needed repairs, so unless they are doing very well and want a new model, most Americans will delay new car purchases and use what they have. This means that many dealer borrowers will have to pay their debts to banks from reduced profits.

      More will fail. That domino will make other dominos’ fall. Car dealers and car manufacturers may fail. The Economist’s “analyst” claimed in an article this month that US banks have a buffer of over a trillion dollars.

      While they have some buffers and their “Fed” has funneled more free money to them when it bought bad debts from them, e.g., corporate bonds that are likely to not be paid, the fact that banks hold mostly real estate related assets seems to be getting missed. Reportedly, 80% of bank loans mortgages.

      That being the case, if the real estate market plunges as I predict, banks will become insolvent or are insolvent. Legally, since they probably cannot pay off their total liabilities if they sell all of their assets, I predict that we will find later that most of the banks again became insolvent sometime in 2020.

      • Meremortal says:

        Banks are in a much better position than 2008 due to equity positions by home owners. Also, due to the boomer generation, 25% of all homes are free and clear of a mortgage. There is a housing shortage in many areas. With over 250 submarkets, the national real estate picture is complicated and not monolithic.

        • jon says:

          Wonder what would happen to real estate when we have 10s if millions of Americans workers out of job..?

          In my hood souther California

          There is shortage of affordable housing

        • M says:

          You are correct that each market is different. I can only speak of all US markets overall.

          The US is made up of so many markets that places like Beverly Hills, for example, may be unaffected or may have some ultra-rich residents able to keep homes there but also buying homes in less crowded areas if this pandemic continues. As they see friends and relatives hospitalized (and hopefully, with improving treatments far fewer but still some deaths), many will be highly motivated to get their families out of Dodge.

          Nevertheless, as other commenters pointed out, the unemployment rate and the basics of the economy have been revealed to be in a dire state by recent disclosures. I hope that I am wrong but I predict that tens of thousands of small businesses will go down this year as evictions commence again or will be so depleted of working capital that they will fail next year.

          That has the reverse of economic multiplier effects: people who lose jobs will spend less to pay their basic debts. I know of many persons who were underwater with their mortgages before. If you are having problems paying basic liabilities, you will not be shopping for a new car unless the engine falls out of your current one.

          There will be decreased demand (for cars and real estate) in many areas of the USA, as real estate prices will go down more and more as more and more business owners get evicted or forced into bankruptcy or employees fall into default on their mortgages. Note that banks will not be in a hurry to foreclose upon or evict persons.

          Their capital buffers increased supposedly but remember that banks’ capital has always been like the skin of an onion over their liabilities. It just takes a minor increase in liabilities (e.g., derivatives/Forex gambles) or a decrease in the value of their major holdings (in real estate, 80% of loans reportedly) and they are legally insolvent.

          If banks foreclosed upon many properties, they would have to make credit bids. They would then be stuck with even more real estate than they were already stuck with: if they start putting massive portions of their portfolios on the market, the real estate market will plunge and banks will ultimately have to realize huge financial losses on their books.

          They will strive to avoid that. At a minimum, if investors realize that the banks have more liabilities and reduced-value assets, not sufficient to repay all of their debts, their stock prices will plunge which may cause shareholder protests. Of course, the core, controlling groups of banksters will retain their control of the major banks.

      • andy says:

        What? Most Americans will delay new car purchases? Have you met Americans?
        Just waiting for 120-months loan here.

        • M says:

          I hope that we never again reach Great Depression levels of misery. However, a party in the Senate just fought bitterly to cut unemployed Americans’ benefit from $600 to $200, albeit without success. They still allowed it to expire.

          Given the lack of acceptance of economic realities, we may be heading to great depression levels of misery next year in many places in America if things continue as they are. Many will be evicted starting now when they are at their lowest. Never assume that such disasters things cannot happen.

          They have and they do. I will pray that I am wrong. I sure would be happy to be proven wrong.

      • Brant Lee says:

        Not to say Congress delaying the unemployment stimulus. $600 a week to tens of millions is a jolt the economy can’t take. People were spending it on something being it payments and/or goods.

        Right or not, once it’s started, you just can’t pull the rug out from under the $600wk and not expect chaos. No one was expecting to still have over 30 million out of work, but gotta have the stimulus or it’s all going to start crashing.

        • Implicit says:

          Look on the bright side. The dollar should change course, and start getting stronger next week. After all, it is the reserve currency. It is the flip side of less free money, and a technical big move down.

    • MrIlo says:

      And this is why there is such thing as classic cars.

    • Don Scott says:

      I’m 71, and I my reaction to new car design is the same as I have toward modern country and rap music. Fugly Give me a time machine!

    • Sit23 says:

      I just walked past a 1971 Wolseley 1300. Woodgrain dash. Twin SU carbies. Transverse motor and front wheel drive. Revolutionary. My mum had one.

  4. Doug Onion says:

    I retired at 48 by being savvy with money but one of the biggest factors was by not buying new cars. I like used cars. A new car is the single worst investment one can ever make when you factor in depreciation, taxes, full coverage insurance, and interest expense. I’d much rather buy a quality used car and save the money for future repairs.

    • Paulo says:

      Amen.

      Choices. Paying my house off or buying a car ‘on time’ with a young family. House always won and I retired mid fifties. I even commuted by bike long before it was trendy, It kept me fit and saved us thousands of dollars.

      My kids have newer wheels but they seem to like them and can afford it.

      Preventative maintenance is key to maintaining older vehicles. If something feels off, check it out. Oil and filter changes are cheap.

    • Drater says:

      I have the same sentiment towards cars and just retired a few weeks ago at 51 years old. Perfectly content with an older Honda in the driveway while my neighbors start their commute every morning – at least they do it in style and comfort!

    • Happy1 says:

      This. Drive a car until it becomes unreliable. If you buy Japanese, this will be 20 years.

  5. Finster says:

    Wolf, stories about huge unused inventory in rental car fleets make me wonder what that implies for used car prices. Is there a supply glut in the works? Implications for new car prices?

    • c1ue says:

      Look in the Wolf Street archive.
      Used car prices were falling in the double digits back in May? June?

  6. Finster says:

    Wolf, stories about huge unused inventory in rental car fleets make me wonder what that implies for used car prices. Is there a supply glut in the works? Implications for new car prices? How long would such an impact likely last?

    • Wolf Richter says:

      The Hertz units are coming. A deal was struck in bankruptcy court just a few days ago, and those cars are now heading toward the market.

      • Trinacria says:

        You mean the Robin Hood account folks who bought Hertz stock in BK aren’t going to get free cars first to help make up for their losses? Well, that doesn’t seem fair as all the other clowns are getting bailed out….. :-)

      • Drater says:

        Starting to see the Hertz car sales ads on YouTube…

  7. epyx says:

    My Tundra is 10 years old and Id like to replace it with something with modern technology but every time I price a new vehicle the idea of keeping my old and paid for truck suddenly doesnt sound so bad.

    • Endeavor says:

      epyx,
      Modern technology like start/stop and lane enforcement wobbling the steering wheel on narrow roads are a annoying. Modern technology is not in tune with driving comfort in my opinion. I think that also accounts to a small degree to people keeping their older vehicles.

      • Richard says:

        Lane enforcement can be turned off. Luddite. I find it a Godsend on long interstate trips. If the lane markings are good and the curves are gentle the car can steer itself for a long time. It reduces fatigue by removing the mundane task of keeping the car in the lane. This allows you to spend more energy on situational awareness. A safety plus in my book.
        I can toggle the lane deviation on and off by toggling a button on the steering wheel. As easy as setting the cruise control.

        • andy says:

          Steering does get old quickly. Same as braking.
          For best results try situational awareness in passenger seat.

        • Gordian knot says:

          I have a annoying auto correct. She sits in the passenger seat. It’s called a wife. Is there a button on the steering wheel to turn it off?

      • Max Power says:

        On the contrary. Modern safety systems on cars are a godsend.

        In my opinion it’s enough for a pre-collision avoidance system to save you from an accident (of which you are probably also likely to be the fault of) just once during your ownership timespan of a car to make it worthwhile to switch from a current vehicle that doesn’t have one, even if it doesn’t otherwise make financial sense to replace your current used vehicle.

        With respect to lane enforcement and start/stop systems… I believe most manufacturers allow you to turn those off if you so wish. I personally don’t own a vehicle with a start/stop feature so I can’t attest to that but mine does have the wheel vibrating feature and personally I don’t find it annoying since it really only does seem to come on at times when I’ve truly left the lane. Maybe my vehicle’s implementation of this is better than others, I don’t know but like I said, I believe it is possible to turn it off.

        • El Katz says:

          On my car, the collision management braking system, auto stop/start, and lane keeping system can all be turned off – but resets when you restart the car – so you have to turn them off each and every time you start the car “fresh”.

          I don’t care for the nanny systems. They are not perfect and, in fact, the collision management braking system on a prior car actually caused an accident because the car detected another vehicle merging in front of me (making a left onto an expressway ramp) and I was making the right. It jammed on the brakes and I got rear ended. Fortunately, the “rat box” in the car showed that the vehicle autonomously jammed on the brakes, not me, and I was able to get the citation thrown out as it wasn’t operator error…. it was vehicle system stupidity.

          The “wiggly wheel” can be the result of your cameras not being properly aimed. If you’ve had your windshield replaced, the entire system must be recalibrated in order for it to work properly. No mobile replacement truck can carry the gizmo that they need to do so. Best done at a dealership. Why? Because the manufacturer will deny any warranty failure claims if the system wasn’t recalibrated by a dealership… and the dealer won’t touch it if it’s not OEM glass. Ask me how I know.

          I wouldn’t use LKAS (lane keeping) as a “self-driving” aid as a previous post suggested. That’s not it’s purpose and, if you read the fine print, is recommended against using in such a fashion. Keep in mind that the vehicle “rat box” can tell if your hands are on the wheel and, if you smack into someone, that could come into play in any legal action.

        • David says:

          I don’t find it intrusive either. Accident avoidance features are not taking away any of my driving enjoyability. I really like adaptive cruise control. Much of my commute is on 2 lane roads with limited passing opportunities. I just lock in a speed and distancing and follow the car in front of me.

        • SiT23 says:

          My country’s law is that rear ending is legally always the follower’s fault for not keeping enough distance to stop if the car in front stops suddenly, whatever the reason.

  8. Stan Sexton says:

    Kill the Middle Class and You Kill the Market.

  9. c1ue says:

    I wonder how much impact the ride sharing “industry” had on new vehicle sales.
    In particular, the combination of NINJA car loans and ride share – both of which are imploding.

  10. adrian says:

    how about if instead of the average, we look at the median age?

    • Wolf Richter says:

      Go ahead and look at it.

      • adrian says:

        How? There is no data…. There are 5 million collectible cars in the US and the number is growing. Their prices are going up as well, so they are not going to be discarded. In my opinion, the average age will only go up.

        • Wolf Richter says:

          “How? There is no data”

          That’s what I mean. If there were median-age data, I would have been the fist one to point it out. Average is all we have, once a year, from one source.

          BTW, those 5 million collectible cars (not sure where this comes from) is only 2% of the total fleet. And every year, new cars, meaning 12 months or less (17+ million per year in recent years, less this year) account for around 5% to 8% of the fleet.

  11. MCH says:

    Increasing the pricing is still linked to hedonic improvements in the vehicles. You just don’t quite get that feeling driving a 10 year old car. But I have to say, economically, I would feel good about it.

    If the 15 year old thing still works, use it. Hedonic quality improvements is functionally no different than consuming large quantity of chocolate. And chocolate is cheaper and can’t be wrecked like a brand new car.

    • Jdog says:

      Hedonics are a farce. Just another propaganda ploy to deceive the gullible.

      • MCH says:

        I’m not so sure, I mean power windows sure are convenient. So are USB plugs that provide power, and well, CD players were pretty useful about 15 years ago.

        • Jdog says:

          They may be convenient, but they do not add “value” to the car. A car without those features will get you where you need to go just the same. Besides, these gadgets are incredibly cheap, and the price point decreases on them constantly just as they do on computers. Yet their “value” computed on autos never decreases and in fact increases. The auto industry profits off selling a lot of thin air…

  12. Just Some Random Guy says:

    Modern today are made so well, you really don’t need a new one. I mean lots of people (like moi) WANT new cars all the time. But if your cars is just an appliance that gets you from point A to B, you can own a car for 20 years easy with good maintenance.

    Even American cars aren’t complete junk anymore, which is really saying something given what Detroit put out in the 80s and 90s.

  13. Just Some Random Guy says:

    Wolf,

    A Camry in 2020 is light years ahead of a Camry in 1990. It’s a but unfair to compare them and say it increased x% in price. In 1990 I don’t know if a Camry even had ABS or airbags as standard equipment. Today a base Camry has 10 airbags, collision avoidance, backup camera, bluetooth, lane assist and blind spot monitors. And at least an extra 100 HP and 3 seconds faster 0-60. They are both Camrys sure, but they are nowhere near the same car.

    • Wolf Richter says:

      Yes, it’s light years ahead. That was the point, made a couple of times in this article here, including this line in the conclusion: “So yes, automakers have figured out what to do in this market: Constantly improve the product to stay alive and jack up prices by a whole lot.”

      If you read the linked articles on the F-150 and Camry indexes, you will get all this in detail.

    • Jos Oskam says:

      JSRG,

      Light years ahead you say? All I see in your list is a bunch of tacked-on “solutions” looking for a problem. Heaps of electronic gadgetry burying the same basic machine. Gadgetry that will fail long before the machine does, that can only be replaced and not repaired, these parts costing a fortune if they are available at all.

      If this is called progress, cash me out.

      • DawnsEarlyLight says:

        Not discounting your position, but what has been the reliability of OEM ‘gadgetry’? You make it sound as if it has had a high failure rate.

        • R U Kiddin says:

          Crankshaft bearing shells, invented over 100 years ago, last over 100k miles.

          Electronics/software on cars, invented day to day, last day to day.

          2011 is a good cutoff date for servicing cars because of software/electronics. A better more survivable date is around 2005. 1996 is safer because its pre-immobilizer, but you have to go back to before around 75 to get to almost completely safe as far as software/electronics. You can’t go wrong in the 60s, anybody can fix ’em.

          New cars are murder.
          Old cars are here to stay.

        • Zantetsu says:

          Nothing brings out the luddites faster than a car article on WolfStreet.

    • Aaron says:

      Both will transport your butt from point A to point B, but one will be about $35,0000 cheaper. People are starting to figure this out.

      Who really needs a Camry that is faster than a 1990 Corvette?

      • Just Some Random Guy says:

        “Who really needs a Camry that is faster than a 1990 Corvette?”

        Nobody needs anything more than a Model T I suppose as that transported you from A to B as well.

    • happy_man says:

      hey random

      People want 10 airbags because the frame of the car is flimsy

      People want collision avoidance & lane assist because they don’t know how to pay attention and drive

      People want backup cameras and blind spot monitors because they have lost so much range of motion they are unable to turn around

      People want bluetooth because they are addicted to their phones and do not enjoy the experience of driving

      The manufacturers are happy to sell all the above features if people want them, especially because they will buy replacement parts. Airbag service is expensive!

      Some people like the extra HP if that’s what you really want extra HP can easily and cheaply be added to any old car if you want it.

      • Paulo says:

        I think they call it “marketing”. People want this stuff because they are supposed to want it. There are some very clever designers and advertising manipulators out there. Add on someone who is good at sales and a customer walking on to a car lot is a deer in the headlights. They’ll buy. It might not be today, but they’re toast if they already started looking. Then, the financing departments work their magic. Done like dinner.

        • El Katz says:

          Much of it is government mandated….. airbags, backup cameras, the shape of the front of the car (for pedestrian protection), crush zones (NTSA crash testing for certification), cabin penetration standards, hands free phone connectivity, EPA mileage and emission standards… then there’s the competitive disadvantage if you fail to provide at least a comparable “mouse trap” to other manufacturers.

          The marketing comes in when you have to justify what you’re charging for all the unnecessary rubbish that is bundled into “packages”.

      • Richard says:

        Utter nonsense. Cars had not had “frames” for ages. The chassis is extremely rigid in the passenger compartment and crushable elsewhere to absorb energy. The survivability is modern cars is on an order of magnitude better than 40 years ago.

        I won’t even waste my time responding to the rest of your drivel. Go buy a ’59 Oldsmobile if it will make you feel safer.

      • Anthony A. says:

        And you can’t just “add horsepower easily and cheaply” to an old car. Horsepower doesn’t come in a can.

        Adding significant HP may require an engine change or several upgrades to the cylinder head, camshaft, fuel delivery system, etc.

        • happy_man says:

          haha engine change or cylinder head upgrade is small potatoes compared to $50,000+ for a nice new car.

      • Just Some Random Guy says:

        happy_man,

        Fine then buy a 1980 Caprice and be a happy luddite. That’s the great thing about capitalism, there is something for everyone.

        • happy_man says:

          so funny you guys think I’m driving one of those spam can 80’s cars. Nope it’s the best of it’s generation. Best car ever made. I think you guys are jealous.

      • Happy1 says:

        I think there would be a sizable market for a basic transportation vehicle that didn’t have all the extra crap that doesn’t optimize safety. I would certainly be a customer for that.

      • Lee says:

        “People want backup cameras and blind spot monitors because they have lost so much range of motion they are unable to turn around>”

        Ah, another problem of obese America………..

        Sometimes you have to wonder how some of those people can actually get in and out of a car.

        • Wolf Richter says:

          I’m as lean and agile as they make them, and I love the back-up camera. You can see the dog or the child right behind the car that you cannot see by turning around or looking in the mirror. Friend of mine years ago (without backup camera) ran over his own dog – very traumatic experience, but less traumatic than running over a toddler.

        • VintageVNvet says:

          Gotta agree with Wolf on the BU camera, far shore!
          Many years ago I was backing up my big 4×4 when I noticed our huge dog running as fast as he could at truck from other side of yard, so I stopped and my toddler walked out from a foot or so behind the truck… scared the shyte out of me, and am very glad to have camera on big 4×4 today.
          Even to the point of paying to have it added to the camper shell!

        • happy_man says:

          OK if you guys want an excuse to burn tens of thousands on a new car to just to get a backup camera that is your choice. But FYI backup camera kit for an older car is under a $100 and easy to install yourself or have any auto shop stick it in there for you.

    • nick kelly says:

      Oh now we’re going back 30 years. I guess 10 years more and we are pre- fuel injection and electronic ignition, the last major FUNDAMENTAL improvements, along with multiple valves. (Detroit last in all)

      If a Camry has a 100 more horses than an older Cam with FI and EI and the same number of valves per cylinder it can only be because it has a bigger motor. There is no other factor capable of making that difference in a motor that is the same motor, except bigger.

      If Camry or anyone else didn’t have airbags in 1990 it was because it wasn’t the law yet.

      OK over 30 years there have been improvements in autos.

      Now compare it to the improvements in computers where performance rose astronomically and price fell inversely.

      • Wolf Richter says:

        nick kelly,

        “If a Camry has a 100 more horses than an older Cam with FI and EI and the same number of valves per cylinder it can only be because it has a bigger motor. There is no other factor capable of making that difference in a motor that is the same motor, except bigger.”

        I think you would find it interesting studying the factors that make gasoline motors more powerful. It’s a fascinating science.

        For example, an F-1 engine is 1.6-liter and generates something like 800 horsepower.

        • nick kelly says:

          I’ve read quite a bit about gas engines including the F 1 and the huge plethora of rule changes over the years. Huge amounts of HP from these non-production engines aren’t new. The key factor was RPM up to 20,000 which meant the limiting factor was reliability. Some were only good for a few laps.
          Speaking of exotics, the HP per cc of a WWII fighter like Spitfire with the final tweak of the Merlin, has rarely been exceeded outside a lab. This required two stage supercharging with inter-cooler. F 1 does not allow this level of boost.

          The theoretical efficiency of the gas reciprocating engine, limited by the pistons constantly reversing motion has been calculated and there hasn’t been much left to squeeze out for a long time.

          Returning to the Camry, the V6 offered in 1990 was 2.5 liter and the one now is 3.5.

        • happy_man says:

          nick I think I’d rather have a 3.5 liter in something other than a Camry thanks. All models of Camry handle like a go -cart.

      • Jdog says:

        The major change in HP on newer engines is computer controlled variable camshaft timing. It basically turns everyday engines into high horsepower engines by maximizing camshaft function for every rpm range…

        • nick kelly says:

          VTEC made its North American debut in the 3.0-liter V-6 mounted in the middle of the first-generation 1991 Acura NSX. By 1999, though, Honda’s trademark tech had trickled down all the way down to the humble (and much more accessible) Civic. Specifically, the Civic Si.Dec 24, 2019

    • Lisa_Hooker says:

      So when your 2020 Camry is six years old and a small accident triggers half the air bags does your insurance total the car?

  14. MF says:

    I went to look for a newer truck to pull my 5th wheel this week. The local Ford dealer was completely out of new super duties, save one. I thought there might be a good selection of Godzilla big blocks. Nope. Apparently, the market is turning away from diesel and towards gasoline rigs.

    OK. So maybe a late model Ram 6.4 gasoline V-8. Nope. They’ve disappeared from used car lots.

    The RV business has been booming for a while now. Perhaps it is red-hot now that people don’t want to be on planes. Most RV’s need big trucks with big towing ratings. Gas cratered to almost a dollar below diesel during the lock-down, and all the new diesels are expensive, complicated and need blue fluid.

    Or. Maybe people who are in mortgage forbearance and eviction moratorium are buying RV’s to move into?

    • ElectronAnalyst says:

      We are spitting out 3/4 and 1 ton trucks as fast as we can build them. 3 shifts, six days a week. These are mostly in the 60-70k range. A few in the 50s and alot around 80k. And the rumor mill says that demand during covid for this model selection only dropped 0.7%. And every truck we put out is destined for a customer. Not to sit on a dealers lot. Same with large SUVs. People might not be buying cars but trucks seem to be on the move! Weird times.

      • tom25 says:

        That’s because they are moving out here in rural flyover with us hicks.
        As I’ve read in here, its required that we own a 85K truck and park it front of our moby.

        That, and every campground near us is full and having a record year.

        If its only for play, I would stay with a gas engine. I haul excavation equipment for my business in a lot of hill country…so I still use a diesel.

    • TimTim says:

      All this talk of large pickups or RV’s…?!

      Time to get back to the real stuff!

      2004 Nissan Patrol, tent, square hexane block stove….

      ’nuff said.

      What more could a man need?

      (let’s forget the fact that that requires patience, ability to drive a tractor and a very forgiving other half…)

      • Bet says:

        Just bought me a ford van Okanagan
        64k miles on it. Beast engine. Runs great. Stove fridge , air, bed , shower, toilet. I can go where big rv can’t
        Looking forward to boon docking In my escape pod

  15. TimTim says:

    Well, yeah, ok. Sort of.

    In the UK there’s been arise in certain areas of individuals doing more home work on their vehicles.

    Vehicle taken to garage. Conversation that runs like:

    ‘So what needs fixing?’

    answer ‘X,Y,Z’

    ‘So if I source the OEM parts myself, how much will the labour be?’

    ‘(F*ck off you b*stard) about X’

    ‘uh, ok, thanks’

    ….trots off to a non-main dealer, but still specialist, alternative…

    ‘Thank you, when can it be done by?’

    Same parts, same process, often by ex-main dealer personnel.

    caveat emptor obviously, but if there is anyone out there from the UK with a 4×4, you know what i’m talking about.

  16. Sea Creature says:

    I have a 20 year old Japanese car. Everything works… perfectly..

    Why should I buy a new one?

    Cars in the 70s, 80s never lasted this long…

    Though cars in the past 20 years are probably more bland and uglier than in the 70s, they are certainly much much more reliable and technically better..

    • Dan Romig says:

      Sea Creature, It depends on what you want to drive.

      For years I drove a Japanese sports car that was old and working perfectly. That was my thing for decades.

      I didn’t buy a new one, but I picked up a 2016 lease-back Bavarian sports car this summer. Now I can’t believe I waited so long to do so every time I get behind the wheel.

    • cd says:

      older cars will have a big place in the world if we get a freak solar blast…..take out all the electronics….

      the guy in the 76 el camino will own the road….

    • Happy1 says:

      This is so true. My 2007 4 Runner probably has 15 more years.

  17. Simon says:

    Wolf
    I come here often to read about the excellent articles on “California Home market” or “Used Car Sales” articles, very informative and excellent comments, as we are talking about cars I had a 1992 Honda Accord EX , drove it for 250K[Snow and rain] miles , while it was working still , just donated it and bought a 2004 Camry LE still running it after 260K (Snow,rain,sand), I have to say Japanese cars made around 1990 onwards do last long, and i have zero payments for past 15 years. I was looking at some of the “Used” HERTZ rental cars on their website, they want 35-40K for a BMW328, they want 65K for 750I, no way ..those are worth after driven. Hertz “Liquidators” will be holding the BAG for sure.

    • nick kelly says:

      If you want a real jolt check BMW and Benz parts $ compared to Asian.
      Here is one for you: master cylinder for a Smart Car: 2000 Canadian. This info from Midas Muffler who’d just done one.
      Then there is Audi and its dual clutch trans

      Family member had a 13K repair bill on an Audi.

  18. Engin-ear says:

    Reasons not to buy a new car: work from home, economic uncertainty, reliability of currently used car pool.

    Reasons to buy a new car: use your money while it is worth something, regulator’s ban on 3 years+ used ICE vehicles (fiction, but car-makers lobbyists are probably brainstorming on this right now), and just plain dumb obsessive-compulsive disorder.

    What is the net outcome – no idea.

  19. California Bob says:

    I’m afraid this is all my fault; I have a ’46 Chevy truck, ’56 and ’67 Austin-Healeys, a ’96 Ranger and 2000 Lincoln (they must have calculated this average before I sold the ’55 T-Bird and ’65 Mustang). I’ll probably keep my ’19 Mustang GT until I die or wrap it around a tree, whichever comes first (or simultaneously).

    • BuySome says:

      CB-Did the Austin-Healy’s come through the Hollywood Sport Cars dealership?

      • California Bob says:

        BS-No sir. I found the ’67, known as a ‘BJ8,’ for sale in the parking lot of the Palo Alto Concours d’Elegance over 30 years ago; I was hooked, and the seller knew it (we made a fair deal, and I’ve since put 150K memorable miles on it). When I finally got the nerve to tell my late father I’d bought a British car he told me “If you’re going to own a car like that you’d better learn how to work on it” (he was formerly a high school auto shop teacher and factory rep for Ford, and was no fan of foreign cars).

        Years later, he called to tell me there was a ’56 Healey–a ‘BN2’–for sale in the local paper’s classifieds; he said he’d go have a look at it and bought it! I thought it was an early 6-cyl car, but it was a late 4-cyl car–a true purist’s ‘sports roadster’–and was one of only 640 documented cars modified at the Healey factory in England (known as a ‘100M’). The car had some of the mods used by Healey when they ran in the 1953(?) LeMans and finished 12th overall (against one-off Ferraris, Mercedes and Jags). We spent ten years restoring it, while my dad fought cancer twice, and finished it just a few years before he died.

        I’ve heard of Hollywood, but have had no experience with them.

  20. nick kelly says:

    ‘So yes, automakers have figured out what to do in this market: Constantly improve the product to stay alive and jack up prices by a whole lot.’

    What improvements? Blue Tooth, back up cams? A few hundred bucks worth of options to justify ten grand of price increases.

    To repeat: this is NOT computers where the customer gets huge value increases over ten years or even five. There have been no fundamental changes in autos in 20+ years.

    But here is one sort of change: you may have noticed a lot of new autos shutting off at stops and starting when the driver steps on the gas. This I am sure is a ‘hedonistic’ improvement, worth a grand on sticker.
    Only one prob: in normal urban driving you are increasing use of starter by 1000 percent, or maybe 2000 and compressing 10 or 20 years into one year. The starter is not a computer that can be tasked at 1000 % with no additional wear. Its life is measured in duty or revolutions. After one year in this starting at every stop it’ll be ten years old.
    So check replacement of starter (1000?) when calculating value of auto stop.

    • Wolf Richter says:

      My wife is now driving a hybrid to work every day – a big one, a Ford Fusion – gets 40 mpg in the congested San Francisco city traffic. It’s got things in it you couldn’t have imagined 15 years ago. Very nice car. Very comfortable. Nice handling. Great on snow and ice in the mountains.

      And the Infinity we had for 14 years and put 160,000 miles on never had a mechanical problem, other than body damage, such as the garage door post jumping out and biting the car. But compared to the Fusion, it seemed ancient and sparse. 14 years made a HUGE difference.

      • nick kelly says:

        I’m sure it is every thing you say it is. In 160,000 miles and 14 years later we can compare it to the Infiniti , which had no problems during that time.

      • cd says:

        I rented one of those in Portland, heading out to dealers in Eugene, Bend, Boise and then back to Portland….

        great drive….super mileage, had 1008 miles when I started, 3700 on return…

        Wolf I think we might have ran into each other. I know the Ford store you most likely worked at….did business with almost all dealers in the state…..Except HanLee….that guy is not a buyer of anything to help staff….

    • Engin-ear says:

      @nick kelly

      You are referring to “Start-stop system” which seeks to reduce your fuel consumption (up to 10%, apparently) at the expense of your starter and of the peace of your mind (I find it troubling not to have an immediate response of car when the engin stops).

      It helps to improve the CO2 emission under the certifications and finally to reduce taxes.
      So it looks like compliance-driven tech.

      • Jos Oskam says:

        JSRG,

        Light years ahead you say? All I see in your list is a bunch of tacked-on “solutions” looking for a problem. Heaps of electronic gadgetry burying the same basic machine. Gadgetry that will fail long before the machine does, that can only be replaced and not repaired, these parts costing a fortune if they are available at all.

        If this is called progress, cash me out.

      • Jos Oskam says:

        @Engin-ear,

        Yeah, start-stop system:
        – It needs a beefed-up starter
        – That beefed-up starter requires a bigger battery
        – Bigger battery wants bigger alternator
        – Plus extra hardware to make it all work

        All this stuff weighs extra, needs to be schlepped around, needs to be manufactured and maintained and makes everything more complex. And I am supposed to believe that this helps to save the planet?

        Gimme a break

        • Engin-ear says:

          I never said it was planet-saving-driven. I said it was law-driven, or, more accurately, tax-driven.

          I hope you see the difference.

        • Kerry says:

          Also, most engine wear occurs on start up, brilliant…

        • Wolf Richter says:

          Jos Oskam,

          Maybe the Ford Model T would be your favorite daily driver. It is as basic as you can make them. But it does have 4 wheels, a motor, and some equipment to connect them, and some sort of braking system, which is really all you need 😁

        • Anonymous says:

          Wolf,

          That is my ’84 Nissan pickup you are talking about.

        • Jdog says:

          What you actually need is reliable transportation to get your butt from point A to point B.
          What you want is something that will impress other people.
          Your ego is the most expensive thing you will ever support…..

        • Jos Oskam says:

          @Engin-ear
          I’m sorry, I wasn’t implying you said that, and I was not trying to score points off you. It’s just that this so-called “progress” in cars gets on my nerves now and then and sets me to rant :-(
          My apologies.

          @Wolf,
          Yep, I would probably like a model T. As I like my 65 Mustang. Something about Ford maybe :-)

          And although a T would be a bit basic, I am certainly not the only person who prefers a “no frills” car. As in a Dacia for example, the only brand under the Renault/Nissan umbrella that still posts a profit. That is not a coincidence.

        • Wolf Richter says:

          Jos Oskam,

          I owned a 68 Mustang in 1976 (289 V-8). And it was a POS already. Stuff falling off (arm rest, clutch linkage), carb leaking, speedometer stopped working, terrible performance, terrible handling, shitty brakes… a veritable death trap. And don’t even get me started about that 3-speed manual transmission. I mean, I loved it at the time, but it was a POS compared to the Mustangs Ford is making today.

          But yeah, as a collectors’ car that you drive three times a year, and otherwise it sits in your garage, why not, it’s fun to have around.

          I would NEVER let my wife drive something like that to work every day, and if I let her, she’d refuse to.

        • What worries me is that in another 25 years, there will be no one left arguing in favor of simplicity in technology, as consumers will no longer have a choice and the simpler, more reliable cars from the 90’s will no longer be available. Politicians will then pat themselves on the back for having achieved full employment through the creation of a nation of help desks to resolve an endless backlog of gadget malfunctions. “Help, I pushed the start button and nothing happens…”

        • California Bob says:

          My dad’s ’65 Mustang convertible I just sold was a cream puff (bought new by Alice Faye, if anyone remembers her). The buyer and his 15-year-old daughter bought it–she paid half with ‘babysitting money;’ babysitting must pay better these days–and she wants to drive it to high school (of course!). Her dad says they’re still “negotiating” (he owns a gun shop; business is ‘insane;’ it’s hard to get the good ammo).

          Anyone who drove one of the old POSes–with no ‘safety features’ save a seat belt (maybe) should have gotten a strong sense of their own mortality, and realizes that the modern ‘nannies’ are only there to save your bacon when you truly screw up, not to make up for a lack of basic automobile operating competence.

        • Jos Oskam says:

          @Wolf,
          Your experiences with your Mustang do ring a bell. These cars were certainly not wonders of reliability and safety. But they are a charm to drive and to me represent the “essentials” of driving which I enjoy tremendously.

          Car safety is important and I surely understand you preferring a more modern car with its advanced safety features for the transport of you and your loved ones.

          However, risk acceptance is a very personal thing. I myself do not mind the relative lack of safety of an old car. I also ride a big motorcycle and that is statistically certainly a lot riskier than any car, new or old. So for me personally it would feel a bit inconsistent to expect my car to protect me from all thinkable eventualities today, while accepting the dangers of riding a powerful motorcycle in unpredictable traffic tomorrow.

          But that’s just me.

      • roddy6667 says:

        Reminds me of the late Sixties Saab 96 with the 2-stroke engine. You had to add oil to the gas. Separate filler spouts, I think. When you were going down a hill, the clutch would automatically disengage and the engine would drop to an idle. A friend of mine had one, and I drove it from time to time.

    • Engin-ear says:

      @nick kelly

      The question you rise is an interesting one – what really changed in last 20 years of car making.

      I think the point of perfection is now very close for the ICE engins and car bodies. Everybody is doing the same, margins are going downs.

      Hybrids and EV are new ways to differentiate the products, sparked by the threat of low cost competition and regulators pressure.

      What I still try to understand is how much of the regulator’s pressure was financed by the carmakers themselves.

  21. lenert says:

    150,000 fewer drivers in the US, give or take.

  22. No1 says:

    You have to wonder… which industries are really healthy right now or even pre-pandemic? Seems like it’s just tech, perhaps media. It doesn’t bode well for economic growth when it’s so difficult to make money.

    • Engin-ear says:

      Weaponry, Artificial Intelligence (both military and civil), debt restructuring and personal security (for peaceful citizens against peaceful protester).

      Looks promising for me.

      • California Bob says:

        An acquaintance–see above–owns a gun shop. Business is, well, brisk (even though they can only allow up to 4 customers in at a time). Popular home defense weapons are long since sold out. Good ammo is scarce.

        It’s kind of a ‘seasonal’ business.

    • happ_man says:

      surveillance industry growing faster than all

    • RightNYer says:

      Right, that’s the problem. Tech companies don’t really make anything, they just facilitate the selling of goods and services. Who is going to buy Google’s ads when the economy is collapsing? Who is going to buy Microsoft’s cloud services? I really don’t understand the investor mindset that the tech companies alone can drive the economy, as if they existed in a vacuum.

    • Anthony A. says:

      Try to buy a box of 9mm Luger ammunition, or a box of 12 Gauge 00 Buckshot shells. Backordered for months….

  23. TinyTim says:

    I fall into this category of aged vehicles. I own a 1994 Buick Park Avenue that I have NO plans on selling. In fact i’ve spent money fixing it up. I have the money to buy or finance a new vehicle but prefer not to.

    I don’t like all the tracking BS in new cars these days and most new vehicles regardless of who makes them have the strength of an aluminum soda can. I’ve seen a lot of the new cars where the body parts have interlocking tabs and if you by chance tap the car with another heavy object or something that refuses to move the body parts come apart.

    I’ve no doubt this is for passenger safety but I prefer vehicle strength and the Park Avenue has that in spades. The other thing that bothers me about new cars is that they pretty much look all the same i.e. ‘hard to sometimes tell them apart’ and climbing into the drivers seat they tend to look like obnoxious Boom Boxes.

    Maybe i’m just getting old and that’s why I drive a Buick. :)

    • Son of an Engineer says:

      I have a 2007 LaCrosse that I want to drive for another ten years or so until the engine seizes.

      • noname says:

        The engine is the strong point on that car (if you have the 3800). I’ve driven them hundreds of thousands of miles and so have numerous relatives. Insanely dependable.

  24. Whisperin Pints says:

    The odometer on my ’83 F-150 just rolled over to 91K.

    • MiTurn says:

      My 1990 Ford F-250 wood hauler just died — +350K miles. And the engine was never opened up, just a water pump some years ago.

      • Whisperin Pints says:

        Correction: my F-150 just rolled over to 89K. The only things I’ve replaced has been batteries and tires. Knock on wood.

  25. Frugal says:

    I have a 98 Ram with which I’ve pulled a small trailer all over the country for many years. Other than being a gas hog it has been a solid, reliable truck. Now with 230K on it I still use it as a work truck for my carpentry business. Last year I bought a new Ram to use primarily for towing our camper. It was eye opening how much trucks have changed in 20 years, although it’s a low trim level it feels luxurious and is the best driving and most comfortable vehicle I’ve ever owned. But the difference over just a couple of years in incremental improvements is nothing like the difference over 20 years. And I still love my 98 when I drive it. Adjusted for inflation I probably paid less for my 2019 than the 98, although most truck buyers these days seem to go for the fully loaded models.

    I’ve typically kept most of my vehicles 20 years. I take good care of them and it’s a good feeling not having car payments – especially in these times.

  26. John Tonge says:

    The electrical grid is near capacity as it is. Adding just a few cars recharging per block will crash the grid. Your average person does not think about our power supply, but it is very fragile. Good luck getting to work in your battery powered car.

    • Wolf Richter says:

      John Tonge,

      Good lordy. Where do you get this nonsense?

      ALL electric utilities love EVs. In the US, the problem that electric utilities have is two-fold:

      1. The long-term stagnation of electricity sales, which started in 2008, and the continued increase in capacity and capital expenditures.

      2. An enormous amount of idle capacity in the middle of the night – all this infrastructure and equipment, that is not used in the middle of the night because electricity demand in the middle of the night is minuscule, compared to the peak demand during the day. And the system is built to handle the peaks. Idle capacity is very expensive for utilities – and rate payers are paying for it.

      EVs are going to solve both of those problems for electric utilities: they will increase demand, and they will increase demand in the middle of the night when people charge up their cars in their garages, and thus they’re reducing this enormous and costly idle capacity at night.

      IN ADDITION, utilities would LOVE nothing more than the scenario you outlined – more demand than the current system can handle so that they could build out their system. Because that’s how utilities operate: they make a big capital investment that produces a steady revenue and income stream for decades. They build whole power plants on that model. That’s how utilities operate. That’s their business model: make big investments and get a return from it over the next few decades.

      • Jdog says:

        Depending upon where you live, EV’s are just not that economical.
        In CA, a Tesla averages $5 in elect. costs for 50 miles of driving.
        Where I live gas is only $2.20 a gallon so I can drive a regular car for about the same costs…

        • Wolf Richter says:

          Jdog,

          No American buys a car that costs $40-110k to save a few bucks on fuel. Fuel savings is a nice-to-have feature for people with money… they buy whatever they LIKE to have, including $100K 1-ton luxo-pickups that they drive to the office every day and that get 15 mpg if lucky.

        • Jdog says:

          If they are not economical, and do nothing to help the environment, what the hell is the point? I sure hope it is not an attempt to impress someone, all cars today look alike, who even notices what anyone drives?

        • Dan Romig says:

          Jdog,

          The point is that some cars are enjoyable to drive. And similarly, some motorbikes and bicycles are fun to ride.

          Each of us only has so much time here on Planet Earth. After working hard and being somewhat successful, there’s nothing wrong with enjoying life.

          I’ve commented before that I’d be happy to pay more for 93 octane non-oxygenated fuel for my M4 & Tuono – if I could. My options in the Twin Cities are 91 octane non-oxy or 93 octane 10% ethanol. So, I use both and blend them 50/50.

      • TheRealMRDyno says:

        I think nighttime charging they love. Daytime maybe not so much, due to infrastructure limits. A CAT dealer we rented a 3-phase powered trailer mounted A/C unit from said the biggest users of those are utility power companies, to blow on heavily loaded transformers.

    • Max Power says:

      Nonsense.

      You see that many EVs have a 300 mile battery and your brain immediately assumes that most folks will need to charge those 300 miles worth of battery capacity daily. Well, yeah, under that scenario the grid will be crushed.

      However, the vast, vast majority of folks don’t need to charge up 300 miles each day. They only need to charge up 10% of that on a daily basis. With most newer EVs you can do that on a simple 110v outlet overnight without overly taxing grid. Your utility would love to sell you that slow-trickle electricity during the time a lot of their plant is now idle anyway.

  27. Crush the Peasants! says:

    “Finicky, astute, and demanding customers relentlessly pressure automakers to out-do each other in order to survive and thrive in an ultra-competitive market that has been a zero-sum wild-ride, with slow ups and furious downs, and ultimately with no growth in unit sales for over two decades.”

    Yowzer! Now that is writing. Good coffee, Wolf?

  28. Page88 says:

    Again, a wish item that is highly unlikely to happen……….small, bare bones pick-up trucks with no frills. Think Mazda B2000 series and Isuzu Pick Ups aka Isuzu “PUPS”. My guess is that manufacturers could produce them for nine to thirteen thousand dollars and add five thousand profit – total cost of fourteen to eighteen thousand. Not enough profit incentive…….but the “middle class household” balance sheet (debt service) takes a severe hit to obtain a fifty-thousand dollar plus truck. Our economy is built on too much debt service.

    • MiTurn says:

      I don’t think most buyers want utilitarian trucks, although they make sense. They want plush trucks, which could be construed as an oxymoron. I think what you see being offered for sale is exactly what most people want.

      Commercial buyers want spartan, but not your suburban neighbor.

      • VintageVNvet says:

        Good point MT,,, having driven pick ups for work since early 70s, I had to order last one to get the reg cab, 8’bed, spartan combined with 4×4, power for trailer, etc., without all the so called luxury.
        19 rambo ”classic” heavy half replaced the 1984 3/4T plain jane, with more haul capacity, couple tons more trailer capacity, better gas mileage, much better ride loaded and empty, etc.
        When I asked when ordering why I had to get some of the so called safety shyte/stuff that I did not want, dealer guy said every bit of it was mandated by EPA etc., during 08-16 era, and I could not get any vehicle without it…
        What a nuisance not to be able to open the door to back up the trailer is just one example, and he warned me not to start removing some of the ”stuff” at least until the warranty ran out, as it might void the bumper to bumper part of the warranty and maybe all of it.
        ”Nanny State!” can go to heck as far as I’m concerned, though I do appreciate an earlier comment that a lot of folks cannot drive worth a heap of beans and need such shyte…

    • Seneca’s Cliff says:

      The costs to produce the metal part of a basic car has gone up dramatically since the 90’s. I used to pay 25 cents per lb for steel sheet in the 90’s and now it is at least 60 cents, same with castings, plastic resin, welding gas etc. It is long past the time when manufacturers can make a profit selling a metal box on wheels, that is why they have to sell plushness, and gadgets to make money.

    • noname says:

      Ford is going to be coming out with a small pickup allegedly. Hyundai also, but perhaps a bit bigger.

      • cd says:

        Hyundai RV is slick, coming soon to US. Hyundai vehicles are darn reliable now…..I worked with them via natl vendor account and it probably is the lowest RO avg in industry…KIA close but their engines are not up to par……

        • noname says:

          I think they’re the same engines, especially if they’re the ones I assume you’re referring to.

          I too have liked Hyundai/Kia vehicles for a long time, but have never owned one. A relative has a 2-year old Kia and the A/C quit blowing cold air last week, going to the dealer soon.
          My getting-old GM vehicle has ice-cold A/C that I have never had to touch, nor did my last GM vehicle that was leaving rust stains on my driveway at 300k miles—-disappointing for the Kia.

        • lenert says:

          They look nice but no one thought KIA might look bad on a car?

    • Just Some Random Guy says:

      Manufacturers make what consumers want. If there was demand for what you describe someone would make it. There isn’t so nobody does. Not much more complex than that.

      • Jdog says:

        Really? So you think people actually wanted Gremlins, Vega’s, Aztec’s and Saturn’s? Manufacturers make what they think they can sell, and make a profit on.

        • El Katz says:

          People actually wanted Saturns…. the problem was that the product line wasn’t broad enough to keep them after their first vehicle. GM also starved the division financially. It was their “Toyota Killer” and it was anything but.

          As to the comments of bare bones cars: During the last economic downturn, my employer at the time thought it would be a great idea to produce a low end version of a very popular sedan. That was the same time that Hyundai to their Elantra upscale. Turned out to be a massive booboo. We had to load incentives on the cheapies and the R&D / designers had to recontent the car and relaunch it within a year. People say they want a cheapie, but their not the people who would buy a new vehicle to begin with.

          Cash for Clunkers: That boondoggle did more harm to the working class family than you can imagine. It took a pool of largely desirable vehicles and destroyed them – raising the used car price because the supply dropped. The politicians would have been better off taking the viable vehicles and trading people out of their really old sh*t boxes vehicle for vehicle. Would have taken far worse cars off the street and provided a cleaner running car to someone who would not otherwise be able to afford one.

    • VintageVNvet says:

      Don’t forget the VW ”pick ups” that would get up to 80 MPG ‘on the road’ when they first came out..
      Very similar to my 57 bug with 1100 engine that I could and did get consistently in the high 60s MPG on the road, and sometimes even more when I was able to keep my foot off the floor more than less…
      I have heard rumours of some with that pick up in its diesel form getting even better mpg, though never seen it my self..
      And then along came Honda with the early hatchback ”low end model” getting better than 60 mpg with 5 speed on the floor,,,
      Basically, what all this comes down to is: IF, somehow, we could get rid of all the derivatives of derivatives of derivatives, etc., etc., AND also, somehow get rid of all the ”nannies of the nannies of the ‘nanny state”’ we could drive on for eva with only pennies per mile,,,

    • roddy6667 says:

      I have a friend who had one of those Isuzu P’ups. Diesel. He had a 60 mile commute back then. He had a 275 gallon tank of home heating fuel that sat a little higher than his driveway. He could fill the truck without a pump. He ran that little truck for several hundred thousand miles. In extremely cold weather he would add a can of antigel additive. He gave the truck to a kid who had a landscaping business and he drove it for a few more years.
      The truck was a rust bucket, the only criticism.

    • Apple says:

      You can buy a Chevy Canyon for $20k.

    • Endeavor says:

      Again, a wish item that is highly unlikely to happen……….small, bare bones pick-up trucks with no frills. Think Mazda B2000 series and Isuzu Pick Ups aka Isuzu “PUPS”.

      I have read Ford has one in the pipeline now.

  29. Seneca’s Cliff says:

    Unfortunately the lifespan of any vehicle drops off dramatically when’s its manufacturer goes out of business and can no longer supply parts, just look at Saturn. The current trends in auto sales almost guarantee we will see several auto manufacturers close up or leave the North American Market. My guesses would be Chrysler, Nissan and Land Rover along with one of the Koreans. I hope you all chose wisely.

  30. Island teal says:

    Good article and comments as usual. Took me a long time to stop laughing after reading the comment about a Tessssla with a million miles on it someday 😂😂😂

  31. Pablo says:

    Given all the great data above, is this the best time in decades to buy a new car? Are dealer incentives matching the decline in consumer interest?

    Anyone have any insights on the best time of the year to buy a new car?

    • Wolf Richter says:

      June had the highest incentives across the industry for any June on record. And Tesla, which doesn’t do incentives, cut prices across its lineup, including on its new Model Y. So yes, you might get a deal. But not all models carry incentives. Some hot models are in short supply due to supply chain issues.

    • VintageVNvet says:

      Paulo,
      Bought 2 new 2007 pick ups; first, in late 07 was discounted 30% from MSRP, second in spring 09 was discounted over 50%, so that might be coming down the road a way this time too. Biggest ‘hitch in the giddy up is likely to be all the supply chain challenges as Wolf mentions.
      Local chevy dealer has a lot of new ‘colorado’ pick ups listed on website at approx 25% off yesterday, base model work trucks, and a few of the more upscale ones of that medium pick up…
      Local rambo dealer has no new pickups in their back lot where there are usually many dozens, but that one was offering zero/84 payments for a while… very old dealership.
      Time of year to buy depends on if you will take what they have left over from previous year later in fall after new year’s models are in the dealer lot, or if you want to order– I have ordered in late winter twice, got approx 30% off MSRP.

      • noname says:

        Gas prices were sky-high when you bought those trucks. The automakers were going bankrupt. Used Suburbans and the like were worthless. Little tin cans were all the rage.
        Obnoxious MSRPs of today require +++% off.

  32. elissa3 says:

    What I’d like to know is where is the two-seater with ample space for groceries that costs 8-10K? The everyday short commute or errand-runner for the 90% (to check actual percentage) of the trips made by the average person. 35-45 mile range. Don’t care if it’s EV, ICE, hybrid, whatever. Keep the nice fancy car in the garage for the longer trips, but use the cheapo one for most everyday ones. Save money.

    Why hasn’t any manufacturer come up with this? India? China? Regulations?

    • VintageVNvet says:

      Tons out there around the world e3, but limited in USA due to ”nanny state” and those nanny regs doubled between 07-16, as per my comment earlier…
      Maybe Wolf can find data as to if USA still the worst drivers in the world,,, but that may depend on if you consider Miami still part of USA,,LOL

      • Wolf Richter says:

        Americans HATE small econo boxes. Automakers tried. But there is just no demand. Back when I was in the business, at some point, Ford started importing small Kias and called them “Festiva” (ca. 1990s). They had no AC, no power-anything, just basic transportation. They were great little cars, very reliable, got 50 mpg.

        We sold them for $4,995 to move them. We sold about 1 a month, maybe, and lost money. People want pickups, SUVs, big equipment, where everyone makes money.

        A cheap car needs mass-demand to make it work. And that’s just not there. We had lots of people who were attracted to the price and they came and looked at it, and then they moseyed over to the used-car side and saw what they could get that was 3 years old for the same price, and that’s what they bought.

        • El Katz says:

          There’s a litany of small cars that died due to lack of demand. Remember the Smart Car? Toyota had the Yaris. Honda canceled the Fit for MY2021.

          There’s a pattern there.

          It costs about as much to make a stripped model as it does to make a loaded version. Years ago, I had been told that the difference between a Cadillac and a Chevrolet was about $1,000 in production costs (this info is quite old, so bear with me). Our manufacturing folks would come to us and beg for us to promote the higher trim cars to improve factory profitability… however, it was hard to feature a car for $399 a month when a competitor with a similar class vehicle was marketing theirs for $189 a month….. and the incentive costs required to get them into parity were eye watering.

        • Robert says:

          “Americans HATE small econo boxes. ”

          Probably, but it’s also true they can’t fit inside them as well.

    • noname says:

      Chevy Spark is going for $12k in my area. I’ve seen them at $10.5k, that was before up was down.

    • Old-School says:

      I have found the norm at some of the costal areas is a high end golf cart preferably gas powered with a Yamaha or Kawasaki engine. It’s my understanding that must be able to achieve 35 mph and be licensed. Most are at least four seaters and some six. I think they are in the 7K – 9K price range. Where I go I was told they allow drinking and driving as long as you are in a cart and not a car.

      • Implicit says:

        IT was semi legal to drink and drive in regular licensed cars in the 60;s and 70’s. The police just took away your liquor sometimes if they didn’t know you ;>{)

    • lenert says:

      In Europe they used to sell the Ford KA – so small they had to drop the R.

  33. john says:

    After reading this article and examining the financials of various auto part stores am considering a buy limit order of AZO @ $1000/sh. Auto part stores did well during 2008 and 2009

    • Wolf Richter says:

      That’s the theory every recession. And there is something to it. But I think there is less to it every recession as cars get more and more difficult to fix for DIYers. And when the cars go to the franchised dealer to get fixed, the parts supply chain doesn’t go through auto parts stores. It goes direct to the manufacturer/franchise brand.

      • VintageVNvet says:

        That would be me far shore Wolf:
        ”Back in the day,” I did all my maintenance and minor repairs, including LOF, tune up, etc.; today, I have not even opened the hood on my last couple of pick ups,,, and have not had any break downs in the last 20+ years in spite of another couple hundred thousand miles driven.
        In days of yore, including my beloved ’84 chev 3/4 T, I could not only identify every single component under the hood, but, if I were broke and had to fix it myself, fairly often, I could do so…
        Now,,, NO way; not only do I NOT know the names of what I see, but my local shade tree mech, a very up to date guy, sez he now cannot even afford buy the computer to know what to do with them either…
        Such another shame on us moment!

      • john says:

        I’m not using a franchise mechanic unless it’s warranty. 3rd party mechanics buy a lot from the part stores. I still believe the sector will be good for at least 2 years.

        • El Katz says:

          You can buy just about any part from online vendors like Rock Auto or Pelican Parts (if you drive a German vehicle). Much of the stuff Pelican carries is manufactured by the same supplier as the OEM uses. They just don’t put the manufacturers trademark on the castings (but I have seen them ground off). BMW uses ATS brake parts (at least they do on my older one) and what I got in the ATS box was a direct match for what I removed from the car – down to the stamped markings (sans copious amounts of brake dust). There’s other suppliers that stock NOS and reproduction parts for older GM vehicles. The catalogs are quite extensive.

          You can buy diagnostic cables and software to connect a laptop to most OBD-II cars and get a listing of “codes” to report engine / transmission / suspension (if electronic) malfunctions. Most repair work nowadays is replacing modules, sensors, solenoids and the like. If you’re ever bored, go watch M539 Restoration videos on youtube or 4laneblacktop for domestic (he actually bought a salvage Bentley Flying Spur and brought it back from the dead) that shows that it’s not as hard as people are lead to believe. The M539 Restoration site is particularly entertaining. He restored an E38 BMW 750iL he purchased from Dubai (he lives in Munich) and shows how he restored and refurbished the car to get it through TUV so it could be licensed in Germany. The finished product – at least from the photographs – is remarkable.

    • Jdog says:

      No one grows up with any mechanical experience any more. Most millennial’s could not fix a peanut butter and jelly sandwich, much less an automobile…

      • El Katz says:

        Depends on who their father is…… my son has built his own engines, rebuilt carbs for power equipment, tore down and rebuilt a few motorcycles, and a variety of other non-garden variety endeavors. My daughter can do basic maintenance on her car as it was a prerequisite to her getting her driver’s license. Their *real* jobs are not in any trades. They just learned that it’s important to know how to do things for yourself – especially if you marry one of the Millennials that you describe

        They’re not alone.

        • Jdog says:

          They are a very small minority though. Nothing like when I grew up and almost every kid bought a old beater and fixed it up.

          To be fair though, to be competent today at any sort of repairs takes a lot of knowledge. I know a few professional mechanics that I do not consider competent, and they do it every day.

        • Dave Kunkel says:

          I have Millennial granddaughters that are willing to tackle all sorts of mechanical projects. Two weeks ago one of them brought her Toyota Highlander over to our house to replace the front brakes. She did most of the work herself. She also changes her own oil.

          Another Millennial granddaughter just replaced the faucet in her kitchen sink herself.

          A few years ago one of my grandsons and his cousin replaced the engine in his Honda civic wth an Acura engine. After they finished they got it approved by California’s BAR – no small feat.

  34. Just Some Random Guy says:

    For those claiming safety features like collision avoidance, ABS, crumple zones, backup cameras, air bags, etc are just “marketing”, look at the drivings deaths per billion vehicle miles traveled in the US, from the “good old days” vs the modern era. Every decade as safety tech improved deaths fell. The 2010s have been flat. Which would indicate we’ve done about as much as possible tech wise to keep people from dying. The next step is to let robots drive and eliminate the last obstacle which is human error.

    1960: 5.06
    1970: 4.74
    1980: 3.35
    1990: 2.08
    2000: 1.53
    2010: 1.11
    2018: 1.13

    • Wolf Richter says:

      Just Some Random Guy,

      THANK YOU for digging up the numbers!

    • Engin-ear says:

      Interesting dataset, yet I see no evidence that all this improvement came entirely from car safety features.

      My point is that the driving death rate is ALSO inversely correlated with the quality of infrastructure (road, signs,…) and some features of modern society (essentially good education, nice lifestyle and associated fear of death).

      • VintageVNvet says:

        Try driving across USA ten times or so E-e,,, and you will change your mind, bigly, IMO…
        Having done so in order to see our ”grands” the last few years,,, it really does shame me to see how woefully inadequate our education system, and, especially our driver education system has become, that I would advocate for a much much stricter driver licensing system that would at least have some minimum requirements that are uniform for all licensed drivers, clearly NOT the case today…
        Similarly wanting to get all or almost all ”interstate” transportation of each and every cargo possible onto the RRs and off our roads…

    • In 2000 they lowered the BAC to .08 from .10, which they say reduced highway deaths 7% or 500 lives per year. In 2017 3166 people died due to distracted driving, (cell phones, texting) which may explain that slight blip in 2108, and probably covers up the continued drop in DUI deaths due to public awareness. Now that Covid has shut down the bars that number might be even lower. Cars are a lot safer, people not so much.

      • lenert says:

        Recently drove transcon for the first time with adaptive cruise control. I can die now.

    • Brant Lee says:

      Man, I do remember a lot more deadly wrecks in the 60s and 70s. Seems like there were a lot of mangled absolutely terrible car masses sitting in some places to the point you couldn’t tell what kind of car it was.

      Just a simple thing like those notches (started not that long ago) on the side of the lane that make the noise when your tires run over them has woke up a lot of truck drivers these days.

    • Jdog says:

      Around the 90’s they started to make seat belts mandatory, that had a lot to do with it , that and going full gestapo on drinking and driving. That had more to do with cutting the death rate than the cars themselves. Also, prior to the 70’s roads were mostly 2 lane, with lots of passing. Everyone old enough to remember those days has probably had some very close calls… When I was a kid, it was common to let little kids stand up in the front seat so they could see over the dash.

    • A A Ron says:

      Some deaths are just unavoidable, ie DUI, driving it into a pond / bridge at 100 MPH, stuff like that.

      I actually think deaths are going to go up as the zombie kids can’t put their bleeping phones down long enough to watch where they are driving. Cell phone use is going to easily replace what DUI used to claim I sadly predict.

    • James E. Overmyer says:

      Tucson

      I spent a couple of years as a newspaper police reporter in the late 1960s in Indiana, where the roads are pretty straight and driving ought to be easy, and I remember covering a lot of accidents, many fatalities. Then, after four years in the Army, I became a reporter in rural Massachusetts, where the roads aren’t very straight at all. But, there weren’t nearly as many serious car crashes. I got out of the business, eventually, but kept an eye on the local news. By the time I moved away a few years ago, road fatalities were pretty rare. Now, I read your stats and see why. Thanks.

    • Lee says:

      Interesting numbers, but can you show the number of deaths as a result of drunk driving and/or drugs by decade?

    • happy_man says:

      Starting in the late 70’s people who wanted safe, heavy cars with good crush zones could get them. Hint these were NOT American sedans. I will agree that crush/crumple zones are a real safety feature. In my opinion, the best thing you can do to be safe is drive a car with a lot of mass that has ample crush zones and have a decent seat belt.

      I will still call air bags, buzzers, lane following tech etc gimmicks. I guess it’s cheaper for the manufacturer to do safety gimmicks rather than build a proper cage to preserve your life.

    • Bobber says:

      I suspect safety advances over the past decade are being offset by the proliferation of smart phone usage while driving.

  35. dr spock says:

    The new cars parts for the average cars are being made more flimsy every year and the warranties are covering less and less. This is hidden inflation. Also, you better be able to repair your car if it is not covered under warranty, otherwise the car repairs, which are also going up and up, will bite you. And even if your new car is still under warranty for a specific problem, there is a new scam wherein the dealer will fraudulently blame you for negligence and charge you.

    • DJG says:

      People who live in the country, where air pollution is not a problem, should be allowed to buy re-makes of cars with 1960s era engines. Anyone can keep those simple engines running.

  36. Are we approaching Bob Prechter’s Two Jaguar moment?

  37. DJG says:

    So start selling all the rental cars that have been stockpiled on vacant lots because car rentals have plummeted.

  38. boxdin says:

    Been reading no one has mentioned the number of guys refurbishing old trucks from the 50s to the 2000s. Companies have sprung up to service old fords chevys and most others. My son & I have reburbed two old trucks this past year and had a blast doing it. We do mechanical and wiring AC everything except paint. Took us two years actually but whos counting. Yes we both have late model cars I uber in mine he uses his for work too.

  39. Jim McCarter says:

    Purchased a 2007 Ford Focus hatchback in December for $400.00. I do courier work and it has been great on gas, maintenance and dependability.
    It had 217,000 on the clock and is approaching 250,000 in another week or two.
    Coldest a/c ever too…
    Why buy new????

    • MiTurn says:

      Jim,

      Good for you. I had a 2004 Focus that was a great car and I’d still have it if my son didn’t roll it (he walked away just fine). Heck it’d cost more money to fix an ac than what you paid for the car!

  40. David Hall says:

    My first car was a 1968 VW Bug. I sold it for scrap after the floor rotted and the axle broke. My 2015 Chevy should last awhile. I bought it new. Warren Buffett kept a car for ten years before buying a new one. Warren Buffett bought a five bedroom house for $31,000 in 1957. He held on to it to save on moving expenses and real estate commissions. It is worth more now.

  41. Wendy says:

    Wolf. Thanks for the analysis. When you write about cars, I know you know your stuff. Newer readers would be advised to pick up a copy of your book, The Testosterone Pit. How far you have come since those days…

    If it were not for restrictive and anticompetitive state laws, this dealer silliness would have ended years ago. I have no sympathy for them, but I do for the US assembly workers, since one mans spending is another’s income.

  42. Lee says:

    Comments;

    1. “But people are driving to go on vacation, instead of flying – another one of those big shifts due to the Pandemic – and this will counterbalance to some extent the lost commuting miles driven over the summer.”

    Our spring and summer is just around the corner, but nobody will be doing much of any driving in Victoria with stage 4 restrictions to be announced tomorrow and take effect probably on Wednesday.

    State borders are closed in many places here so there is little driving between states other than NSW/Queensland.

    2. Our average age of the car fleet is now 10.4 years in Australia. In 1995 is was estimated at 10.6 years. In 2010 it was 10 years. So not much change at all over the years.

    3. Car sales here in June exploded upwards as the end of financial year is on 30 June. The government splashed out huge amounts of freeeeeeee cash to all sorts of businesses and also increased the amount that could be immediately written off for purchases of ‘equipment’.

    There were 110,234 vehicles sold in the month. April came in at 38,926, and May at 59,894. Toyota had the biggest share of the market with 22,867 sales.

    4. June also had another interesting feature: luxury car sales hit a record. In June there were 12,235 luxury cars sold. MB sold 4437, BMW with 3307 Lexus with 1560.

    Was it last year (or the year before) we had a Lexus dealership set up shop down the road next to the Land Rover/Jag dealer which moved in a little before that and a new BMW place is now under construction. MB has been here for years and years. So within a couple of miles of the place I can buy any ‘ reasonable’ luxury car around.

    The Porsche/Ferrari dealers are located much farther away!!

    • Lee says:

      Our new ‘lockdown’ rules here in Melbourne:

      Under the stage four rules:

      Exercise will be limited to one hour per day

      Only one person per household will be able to go out shopping within 5km of their home

      Remote learning will resume for all students from Wednesday

      Public transport will be restricted overnight

      Weddings will be banned from Thursday

      Funerals will only be allowed in regional areas

      Organised sport will be banned

      Visits to intimate partners will be limited to 5km”

      Well that’s a bunch of bs…………..so what about banks, takeaway food places, beauty shops, barbers, hardware stores and post offices being open………not a word about them yet so more ‘making it up as we go along. Are they going to close the parks again?

      What about clothes shopping if the nearest shopping centre is 5.3 kilometers from your house?

      I wonder how in the world they are going to check to see if you’ve only done 1 hour of exercise per day?

      And all caused by the stupid state government and their policies which allowed the virus to escape into the community – and what about the 400 people with active symptoms who weren’t at home in quaratine whne police checked up on them?

      • Winston says:

        “Visits to intimate partners will be limited to 5km”

        At that distance, carnal knowledge will be quite difficult for most.

        • Lee says:

          Don’t worry…………….we get screwed by the government here on a daily basis……………….

  43. MonkeyBusiness says:

    Don’t worry. With the previous stimulus, people bought iPhones by the truckload. With the next one, they’ll use it as DP for a used car.

    UBI is finally here.

  44. RD Blakeslee says:

    I’ve driven my 2017 Subaru Forrester less than 10K miles since I bought it new. The dealership where I bought it offered me $25K trade in, if I’d buy a new car from them. Told them I’m not interested.

  45. Raymond Rogers says:

    Why buy a new car?
    Vehicles are overpriced. Insurance for new cars is high. My state wants an arm and a leg to register the vehicle. No thanks.

  46. Lee says:

    “My state wants an arm and a leg to register the vehicle. No thanks.”

    What does that now in the USA and how is the cost determined? By weight, engine size, original cost?

    Here in Victoria the basic cost for the car and mandatory state insurance is about $A800 a year. The same for a Coroalla or a ‘normal’ big V6 SUV.
    Don’t know about EV’s or super luxury types though.

    Oh, and a gift from the state – as a result of the virus they aren’t going to increase the cost during the duration. It was to go up by 3% this year.

    Just wait it will end as soon as ours comes due.

  47. Jason says:

    I bought a brand new Golf TDI in 05. I protected it with anti-corrosion wax undercoating, change the oil every 3k, warm it up by driving slowly, and treat it like it’s the last car I’ll ever own. It has 77k on it now, looks like new, drives like new. I paid 20.5 for it and it’s probably worth 7 now. Take care of you hard earned stuff because it might be needed to take care of you.

  48. cas127 says:

    Wolf,

    Don’t know if you want to put together a post on it, but here are the summary guts of the Hertz workout deal…

    https://www.autoremarketing.com/wholesale/fitch-ratings-hertz-investor-settlement-step-right-direction

    That *monthly* depreciation figure of 2% is an eye opener if it means what it appears to say…

    • Wolf Richter says:

      2% a month is just about standard in the rental business. It makes sense. If a rental car company bought a new Ford Fusion at a steep fleet discount and depreciates it 2% a month for two years, it will have taken the book value down by 24% off its cost. So it might break even selling it at auction after two years if the car is in good shape and doesn’t have too many miles on it.

      • cas127 says:

        Wolf,

        I realize that there is sort of a reverse compounding effect going on with depreciation, but that said, wouldn’t 2 yrs of such depreciation (24 months) be closer to reducing the value of the car by something-short-of-48% (reflecting the reverse compounding effect) rather than 24% (which my approxi-math suggests would reflect 1 yr’s – 12 months – depreciation).

        If my too-lazy-to-fire-up-Excel approxi-math is right and the car falls by, say, 40% after just 2 years…that is hard to square with the depreciation numbers that various used car guides put out (of which I was always dubious but…evidence!!).

        Granted these are rode-hard-and-put-up-wet rental cars, during a quasi fire sale period, but the rapidity of the disclosed depreciation is notable.

        As an ex-industry insider (or adjacent industry insider), what would you suggest as the best sources for more accurate used car prices (Blue Book, Black Book, Edmunds, etc)…even low fee reference sources (online or otherwise) are fair game for consideration…

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