$1,768 a Month, with $10,407 Down, 5% APR, on a Ford Pickup? Update on Q3 New-Vehicle Finance

Automakers need to do some serious navel-gazing about price levels and going upscale, if they want to sell more vehicles.

By Wolf Richter for WOLF STREET.

To illustrate the data we’re going to look at in a moment, I “built” a 2023 model year F-250 Limited on Ford’s website: MSRP $104,070. I could build something more expensive in the F-350 lineup. Ford suggested to finance it with Ford Credit. With a down payment of $10,407, and a term of five years, at 5% APR, I would end up with a monthly payment of $1,768. Screenshot from Ford’s website:

There is a wide range of options and trim packages, particularly among trucks. I also “built” a 2023 F-150 Limited, and it ended up with an MSRP of $90,780. Ford suggested to lease it from Ford Credit with $9,014 down, over 48 months, for $1,007 per month. Screenshot from Ford’s website:

According to Experian’s State of the Automotive Finance Market report for loans originated in Q3 2022, the average monthly payment for the F-150 in Q3 rose to $893 a month; for the Ram 1500, it rose to $860; for the Chevy Silverado 1500, it rose to $808.

Pickup trucks have long been among the bestselling new-vehicle segments in the US. They’re a huge part of the business. Ford didn’t take EVs seriously until Tesla threatened to build a pickup five years ago. That’s when Ford got religion and dove into EVs and has come out with an electric pickup to defend its core turf, while we’re still listening to Tesla threatening to come out with one. Ford lives and dies by its pickups.

And automakers have taken them upscale over the past two decades because upscale is where the money is, and they’ve come out with high-end models and equipment packages that push pickups into the luxury segment, and they have jacked up prices, and they’re making huge profit margins on them.

But other popular vehicles have big payments too. These are the average payments for some models, according to Experian:

For all new vehicles, the average amount financed in Q3 – after down payments, trade-ins with spiking trade-in values, etc. – rose by 10.4% from a year ago to $41,665, according to Experian, up by 20% from Q3 2020 ($34,678).

The average new vehicle loan rate rose to 5.2% in Q3, up from 4.1% in Q3 2021 and from 4.2% in Q3 2020.

So the average new-vehicle loan payment jumped by 13% year-over-year to $700 a month. Over the past two years, the average payment spiked by 24% (from $565 in Q3 2020).

The average loan terms for new vehicles ticked up just a tad from a year ago, after dipping in the prior year:

  • Q3 2019: 69.0 months
  • Q3 2020: 69.6 months
  • Q3 2021: 69.5 months
  • Q3 2022: 69.7 months.

But there are differences: Buyers with a credit rating of “super prime” averaged the shortest loan term, while “near prime” and “subprime” averaged the longest terms:

  • Super prime: 64.1 months
  • Prime: 71.2 months
  • Near Prime: 74.7 months
  • Subprime: 74.2 months.

The share of loans with ultra-long loan terms grew; and interestingly, the share of short loan terms grew as well perhaps as buyers were trying to benefit from the lower interest rates in that range. But the share of the middle range, loans with terms of 5-7 years, declined:

  • Up: 85 months and longer: share grew to 1.8% of total loan originations in Q3 2022, up from a share of 1.3% in Q3 2020.
  • Up: 73-84 months: share grew to 34.6%, up from 28.9% in Q3 2020.
  • Down: 61-72 months: share declined to 36.7%, from 44.6% in Q3 2020.
  • Down: 49-60 months: back when I was in the business, this was as long as you could go; share declined to 16.6% from 19.7% in Q3 2020.
  • Up: 48 months and shorter: interestingly, the share jumped to 10.3% from 5.5% in 2020.

Who did the lending?

The share of credit unions jumped to 28.8% of all new vehicle loans originated in Q3 2022 (red line), while the share of banks declined to 29.5% (blue), and of the share automaker’s own finance divisions (“captive finance”), while still #1, dropped for the second quarter in a row, to 35.3% (gray):

Dismal sales.

The sky-high costs of new vehicles – and the sky-high payments that they entail even at still relatively low interest rates – explain why, over the years, new vehicle sales volume in units has been a dismal affair for over two decades: sales in 2022 are on track to be where sales had been in the late 1970s.

This year was hobbled by supply chain entanglements. But even the Good-Times-2019 sales were below the sales in the year 2000.

If the auto industry wants to sell more vehicles, it needs to do some serious navel-gazing about price levels and going upscale (2022 includes the official WOLF STREET estimate for December sales, better than last December):

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  238 comments for “$1,768 a Month, with $10,407 Down, 5% APR, on a Ford Pickup? Update on Q3 New-Vehicle Finance

  1. Phoenix_Ikki says:

    Try Civic Type R…$77k OTD with dealer mark up… truly insane

    • Leo says:

      If sales are exposed in units, this same trend would show in so many goods and services.

      • Joe Alan says:

        Insane 2033 Q3 prices…I’m gonna sell my 2020 Honda… Thank God I am retired at age 58

    • Morty Mc Mort says:

      Reminder folk…
      Increases in Price COMPOUND year over year..
      That 100 K truck that went up to 110K – the next year goes up 11K..
      The price increase is based on the Increased price…
      Many many people don’t really get this….
      (Ask around, you will be surprised how unsophisticated most are)

    • Morty Mc Mort says:

      Read your history…
      Auto Manufacturers run into the inevitable Downturn…
      Eeeeeek – Who could have seen this coming!!
      Shut down plants, lay off workers…
      Shift more production to survive!!
      Threaten to bankrupt or shut down….
      Gain massive Taxpayer Bailouts…
      Make a fortune…
      Rinse and repeat…
      Again, suckers.. read your history..

      • Harvey Mushman says:

        I don’t need to read it… I remember it!

        • joedidee says:

          it’s why they buy fiat and hyundai junk
          it’s cheap for reason

          you can buy some nice vehicles for under $50k

          and who – other than 1% buy new?? with 30% devaluation in 1 mile from dealer

        • Nissanfan says:

          “and who – other than 1% buy new?? with 30% devaluation in 1 mile from dealer”

          Somebody has to buy new, so there are used cars available for sale for second hand market buyers.

          If nobody will buy new, we will end up with even bigger auto market bubble.

    • Leo says:

      Wolf, this is just a TIP for another article. Bank of International settlements published a report that says 64 Trillion Dollars worth of FX swap derivative liabilities, that don’t show in balance sheets as liability, will be due in next year. Do you think there is any need to worry of do you think they can roll them over with even larger derivatives, may be 100 Trillion for next year?

      • Wolf Richter says:


        People need to stop dragging this clickbait headline into here. I’m tired of it. So I just repeat what I already said:

        I just cannot get excited about currency swaps. I lend you $1,000 so you can bet on some USD-asset, and you give me €990 as collateral. If your bet blows up and you cannot repay me the $1,000, I will keep your €990, and I’m fine. The collateral is a liquid currency. It’s not like the collateral is a crypto whose value collapses or real estate that cannot be sold quickly except at 50 cents on the dollar.

        Now if the swap is USD/ARS, with the ARS collapsing, it’s a different deal. But anyone engaging in that sort of thing knows they’re gambling.

        That’s why in some jurisdictions, currency swaps can be done without listing them on the balance sheet as a liability — because you’re swapping one liquid currency for another.

    • FlightlessBird says:

      That’s insane pricing.

      I just checked on the Honda NZ website, and although apparently the whole first allocation of the new Civic Type R is reserved already, the price is listed as $69,990 NZD + tax – around $45k USD all up. There aren’t any mark ups AFAIK, and it’s just a first come first served/having an “in” with the dealer basis (e.g. if you bought the last generation you go to the front of the queue for the new one)

      That’s expensive enough for me, as the previous generation retailed for around $55k NZD (at least it did when I looked at buying one, prior to Covid hitting and removing my need to drive).

      If US Type R pricing applied here in NZ, it would be cheaper to buy a loaded Mercedes Benz A45S AMG.

      Madness … but people seem content to pay these prices?

    • Kentest says:

      Ok men, we get a tattoo with monthlys?

  2. andy says:

    Why would they try to sell cars to poor people?
    If supply lines are tight, it’s not a volume game anymore.

    • Wolf Richter says:

      So now we have a problem: supply chains are getting better, and pickup inventory is building on dealer lots, and yet sales of pickups are down, and Ford is getting hammered for it.

      • andy says:

        Where are the inventory numbers?
        Because it still seems like selling fewer, high margin vehicles can be just as good as selling more low margin vehicles.
        Especially with the higher interest rates these days.
        If you’re poor, buying a new truck is discretionary, and can wait.
        If you’re rich, with good credit, and don’t even notice your bills, you might as well choose the trim package you like.

        • Depth Charge says:

          The more narrow your customer base, the more susceptible to vicious market forces you become. What’s their end game, making a single $200 million vehicle that only a few of the worlds’ billionaires can afford?

        • Cas127 says:

          I have to agree with Depth here, the US auto industry is aggressively steering itself into a box canyon death zone. And really has been for decades.

          I get the price elasticity argument (many fewer sales at much higher prices equals the same or better revenue).

          But the underlying *reality* is that these are pretty “phonied up” “sales” built upon a succession of dubious, vulnerable contingencies…perpetually low *phony* interest rates (until very recently), endlessly lengthening “loan” terms (at some point they are more akin to rentals…) whose hugely increased default risk is only survivable/off-layable because of a ZIRP-based, bottomless demand for ABS packages foisted onto the public markets (no matter how shitty the manufacturer-cum-conmen’s “loan” underwriting is).

          All of this deeply stinks of desperate improvisation and unbelievable, multi-decade incompetence regarding efficient *production*

          In the end, the *efficient* producers will annihilate the US “game players” – efficiency can offset marginal mistakes and market evolutions, whereas the US model of auto manufacturing has become an obscene parody of its former self.

        • JeffD says:

          Depth Charge,
          With the way the Fed doles out money, why not? And yes, the Fed deserved that.

        • Jeb says:

          I spent a lot of time in the auto industry, my family having owned 3 car dealerships. (Albeit a few decades ago now). The real money is not in the vehicle sale. The money is in parts and service, kinda like a legit pyramid scheme.

          Back in the 1990’s, the average car sale only netted about $1200-$1500 per unit, which is not a lot considering the flooring/fininancing cost of keeping a then $25-$35,000 vehicle around. However, over the next 20 years (before the car hits the auto wreckers), that one vehicle will bring in around another $5,000 in profit from parts and service. (Keep in mind I’m talking 90’s figures). Thus, the more rubber you put on the road, the better off you are in the future. Even if you don’t go to the dealer for servicing, you are still supporting them. Other garages still buy a good chunk of the parts for your car from the dealer… get into an accident and where do you think the body shop buys your new fenders at?

          Most car dealers actually get their inventory financed by the manufacturer, often with 90 days interest free. So what the dealer does is have the inventory for 90 days, and the second it passes that time, they will pump the vehicle out at $50 bucks over cost as fast as they can, and replace it with something fresher.

        • joe2 says:

          Cas – that’s the real point. Stop buying vehicles and stop driving. In Oxford county in Britain, driving outside of your immediate area is going to be restricted to 100 trips per year.

          Car manufacturers, oil companies, commercial banks, brick and mortar – expect some changes.

        • joe2 says:

          jeb – yeah, the US will look like Cuba.

        • Augustus Frost says:

          Cas127 nailed it.

          That’s why this business model is a long term loser. When the cheap credit ends (yes, it’s still cheap) and credit standards tighten noticeably (which it will), the employment market will weaken noticeably and the economy with it.

          Sales of luxury vehicles are presumably also contingent upon the fake money wealth effect. Many of these probably didn’t and haven’t been using compensation income to make these payments.

        • LK says:

          Don’t worry, the government will bail them out.

        • Harrold says:

          What’s going to happen to businesses when their customers can’t afford to purchase a car to drive to the 10 miles to the business?

          There’s a reason Dollar General, Family Dollar, Dollar Tree, etc. are putting small stores within walking distance of their customers.

      • Rick Vincent says:

        They’re going to regret getting rid of the Fiesta, Focus and Fusion; if they haven’t already.

        • All Good Here Mate says:

          No one else will. Those models were crap.

        • Chuckturdburger says:

          I drove a Fiesta up to Sequoia National Park once. That was a real party, let me tell you.

        • crazytown says:

          The Fusion was great. Fusion Hybrid and Energi were stupid to cancel. Focus had the worst automatic transmission ever put in a vehicle.

        • Jim Mitchell says:

          Crazy town, yes! The Fusion was a great car. My 2006 was made in Mexico. It has a Mazda motor and a Toyota trans in this first-year model. I bought new and now it’s as old as I am. 204000 miles. Oil and tires are all I’ve replaced. This is the sort of car people should be driving instead of that horrible F-150 that so many drive to the Walmart to get a bottle of milk for Mother.

      • Phoenix_Ikki says:

        Good, I got the world’s smallest violin on reserved for them. Time and time again, GM and Ford have shown to be not so forward thinking and can only capitalize on what’s hot right now trend…so they deserve it big time, just sucks for all the people that got laid off from there not too long ago.

        • AlexW says:

          I remember an auto bailout (2008?) where the auto worker’s unions accepted very low new employee starting wages & reduced benefits to maintain their senior union employee’s wage and benefit packages.

          That bailout, and the reduced wages for new employees was, as I remember, more of a bribe to maintain employment levels in the US, rather than moving more of it to Mexico.

          Ford in 1914 said he paid his guys the crazy huge sum of 5 bucks a day (149.00 today) so they could afford to buy the Fords they manufactured. In 2008 we subsidized Ford as wages were slashed.

          Today inflation and interest rates determine what percentage of our, “service,” population can afford new things. I believe that population of, “consumers,” will shrink radically as the consequences of our growing massive debt and 15 years of interest rate suppression finally & fully manifest themselves.

          The trajectory of working American’s ability to purchase what they manufacture has been crushed over the last 50 years, especially as the vast majority of US manufacturing (and supply chains for about everything) have long ago been offshored. In my view inflation sparked by low interest rates & our massive debt is going to drive consumption into the ground.

          These bleak sales trends Wolf highlights now indicate future hard times for Mexicans as well as Americans, nowadays:

          Ford Motor Company Mexico Plants & Facilities Pages
          (Via Duck-Duck Go)

          Ford Motor Company Chihuahua Engine Plant – Chihuahua, Mexico (Went through on 2nd class train-did not get off)

          Ford Motor Company Cuautitlan Plant – Cuautitlan, Mexico
          (Mexico City suburb…Mx City is a scar on the Earth…)

          Ford Motor Company Hermosillo Assembly Plant – Hermosillo, Mexico (Herm is the capitol of Mexican Cowboy Clothes: Best & Cheapest cowboy boots/hats in the world…)

          So, now we are potentially seeing less tacos on the table for America’s Mexican peasant manufacturing workers and their families as America’s political-economic clown show works its way to some kind of sustainable path, without generating massive debt at crazy low interest rates. What we have now is not sustainable…

          I’m feeling a little deja-vu (how do you say that in Spanish, or Chinese?) after watching Detroit and its “diverse” auto worker community implode (and go from eating steak to burgers, and finally to homeless drug addicts eating out of garbage cans) as one of the many consequences of offshoring manufacturing during the ’80s. (Another consequence: China has growing fleets-we have homelessness growing on the streets)

          When I put those offshoring experiences we observed during the ’80s (which still deeply influence working class economics) together with what I saw happening during the inflation-wracked late ’70s & ’80s, I see potential for a bout of stagflation that will stress everyone’s reality for at least a long as it took to create these circumstances…

          If/when these sales trends, (or other crazy market, “activities,” like whatever will constitute the next subprime crisis), again lead to breakdowns & broad bailouts in the economy, it would not surprise me a bit if this time our political leaders also give (our money) to Ford to subsidize keeping peasant-wage Mexicans employed in Mexico.

        • Prairie Rider says:


          “In 2008 we subsidized Ford as wages were slashed.”

          On 5 September 2006, Alan Mulally left Boeing to take over Ford as President and CEO. One of his first moves was to borrow $23.6 billion. He even put the Ford logo into the assets of collateral.

          Ford did not take U.S. money from the TARP program. GM and Chrysler did. Mulally testified before Congress to support the handout to GM & Chrysler as he saw it was better to do so in order to prevent the impact on the U.S. economy a shutdown of the other Big Two would have made. Plus, it would have impacted Ford by having its parts suppliers go out of business.

          Mulally is an aeronautical engineer. At Boeing, he was director of engineering in the development of the 777. Hired by Boeing in 1969 out of college, he became their CEO before leaving.

        • Augustus Frost says:

          Prairie Rider,

          The real reason Ford Motor did not accept a bailout is that it probably would have meant the end of Ford family control, whatever remained at the time.

          I don’t see that those in charge of the company would have cared about the factors you listed any more than their competitors.

        • Harrold says:

          The suppliers of GM & Chrysler are also the suppliers of Ford.

          Bailing out GM & Chrysler was also a bailout of the supply chain. Without the supply chain ( as we have seen recently ) Ford wouldn’t have been able to build any vehicles.

      • polecat says:

        FORD TOUGH$h!t

        They’re not making what people want. They’re making what their brown-acid engineered corsperate minds deem profitable, whilst nudging the plebs into NOT thinking what they need… or, like that yuuuuge Big Mil Pentagram, caring not the cost to society at large
        It certainly ain’t All ‘ECRIC .. nor the BIGGEST .. nor MOARRRRR USELESS ‘OPTIONS’. The choices given the plebs are downright awful, and have been for decades!

        Practicality, going foward, is what should be winning the day – instead it seems that its donkeycarts and rickshaws ‘here we come.

        • Harrold says:

          Consumers want big trucks. No one wants tiny, fuel efficient econoboxes.

        • Sit26 says:

          Has anyone heard any more about the new Lada, which will have no computer chips or electronics in it? I hope to live long enough to see it. There is a ready market for such a vehicle.

        • nick says:

          I don’t know if that is true Harrold. Here I am thinking of Ford’s Bronco Sport and Maverick. They kind of botched those roll outs but the demand was there for sure.

      • DoubleD says:

        We use exclusively Ford vehicles and give our construction PM’s pickup trucks as a benefit, rotating them out on 3-year leases. Two years ago we couldn’t get enough of them, now our dealer is begging us to update early to move new trucks sitting on his lot. Are used trucks still highly profitable? I don’t pay attention to the market.

      • NBay says:

        Just incidental truck knowledge, but at JC auto shop about 10 years ago I saw this rig that was HUGE (full 8ft wide, tall, massive tires, suspension and ground clearance, etc). It looked military. All black but with Alaska plates. Would dwarf a Hummer.
        Turns out it was one of the Chevy 4500 series, and I bet Ford makes a 450 series to compete with it.
        Who ARE these people?

        • NBay says:

          Was just looking it up. It may have been what they call the “Special Alaskan Package”, but it sure drew a crowd.
          One of the several PU pictures in that series had the word “Authority” written across the pic in big black letters.

        • Phil Blythe says:

          I live on the Kenai Peninsula. I’ve never seen one.

      • Bob says:

        My last truck was an F-150 xlt. Cost was about$30,K. People with a payment over $1,K are nuts! My mortgage payment is $900!!! A couple of car payments for them covers a new transmission! A few more is a motor.

        • Grampa says:

          Yeah, bought an F150 XL in 2006. Paid 21K.
          Still driving her, paid off since 2009.
          ~206000 miles.
          Got a few dings and a bullet hole from a 2020 Biden supporter but running and driving like a champ.
          Of course, had to fix some stuff over the years.

        • Wolf Richter says:

          “bullet hole from a 2020 Biden supporter” LOL things around here get funnier and funnier

  3. John says:

    They know the money is out there I think. Sounds like less financing becoming available too.

    • Old school says:

      The great thing about mostly free markets is you have a nearly infinite way to spend your money. You want a beater for a $1000 or a new luxury vehicle for $100,000. We all get to choose how we do it. Saver, investor or drunken sailor.

  4. phleep says:

    I bought my townhouse for $90k. Bought my low-mileage Lexus SUV for $15k. My cost of living averages $1,500/month. That is with full medical-dental. In SoCal. I joke that I live in a time warp. I am just radically choosy and careful and thrifty. I rejoice I don’t live “in” the economy that most around me do.

    If these automakers fail, I will not be friendly to bailouts. I tightened my belt, they can too. I would rather drive some pile of junk than suffer this sort of indignity.

    • Sammy says:

      “I will not be friendly to bailouts. I tightened my belt, they can too.”

      HEAR, HEAR !!!!

      My wife and I bought our modest home in a quiet little town in the Deep South back in 2013. For a price I won’t mention, because maybe you’d think I was lying. We’ve paid down 16 years in the space of 9. It’s called “pay extra principle, dammmit!”

      We bought our cars — one Korean, one Japanese — second hand from a rental car agency. We’re 4 months from paying off one, and 10 from paying off the other. We got them in 2018 and 2019. Again, its called paying extra.

      We have worked and scraped and fought like we were in Stalingrad to the power of Gettysburg. So yeah, we are

      100000% DONE

      with anyone who wants to dig their hands into OUR pockets because THEY spent money they didn’t have on crap they never needed

    • SpencerG says:

      I was thinking the same thing… $1,768/month is exactly TWICE my mortgage. Ford and the rest may be able to get away with these prices while they are unable to fulfill orders due to COVID shipping/chip backlogs… but they are going to be in for a world of hurt in pretty short order once things “normalize.”

      • Flea says:

        Why doesn’t anyone mention a devalued dollar which is really screwing the middle and poor. Printing paper becomes= WALLPAPER

        • Lauren says:

          In my opinion, it’s tough to convince people that the government they voted for is screwing them over. No one wants to feel duped.

    • Implicit says:

      Well said Phleep and Alex W!

    • Gabby Cat says:

      It’s living below your means. Embarrassed to say it took till my 40’s, reading Wolf and his commenters, that I finally got it. Now, I am trying to get a head and be debt free. Then I want to figure out how to trade safely so my money works for me. The problem is figuring out how not to view Wall Street as another casino. It was how I was raised. Where does one start outside of a 401K? How does one shop around for stock that pay dividends?

  5. Depth Charge says:

    This was only possible because of the most ginormous credit bubble in the history of the world. A few years ago I was talking to a guy who sold new cars for a living, and had been for like 7 or 8 years. He told me he had never had a single person not qualify for a loan. Everybody qualifies. Here we are. It’s a credit mania.

    • Petunia says:

      During the GFC we purchased two cars with awful credit. The first was used with a 24% interest rate and a few years later the second was new with a 9% rate. They only care that the buyer has income.

      • Cas127 says:

        The manufacturers *really* only care that they can sell off the crap-loan risks into the ABS public markets – the manufacturers may “underwrite” these crap loans, but they don’t hold the default risk…they quickly sell it off.

        And the day the manufacturers can’t (because ABS buyers wake up out of their ZIRP-induced coma and stop buying securitized crap), the manufacturers will put a “sudden stop” to these doomed loans.

        At that point we will find out what true US auto production costs are.

        If they are far, far lower than current sale prices are, the US makers may survive (and buyers for many years will be exposed as utter fools).

        If US production costs are anywhere remotely near current sales prices…the US makers are all finished and will have to go through Chapter 11 to have any hope of (temporary) survival.

        • ers says:

          Most ABS are only sold to institutional investors (144a) and remain on the issuers’ balance sheet as the ABS trust meets the definition of a variable interest entity (VIE) and is consolidated by the issuer. Yes, credit risk is absorbed by investor, but if most ABS go belly-up so will the issuer.

        • Cas127 says:


          Please – more on the ABS/VIE implications and how offloaded default risk can still torpedo manufacturers/underwriting issuers.

          I don’t get it (although I can imagine securitizations having some “put-back” type protections (among others)…but there is little in general circulation about these risks to auto abs issuers (if they exist).

          It is hard to believe ABS buyers could trust the manufacturer/underwriters to do a decent/honest job (post 2008) but I haven’t heard much about the manufacturers still being on the hook for the crappy/hugely price inflated loans they have been making.

          Maybe the manufacturers are (and GAAP, per usual, is blind to it…) but I’d like more details (it sounds like you are knowledgeable).

          Any insights are welcomed.

        • ers says:

          Here is a high-level overview…

          Very little money is made on the front end at the time of loan origination by the lender. Perhaps an upfront fee to cover the costs of underwriting, processing and loan boarding (setting up the loan on the loan servicing system).

          Most auto lenders have debt facilities with big banks to help finance the loan originations. The bank will finance a % of the loan balance and the lender/issuer will cover the difference. For example, a loan of $20k – the bank will cover 80% and the lender/issuer will cover 20%. Once enough loans have been originated to form an ABS, the proceeds from the ABS will repay the bank.

          Once enough loans have been originated to be packaged in an ABS, the auto lender will work with a major bank and attorney to structure, package and market the security. There are a lot of ways ABS can be legally structured, but in most cases they remain on the balance sheet of the issuer under GAAP. Like previously mentioned, most deals are only marketed to institutional investors under rule 144a. Though some lenders are now just pooling the loans and selling participations in the pool of loans that qualify for a sale under GAAP (ASC 860) and the participation sold is removed from the balance sheet – no more credit risk for the participation sold. This is more common amongst banks and credit unions.

          ABS are structured into tranches and each tranche has its own credit risk profile and interest rate. Structures can be pretty simple to very complex. To keep this example straightforward, lets use a simple structure with four tranches – A, B, C, D. Principal repayment is based on priority. “A” with highest priority and “D” with lowest priority. Meaning “A” is fully paid off before “B” begins receiving principal repayments and so on. The further down the tranche you are means the higher compensation you receive in the form on interest (“D” pays more interest than “A” b/c “D” has more credit risk). All tranches are paid scheduled interest when due under the agreements. Some ABS structures have credit enhancements to protect investors and some do not. Enhancements can take various forms, but in auto ABS these are typically in the form of cash collateral accounts held in trust that represent a % of the issued security. Some ABS structures allow for substitution and some don’t. What this means, if a loan in the ABS defaults, it can be substituted with a newly originate loan that fits the profile of the ABS. There are pros and cons to this obviously.
          It is important to note that the credit rating agencies (moodys, S&P, etc) rate all ABS before they are sold. They in theory review the collateral tape (detailed listing of all the loans which has every piece of information received at underwriting by the lender/issuer) and project repayments under various scenarios and come up with a rating. Each tranche receives a credit rating.

          Most ABS deals have spell out the minimum underwriting requirements for each loan in the ABS agreements. These are reps and warranties the lender/issuer makes. If a loan defaults and does not meet the underwriting requirements, it is either substituted for a new loan that fits the ABS profile or the lender/issuer repurchases it (makes investor whole). These underwriting standards can range from NINJA to prime. It is all boils down to what the lender/issuer thinks they can unload. In my opinion, they can unload a lot of crap due to low interest rates and yield starved investors.

          To answer your question – investors, if they perform due diligence, know what they are buying. The underwriting standards for each loan are spelled out in the agreements and then each tranche is rated by credit agencies. Me personally – I question credit ratings from the agencies as I have seen some funny things, but most institutional investors accept them.
          To understand the issuer/lender and the impact of the ABS on the lender, you must understand the lender/issuer’s cash flows. Cash inflow primarily consists of loan payments. Cash outflow are ABS payments and G&A payments (salaries, rent, software, deal costs, etc.).

          In an example of an issuer with only one ABS to keep it simple, the ABS must perform at a certain level to service the ABS, pay staff and all other company costs. It is easy to see if loan payment inflows cease then the lender will go belly up unless there are cash infusions by another investor. In other words, the net cash inflow or residual cash flow from the ABS (loan payments received – interest payments – principal payments) have to be sufficient to cover all other costs of the lender/issuer and provide enough additional cash flow to finance new loans.

          Auto lenders are highly leveraged and if loan defaults are high, things can turn bad real quick and I have seen it happen on a number of lenders – mostly those dealing in the subprime markets.

          Hope this helps…

        • ers says:

          Sorry for the lengthy response. each subject can be multiple books….

        • cas127 says:


          Thank you, that was very helpful.

          Some of it I was familiar with, some less so. I want to take some time to mull it all over and then respond to specific details (who gets stuck with which loan default risks is really, really important).

          Wolf, the origination, packaging, and sell off of loan risk (autos, mortgages, etc) is a huge, huge factor in today’s half-crippled American economy – It would be great to get your view/stats in an updated post.

          I know you have covered the topic before, but it is complicated and largely hidden from the general public’s view…yet, if the process blows up (which I think sooner or later – sooner – it will) the “American Way of Life” (debt slave division) will come to a screeching halt (“unexpectedly”).

          That might make for a audience pulling post.

          The amazing thing is that we’ve all seen this horror movie – not that long ago – 2008-9.

          It is particularly stunning that buyside institutions’ hands have not just “wobbled back to the fire” but may have actively embraced it.

          The bayonets of ZIRP have driven a lot of madness, but CALPERS et al surely know when they are waltzing with disaster – the brains on the wall from loan implosion ’08 are still drying on the wall.

        • Wolf Richter says:

          What Ers was talking about, and as he pointed out: this is an issue with subprime. But subprime is now only about 16% of total auto-loan originations. Some small specialized subprime lenders collapsed before the pandemic, and I covered some of those, and there will be more. But the income is HUGE from subprime lending, so these outfits are taking big risks to make big returns. But it’s really just a small part of the market. It’s high risk, high return … the way it’s supposed to be.

  6. Charles Henry says:

    I bought a 1996 Buick Roadmaster from a 96 year old lady at our Church. 37,000 miles for $3,500. Just took a trip from Chicago to Houston no issues 21 mpg. If someone has the 100,000 which I do and you like the Ford Truck buy it, the country could use the currency circulation. But if one is financing their purchase, buy something for cash. Cheap insurance, no payment and no worries of theft. FYI the Girlfriend drives a Cadillac Escalade-V just over &170,000 out the door, so what do I know, But paying cash is BEST especially in todays economy. Good Luck

    • Lune says:

      As long as we’re flexing, I have the cash to buy new luxury vehicles outright too, but no way would I do it. If the rule of thumb is that a vehicle loses ~1/3 – 1/2 of its value in the first two years, that’s $50k-$85k in 2 years out the door on that Escalade. Regardless of whether I can afford the loss, it’s still a loss.

      Why not buy a 2 year old pre-leased model? The dealer will still give you a manufacturer’s warranty and everything.

      Personally, that’s the sweet spot for me: 2-3 year old vehicles coming off lease that will still be warranted by the manufacturer for 4-5 years. Still feels like a new car, as reliable as a new car, but at half the price.

      • Cas127 says:

        I’ll never understand why some thousand-dollar “millionaires” think that offering up evidence of their financial raping/stupidity somehow impresses anybody with an IQ higher than single digits.

        People aren’t admiring them (everybody and their literal dog knows about the universal availability of huge amounts of consumer credit…the dog likely has a high limit credit card).

        People are shaking their heads at the eager debt slaves.

        • Fed up says:

          Lol. Agreed 100%

        • Augustus Frost says:

          The median net worth in the US is something like $120K or $130K right now per FRED.

          If you buy the typical new car for $40K+ and it depreciates 50% in three years. that’s 15%+ of your net worth down the gutter. Do it over your entire working life and it’s potentially more than the net worth you will end up with at retirement.

          This type of economic behavior (which is rampant in the US) is Exhibit A why most Americans are much worse off than they could be and will be noticeably poorer later.

          To anticipate a rebuttal from others here, I know it’s their money. They are free to use it as they please, but never to get politically mandated handouts from anyone else, ever.

      • eg says:

        I learned this strategy from my father — buy used (typically 3 years or less) and then drive until “prohibitive to repair” which is usually at somewhere between 12-14 years old. Right now our little two vehicle “fleet” is coming up for years 12 and 13 so we’ll see how much longer we can hold out …

        • Harrold says:

          My father says this too. Just like the comments above you. However, that advice is no longer valid. Look at used car prices. A 4 YO car with 100k miles isn’t much less than new. This has been true for years, and especially since the pandemic.

          I wish ignorant people would stop spouting nonsense. The best deal now is a new car, if you can find one that isn’t marked up a whole lot.

    • Goodlooking says:

      I couldn’t imagine having to payout the sales tax on a $150,000. car much less the $150,000.

  7. Depth Charge says:

    “If the auto industry wants to sell more vehicles, it needs to do some serious navel-gazing about price levels and going upscale”

    I was reading an article a few months ago, and one of the CEOs of the major manufacturers – maybe Mary Barra of GM – said they were enjoying the recent higher margins and were going to do everything they could to protect them. That’s some “navel-gazing,” I’d say. I hope they all go belly up.

    • Old school says:

      Auto industry is a terrible industry for investors unless you can time the cycle. They are debt bombs that detonate in recessions.

  8. Prairie Rider says:

    From today’s Farm News out of Grand Forks:

    ‘In an update on Deere’s quarterly earnings, Reuters reported farm equipment and combines are virtually sold out for 2023. StoneX Chief Commodity Economist Arlan Suderman says the high commodity prices in recent years have driven up demand’

    “Unfortunately, the same issues keeping us from getting new cars is also happening in the equipment industry.” The computer chip shortage is the missing link. “So much of our equipment is reliant on chips and there is still a shortage. The ability to manufacture and get products distributed has led to some long waiting lists for equipment.”

    A new Ford F250 truck for $100k? How about a new John Deere S790 combine for $740k?

  9. JohnnySacks says:

    Holy crap! What the everloving hell is going on out there? Pity the guy who simply wants a vinyl bench seat rubber floor mat four on the floor grunt appliance to put to a lifetime of crap work. Or anyone on a reality budget.

    • bulfinch says:

      Rare are the trucks I see around town that aren’t cream puffs. For every bed full of lumber, feed, sh**kickers & tool boxes, there’s ten other beds that look clean enough to serve as mobile surgical theaters. Half these paper tigers can’t even park the damn’d things right.

      Our manufacturing sector is robust here in the states, but we transitioned away from durables to image ages ago. Built Potemkin tuff.

      • Digger Dave says:

        And we wonder why it costs so much to build things. The basic affordable four tires and a steering wheel trucks don’t exist anymore. I’d love a 4wd, manual transmission pickup truck with no fancy electronics or complicated drivetrain systems. Built to tow, push and haul for a reasonable price, like they used to be made. Don’t need ABS, traction control or electronic drive selection. Don’t need power windows or power locks. Don’t need a super light liftgate with motors and a step. No fancy lighting. No outlets in the bed. It doesn’t need to wipe my butt…just carry it. In any other country besides US and Canada this truck exists and it’s reasonably priced. Why are we such poor consumers? Why are there $100,000 trucks but no $20,000 ones for tradesmen???

        • Jeb says:

          Lol! Awesome comments! I always tease the young guys about their Barbie trucks with plastic mirrors. You know what I want on my truck? Big steel mirrors that can kill a moose on the side of the road if he gets too close! Remember when Dodge’s slogan was “Big, Bad & Ugly!”? Those were trucks, nothing worked but the powertrain, it had a headache rack in the back, and big, flat black welded bumper up front. Needs lotsa dents too, else it’s not a truck.

        • fajensen says:

          Why are there $100,000 trucks but no $20,000 ones for tradesmen???

          Because people, also tradespeople, have a burning desire to pay $100000, and even more if only they could, for a truck!

          “The Market” is what sets the price, not what it costs to make the thing!! And “The Market” is royally fucked in the head!!!

          Industrial goods cost very little to make, if the manufacturer are any good at all, and they even trend towards Zero: Each time production doubles, the costs will decrease by about 20%.

          It doesn’t matter that much how complex the goods are, because that complexity is not there for the customers.

          It is there because it alleviates “production side” problems. It makes life easier and more cost effective, for the designers, the logistics, the production and Sales. Not you!

          In reality nobody cares about “you”, “your needs” and “your experience” above the bare minimum that is needed to move the product.

          The “complexity costs less” is very visible in foodstuff, where the more complex the product is in terms of manufacturing steps and additives, the cheaper the stuff becomes. Always!

          Simple & Clean is Expensive!

      • Harrold says:

        If people would buy plain and basic pickups, they would sell them. Nobody wants them.

        • bulfinch says:

          Absolutely false.

        • El Katz says:


          Not absolutely false. There is a minority of customers that want plain and simple, but not enough to justify building them. “Plain and simple” requires different components and assembly. Wiring harnesses, CANBUS controllers, axles, engines, window regulators, transmissions, diffs, etc. to at least break even. Small volume demands higher input cost which narrows the pricing delta. Emissions certification for manual transmissions is tricky. Automatics “automatic”. Manuals are up to driver’s input. CAFE shot the manual trans in the head. ABS? I believe mandated, just like backup cameras, and other “safety” features. Traction control and the like are pushed by lawyers for product liability (knew or should have known that most drivers are incompetent) reasons.

          How do I know this? My previous employer tried the austerity model in 2010 “because GFC”. We choked on them, the dealers had to fire sale them, and the company was forced to spend hundreds of millions to retool/re-engineer the vehicle for a mid year refresh. Since this was a brand new generation of vehicle, the normal profit target of year-two got moved out to year three and then trashed again because year three was the scheduled “update” of the 5 year product cycle. So, the beannies ran it for nearly 6 years to compensate.

          The basic vehicles you described were built as loss leaders. Build a few, dealers agree to stock one or two, advertise it at a low price point to hook the rubes, and do your level best not to sell it by offering the higher content vehicles for not that much more of a monthly. Now, with supply constraints, it’s not practical for a manufacturer to build it. They don’t lease well (the residuals suck) and, if you’re a lease conversion, the loaded car can end up being not much more than a buck a day vs. the Flintstone version.

          Look to the imports for an example. None of them market a “DX” version any longer (DX had crank windows, dealer installed air, plastic wheel covers, mowed rat fur seating, often no rear defroster (except in NY where it was mandated),etc..). The “base” cars are now the “LX” versions which include power windows, A/C, and the like. It’s for efficiency in production. An “LXE” might have a hole in the roof, upgraded cloth or leather seating. Almost no manufacturer builds a standard transmission vehicle because it’s now considered an anti-theft device because few people can drive one. The imports were traditionally more profitable due to the bundling strategy and made the factories more profitable as line speed could be increased.

        • bulfinch says:

          El Katz — great comment; highly illuminating/educational.

          One note to add — people are pretty suggestible. As much as I hate marketing, I suspect that if you were to create a compelling enough ad campaign, which effectively made all the status-crazed truck consumers feel inferior for buying anything other than a stripped-down version of their beloved land yachts, you might get some better action. Miller High-Life did this back in 2000 and it was a terrific success. Go look at their ads by Errol Morris, celebrating the High-Life man. It’s a terrible beer, but tell me you don’t want one after watching two or three…

        • Paul from NC says:

          Practical vehicles absolutely sell. Just not in the US.

        • Venkarel says:

          I am not the most knowledgeable about the car industry but seem to remember (from years ago) that many basic models sold abroad are not available in the US because of safety/crazy regulation, emission regulation, and MPG regulation. Specifically in this case, I remember it was a Toyota truck that is very popular everywhere else but the the US because it cannot be sold here. Is this true? Considering the increase of regulations, rules, registrations, etc I would assume it is worse today. Is this true that basic good cars exist but cannot be imported because they have been ruled out in the US? Next, is it possible to meet the current and near future MPG and emission targets not using computer controlled engines? Truly curious.

      • Stan H says:

        >Here here. They use the pickup to haul their golf clubs to the course. Lol but I still like golf.

  10. John says:

    Cost of service on mustang pony 2013. Lost anti- freeze about a half gallon. Heat was gone by the time I got to N.J. from Maine. Filled it up coming back no problems. Took it to a ford dealer has a coolant flush and injector cleaning (their suggestion while it was running) also check heated seats if it’s a fuse or the pads. Bill was 662 dollars. Small leak somewhere just can’t see it. Pressure test next sometime, not going far in winter though.

    • El Katz says:

      Injector cleaning… the greatest ripoff of all time. Bet they used BG products and the service writer got a spiff.

      Hope your coolant loss is not a blown head gasket…..

      • John says:

        Still has the power hoping it’s a stone in the radiator.

      • Anthony A. says:

        Injector cleaning…..I guess people don’t know that gasoline is a good solvent by itself.

      • El Katz says:

        It will still have power…. the head gasket leak will be between pistons. Get a no-touch thermometer and check each cylinder for even heat. If she’s a leaker, the affected should be cooler.

  11. gametv says:

    The really big money was the PPP loans for small business that got forgiven. Small business owners who were doing fine had a windfall. They need to burn that cash off. Lots of fraud. Trucks are a favorite purchase of small business.

    This will crash. American car makers are short-sighted.

    • Random guy 62 says:

      I agree PPP was a big deal, but think people do not factor in the stimulative effect of cash-out refinances during 2020/2021. Lot of middle class folks tapped the old home ATM with low rates and high appraisals and plopped down greenbacks for cars and toys.

      I did a refi and so did my brother. Both brokers knew us well enough to know we did not want cash out, but both said they were writing cash-out refis more often than not, and could barely keep up.

      • Thunder says:

        @ Random Guy, Yes and as interest rates rise, the tide goes out and I (and I suspect you) will buy off them for a major loss to those who just had to keep up with the annoyingly stupid “equity makes Money” mob.

        • El Katz says:

          I think there also the accelerated depreciation schedules for company vehicles to consider…. Buy one, drive it for a few, it’s depreciated down to near nothing, purchase it from the company, private sale it, and pocket the profit.

      • Felix_47 says:

        I think that you get a big write off for these big t;rucks. They are subsidized mightily by the tax code.

  12. Pilot Doc says:

    We bought a used 2001 F150 XLT 2WD 5.4L in 2003 with 23K miles for $19,000. Sold it in 2013 with 150k miles when we bought a used 2011 F150 Lariat 6.2L 4WD with 19K miles for $29,000. Sold it in 2019 when we bought a used 2017 F150 FX4 Rocky Ridge Edition with 16K miles for $39,000. That truck used now sells in the 50s….I cannot believe the inflation in truck prices since.

    • Pilot Doc says:

      There was nothing wrong with the Lariat when we sold it. Wife just wanted a new truck. I didn’t want to get rid of it, but looking back, damn glad I did. Perfect timing.

    • fajensen says:

      It’s crazy right now:

      In March 2022, I bought a used 2016 Toyota Yaris in good condition for 81000 DKK from the local Toyota dealer. Today, the very same vintage and model is listed at 104000 DKK!

      The money saved on car expenses, wife and I then splurged on two e-bikes for local expeditions.

      I believe “people” are about to simplify their lives radically, whether they want to or not, and my family is, for once, front-running the trend here :)

    • Harrold says:

      So prices doubled in 16 years and you think its just now an issue?

  13. Frank says:

    I wonder if they did make a bare bones pickup for a “reasonable “ price – would folks really buy it??? I believe this was tried in the past with other vehicles but failed as the buyers were to fixated on bells and whistles.

    • Pilot Doc says:

      Maybe as a work truck, but in the past, they had no resale value as no one wanted them. I don’t think they would sell well.

    • Xavier Caveat says:

      Saw the only new Tacoma truck on a car dealership lot.

      It was a 4 door-4 cylinder-2wd.

      Sticker was $26k, they wanted $32k.

      I wondered just who would buy an underpowered 2wd Tacoma, the type of car not too long ago would be available @ 20% off of list.

    • TheRealMrDyno says:

      Ford’s Maverick is sold out on a week, for about $20k I think.

    • JeffD says:

      I loved the Ford courier. That was a great truck. I’d buy one in an instant, just for the fact that it had no computerized parts that cost big bucks to fix.

      • Harvey Mushman says:

        I remember back in the 1980s I was at my Uncle’s funeral. In his will he gifted his low mile Ford Courier to my cousin. I was about 21, my cousin was in his mid to late 20s. When I congratulated him on the Courier he replied to me “are you kidding? I wouldn’t be caught dead driving that thing!”. This guy didn’t have two nickles to spare, yet he was still worried about being seen driving a clean, low mile, un-glamorous, pickup truck.

        Everybody’s different.

        • Anthony A. says:

          I had a Courier Pickup for a few years when living in California. Mostly Mazda under the skin. Noisy, small, just basic transportation. It was marginal. at best.

    • bulfinch says:

      For many years now I think there has been a real appetite among American drivers for a seriously good-looking, stripped-down, long-bed single-cab workhorse. I’d buy one that ticked all those boxes *tomorrow*

      • El Katz says:

        See above response to your earlier post.

        It’s like enthusiasts that clamor for a manual transmission “3-pedal” vehicle. The luxuries don’t import them because most Americans cannot operate one and the dealers don’t want to stock them as they are the last off the lot. Look at the price of a Civic Type R for what such “one offs” cost in this day and age (a “starting price” of $43K). Hot sales from the enthusiast group but limited supply – which pushes the cost.

      • Gilbert says:

        Me too. Assuming the MPG wasn’t below 25.

  14. Bobber says:

    Wolf’s chart shows credit unions have upped their share of auto lending. They are really going for it. Even today, my parent’s credit union pays zero interest on savings, and .25% on CDs. Another small bank they have an account at, in a different state, has the same policy.

    If you pay zero on deposits and then make auto loans at 5-10%, you can make a killing, using others’ money!!!!

    I’m starting to think the majority of inflation is the result of runaway corporate greed, as well as financial ignorance of the general public. It’s wolves doing business with sheep.

    • Gilbert says:

      Our bank is the same way. We have been customers for several decades and they pay miserable interest. So we took just about everything out and went to another bank where we get almost 5% with FDIC protection.

  15. Z33 says:

    At these prices, I rather find a nice vintage fully restored truck with all the bells and whistles. They look cooler, easier to maintain, and probably won’t depreciate.

    • bulfinch says:

      Yes. Aside from some advances in safety features, suspension and steering, the razzle dazzle of modern fleets is unnecessary and just more stuff to break. They look forgettable, too.

      • Laughing Lion says:

        The “some advances in safety features” part is nothing to sneeze at. Still, if you’re talking about a work truck that will rarely leave your own property and/or be driven for only ~4,000 miles a year, you may be right.

        IMHO all trucks look forgettable, regardless of vintage, so I clearly am not the target customer

    • nemo300blk says:

      I watched Mecum last weekend, and several restored right 50s trucks went from high $40’s to very low $50K’s. These were trucks that, if you paid someone else to restore them, had $100-150K restorations in 2022 money. Ninety-nine percent of the Baby Boomer era restorations are selling for dimes on the dollar.

      • Harrold says:

        They are aging out and selling off all of their toys, but the younger generation doesn’t wants them.

        • El Katz says:

          Square bodies are hot property with the Gen-Xers (or so it seems). There’s an entire cottage industry of repop parts for the old GM pickups and the auction prices are surprisingly high.

  16. Boomer says:

    Ford showed up on a list of least reliable vehicles. Small wonder with 40 thousand trucks stuck in a Kentucky parking lot waiting for semiconductor chips in recent weeks. I remember an RV manufacturer complaining about rodents in the yarded chassis waiting to be built out. I don’t want a truck sitting for months in the elements. Neighbor bought the Electric Lightning for 77k MSRP. Preordered when they first took orders. The dealer immediately offered to buy it back for 90k.

    • Depth Charge says:

      Here’s hoping an army of rodents descends upon that new Ford truck holding facility and starts feasting upon the soy-based wiring to the point they have to scrap them all. A guy can dream.

      • MoneyMan says:

        That parking lot is the closed Kentucky Speedway on I-71 and the 40,000 trucks waiting on chips is probably an understated number.

  17. Ed C says:

    Wolf, you didn’t mention the sales tax. That would be 9.2% here in Glendale, AZ. Over 9 grand just for that F-250 gas guzzler. Ridiculous.

    • rojogrande says:

      I was thinking the same thing about sales tax. It’s ridiculous when the sales tax alone could have bought a serviceable used car only a short time ago.

      • Robert says:

        When looking for a used Quad cab pickup in 2021 the Ford-Ram-GMC dealer had 17 used F150’s with low to mid 30’s for miles & $32000 to 34500 for price. Sales guy mentioned a New 2021 Ram 1500 Classic with 2000 mi as a store shop runner for $36300. That fit my thoughts & so far I like . At that time a totally New Classic was $38500. Of course the Ram is missing items the F150’s had but think I did better. Ram is an extended but rear doors open the same as the front doors do

  18. Don’t Bullshit Bob says:

    $1768/mo is more than my mortgage refi @ $1600/mo on 245K @ 2.75%. I can see folks being hit by hurricanes not giving FEMA trailers back in near future. America loves its trucks. Cash in some more FTX or Bitcoin. Good credit bad credit No Credit. We Tote the Note.

    I like my truck
    I like my truck
    And I like my girlfriend
    I like my girlfriend
    I like to take her out to dinner
    I like a movie now and then
    I love this Bar come as you Are ….Um Um Um

    • DawnsEarlyLight says:


    • anon says:

      Don’t Bullshit Bob …

      100% agree.

      Yeah. Those crazy monthly payment amounts are larger than our mortgage payments were.

      Funny post too!

  19. Don’t Bullshit Bob says:

    I like my truck
    I like my truck
    And I like my girlfriend
    I like my girlfriend
    I like to take her out to dinner
    I like a movie now and then
    But I love this bar
    It’s my kind of place
    Just toein’ around the dance floor
    Puts a big smile on my face

    • Mark says:

      “We’re idiots , babe
      It’s a wonder we can even feed ourselves”

      Bob Dylan

  20. George W says:

    Try selling a $1,768 per month 2023 F-250 Lariat in China, Korea, Japan or
    any other large car manufacturing country, it is not going to happen.

    All these foreign car manufactures focus on the US market as the US consumer is willing to finance anything. Not so, in most other countries.

    The fantasy is unraveling but still quite slowly…

    • George W says:

      US corporations failed to export their consumer financed nonsense?

      Yup, the rest of the world is just not buying into that irresponsible dream.

      The biggest problem for US manufacturers is not that they cannot sell their products abroad but that they cannot sell their highly leveraged financed nonsense to make it all happen!

      • Wolf Richter says:

        Used vehicles made in the USA are a very popular export product. They go all over the world. The US exported nearly 1 million used vehicles in 2021. The UAE and Nigeria were the biggest destinations.


        US automakers all have factories overseas. Ford has factories in Mexico, Europe, and Asia. All the Fords made in Europe and Asia are sold in Europe and Asia. GM sells more vehicles in China than in the US. Most are made in China, some are exported to China. The former Chrysler is now a European company (Stellantis).

        • George W says:

          GM sells more vehicles in China, than they do in the USA.

          I bet they were are all profitable, $1,768 a month 2023 F-250 Lariat’s.

          The free money show is over, now show me a profit!
          Soon, GM will not be selling any vehicles in China.

        • buda atum says:

          “The UAE and Nigeria were the biggest destinations.”

          Don’t know about UAE, but Nigeria gets them at over 10 years old mostly, and usually not those 4litres, as gas or petrol as it’s known, ain’t cheap there nor is finance available.

        • Thunder says:

          In Australia these used trucks are brought over and converted to RHD. They then sell them for eyewatering prices to Tradies who pull locked tool trailers. They have the highest growth of any Vehicle type here (off a low base from 2016)
          Small problem is our car parks are not made for them and they tend to look like a sumo wrestler in an economy flight seat.

        • Anthony says:

          Same from Britain but they are usually knocked off…..

        • Swamp Creature says:

          Used vehicles are in high demand in the tropical islands. When I was sent overseas to Guam, I was told to ship a vehicle there before I reported for duty there. Good move. Shipped it from NY through the Panama canal. Most of the cars there were rusted out and left as is to pollute the water supply. I sold my car for 2X the blue book value and bought a motorcycle for transportation.

  21. NewGuy says:

    Insurance is what,,,,$500/month ?

  22. Phoenix_Ikki says:

    Ford just come out with their own 30 yrs fixed or 14 yrs ARM for their $100K pickup…afterall, not too long ago, $100k was a mortgage for a lot of people on home purchase…

    All that money for not even a Raptor…world is nuts

    • Lauren says:

      I can’t tell if you’re joking or not.

      • Phoenix_Ikki says:

        Well, think of it this way. If Ford did come out with a 15 or 30yrs payment plan, the joke would be on the borrower.

        • Lauren says:

          No doubt. I just meant a long loan period like that no longer seems out of the question.

    • El Katz says:

      Put a camper top on it and call it a tiny home.

  23. Nathan says:

    What a splash of ice cold water this article is! Lunacy and the detachment of pricing to value. Somebody is going to make a fortune selling reliable, practical cars to the “people”–like the Volkswagen of old. This time it will likely be an Asian EV company. I bet 75% of America’s drivers would be perfectly happy with a simple practical Hybrid or EV for under $35K with a nice set of options for those who want the leather and power windows. Every company cannot keep on focusing on being in the luxury market!

    • fajensen says:

      Somebody is going to make a fortune selling reliable, practical cars to the “people”–like the Volkswagen of old

      No, not in America, they won’t!

      The culture will not allow it. The proper way to “fit in”, in America, is to be Big, Noisy and Wasteful.

      To behave differently is seen as weakness by at least half the country and one will be bullied, preyed upon and pestered into conformity by loudmouth morons that feel that they can get away with anything (and generally, they are totally right about that).

      The life of most people is hard enough without the added aggravation so they will just buy that stupid truck and the gaudy clothing, and blend in.

      • Harrold says:

        I agree. No one wants a practical, reliable, and cheap car.

        • bulfinch says:

          Hah. This isn’t real!

          I don’t know which part of America you gang are walking around in, but these hasty generalizations don’t at all jibe with my experience. No size queens going around bullying anyone about their trucks not being awesome enough or pestering one another about how their clothes aren’t enough gaudy; if anything people pick on these would-be road emperors for overcompensating with vehicles big enough to require a portable filling station to be towed behind them. And nearly everyone I see attires themselves in a manner which suggests they’re perpetually on their way to/coming from the pool.

  24. Greg says:

    I’ll continue to enjoy driving my paid-for 2007 Ford Ranger. The price on the new Rangers is insane. Plus, this truck is very cheap to insure, and it doesn’t need a lot of repair.

    I’m old and gave up my ego a long time ago, so I don’t need a $100k truck to make me feel good.

  25. Christen says:

    I drive a ’94 BMW 325is. Family car. 114K on the clock. Curiously however, I just noticed something odd. It has 4 tires and a steering wheel on it! Go figure. Just like Daddy used to tell me…along with “shush…listen”. When I said “I don’t hear nuttin'” he said listen closer…and if you listen carefully, that’s the sound of your car (truck) rusting away outside. By assets that go up in value on credit. Those that do down…for cash. Another little “words of wisdom” passed down from father to son. The old man was the smartest guy I knew. Bought stock in only two little known companies…American Telephone and Telegraph, and Eastern Standard Oil. Reinvested every nickel in dividends. Left momsy wanting for nothing in old age. And he never finished high school. What?

  26. Rosta says:

    One point that comes up in a lot of other articles on this (on automotive websites; gear head soul searching) is that new cars are so much better built.
    They are lasting many, many more miles and years. My dad told me in the 70’s that if you had a car that went 100k it was really something – you bragged about it, and ‘how many times were the heads off?’ (upper half of engine rebuilt basically).
    Now you have CEO’s bitching that everyone expects not an engine problem for 100k. I personally have take 3 cars in the last 15 years to over 250k miles and sold them still running like a good old horse.

    I’ve seen some data that people are keeping used cars much longer, of course, at these prices, for many people that’s the option.

    • Prairie Rider says:


      New performance motorbikes are simply amazing! BMW’s new superbike, the 2023 S 1000 RR, has electronic slide control technology that keeps the rear tire steady as you enter a corner hard under braking.

      By having the computer read the steering clip-ons’ angle and adding it to all the other data that the IMU gathers, as you counter-steer into a slide, the bike reduces engine braking and adds a touch of fuel lightning fast until the rear tire hooks up again. It also works on corner exit to keep you connected perfectly. Saves tire life too.

      This technology can really only be utilized on a race track, but the other driver aids on new bikes make street riding safer and better.

    • Venkarel says:

      I heard an interesting story about Hyundai’s recently. Basically back when they were trying to break into the car market they were having trouble with their reliability reputation. So the CEO/head of the company (I am not familiar with Hyundai’s business ownership structure) promised the best warranty (I think it was 60K bumper to bumper and 100K power train and transmission) in the industry then went to his engineers and said make it work and oh yeah we have to still be profitable. They achieved their goal! The warranty was so popular that it eventually forced other car manufactures to offer the same.

  27. Denise says:

    We just drove to the Blue Ridge tri state region from Florida. Everyone seems to have at least one vehicle as a truck in their garage. They are nice to have to haul stuff to and from home depot. You can not pick up a TV (Costco) these days without one. What surprises me is the number of people (young and old) who are living in trailers. Fifth Wheel or regular. You need a truck to tow your home. Manufactured homes (single or doublewide) are not as popular as they used to be. Young men who are self employed need a truck for work and to fit in with their buddies. They also need a place to live and seem more itinerant. A truck and a trailer can equal an apartment and no one is going to take it from you and leave you homeless. Buy your first truck used while in the military and you are good to go.

    Trump’s 2019 tax cut package had huge incentives for expensive large trucks and other vehicles. Accelerated depreciation and purchase price tax breaks has incentivized the manufacture of large expensive vehicles. Now the government , through EV tax breaks,, will incentivize the purchase of EV’s. Detroit can not pay high MC wages unless auto’s are subsidized by the tax payer..

    We have a Honda Truck it is more practical as a second vehicle than a SUV. My primary vehicle is A Fusion hybrid. We have always bought vehicles new once we could afford too for cash then drove them until their wheels fell off. Not too sure what our retired future looks like. Probably off lease used for us. Cars are just too expensive.

    I can see truck prices coming down as the slipping economy effects all wage levels. Loan and lease defaults should be on the upswing.

  28. Bill says:

    Things have changed. Last December I finagled a new top of the line gv70 2.5 for 2k over list. Since my credit was good the sales manager beat the 1.9% Genesis was offering. The local credit union was 1.7% and $2,000 down for 60 months.

  29. MiTurn says:

    The joke’s not on Ford for selling $100k trucks, it’s on the fools that buy them.

    • Bobber says:

      I wonder what portion of the truck sales relate to PPP loan/grant recipients, who received $100k+ in government handouts.

    • Happysam says:

      True. They can ask what ever they want for their junky vehicles and if they ACTUALLY get suckers to line up and pay, good for F.
      It can’t last like that, but for now….

  30. Bs ini says:

    For used car folks someone had to manufacture the new one and inflation in vehicles keeps going higher. Also the point of easy money stock market and housing gains creating the bubble on stocks houses and trucks.
    Bubbles last longer than I realize.
    Deflation may take longer also.
    Earnings contraction on horizon

  31. Ulev says:

    Time to join the Vehicle Fray’
    Purchased a 2010 Prius III new back then.
    Have kept it well maintained to current date. Its exceptional 44.7 MPG overall has ‘endeared’ me to its somewhat controversial shape..recently, was offered $9,700 while being serviced at a Brand Dealership..@ approximately half its original cost. It may not be ‘pretty, but its physical attributes and sturdiness outweighs the cosmetic competitors…

  32. Adam says:

    At $100,000, you can be buying a Porsche or a lower end Lotus! But, many of these F-150 tricks6 are subsidized by you, the taxpayer…. Because my contractor uses his tricked out big truck to haul around his jet skis and visit customers, and deduct the truck as a business expense, while he has his guys in beat up old trucks do the actual hauling.

    • Pilot Doc says:

      And the mileage, his phone, his trailers, his mowers, his tools, his furniture, his appliances. Hell, I know a guy that deducts guns and ammo due to shooting pesky critters around his shop….deduct EVERYTHING!

    • Prairie Rider says:


      Lotus is now majority owned by a Chinese firm.
      Porsche has a nice ownership stake in Rimac Automobili, Sveta Nedelja, Croatia.

  33. JoshWx says:

    When you look at median household income statistics and compare them with median home and car prices there seems to be some level of disconnect. Where I live (well northwest of Boston) judging by home prices and the mix of cars on the road, you’d be convinced the average household must be making 300-400k+. In reality most “upscale” towns in my area have median household incomes of 120-150k. Many of these people are living in 700-900k houses while driving 80k cars. Am I a cheapskate living well below my means or is the average person leveraged out the ass?

    • Old Ghost says:

      Just as an exercise in curiosity, I looked up the average annual wage in my corner of Wisconsin.

      I got 4 different numbers from the Google search for 2022.





      Most of the jobs I see advertised are in the $13-$20 area. One was even being screemed out loudly as $26 hour (night work).

      • Augustus Frost says:

        Average or median? Average is irrelevant.

        Household or individual?

        Most “middle class” households have more than one wage earner or if not,
        someone with income such as SS.

  34. Digger Dave says:

    I live in rural New England in the boonies. It’s an hour drive to the nearest town in any direction with over 10,000 people.

    I’ll keep driving my work vehicle, an early 2010s GMC 3/4 ton, purchased used with cash, until prices come back to reality. Unfortunately, where I live criminal amounts of chlorides are spread on the roads, so vehicles do not last long. I’ll keep driving my daily driver a VW TDI wagon, purchased used with cash, until it rusts out. My wife will keep driving her salvaged PHEV, which I purchased for peanuts, fixed and got a rebuilt title on, until it rusts out. Our annual insurance on these three plus another fun car is less than $800 combined per year (with full coverage on the truck and wagon).

    We’ll keep living in our debt-free house, which we bought for a little over $100k (and subsequently paid off within five years), until some semblance of reality comes back to the housing market (would love to trade up, but not worth the aggravation with low inventory that is so overpriced). Where I live, your property taxes are quickly adjusted based on what you pay for your house. So our house is taxed like it’s worth $150k even though comparable houses are still worth $450k to 500k in this town now. If we sold it and traded up to a $450k house, our property taxes would triple! No thanks. We’ll make do with what we have. Our insurance on the house, replacement cost is also less than $800 per year.

    Sorry, but not sorry. No sympathy for people loading up on debt trying to keep up with the Joneses. Unfortunately this hyper-consumptive lifestyle, which is what everyone is supposed to strive for now, is making it harder to afford daily necessities for a lot of people. The quicker the house of cards falls, the better.

    • fajensen says:

      Unfortunately this hyper-consumptive lifestyle, which is what everyone is supposed to strive for now, is making it harder to afford daily necessities for a lot of people. The quicker the house of cards falls, the better.

      Screw “Justice”. Should those cards fall, it will soon be like living in Russia during the collapse of the USSR. Nobody really wants that; It’s like using a neutron bomb to stop ones neigbours noisy barbeque. It sure works as intended, but, it sucks for you too.

      Instead, we must make a personal effort to ignore the morons and all of their antics. They are a diversion, to keep our noses to the grindstone, to stop us thinking about ourselves. One knows this because they are being pushed into our attention span 24/7 on all SoMe channels, sponsored by the very people who wants hyper-consumption.

      Instead, one can make good use of these times of easy living and plenty of stuff, to, as individuals, build up a different lifestyle for ourselves, than the one we are “supposed to want”. Each day choosing to do things that will serve *us*, and the people that matter to *us*, better.

      Worry about what we control, then take control!

      • will says:

        I agree with this, although I want irrationality to pop. I dont want a “true recession” just deflation, and constant deflation to go back to ’90s rate, give multiple generations buying power back. Unloose the lost generations.

    • Jos Oskam says:


      If rust is the main enemy of your vehicles, you might want to do a Google search for “fluid-film”. Before the winter/salt season hits, do an underbody/chassis wash and treat chassis and hollow spaces like doors with this stuff. If you have an air compressor and buy the special air blow gun, it is a few hours work. It’s ideal if you can put the car on a lift. You’ll need protective clothing, I use disposable coveralls. Avoid spraying the brakes. You’ll also find some informative videos on uuutube.

      This stuff works wonders in protecting my vehicles against winter conditions. And no, I am in now way affiliated with them, nor do a have stocks or other interests ;-)

      Good luck!

      • Digger Dave says:

        Funny you should mention this. I have a 10,000 2-post lift. I work on cars for a hobby. Was just loading up the undercarriage of the TDI last night. Been using the black fluid film lately, buy it in 5 gallon buckets now and do this service for friends and family too. There are more expensive products, like AMSOIL, that works somewhat better, but the value is not there. Where I live need two applications of fluid film because winter is long. Another problem is that salt gets everywhere and it’s nearly impossible to get the fluid film everywhere. There’s a lot of nooks and crannies on a pickup truck that you can’t even get with a whole set of spray tip attachments. The average life of a plow truck, like mine, that does commercial work (100-200 plow hours per season), is 6 years at best. Mine has 10 years of service on it and is still going. If I want to keep it going I would need to take the cab and bed off it and do some serious frame restoration. That’s a lot of hours. I’d rather see them well cared for then moved onto someone else for lighter duty. This is my third plow vehicle. It’s all the plowing wear and tear that does them in. You name it I’ve broke it. Cracked frames, split in half differentials, leaf springs snapping through the bed, broken in half axles to name a few. All that abuse catches up on plow trucks real quickly.

        LOL I always go nuts and the brakes get loaded accidentally. It burns off within a mile or two. I take it for a drive down my road and by the time I’m at the end the brakes are fine.

        The clear stuff is very nontoxic. 90% plus lanolin. It doesn’t bother me. I wear a respirator for the black due to the added carbon tint. I have a few sets of auto clothes. The fluid film ones get reused all season and then once a year or so I do them and all my other oil soaked clothes all at the laundromat.

        I also have a low pressure hot water wash system set up. All the vehicles get a good wash from bottom up after every storm.

        • Jos Oskam says:


          Thanks for the feedback! There is obviously nothing more you can do to prolong the life of your vehicles. In my neck of the woods the conditions are less harsh so treating my cars with FF once a year makes the difference between writing them off early vs keeping them alive almost forever.

  35. Erwin says:

    I wonder how many of those F-150 and light truck sales go to business customers. They don’t need a $100,000 truck for their business, but it’s going to be expensed anyway. I’d think sole proprietors and small business owners would get it for personal use and light business use. And using a PPP loan in this manner would be legitimate too. 100% tax deductible the year of purchase too I think.

    • VintageVNvet says:

      You’re supposed to amortize new trucks and even computers on a certain schedule over 5 years,,, or were so the last time I did a Schedule C for my biz income as a GC and professional services provider…
      BTW, I was audited 3 times by IRS,,, told to go away twice, without penalty, and even once they sent a check when I showed my inclusions a bit more clearly.
      Please bee very clear with IRS rules, OR hire a professional RA (registered agent), not necessarily a CPA if you are NOT.
      Will save you a lot of time and trouble and very likely money too…

  36. AdamSmith says:

    I was a General Contractor in SoCal for about 30 years.

    Have had say about 40 trucks all sizes, gas and diesel.
    In 2004, 2005, and by year 2006 I owned all three Dodge Ram Trucks like the 2500 Regular Cab 3/4 ton Long Bed, 3500 Dually Regular Cab Long Bed, and a full-on 4 x 4 with extra cab and long bed to boot with every option available. Total cost for all three was about $125K.

    Asked a construction worker how tradesman could afford the 100k trucks and the answer was home equity loans paying for trucks in whole or part of with payments.

    First, housing must reduce dramatically (government won’t let that happen with forbearance/modifications), Then truck owners will have to sell, trade in for less, or suffer a repo (government won’t let that happen).

    Then, I noticed that Gov. Newsome is going to cap the oil refineries in CA further accelerating the construction of gas stations. Add the cost of gas, maintenance, and DMV in the thousands each year and one can see a major catastrophe in the making. Wolf says “Nothing goes to heck in a straight line….Here, Here.

    I will likely never buy another truck for my horse ranch. Instead, I will buy something like a Tahoe that can tow a trailer which is the cheapest “truck” you can buy as I will use a depreciated or reposessed Tahoe to cruise around town and hook up the trailer to load when needed. That way I get a truck and a family car for the same price…

    Bottom line? Trucks are toast in California starting NOW…

  37. josap says:

    Vehicle prices are insane. So glad we bought near light rail 10+ years ago. We have one old GMC that gets us everywhere we want/need to go that light rail won’t get us to. And light rail, plus a few minutes of walking, gets us to most places.

  38. David Hall says:

    I bought a 2021 Ford Escape SE in January with two miles on the odometer for about $32,000 including tax, title and destination fees.

    I looked again. This dealer has no Ford Escape 2022’s in stock, some in transit and some back ordered. There is a larger dealer some distance away selling Escape SE’s cheaper than what I paid for, but they are courtesy vehicles. They have one new 2022 Escape SE in stock. It costs more than what I paid. Neither dealer has any 2023 Escapes in stock.

  39. IanCad says:

    It has always appeared to me that the larger the truck the lesser is the owner.
    The outward expression of what is lacking within the trousers.

    • The Colorado Kid says:

      The outward expression of what is lacking within the trousers.

      Yeah, my good buddy drives the biggest noisest truck known to humankind – and she has no intentions of trading it in, even though she can barely get into it.

  40. Happysam says:

    Sure, it’s a total joke. My first car, a used 4 y.o. vehicle sold for $7000 and a payment of $267 for 36 months. Reasonable.

    But, from an auto manufacturers point, where they are now is ideal: low volume saves a bunch of money in manufacturing, parts, delivery, etc. They don’t pay the commissioned sales people so they don’t care about them. They’re making absolutely ridiculous margins by supplying much less. They also don’t have to worry about superfluous inventory and all that hassle.
    Of course it’s not going to stay like that, but for now…
    When the total switch over to all electric vehicles kicks in, things can then go back perhaps.

  41. nemo300blk says:

    I ordered a well-optioned 2022 F250 Limited with a $93K MSRP in early 2021 that never came in.

    We bought a 2022 F150 Platinum on the lot to take this F250’s place because we had a 2019 F250 with 150K miles on it that added 1000 miles per week.

    A couple of months ago, I ordered a 2023 F250 Limited H.O. PSD and checked almost every box except the $4500 Tremor package, which adds 35″ tires, and the MSRP was $104K. This includes the $3500 Warn winch.

    We write corporate checks for the difference between the new truck and the trade-in, so we can afford these business toys, but we agree the window stickers are getting ridiculous. IMO, this is a $60K pickup truck.

  42. billytrip says:

    IMHO all of this nonsense is driven by the chip shortage and once it is rectified there are going to be some serious adjustments made.

  43. AB says:

    Consensual hallucination extends far beyond crypto. This is a classic QE story.

    Supply chains were generally fine pre-pandemic and clearly disrupted during it. However, the almost universally accepted narrative of supply bottlenecks over a demand orgy caused by money printing, as being the principal cause of inflation, has likely led to over-investment in supply chains.

    When inflation tops out, an historic dose of reality looms.

  44. Turtle says:

    Could you even park that thing in S.F.?

    • Wolf Richter says:

      There are documented instances where these trucks have been successfully parked in San Francisco.

      • Depth Charge says:

        Used to visit a friend who lived on Geary in the early 90s. I’d let him know ahead of time an eta and he would sit in the window of Pat O’Shea’s and have a beer until he saw me. I’d honk when I pulled up, he’d run out and hop in, and we’d go hunting for a spot to park my full sized beast for 3 days. Once we found something, he’d be out directing me because sometimes it would be a mere couple inches clearance front and rear to shoehorn the thing in. I wouldn’t move it until I was leaving.

  45. Citizen AllenM says:

    Look, the el cheapo tradesman trucks still exist- just took a stroll through the bill luke website and see a door buster $30k v8 automatic- and no kidding it is pretty plain compared to the queen bee editions.

    I can still get a 4wd V8 for $45k out the door here in Phoenix. The markups on the lot lizard sales are insane. Meanwhile, the back door need a truck to get my biz wrap on it can be had.

    Cars are plenty stupid too- and EV demand is dropping with the gas price. But the total monthly costs of owning a new car with payment are keeping the repo guys waiting for the recession.

    The new car market is also going to be very interesting, but Carvana is toast, too much debt to survive. That is now baked in the cake and the stupid used car prices supported by dot bombs are also going over the falls.

    In short welcome to a lack of huge money flood recession.

  46. KGC says:

    My truck is 38 years old. I bought it for $400, used. Rebuilt the engine and transmission, put some time and money into keeping everything mechanically sound and neat and clean. I get comments on it whenever I drive it. It’s hauled everything from lumber and gravel to fine furniture. Frankly, it’s irreplaceable at today’s prices.

    Best of all, it’s appreciated in value.

    • Charles Henry says:

      Great Job KGC…
      An 87 Silverado Short Bed with FI??
      I guess that would be 85, I like Carburetors.

    • Robert (QSLV) says:

      My Jeep Cherokee is 26 years old, 386,000 miles, runs like a top. Had it since 2011 when it had 158,000 miles. Paid $5,000 for it. I do most of the repairs/maintainence. Gets 20 mpg.

  47. Ray says:

    Thanks always Wolf for the succinct data.

    Let them all go out of business with their decisions. I’m tired of the insane amount of subsidies we have created for the auto industry.

    People are taught at a young age that the roads are paid for with their ‘gas tax’. Yet the highway trust fund since 08′ has had over $140 Billion transferred to it from the General Fund. That’s not a system that pays for itself! Pure subsidization.

    And that’s just at the federal/state highway level.

    That’s not even scratching the surface of the untold amount of roads that municipalities are on the hook for.

    Which in my eyes and others have been incorrectly using cash accounting (instead of accrual) and listing them as ‘assets’ while not accounting for their true replacement cost.

    Hence the Bipartisan Infrastructure Act when looked closely was just a bailout for our non financially sustaining road infrastructure. And all the money spent still could not cover all the liabilities.

    I personally think as subsidized suburban growth shrinks. We should see a decrease in autos sold the next two decades and beyond as our cities redensify.

    Maybe the cities, states, or national gov will finally put some paint and cement on our current streets and allow people to safety and inexpensively bicycle around. ($20k car v $2k bike).

    Undoing just a small bit of the subsidies given to autos

    But I won’t hold my breath.

  48. Swamp Creature says:

    The auto industry is doing the same thing the housing industry is doing. Building cars that no one wants and no one can afford. I’m keeping my 2003 Subaru Forester and 2000 Corolla until hell freezes over. You can have all those new cars with their gadgets, distractions and chips that will have supply chain issues, all break down, depreciate, and cost you a fortune in insurance.

  49. ozz says:

    The price of a vehicle is now like the price of a house. It is determined by the amount of money a lender will loan for it. The price will come down when it cannot be funded through loans.

  50. CreditGB says:

    Someone at Ford actually believes their customers have the cash for the DP and ability to pay $1k per month for a machine they don’t use except to grocery shop. AMAZING! Has to be only businesses or fleet buyers or top earners looking for a macho image are left. Ford shouldn’t expect too much mileage out of the remaining market once the Joe Sixpacks have retreated as they no doubt have. EV trucks? Even at 300 miles per charge, who has the hours to spend recharging? No one I know of.

    A perfect time for someone to come out with a no frills PU truck. No chips, no computers, and only a few luxuries. PS, PB, AC, with a bullet proof and serviceable engine and trans for rock bottom prices. Don’t look to the present crowd of woke Corporates to even think of it. They’ll plod on oblivious to their customers, until they retire or are forced out with a golden parachute.

    Better is to look for a decent old truck and keep it maintained. Current offerings aren’t even suitable as yard art.

    • Geezer says:

      No chips? No computers? So point ignition, carbureted engine… Why not go further, steam engine, wooden brakes, rectifier/regulator instead of alternator

  51. JP Morgan says:

    Best life hack: if you need to borrow money to buy a personal car, you can’t afford it. Thus don’t.

  52. Mtnwoman says:

    I feel like an oddity in this bizarre nation.
    I am totally happy driving my 2004 Honda Civic. It is fantastic around town. It could drive longer distant but for that I have a 2011 Camry.

    So I get to sit here this am purusing the internet and not at a job I hate slaving to pay for silly show-off things.

    I would always rather take a long leisurely trip that show off fancy things.
    To each their own…

  53. ru82 says:

    I was contemplating a Hybrid or an EV this summer. Could not find one that was marked up a lot over MSRP or the wait time would be very long.

    Oil is down to $73. Pre-covid it was low 60s, Gasoline prices will soon be sub $2.50? For me, the hybrid or EV is not worth the extra price if gas is below $3.

    • Philthy says:

      Buy a gas guzzler and then scream about gas prices when they inevitably rise again… It’s the American way.

  54. ru82 says:

    Am I the only one noticing the commodity price crash the past 3 or 4 months.

    In theory, this should lower food prices. Well I guess that is dependent upon the Grocery stores and Restaurants wanting to pass the saving on to the customers.

    This summer the CEO of Grupo Bimbo said transportation costs is 60% of the cost of his products. The combination of lower grain prices and oil should reduce food prices. But like I said, it depends if the grocery stores want to pass the saving along or just make more profit.

    If they pass the lower cost to the consumer, that should help tame food inflation, if they do not, it will help their stock price. LOL
    MEXICO CITY, Oct 27 (Reuters) – Oct 27, Mexico’s Grupo Bimbo (BIMBOA.MX) on Thursday posted a 51% year-on-year jump in its third-quarter net profit, beating estimates, boosted by strong sales and product price increases to tackle rising inflation.

    “We reached record levels and our volumes continued to grow despite price increases,” Servitje said in a statement.

    • Augustus Frost says:

      I used to work at a local Kroger in the 1980’s. I once asked one of my store managers why corn sold for so much more than the future price for a bushel. He didn’t provide an answer, probably because he didn’t have one.

      This was in 1985 or 1986 when a bushel was maybe $2 (can’t remember exactly) and my store sold it corn 4/$1 or something like that.

      There is a lot of corn in a bushel. I know there are numerous built-in costs from the farmer to retailer, but still.

      • Prairie Rider says:

        In 2021, 8 million acres of corn was grown in Minnesota; 1.4 billion bushels produced. 1.16% of that, 93,000 acres, was sweet corn. Humans eat sweet corn.

        38% of the corn, field corn, went to meal to feed livestock. 29% went to make ethanol, but in Iowa & South Dakota more than half of the corn grown last year turned into ethanol. More than 16% of Minnesota’s corn was exported; most all of it by rail and barge. 5.6% went into silage — for livestock food.

        Syngenta’s BT corn program was started by my dad thirty-two years ago. It seemed like a good idea at the time, and it sure as hell has made a lot of money for the Swiss company and its seed dealers.

        Perhaps that answers your question A F.

    • Bobber says:

      Food businesses will not reduce prices. They will keep prices high, and increase wages if necessary to keep the business going, feeding a wage price spiral.

      Inflation is hard to control because business profit seeking is relentless.

  55. Rosarito Dave says:

    I’ll add my .02 to the discussion. I bought my first new car shortly after moving to San Diego in 1987. It was a basic Toyota Corolla. I paid $10,000 cash out the door (incl taxes etc). a basic model w/ a 4 speed transmission. in current USD that equals about $26,200…It got 32 miles/gal city and about 43 MPG on the highway. I had it for 7 years and about 140,000 miles before I got hit by a city bus (their brakes failed on a rain slicked road and went thru a stoplight). I had zero real issues with it…in retrospect, I should have taken the insurance money and bought another one, but…. after owning a basic model for years, I decided to go bigger… (and better? NOT!).. Upward mobility back then…lol

    Ahhh… the follies of youth!

    • joe2 says:

      Speaking of follies – my first car was a Vega. After they had to replace the engine, I was down on GM products and so I bought a Ford Pinto.

  56. MC says:

    It’s really hard for me to wrap my head around this.

    A combination of luck and skill managed to get me a showroom floor fully loaded 2020 Jag E Pace in November of 2020 when my Audi lease ran out. This thing has upgraded everything from the paint to massive 21 inch wheels. Full tint, upgraded sound, even had a trunk in the rear filed with tool, umbrella, cleaning supplies, and bunch of other items complimentary including all the rubber Jaguar mats left in the vehicle. While the E Pace is their entry level model in general, the MSRP was actually higher than the base F Pace as an example. My tag was $57k and change. This is a vehicle sitting center floor in the showroom and this kid had two deals fall through at the time and just couldn’t give it away (this is Miami, just a pinch before everyone fled to here).

    After two weeks of negotiation I drove it off with just $1500 out of pocket (including first payment, tax, reg, etc). And $545 a month all in with tax and annual service. This same truck I just did on their website is $1,004 per month with $5k down. I have two more years and I’m way under my mileage allowance, so I’ll probably buy it out.

    This is nuts.

    • MC says:

      I should also add to my comment above. The MSRP of the new vehicle I referenced on their website today is actually around $55k. So my truck still has more options at a cost of around $2k more. And yet, the down payment is 3x and the monthly payment nearly 2x. As a few point out above, this has to be a byproduct of underwriting versus demand and I don’t even know what that means, but something funky is going on when you really look at it. This wasn’t a topic on my radar until I read it on this blog today. Thanks!

  57. Tim in Minnesota says:

    These comments are pure gold. There’s so much wisdom out there if one knows where to look. Okay, as long as I’m here… wife drives a 12 year old 4Runner and I drive a 10 year old Camry. Like a commenter above, I’ll keep maintaining them and replacing parts until it no longer makes financial sense. I want to drive a fancy car but I *hate* car payments… so here I am. Thankfully, my wife is on the same page. Thanks for the great article Mr. Wolf and thanks for all of the terrific comments.

  58. DR DOOM says:

    What a fu$&ing bargain. I hope they don’t run out before I hit my brother in law up for that down payment.

  59. J-Pow!!! says:

    100K for a truck. Good price.

    • Ricky says:

      Don’t worry J-Pow!!!, sir.

      After these poofters roll these things off the lot they are still bottle-necking into the aftermarket, custom shops so they can spend another $15-$25K on lift kits giving them another 6 inches, at least.

      Then they have the room to swap out the wheels and rubber needed to be a true presence out there in the pick-up truck world.

      Oh! Some really love the swinging nutsack thingy too. So maybe another $30-$35K, after-market, tool
      ‘merica sir!

  60. joe2 says:

    My first house was $36,000 and I was shaking in my boots. The seller thought he robbed me as he had paid $14,000.

    How many bathrooms do these trucks have?

  61. Ricky says:

    As I read this, I keep visualizing the spread, between those chasing the luxury scene and those who would prefer to stay practical, widening to where it appears that those who wish to remain practical, and are willing to pay the price to have a “practical” pick-up, are being pushed into the “economy” zone.

    One of my faults, is that I view driving an economy class car as demoralizing. I love vehicles – ever since I started earning enough dough to start upgrading my 2003 Mustang GT (yea, the 4.6 – it didn’t even have the trademark 5.0 on the side) into my own version of the Cobra model. Vortech blower (w/ new injectors, plugs, oil drip, etc), Flowmaster, gears, shift kit, street-legal slicks on the rear, and more).
    Just laying a little context. Definitely not trying to shine a light. Shit, I got lit up at the 1/4 mile drag nights. anyyyyways..

    Even though this isn’t in the pick-up truck world, I look at Kia – a brand that would definitely qualify, to me, as demoralizing and I’m taking longer and longer looks.

    They’re obviously not trying to throw their hat (wisely) into the pick-up world, but I think they are going to be successful in filling the similar gap being created in the SUV scene.

    From what I’ve seen, it looks like Hyundia has done a great job enhancing the Kia brand as they go toe-to-toe with Tata and start pulling market share away from Range Rover.
    Like Wolf, I was inspired to build a mid-level Telluride. Exterior looks awesome. Interior sparkles. It’s NICE.
    Best part. The only add-on you should make is the AWD (with extras) for $2K. That’s it.
    Final price = $48,885 MSRP. Their smaller models are just as nice.
    The only disappointing thing is that there no way around the naturally aspirated V6 engine. No turbo. No blower.

    Back to Pick-Ups, Rivian seems DOA – a flash in the pan. Anyone else noticing a brand taking a shot at the $30K-$50K Pick-Up space?

  62. Remy says:

    No wonder why my 18 month old reservation of a $20k Ford Maverick truck still has not been delivered.

    • Digger Dave says:

      Cancel it. Not for the price. It’s the build quality, as in uncoated metal on the undercarriage. In 2022? Rust proof paints are pretty much expected these days and they can’t even be bothered. Shows that they’re pinching pennies in the wrong places. The big 3 don’t know how to do affordable and quality. Go with a Santa Cruz. You won’t regret it. I have to say that as someone that wouldn’t consider foreign cars for the longest time. But that’s where we’re at.

      • Remy says:

        Hey Dave,

        So are you saying the frame is not dipped in whatever bath they put most cars in? I had not heard about that. A MN winter will be a good test. We salt TF out of everything. If I get a dozen years out of it I will be happy. Dealer tossed in a free lifetime powertrain warranty; those seem to have disappeared in recent years. But, Ford, would still need to build the rusty Maverick for any of this to happen.

  63. Dang says:

    One hundred thousand dollars for an F-250 Lariat is shocking. But, typical business strategy for the Ford Motor Company.

    I remember way back in 1980, when the inflation was not as bad as it now, probably because the FFR was at 12 pct.

    I looked at buying an F-150 but found they were priced at a level that directed consumers to buy their alternative offering. They wanted 25 grand for a plain jane.

    The Ranger.

    And they got their asses kicked. Hubris seems to make one vulnerable to that kind of failure.

  64. ft says:

    I bought a nice, new BMW SUV a year ago and I am happy with it, but it seemed to me like it was horribly expensive. Well, good thing I didn’t have my sights set on a Ford pickup!

    • Bobber says:

      It seemed to you like it was horribly expensive, yet you bought it anyway?

      Therein lies the key to our insane economy.

      • ft says:

        Yes, I did. Its level of luxury, utility and high performance made it a relative bargain. Some of us require our vehicles to be more than just rolling toasters.

  65. Depth Charge says:

    Now imagine that POS depreciating asset rusting away out in the driveway suddenly increased in “value” by 45% in less than 2 years.

    “We’re not even thinking about thinking about raising rates.”

    ~Jerome Powell – when all of this was happening and apparent to even the dullest of the dull. And this guy still has a job WHY?

    It’s time to burn the whole system down. It’s too rotten and shot through with corruption to fix. When horrific bureaucrats can’t even be fired for destroying the entire country, it’s a failed model.

  66. DawnsEarlyLight says:

    But, does it have a CD player?

  67. Tolkapiam says:

    In 1997,I bought a used 1996 Ford Escort station wagon with 9000 miles for $5000 cash. It had salvage title. I did not know about insurance damage & rebuild as I was fresh from the boat( camefrom HK after handover to china) . I drove it from LA to Miami Dade via I 10 west over 5 days with a wife+ infant) and came back to LA via I 40 . It worked well. After I year I sold it to a Mexican girl in Bakersfield with almost no loss. I did this buying via penny saver online and sell via penny saver print & la times paper twice in the next 3 years. Kia, suzuki etc. Always drive for 1 year and sell with negligible loss.
    Now back home in Asia I drive 4 door compact 1000 cc “manual transmission “Hyundai no power windows basic LX model new costing $ 7500.

  68. Doubting Thomas says:

    I have friends and family who need a pickup truck to make a living… electricians, plumbers, upholsterers, HVAC, etc. But I also know accountants, lawyers, office workers, retirees, etc. who absolutely do not need a pickup truck. I can’t believe the amount of money that people who don’t need trucks spend on buying, financing and running the trucks. What’s going on? Whatever happened to frugality and saving for a rainy day? I feel like Rip Van Winkle waking up to a world that I don’t recognize. Am I alone in this reaction?

  69. DV says:

    Effectively, the US car manufacturers like Ford and GM have elected to become niche luxury brands. I would not be surprised that some years from now there will be more Chinese-made cars sold in the US than those ‘made in the USA’. Decent Chinese SUVs sell for 15k new in China.

    This is going to be a necessity as the US fleet is going to age fast.

  70. Tobi says:

    Overall sales stagnate because vehicles are much more durable than they used to be. A modern car gets double the milage compared to one from 2000.
    It’s the exeptions which run longer.

    Thats the reason why sales stay flat even though the population is increasing and the cars on the road are increasing, too. Used cars age better.

  71. Auto-outsider says:

    A few points that have probably been brought up before;
    1) Inflated residual values during the boom driving low lease prices on pickups – this gets solved during the bust when the automakers have to show the loss. In southeast Michigan, everyone expects a $300 lease on loaded pickups until recently.
    2). Emission regulations and equipment – small vehicles actually have tougher regs but require essentially the same equipment as trucks – this pushes all manufacturers towards the higher end vehicles. In this case, the government pushed the market towards less efficient vehicles.
    3). Trucks and specifically the F150 have been the top selling vehicles for a long time now

  72. Chux says:

    It was Christmas week in 1993 when my late brother and I went looking at pickups in the Tacoma Washington area as he being a Boeing worker that’s what he was looking for back and forth to work. We went to 2 or 3 dealerships looking at different trucks but he “liked what he likes” and nothing caught his eye. So we stopped at the local Dodge dealer and when the salesman asked what we were looking for I said a new pickup. He says I’ll be right back and when he returned he was driving a brand new 93 Dodge Cummins. He says, this is the last one of the 93’s left so I can make you a great deal if you’re interested. So we took it for an hour long test drive, I liked it my brother did not. It was priced at $24,700 but was on sale for $21,999. My brother passed. On a whim (and to make a long story shorter) I told him I may be interested although I WAS looking for a real great deal. What did you have in mind he asks? So I offered him $18,800 with $2500 down for the last 1993 Dodge Cummins on their lot till the 94’s started rolling in. And you know what?? They accepted my offer and after signing the papers and giving them my down payment my payment was $347 a month for 4 years. I also bought their “lifetime oil change” which I used as often as was allowed which was twice a year. Remember that truck has a 12 quart oil capacity. So I used it so long they laughingly accused me of trying to pay for that truck by using the lifetime oil change so long. Anyway I drove it commuting back and forth to work 60 miles a day and because it was a 5 speed manual transmission it got 23.7 MPG like clockwork the 12 years I owned and drove it. I teased my neighbor who drove a classic custom VW Bug that I got better mileage then he did!! When I went to sell it with 230,000 trouble free miles on it I got $5200 and the guy from California who bought it was absolutely giddy that I sold him that truck. It was never wrecked, had custom aluminum wheels, a lighted moonvisor, it was unchipped as the 93’s were difficult to chip, chrome tool box, etc etc and if anything went wrong (which not much did – ALL AROUND it was the best pickup I’ve ever owned looking back now) I fixed it right away. So to this day I have a real soft spot in my heart for Dodge Cummins pickups though these days I wouldn’t even think of buying something that expensive.

  73. John says:

    For $1700 a month, I could tow a porter potty and just make this porter potty my primary residence. Holy cow

  74. steveNJ says:

    Can someone opine as to what the max of income should be dedicated to car payment? 10%. These payments seem very out of touch with middle class incomes.

  75. Mitry says:

    Hey Wolf,

    You priced out an F-250 Limited. The Lariat base is $61,410.

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