Here’s the latest reader rant; my comments follow!
John writes: As one who spent his entire career in the carbiz (after the military) and owned several new-car dealerships, I’d like to add the following: We’re now precisely where the UK (the Uck) was fifty years ago. Back then fully half of all new cars in the UK were leased. Now half the new cars in the US are leased. Actually, the cars haven’t increased in price – the value of our currency has decreased, and by about 90 percent vs. the dollars of fifty years ago.
This can’t go on – and when something can’t go on it finally stops. Sometimes gradually and gently but more often with much pain and suffering. Just recall all the made hysteria during the two gas “shortages” of about twenty years ago, with crazed motorists driving around hysterically constantly looking for an open gas station at which to top off. There was no fuel shortage. All that happened was that the average fuel quantity in fuel tanks went from about four gallons to nearly twenty. This stopped abruptly when gas stations made the minimum fuel fill was established at about ten gallons.
My reply: Agreed, John. I feel like a man howling into the wind sometimes. I, too, have been in the biz a long time now – formally, for the past 25 years. Informally, all my conscious life.
The signs are neon backlit and flashing obvious at this point – but few notice. Car loans are now on average twice the duration they were – and (per the article) leasing has exploded to almost a third of all transactions. This is a clear barometer of an unsustainable gap between what people are buying and what they can afford to buy.
I rail often about compliance costs – which are enormous. But equally driving this bus off the cliff is the finance crack of easy credit on depreciating appliances. The general American attitude used to be – buy what you can afford. It is now – get a loan for whatever you want. 
I’ve read that more than half the population could not come up with $1,000 cash for an emergency without having to borrow it. Yet most of these people drive a late-model vehicle. They probably also have an expensive smartphone and other gadgets.
There is nothing wrong, per se, with gadgets. The problem is one of assuming massive, unsustainable debt to “keep up” with the “latest thing.”
I just finished writing a reply to a reader who asked about the new Jeep Gladiator – which is a Wrangler with a small bed. The thing will sticker for almost $40k – to start. This is jibber-jabbing, drooling madness.
It’s a Wrangler. Onto which they bolted a bed. Made of steel panels. The basic package ought to be available for under $20k. But Jeep loads the thing up with gadgets and amenities – because most people insist on them and can get financing.
One can almost see the Jenga Tower beginning to lean, eh?
. . .
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Actually, it’s not a Wrangler with a bed. It’s a truck that looks like a Wrangler.
The Gladiator has a different frame, rear suspension and heavier duty brakes and cooling for truck stuff.
During the reveal, Jeep kept reiterating that it is not just a Wrangler with a bed. Originally because they know what it looks like to the average person.
That’s why I wish they would have gone with the M715 style front end, as they’ve used in several concepts, and on the original Gladiator for that matter. It would have given it the separation that it’s capabilities show.
But yeah, it’s going to be WAY too expensive.
I see people making $50k a year and driving $30k (or more) crossovers and living in $400k McMansions overlooking a landfill (true story). This is decadence, plain and simple.
I’ve long given up trying to the math on those things… I just.don’t.get.it…… At the very least, you have to have enough cash flow to cover all those payments! My theory is that the ’08 crash was precipitated by the $4.00/gal gasoline we had at the time. My reasoning goes like this: Well I *have* to get to work, so I pay for the gas. Now, I’m short for all the other things, so I can either feed my kids, or pay the mortgage. “The banker can suck it!”, I say. That works for a while then I have to bail on my house, etc., etc., etc….
The fuel shortages of the 1970s were caused by the government. The foreign policy combined with price controls. There may be something to the tank size though. My ’75 Maverick had a 19 gallon gas tank. Fill ups were few and far between. The ’73 I have now has a 15 gallon tank. All my newer cars have tanks roughly of 12-15 gallons.
As to leasing what our “betters” want for society is the company town. Everything is rented from them. Well ultimately them via corporate structures. If you get out of line they deny you service. If you are a big enough problem you lose your job or your business is crippled via payment systems and since you rent everything without owning anything you are soon homeless on the street. Thus I don’t think car leasing will collapse but rather cars will go away or become rental on demand. The idea is hand-to-mouth company town life.
A lot of families have multiple cars, like three or four. Most married couples have at least two. I wonder if we will see that start to disappear over time as people start owning fewer vehicles at a time. Maybe a married couple goes back to one, or a family goes back to two, using ride share etc more to “replace” those vehicles.
Would go with the gradual reduction of personal vehicles the ruler want. They really hate those families that insist on owning a vehicle for every licensed driver in a family.
It will disappear once they’re forced to live within their means.
Looking back 40 years ago, most working and middle class families owned no more than 2 cars. A kid’s first car was usually a used beater that they were responsible for, not mommy and daddy.
The thing will sticker for almost $40k – to start. This is jibber-jabbing, drooling madness.
It’s a Wrangler. Onto which they bolted a bed. Made of steel panels. The basic package ought to be available for under $20k.
That’s right. It’s all cheap materials, getting cheaper all the time. But the labor to design it, engineer the production line to accommodate it and (mostly) the marketing are getting more expensive. In the case of Jeep they have a lot of aftermarket “designers” who do most of the early product testing, so that probably helps. But any large company has to have a lot of people to spread the blame around when a product is a failure (meaning fails to reach somewhat arbitrary goals), and given the restrictive job market these days, that doesn’t come cheap. But besides, who the hell cares? We’ve long gone past knowing how to value a product. Hell, you can’t even negotiate anything these days, despite what we’re led to believe about buying big ticket items. Even eBay has pretty much abandoned the Dutch auction model in favor of “buy it now” and retail-level opening bids. We start at what the seller says it is worth and go down, while we should be starting at $0 and working our way up.