New car sales are down – again – for the seventh month in a row. Which means they’ve been slipping all year long so far. The last time it was this slow was about ten years ago – which was the last time the car business fell down and almost couldn’t get back up again.
Several factors are in play – some of them undiscussed.
One, interest rates on new car loans have been inching up slowly but steadily since 2013, when they were near zero or actually were zero (free financing).
The average rate – assuming excellent credit, which many people haven’t got – is currently about 4.74 percent. It was closer to 4 percent a couple of years ago. It’s still extremely low relative to the double-digit financing that was common in the ’70s – but the average new car cost less then (you could buy a full-size American sedan like the 1970 Ford LTD for $22,700 in inflation-adjusted 2019 dollars) and people had more money available to buy them because they weren’t hemorrhaging money on things like health insurance (and medical care, which is something different) as they are today.
The average monthly cost of health insurance for a single – and healthy – individual is almost $500. Many people are paying a great deal more.
There’s less cushion in the budget now – which almost certainly explains why about half the new car loans made today are long-term (60 months or more). This is about twice as long as they were back in 1970 – when the interest rate on the average new car loan was 11.5 percent but the typical new car loan was paid off in just 36 months.
Today, it is common for people to make payments on a new car for 72 months – or even longer.
New car loans are made to seem more affordable by spreading out the payments over a longer period of time. But that doesn’t mean they are more affordable.
But it may be the hidden – or at least, undiscussed – costs of new car ownership that accounts for the wilting of new car sales, in spite of still-easy financing.
Insurance costs have been skyrocketing because of the skyrocketing repair costs of today’s cars, which can suffer thousands of dollars in damage from very low-speed fender-bender accidents – because new cars no longer have bumpers.
Instead, they have pretty but fragile body-colored plastic bumper covers (the structural parts of the car designed to absorb impact forces are behind the cosmetic parts of the car) that are easily torn or torn right off the car. Often, the whole “assembly” must be replaced after a minor accident – along with incidental (but not inexpensive plastic trim pieces, such as the grille).
Metal fender panels and hoods are made of startlingly thin metal that can literally be bent by hand. It is very easily bent beyond repair in an accident. Most new cars are unibody cars – meaning most major panels have to be cut out and new ones welded back in to effect repairs. 
In the past, most cars had panels that bolted on – and were more easily – and inexpensively replaced.
Aluminum is being used in many new cars, also to save weight. But also more easily damaged – and much more costly to repair when damaged.
Air bag replacement costs are another big one – which didn’t exist at all before the mid-1990s.
Modern cars are more likely to be thrown away – totaled – after an accident because of the cost to repair them.
Thus, the average person pays about $1,500 annually to insure the average new car. Over the course of a 60 month loan, that’s $9,000 in addition to the loan. It is also equivalent to about a fourth of the price paid – and financed – for the average new car, which is just over $35,000.
In effect, the $35,000 new car actually costs $44,000.
According to the Bureau of Labor Statistics, the price of car insurance has risen 378.45 percent since 1985, with most of the increase taking place in the “modern” era of plasticized/thin-paneled and air-bag-laden cars. 
It’s a hidden – but very real – cost of new car ownership that is almost certainly affecting new car sales.
Another hidden-but-real cost of buying a new car is the property tax applied to new cars in many states. These taxes are based on the retail value of the car – and new cars have the highest value and are thus subject to the highest tax. These taxes can be as high as the cost of insurance – as much as $1,000 annually or even more, depending on the state.
Over the course of 60 months – the length of the average new car loan – the property tax on the car can add another $5,000 to the cost of owning a new car.
The $35,000 average new car is now a $49,000 car.
The total cost – including hidden costs – of buying an average new car now approximate the annual family income of the average American.
Is it any wonder people are shying away from buying new cars?
And just wait until electric cars become the only new cars you can buy. These cost 30-50 percent more than otherwise equivalent conventional (IC-powered) cars, will cost more to insure because of even higher repair costs (read up on Tesla repair costs) and are more disposable cars because of the shorter useful life (and high replacement cost) of a battery pack vs. an engine or transmission which usually never needs to be replaced over the useful life of a non-electric car.
We have bought the ticket, as the Dr. used to say.
And now it’s time to take the ride.
…
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I pay $50 a month car insurance, on a 14 year old car, I’m 40-something, never had a claim, driven 500,000+ miles in my life, currently drive 4,000 miles a year. Shouldn’t I get a discount for being their lowest risk customer? And get this — the premium still goes up ~10% every single year — heck they don’t even have to invest in the stock market — they just raise their rates 10% every year! Geez, must be nice! Meanwhile I’m living month to month.
Where you live has a great deal to do with rates. Are you and 3 other people the only residents of a 100,000 sq mile county and unlikely to ever see each other, or do you circulate with a million uninsured drivers in down-town New York City? Do you drive a car like an Accord or Camry that are favorites of car thieves because they blend in so well? Is the car garaged? These are things that you may not think about but the corporations that have to pencil out every quarter have to.
Yeah, that’s true. But I still think the 10% per year rate increases are unethical. THIS is what inflation really is — everyday commodity costs going up due to greed or govt taxes/fees (insurance, food, housing, phone/internet, taxes/fees).
I saw a list of the 20 most stolen vehicles recently(Steve Lehto). It wasn’t what I thought it would be but it does hit the high end market first. Lexus was up there near the top and Land Rover, but special editions/Types of both. 5th were newer GM pickups and they came in again on down the way for other year models.
I’m not an economist, so I read what the economists say. They mostly agree it’s about 10%. The govt. jacks with their numbers to the point they mean nothing…..just like when every prez takes off, about six months later they report the “less than 5% unemployment”. Of course 10’s of millions of workers have dropped off the list because their method of how long someone has been out of work drops them off the list even though they’re still looking and working part time and often two or three jobs.
Gummint figuring is just like Gummint everything, it’s all a lie.
Fun fact: Windshield replacements are also getting vastly more expensive. Only a few years ago, a typical windshield replacement for a car or truck would have been about $200-400 or so. I know, because I drive enough to get rock chips and cracks often enough to have to get windshields replaced more than most folks. In only the past few years, though, prices have begun to skyrocket. The reason? Technology.
The new driver “safety” systems such as lane monitoring/warning and lane assist features, emergency braking/collision warning systems, etc. almost always operate via a fancy camera and/or other sensors mounted behind the windshield up around the rear mirror post. Because this is a “safety” feature (like airbags), it is much more tightly controlled by DOT and other federal regulations. The glass has to be just right in terms of composition and clarity so that the visual and other sensors can operate correctly through the windshield. It seems like it is almost impossible for a third-party to manufacture these sorts of windshields in a profitable way since the complexity just increased astronomically and the market for them is much narrower. You used to be able to get a cheaper windshield, perhaps without as much tinting or special features, and save a few hundred bucks in the process. No more. Now, more and more, the only manufacturers of the windshields are the OEMs themselves (e.g. Ford, BMW, etc.), which makes them especially expensive. The last two windshields I had to replace, in two different vehicles, were each over $1,000 (one was $1,500) because of this.
Safety is costing us an arm and a leg.
Hi SJ,
Indeed; thanks for bringing this up! It’s one more reason why the cost of insurance is inflating like a Weimar Deutschmark. And much as I loathe the insurance mafia, these costs – which they have to bear – are legitimate. What’s vile, though, is that people (like me) who haven’t got a new/recent-model car with all these idiotic (and expensive) features are nontheless mulcted by the mafia to offset the costs.
Everyone’s insurance is getting more expensive.
eric, the wife worked at an insurance agency when Tx. went mandatory, 86 or somewhere in there.
So she tells me about it and I reply something like “just what we need, higher insurance rates”. Oh no, she said, rates aren’t changing. Well, she was right, they didn’t change…..that day.
6 months later we were selling pickups we couldn’t afford to insure. She said it was a good thing since everyone would have insurance. Sure, everyone will have one payment’s worth of insurance. And that’s what happened.
I pointed out to her it wasn’t a big deal before that because we bought the uninsured motorist option and literally paid a dollar or maybe 2 dollars for it, so cheap it was a no-brainer. It didn’t stay cheap when “everyone had to have insurance” as if that could be done.
Every Mexican we knew bought a month’s worth, got the card and didn’t didn’t have insurance but one month of the year afterward. Meanwhile uninsured motorists went up by 20 times.
Damn, I wish I had something to sell the govt. wouldn’t let you not buy. OK, no I don’t but you get my meaning. Reminds me of the old cartoons of mice playing piano and wearing blackface singing “We’re in the Money”.
Hi Eight,
Yup! It’s such a simple thing, but so hard for some people to understand. Mandatory car insurance is also arbitrary; why not also force people to buy gun insurance, too? Oh. Right. That’s coming, too.
eric, I used to have loads of guns. I was replete with all sorts of firearms. I bought new(very seldomly) and slightly used(almost all of them) but there was no such thing as a gun registry. To this day, I still don’t have a “registered” gun.
I don’t have to have the latest things. Perfectly good guns of all kinds have been made for a century. Ever shot a suppressed Mac 11? That’ll put a smile on your face you can’t wipe off. One time the wife said “Why were you cutting wood(summer)and is there something wrong with the chain saw , I just barely heard it out the kitchen winddow?”. I was chipping wood….big logs in the pile but there was no chain saw involved.
Eric,
“why not also force people to buy gun insurance, too? Oh. Right. That’s coming, too.”
Fucking soothsayer!!!
https://www.google.com/amp/s/www.mercurynews.com/2019/08/12/after-gilroy-shooting-san-jose-mayor-pushes-new-gun-liability-insurance/amp/
Good morning, T!
I had a feeling. And I expect this to spread as the logic of it is ineluctable. We’re forced to buy health insurance and car insurance because what we do might impose costs on “society.” If that is legitimate, then it’s also legitimate – or at least, of a piece – to force people to buy insurance for the harms they might cause with a gun they own.
Of course, the insurance will cost more than the gun in many cases. Several times as much, over time. Which is just what’s wanted. Don’t ban them outright. Just make it so expensive to own a gun that most people can’t afford it.
PS: AGWs are exempt from this proposed new law.
Ever notice there is absolutely no effort placed on behaviors of people that do put a cost on “society” so long as those behaviors grow government?
Once the government has ‘single payer’ watch it work to control all behavior with that leverage. But until then, do whatever you want. The more sick people the easier it will be for government to get control.
It’s pretty obvious that those in control are working towards a more chaotic and dysfunctional society.
Well, good ol Joe came right out today and called it “confiscation”. But his version doesn’t have anyone coming to your door to take it back at force, it’s all a buyback. And that smarmy MF can say that with a straight face.
He also said the Constitutional 2nd Amendment is bullshit because you need F 15’s to take over the gummint.
What an ahole, who do you think controls those planes and missiles? The rich and wealthy who won’t get killed or the guys in uniform that are damned if they do, damned if they don’t.
You can always threaten somebody and threaten somebody else to keep the threateners in line. Or so they think.
Not all military is going to fall into that bs. Sure, just like an ossifer I saw the other day telling about how good his weapon systems is and his underlings have to do what they’re taught.
Push comes to shove, you can lead a man a helluva a lot further than you can push him.
Same thing in Colorado in 1987. I couldn’t afford to insure my log truck any longer and had to just go out of business. The new rate was almost as much per month as I had paid before for a six month season (we would drop the truck in the fall and just keep the pickups insured). I contract cut again for a little while, and then moved to town and got a job that ended up ruining my health. Of course, work comp wouldn’t cover it.
Ironically, I just ordered a semi-load of firewood logs, since it’s getting harder and harder for me to go cut pickup loads out of the woods nearby. That used to be my main business: delivering loads of logs for folks to cut up into firewood!
I think the problem is two fold but both due to government corruption. The government has forced automakers to make crap trying to keep up with regulations and secondly many people arnt driving and using uber or Lyft to avoid the gangbangers in blue. The government uses the roadways for another cash cow and a tool to harass the citizens. No wonder they made travel a privilege and not a right. I will never buy a new over priced union made piece of junk car ever again.
Newer cars most engines cant be rebuilt if aluminum,or if they can only rebuilt once due to thin engine blocks…
Problematic electronics in todays cars,computer for ignitions,computers for recognizing the key/keyless if one of those goes it also can be thousands in repair at the dealer as they need a special scanner to reset the computer,otherwise you cant get the car running..Years ago people would replace the ignition for cheap themselves and car was good as new!
A friend has a mechanic shop. He dabbles in buying vehicles for parts, has a wrecker so he can go get a ruined one of out the ditch and if it’s not very new, gets it cheap from the owner, whoever that may be after totaling one.
He recently sold a few cars for scrap and got nearly nothing. In his words “The cars these days have almost no steel on them, plastic panels everywhere, so they’re not worth anything at the recycler”.
Get a magnet and go down the side of a car or pickup these days. Mostly, it doesn’t stick. Entire door panels are plastic and the lower parts of a lot of cars are plastic. it doesn’t rust and doesn’t bend easily. not a permanent bend anyway.
… and don’t forget about the sales tax. It has doubled here in the last 20 years. In my area it is now 10%. And that’s a big hit on any car, new or used. It can only be offset if the car is traded in (at the same dealer) on a new one. No trade and you pay the whole thing. What a rip off. And what’s the future? In the next 20 years it goes to 20%? And the crazy thing is… voters approve the increase every time.
Cars are just stupid expensive these days. And affordable used cars are hard to find.
Another reason people aren’t buying cars is that quite frankly, they’re not fun anymore. V-8s, manual transmissions, and the like are disappearing, and too many carmakers seem to think that a vehicle is a little pod that you take to your destination. Might as well take the bus.
Hello Eric,
Nowhere did you factor in the cost of maintenance or repair of said vehicles. With compression pushing 16:1 on gas engines, a hiccup in the cam timing will frag a motor and replacement will be very expensive. Best thing the manufacturers can do now is place dzus fasteners at bell housing allowing for quick replacement.
Hi Dale,
You write:
“Nowhere did you factor in the cost of maintenance or repair of said vehicles”.
Eric wrote:
“Insurance costs have been skyrocketing because of the skyrocketing repair costs of today’s cars…”
Seems like he did.
Cheers,
Jeremy
That’s only for damage not normal wear and tear on the vehicle. So Dale is correct.
Hi Habla,
Well, I don’t see it that way. Dale did say “maintenance or repair”.
Cheers,
Jeremy
Insurance typically means an accident and I believe that is the context of Eric’s remarks. You can buy aftermarket repair insurance for drive-train to take effect after warranty period and with the complexity of today’s vehicles, that is up too. But my original comment was related to drive-train repair/maintenance. I thought I was clear, evidently not in all cases.
Hi Dale,
You’re right – thanks for bringing this up. And the problem is getting much worse – though this knowledge hasn’t yet percolated to the general public – because the massive increase in complexity over the past five or so years hasn’t yet been felt in terms of what will be catastrophically high repair costs. Some of these will be high enough to “total” an otherwise viable car. For example, replacing a $5,000 nine or ten or ten speed transmission in a twelve-year-old-car that’s worth maybe $10,000.
Wait.
Eric “For example, replacing a $5,000 nine or ten or ten speed transmission”
That is if you can even find the right one. Year to year changes on models are making almost all major parts year specific now.
And it is not just starting. Buddy just had his 1995 Blazer transmission explode. It is a single year unique transmission. Almost identical to others 1996+ that will bolt up but the electrical connectors are different on the 1995. I am sure it has not gotten better in the last 25 years.
Hi Eric,
Good to be back Eric. Many years ago I remember reading about a cream puff Corolla totaled on air bag deployment ONLY. At the college I am an instructor at, we are having trouble incentivizing our students to sink 2 1/2 years into a career path in automotive technology when area shops don’t want to offer more than minimum wage to a CTE Auto tech grad. Let’s see…college or shuffle fries across a counter for $15/hr. Wait to see where costs go when shops are forced to pay wages commiserate to experience needed to repair this new ubercars.
My wife’s 2011 Fusion will be up for replacement in a few years. Will be looking for an older Subaru with 100k on the clocks. Around here you can get super clean 2005 models for around $5k. Will be a cash purchase. My bigger problem is my truck will be about rusted away about the same time, and pickup truck prices are incredibly stupid right now. Unlike a lot of these ignorant mall running soccer mom city slickers I actually use my truck for what it was intended for.
All I want is a manual trans, a throaty V8, regular cab long bed, 4×4, a low geared limited slip axle, and enough springs to keep me from bottoming out when I put a sack of feed in the back. But that’s bad for the environment and a big stack of springs makes the truck ride too rough down the paved city roads for their delicate behinds. Because a pickup is suppose to ride like a damn Cadillac….
That super clean 2005 Subaru almost certainly needs new head gaskets, which is about a $3K repair.
Subaru’s are well known to have head gasket and if automatic ,very weak,problematic transmissions..
When electric cars will be all that’s available next decade (some say), prices now are already high on electric cars now, many won’t be able to afford them when they hit the market. Bikes will be an option. Mules could be used for getting around (hardy and long life) in small rural towns, not in cities since codes don’t allow farm animals except hens and rabbits. Will used trade in cars be resold and will gas stations be selling gasoline by then? Charging (electric) stations will later be in front of conveinence stores, what about hydrogen powered cars w/fuel cells?
This has been coming for a long time. In the 70’s we used to hear the talking heads all yapping about how to end “America’s love affair with the automobile”. They finally figured out how to do it. Regulate the cars to add new saaaafety features until it is unaffordable, make it conform to arbitrary fuel economy standards that cost $5 for every $1 saved on fuel, and now the EV’s will make sure that only the “elites” will be able to afford or drive cars. You can bet the armored SUV’s driven by our glorious leaders will always be available and affordable (to them since we get to pay for them).
I know they would love to see gasoline prices at European levels, but they can not do that without sparking a mass revolt. So they do the next best thing, require a car to have $12000 worth if turbos, 8-speed transmissions and so you can save a tiny fraction of that amount on gasoline. And of course, getting rid of the diesels was job #1.
The plan is actually brilliant as well as effective, unusual for a government program.
They will drive while we get to take the electric bus.
Mobility is freedom, we will have none of THAT in the Brave New World.
The U.S. needs to have good reliable public trans. in smaller cities. Europe has good trans. and some cities will be banning cars soon if not already in the E.U. Not everyone is able to ride bikes, golf carts aren’t allowed on streets, so these new cars had better be affordable. Motorcycle owners may protest and refuse to comply.
Some of us refuse to ride pubic transportation full of violent natives and turd world trash.
Communicable diseases, don’t forget those little things that were all but eradicated years ago before our countries very generous immigration policies.
And don’t forget that practically all “public transportation” vehicles are “gun-free” zones. We all know the heightened risks that means.
I live far enough in the boonies where that’s not here nor there for me LA. BUT, if I did have the opportunity to ride pubic transportation, I’d ride a bike, walk or hitch. I seem to always be near a smoker and that tears my allergies up, gives me a headache and just ain’t worth it.
I believe the only time I rode a bus was in college and they had their own service which was free. I’ve been on a train trip once, a school trip. The only problem then was my classmates who couldn’t shut up and their moms who were concerned if you moved the way they didn’t like, as in looking out the window and not commenting.
I have ridden a Greyhound once, when I was trucking. I sat behind the driver and we shot the shit the whole trip. Austin to Abilene took forever.
When I lose the ability to have a vehicle which I doubt I’ll live long enough to see in Texas, I’ll just make a deal with property owners and drive across their land to town. I’m sure we’ll all be able to accommodate each other. Then again, I might hitch a ride with my neighbors who have a nice, new helicopter. Probably the church will allow choppers in the parking lot. It’s next to grocery store and only a couple blocks from the liquor store.
If all else fails, I’ll get a buggy and a mule.
What the hell am I talking about? I’ll just use the county big rig. They won’t be able to stop that. If I need to go long distance I’ll catch a ride at the truck stop. Drivers don’t mind other drivers if they’re neat and clean and can STFU.
I rode the Greyhound bus to visit friends while in college. A trip that would be three hours by car took six because instead of taking the interstate the bus took all the back roads and stopped in all the small towns.
This is the failure of public transportation. Every proposal for high speed rail ignores the fact that it only really becomes high speed when it is run like an express line. Even the “high speed” Acela rarely gets up to the speed it is capable of because it makes too many stops along the way. Compared to air travel, which is much more point-to-point, it is much slower (although time spent at the station vs time at the airport makes up for much of the advantage air travel enjoys).
Of course the real issue is that moving people around isn’t very efficient anyway. We need a lot of space, especially Americans. We don’t generally like moving in enclosed areas, so we need windows or we get nausea. We need gentle starts and stops. We don’t like high-G turns. We need seats, isles, bathrooms, snack bars and entertainment. We complain about everything and file lawsuits.
Much easier to haul coal. Rocks never complain.
Sounds like my wife. “I wish you wouldn’t go so fast around that curve”. Ok, it’s marked 55 and I was doing about 58. What speed would you like to travel around it, 20 mph? So we can cause a big wreck since the curve is blind because of trees? I’m nauseous. Me, What’s new?
She needs the ladies room, I just need to stop and check out a tire or lean over into the bed and fiddle with some imaginary thing. She used to drive me crazy when she’d truck with me. I had places I knew I would stop on a route I had run many times. Those places where it’s easy and safe to pull a semi over, get out and stretch, do a walk-around bumping tires and checking lights and getting a drink out of the cooler. Even though there were no lights in sight……anywhere, she had a problem with pissing on the ground.
Can we stop for “name this tune”? Me, Sure, I don’t mind taking all day for a mere 250 miles.
See also: Nuclear power.
Local and state governments are going broke because of promised pension benefits many of them will struggle to pay in the future. They cannot print money like the Feds can, and thus the hunt for taxes. They love taxing cars and car usage because there are so many of them and the public has little recourse. Throw the bums out out of office and the next gaggle of bums is even worse. It will get more difficult to afford a new car as they add more and more electronics that can easily get clobbered in a crash. They aren’t cheap to replace. And with the “liberal-mobile” standards from Cally affecting all the carmakers, these machines will get even smaller and lighter, yet will cost as much or more. I figure by buying a good used car last year, I saved about 10-15K verses buying new. Maybe my loan costs are a bit higher, but my overall payment is much less than average. My last new car for myself was a 1973 Nova. Like most everything else…hi tech, healthcare, insurance, housing, etc…the many are paying to support the few who are not willing to give up their luxurious lifestyles, even in retirement.
Government employees are parasites. Leeches and maggots. They enjoy high salaries, lavish benefits, and generous pensions on the backs of people who have none of those things. Most do nothing that is of any use to anyone but themselves and the political class. They effectively comprise a ruling class feeding off the serfs.
Agreed, Jason –
And – arguably – the worst part is that many (I suspect) never even think of themselves this way. For example, the neighbor lady – a nice woman, as most people would define one – is employed as a server at the government school cafeteria. I was over at their house one day and listened to her complain that what she was being paid wasn’t enough.
Of course, the raise she wants – and the money she’s already receiving – comes out of the pockets of people who are forced to pay her. But then, she – and those like her – were raised to not think in such terms. To not think at all. To her, it’s just a job – like any other – and she is as entitled to get paid as much as she can get – even when the getting involves taking.
Because a lunch lady trading her labour to a private concern for money is a working useful part of the economy; and a lunch lady doing exactly the same thing but being paid by the government is a leech and a drain on society. Weird how that works.
We made our own lunches. I never met a lunch lady in my life, so why are they necessary?
Oh, gubmint is supposed to feed us too. Yeah, she’s a leech.
Amen, Dave –
The tragedy is people like her aren’t consciously evil- but their unconsciousness is what makes evil possible.
eric, I had a brief but informative job working for TASS, Texas Agricultural Statistical Survey, and I don’t know why it’s name is so because it’s part of the USDA.
I had a woman, living in a dam nice house, much better than mostly everyone else, tell me she thought the govt. didn’t “give” them enough.
You can identify the subsidy farmers just by seeing their house and barns and barns and hangars, from a distance. But she wasn’t getting enough from govt. She didn’t seem concerned I was driving the same year model pickup as their oldest one just sitting there among other newer ones and the new ones were out in the fields, owners checking on the hands…..driving the last pickup the owner drove.
8S, TASS was the old soviet news agency that dispensed propaganda according to soviet government rules. This agency probably performs a similar function. They just hope no one notices the similarity in name and function for these 2 “disparate” agencies.
joeallen, they basically perform the same function. They get all the info they can from farmers and then give it to Wall Street to make more money.
I knocked it off fairly quickly when somebody asked me what they did with the information. What they say they do and what they do are two different things once you go over everything you have gathered.
It wasn’t the first mistake I ever made.
A lunch lady working for a private company is paid via voluntary association with those who want her services, and through her employment creates wealth.
A lunch lady working for a gunvermin skrool is by proxy engaging in armed robbery against her neighbors, and forcibly siphoning wealth off from those who produce it.
Government and its employees do not create wealth. They produce nothing, instead stealing wealth produced by others via violence and coercion. There is no real difference between the way governments operate versus any other violent criminal gang.
Hi Jason,
Exactly; well-said. The problem is one of understanding – and awareness. The system in place is ingenious because it allows people to avoid dealing with the wet work of theft. My lunch lady neighbor doesn’t have to come over to my house with a gun and demand money. She just goes to work… and is paid by others who’ve done the wet work on her behalf. Since she doesn’t do the wet work she can avoid thinking about the wet work. And so, it’s just work – and she just wants to be paid.
Like anyone else.
Except, of course, it isn’t like that.
Things will get better when people remember that theft is a hideous thing, no matter who actually does it – and are repelled by the idea of it being done to benefit themselves.
It’s not armed robbery but I think it falls under racketeering. It’s the same thing that happens when you have a business and then have to pay for the mafia’s garbage disposal service regardless if you use it or not.
Government employees work the same way. They come up with all these government services that of course require employees.
So much of the conflict between people in the USA is generated because of all the calls for and creation of government ‘services’ for this that and the other thing.
Posted elsewhere but relevant here.
https://www.activistpost.com/2015/10/camping-on-your-own-land-is-now-illegal.html
Brent, don’t pay for it. Don’t pay taxes when you get the bill. The more formal letters sent by certified mail can simply be thrown away. Nothing will ever happen to you by armed thugs. We can have that inscribed on your tombstone.
NOBODY would pay most of their taxes or maybe any of their taxes if it weren’t for the threat of force and they won’t be bringing good will.
I partially agree with the article, but I personally know several retirees who worked the automotive industry. The benefits packages and retirement for these people is unbelievable. Ex. One friend worked at a GM plant and theu discontinued the model. He was out of a job except that he went to a building and played cards for 4 hours a day and got his full pay. He and his wife both retired from GM and are bringing in 12,000 pet month roughly. No wonder cars cost so much.
The “Jobs Bank”. A real issue back in the day.
As well as keeping those lines humming even without the demand to use that high $$$ labor.
Yep re: Healthcare and medical care. I can’t believe how much of my money goes there now. Before Obamacare, my premium was $100/payday ($2600/yr) It has TRIPLED to $7800/yr. Thankfully, it is *still* pre tax dollars! (That’s the next thing to go…) Meanwhile, my deductible has risen from essentially zero to $3000/yr. This adds up to $10,800/yr. To get to this level of $$, I need to make ~$14k of salary. Man, that $10+k would buy a lot of medical care on a cash-and-carry basis! (esp. since my family is all healthy)
There’s a decent used car right there! Even a brand new one after 3 years…
Hi Tom,
I have been – knock on wood – healthy so far and so have elected to skip buying health insurance, chiefly because it is unaffordable. As a single/self-employed guy my premium would be around $500 per month. That’s six grand a year – which is lunacy for a guy who (to date) hasn’t had to spend a penny on medical care.
I’d like to be able to occasionally go to the doctor for simple things like physicals – or to get stitches – but on a reasonable, fee-for-service basis, which has become effectively impossible.
Going to the doctor is worse than going to the DMV – and ten times as expensive.
I will just carry on and hope for the best. Being single – and without kids – I can indulge this. If I keel over, only my cats will notice! And they are welcome to consume my remains…
One of the reasons that other companies eat the big 3 lunch. These are called legacy costs, or the amount of money needed to service the labor contract. I remember it being said that the legacy costs for American car companies was something on the order of $5500 per car, Toyota was $1200. What does this mean. Two cars, same demographic and price point, Toyota can offer leather, high end stereo, custom car colors where American companies offers much less. There is a price to be paid when a line worker gets q pay package worth $150/hr to tighten 3 left pan bolts thanks to the Union. The employees also get to learn about “automation” and “off-shoring”.
Hi Dale,
Yes, that’s true – or rather was. At any rate, it’s less true now. GM went bankrupt and reorganized; the legacy costs were.. . “restructured.” Same with FCA (the Chrysler part).
But regardless, the industry as a whole is slowing down, sales-wise. I submit it’s because cars have become too expensive relative to what most people can afford to pay and what banks are willing and able to loan them.
Not that the numbers are a “deal killer”, but just made the “Use Tax”, or, it should be termed more properly, “Private Property, self-propelled (for me, even if I were using my feet like Fred Flinstone, LoL!), four-wheeled” TAX to the state of Cali(porn)ia…this will be the sixth payment, and it went UP, slightly, AGAIN…$236 for a 2014 Ford Focus. My truck’s fees are even HIGHER. And that’s just the “reg”.
As we move down-cycle in our economy, expect to see the number of shiny new cars on the road, as opposed to on a dealer’s lot, decrease significantly. There will still be folks who will buy them, but the purchase of a vehicle is going to become a far more considered thing. They may not be thinking of things like taxes and depreciation now, but they will when dollars are harder to come by.
Quick note on repair costs, especially relating to “bumpers”. In 2011 I bought a new Subaru Outback after my 98 Olds Intrigue dumped its transaxle. Fast forward one month and I had a ditzy blonde bumper tap my rear in a drive-thru. Bumper cover, Styrofoam inserts, several brackets and some paint later her insurance had to foot an almost $1300 bill. That was the beginning of getting fed up with new/modern vehicles and my pursuit of older ones. That car is up for sale now, and when it’s gone, as the evil man said, my training will be complete.
A Saturday at Pick-n-Pull to get a gear box for that Olds (as low as $69 on “half-price” weekends), another weekend to do the swap, and you’re “King of the Road” again!
I wish. That car had the “Autobahn” package. Special transaxle and control module. At that time (2011) there were zero of them listed by salvage yards. I waited for a while, but eventually I had to do something, which was that $#@% Subaru. Never again.
I don’t think that the American public is sophisticated enough to control their purchases because of property tax rates and insurance costs. They usually get hit with those after the sale. They “demand” high “fuel efficiency” and saaaaaaaaaafety. They want lower speed limits in their neighborhoods but will speed through everywhere else. The American public agrees that we should do more to stop pollution and protect the “envrionment” yet they get in a car just like the rest of us.
They bathe in hypocrisy.
All that said, they haven’t seemed bothered by high car prices as they finance the 10 year loans without complaint. I think an unspoken event is causing these cars not to be availabe: the country is going into a recession. Probably next year. Bet on it.
They probably want lower speed limits so they can walk down the middle of the lane with impunity. Seen that twice now, most recently yesterday evening, but the first time was on a road with a 55 limit and a retarded amount of blind zones. Last winter a bicyclist got hit in Anchorage because he was riding in the oncoming lane, without lights, on a dark, icy road, and blowing signals while he was at it.
Hit one of these idiots and if you’re speeding or doing anything else that the prosecution could use as an “I win button” then there’s probably going to be a lot of prison time waiting for you… but if you actually want to avoid hitting someone like that you’re either doing 15MPH over crests or relying on blind luck that there won’t be someone walking straight at you on the other side. I like to complain about bicyclists making me hug the center line around corners but some people are so suicidal that literally nothing you can do short of literally straddling the center line is going to help.
If you’re not giving the prosecution any free wins, then it will just get put down as a horrible tragedy, rather than a symptom of a much larger problem which is people believing that everyone but them should be responsible for their safety.
As I’ve said time and time again, the used car market is going to be a goldmine in the future. Let someone else take the hit on the car you want, and then get it at a better price and not as much useless electronics.
With that said, why get something boring when you can have something awesome for a similar price?
I almost bought a new car once, back in 78. Slimy salesman queered the deal. As you say, the old ones are better anyway.
Mom very nearly bought a new Forester to replace her 09 model. Everything was going well, until she asked “Is this your lowest price?”, which is when the salesmanager came back with a lower price — on a lower spec (different) Forester. And this was with me sitting with her – imagine what they would have taken her for if I weren’t there, and it was just a 80 year old widow doing the negotiating.
She ended up with a CR-V. The Honda dealer had one of those “dealer option” stickers on the window next to the Monroney with about $2000 in window tint, etc. on it. But it turned out she wanted all that stuff, so good enough.
Oh, that should be easy, just add a year for every 5 you still have left until retirement, and, barring any holidays, vacations, medical needs, household repairs, appliances, insurance, food, and taxes, that’s how many new cars you can buy before you die, provided the prices of everything never increase. Sounds realistic to me.
Oh, forget about burial after your deceased, though. They can just recycle you for fuel to run the power plants that will be re-charging everyone else’s EVs 24/7.
Soylent Green is people!!!
The property taxes here where I live are a big killer, $4.59 on the $100. I’m getting raked over the coals on my 2014 F150 and 2010 Wrangler. A friend of mine and his wife purchased a 2018 Suburban last year and the property tax on that is about $1,800 a year! So my plan is to put off purchasing any more new vehicles and hold on to what I have. What will happen is that localities NEVER reduce spending and because if enough people also decline new car purchases as well, then depreciation kicks in and less revenue comes in. Then locals governments WILL raise the tax rates to make up for “lost revenue” thereby reducing new purchases even further. It’s a no win situation for us working peons! Land of the free?? I don’t think so!
One state where I lived, Rhode Island, is even worse than that. It’s 6% of the value of the car annually in Providence, for example. It differs from city to city, but Providence is the worst.
VA, where I live, taxes cars at 4% of the book value. However they apply tiered discounts: If your car has a book value of $1000 or less, you get 100% relief. Then up to $20,000.00, 40% relief. No relief over $20k. Sooooo, buy a used car that doesn’t book over $20k. Or at least upon the 2nd year of your ownership. (I think you pay the first year up front, or when you pay the 5% sales tax a portion of that goes to the county, or some such.)
Hi Tom,
Yup – I’m also in Va. But they still hit me with a $75 tax on my almost 20 year-old truck each year. I know, $75 doesn’t sound like much. But it’s a month’s electric bill or Internet for me. And over the past 15 years, that annual bite amounts to at least $1,125 – at the current $75/annual bite. In reality. it’s closer to $1,500 because my truck was valued higher – and so taxed more – 15 years ago.
That’s on top of the annual $60 registration fee – which I just stopped paying.
So – rough math – about $3,000 to date in property taxes and registration fees. I could live on that for almost a fourth of the year, in terms of food/electric/cable and basic incidentals.
I’m weary. I work all the time – and at least half of the time I work to pay all these got-damned “fees.”
Once you realize how little you’d need to earn just to support yourself – as opposed to yourself plus a limitless horde of tax-feeders – you begin to grow angry.
Right there with you. Everyone in my pockets these days. Wife gets mad at me when I won’t donate to charity moochers outside of retail establishments. Flat out told her those “needy” people got their pound of flesh already. A couple times a week I see people who I know don’t work driving new or late model cars, while I work full time with a side gig and drive 20 year old beaters I have to work on myself. It’s to the point that every time my congress critter polls about spending I say increase it. The system needs to burn to the ground, better to happen on my watch than my kids’.