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As supply chain constraints, production, and chip manufacturing begin to improve…used car prices are beginning to drop, down 6.4% since the record high in January. This also marks the FOURTH consecutive month that auto prices have fallen…and, the FIRST month that sales declined 17%.
Even though this is certainly GOOD NEWS if you want to buy a car…it’s a NIGHTMARE for banks who have LENT MONEY on those cars, at a value that’s rapidly beginning to fall.
Right now, “investors are willing to bet that consumers will keep paying their loans in the near term” – because, after all, a car is an essential purchase that allows them to go to and from work, or be used as a way to make money…although, that might not necessarily continue.
A survey from Fannie Mae found that: “16% of consumers said they expected to lose their job in the next 12 months.” – and, THAT is generally the time where finances get tight, and people cut back on the items that might be costing them too much money…or, in this case, certain Auto Loans.
The WallStreetJournal even found that “more subprime borrowers have start missing payments” as rising prices force households to choose between paying for essentials and paying their monthly loans. NOW, the government is warning of a surge in CAR REPOS, and that “the problems could get much worse unless we stay ahead of it.”
The reality is – lenders have given potentially unaffordable loans to buyers, without verifying their finances, on cars with overinflated values that can’t be sustained without a chip shortage…and, it’s only a matter of time until – EVENTUALLY – things have to come back down and return to normal….after all, used cars can’t sell for more than NEW, FOREVER.
ON THE BRIGHT SIDE….logistically, don’t expect this to be ANYWHERE NEAR the size of the housing market collapse…because, loan sizes are SIGNIFICANTLY SMALLER, and it’s MUCH easier to repo and auction a car than it is to foreclose on a home.
In addition to that, most auto loans have a fixed interest rate…so, even though a buyer may owe WAY MORE than what the car is worth…as long as they can continue making that monthly payment…the solution is to simply hold on to the car longer than you expected, and keep driving it until – eventually – you break even.
The best strategy, in this case…is to simply recognize that 40% year-over-year price appreciation is by no means normal, or to be expected…and, if you find yourself with a loan that MIGHT not be affordable….NOW would be a good time to either lower your interest rate, or drive something in a more affordable price point to save the extra money.
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My buddy just made another great video on this topic that you can watch here, lets see if we can get him to 100k subs! He’s only <200 away! https://www.youtube.com/c/AutomotiveLifeTV
read up on noni loans, that totally doesnt sound like ninja loans, totally /S
Why do so many YouTubers have high-pitched effeminate voices like Linus and Graham?
But the car market bubble hasn’t popped.. this is nothing more than click bait garbage.
@James Stewart check the lucky lopez video. basically there are thousands of repos just in vegas, but they auction off only 100 cars a week. and the car repo companies are buying more and more land because its going to get much much worse
@Stanley Kubick³ Effeminate? Graham’s voice is not effeminate just because it’s not deep-pitched. Not all guys need to sing bass or baritone. The world needs tenors too. (Not just in music but in life.) My husband has a tenor tone to his voice like Graham. I prefer it.
can’t wait for you to post a video saying the opposite to farm views
honesty is something you’d never comprehend.
Repent of your sins and turn to God. Know that God and the Son is one and the same. The only way to the Father is Through Faith in the Son! Have Faith in Jesus Christ! The Kingdom of Heaven is here now!!!!
Thank you
I’ve been watching the car market like a hawk
They want to forgive all student loans, they bail out bank mistakes, how about they bail out bad car loans where the dealership blatantly price gauged you
Great advice thanks
My business is dealer recon. Business is booming. Big time.
This is one of the reasons I just sold my new truck for more than I paid for it last year. The market absolutely can’t sustain that rate, especially once manufacturers begin catching up with production. I’ll take the profit and drive something cheaper in the meantime.
Would be less of an issue if the US wasn’t so terrible at public transit.
How can I short this
12-18 months until used car prices drop 20-30% but my car just broke down.. I have to buy a car next week 😭😭😭😭
shameless ad considering the video lmao
I blame the rise of prices, on the sneaker reselling market lol
These chips are also outdated. They really just need to get up to date and run off just a few chips.
First Graham Stephan’s video I’ve watched. Does he always over-gesture? Very distracting.
Without repos used car prices won’t come back down. New car prices are going up to meet used prices and with manufacturers seeing demand is not related to inventory cash back incentives have gone away. I have been in the car business for over 25 years and have little faith prices will come down I believe new and used prices will stabilize at these higher prices.
Although car loans at dealerships are easy to get, I can attest that loans for a Tesla are not easy to get.
HEY! Don’t you dare sell that car! It’s a legendary item.
Great video and perfect timing. Subscribed!
What about dealerships that are fully stocked with used vehicles at prices close to new.
You mean nobody is buying Ford F-250s at 70k anymore?
Sold my 2yr old BMW X1, after driving it for 2yrs and 30K miles, for $6K more than I paid for it lol. No way I was gonna pass that up. I have an older Lexus RX330 and 2008 BMW 325i, I’ll drive those for now and buy something in a year or two, when prices come back down to normal. I don’t drive enough to worry about a newer car. Way cheaper for people to repair a car , than to buy a new or used one now.
I don’t understand people having their cars repo’ed, when you can sell a car to Carvana etc, for probably more than you owe. How can you be underwater on something that has gained a lot of value in the last few years?
But but will the housing market drop next? 😁
More stolen vehicles and carjacking will definitely be on the rise.
Time for me to finally get my Wrangler!!
Good
I really start to hate the way video title is misleading.
Wtf is wrong with people. As soon as credit becomes cheap they starting maxing it out on stuff they can’t afford. No wonder everything is so overpriced, people playing with monopoly money.
Wow was considering selling my car wasn’t sure if the bubble was gonna burst anytime soon. I’ll definitely be selling now and waiting it out
I bought a toyota carolla 2018 for 15K 2nd hand and gave them hard cash. The bank did try to persuade me to take a loan instead but I am like nah I hate interest with a passion.
Let’s not forget that the biggest payouts in the markets don’t come from great performances but rather it’s great promotions. Stay invested, diversification for streams of incomes is very important And with the right skills and proper understanding of how the market works.
Starting early is the best way of getting ahead to build wealth, investing remains a priority. I learnt from my last year’s experience, i am able to build a suitable life because I invested early ahead this time.
@Jason Watkins You are right, to be a successful person in life require him or her of hard work and time
Finally I will be able to afford a car now
My car has close to 100000 and only loss about 4000 less than I laid for it. I can still get over $3000 after trade in.
Steph! I bought BBI stock! Up 15% so far! Will run up! Biotech is the only big thing in this market! 🚀🚀🚀🌙🌙🌙
Both of my cars are paid for…..nah nah boo boo!
So what I’m hearing is car prices are going to drop soon 👀
I sold my friends car in 2021 for a $200 profit after she had driven it for 12 years 😂
I’m not sorry ,I gotta get that mint 95’ firebird ,at 10 grand I have to to do it
Lemme just ask this.. is a 7% apy for my first time buying a car bad?! I feel stupid now buying my car.
Don’t write scam, or bot. Look @ age of these accounts!
Omaze is a scam
PLEASE STOP MOVING YOUR HANDS SO MUCH in front of the camera, it is extremely distracting!
Can we also talk about how unfinancially responsible it is to purchase a new cell phone @ $1000 when in THREE months it will only be worth $300 and will most likely not work or be traded in 1-3 yrs
Js
Not a problem. Car prices are ridiculous!
I am just waiting for price to drop to get a car. I knew these In floated prices weren’t worth it.
The Transmission on that towed corvette is toast.
I been wanting a Tesla for years because it was about 40k. Now it is like 80k. The car used costs more than it does new which makes no fucking sense.
The title was borderline a clickbait but lets just say its in the grey-area 😂
Omaze is a bad company, Graham. Truly, you should stop working with them.
Not trying to get between you and your check, but something to think about.
Still been driving the same truck since 2007. Maybe if people did the proper maintenance they wouldn’t have to keep “upgrading” their vehicles.
Just popped or is about to?
And they are not going down never!!
PLEASE STOP with the hands. Good info, good advice, but the hands cause me to shut you off early, or skip over you completely. My opinion ——– Don
oops, generally it helps retention :/
The dealership I work at doesn’t see the same volume of sub-prime/bad credit customers it once did when I started in 2019. 2020 we still saw some of that, but at some point in 2021 the average customer demographic changed. Most co-signer deals these days are for younger buyers getting help via their parents. Otherwise it is mostly people with great credit. Plus, to echo other comments, we pre-sell most of the inventory, so the supply is still much lower than the current demand. These things take lots of time to unravel.
Thank you, I refinanced to vehicles end of April and last month. The value of one vehicle was higher than the outstanding balance (which included a trade in.)
I’ve been telling people around me your car is at high value re-fi or even sell you can survive without. Knowing they don’t know or care what I’m talking about.
With the high possibility of repos flooding the market it’s good to know, I’m much better positioned. Especially if I spy a great auto at low value down the road so to speak.
In a few months or no time people will definitely be kicking themselves regret for missing the opportunity to buy or invest in forex/cryptocurrency and Bitcoin trade.
expert Mr Alex Donaldson have brought me out of wrenches and to be a better living through trading options i encourage newbies to trade with him.
he is really good in his trading.
when someone is straight forward and good at what he does people will always speak for them for me i would say expert Mr Alex Donaldson for financial institutions he would make you happy.
here in Canada expert Mr Alex Donaldson, Carrie’s out both orientation and mentorship potential.
can I start with $20,000? I’m a newbie and I want to see how it works?
Blame the banks for taking on loans when they knew very well the vehicle was sold for a super inflated price. Of course, the consumer pays the price in the end. Banks and dealers deserve any ramification that comes there way.
How can a used vehicle cost more than a new one!
My 2016 Toyota RAV4 Limited… I sold it for $25,400. It had 24,605 miles in it. Shocking. I paid cash for a new car! Yes it was a step down in cars but still I bought a new car. Mark-up was very small at least. I wanted a diff car but that car was $4k over what the website said so I said no.
The dealerships don’t even care about loyalty. They jacked up prices and didn’t negotiate even if you bought several cars from them in the past. Ya know they serviced all my cars too?? Dude missed out on a cash sale. The sad part? He sold us a car last August at MSRP. This year he didn’t give crap if I bought another one.
ooh my good thank goodness
i was out shopping for my first car at a used car lot and you couldnt get ANYTHING below 100k miles for less than 10k
its fucking insane
Wait my comment had a thing about a prize I won and I haven’t a clue what happen to that or the comment I posted under it looking for the prize instructions. I can’t find the instructions nor the comments now?? Help please
Curious where these dealers that have no new inventory are.
Just drove from Tennessee to Florida last week
Tons of dealerships with a bunch of new cars
Chevy dealer in destin Florida had at least ten new corvettes btw, the ford dealership down the street had tons of new trucks
Dealerships in Tennessee have tons of new cars that I’ve seen on the lot for months
What problem.. LOL
I couldn’t afford a new car so I bought a new motorcycle instead
If consumers are in this day of information at your finger tips still foolish enough to sign a car loan that haunts them later then too bad for said fool consumers
Can you talk about making money again during a recession like how to use a trust fund or MPI.
…I ENJOY SEEING THOSE BIG TRUCKS WITH BIG TIRES AND A TEEN AGE GOOF-BALL WITHOUT A JOB SPEEDING DOWN THE ROAD! ….IN DEBT UP TO HIS EYEBALLS AND A BABY DADDY AT 18!
Meh! Water is wet.
You talk too much bro, get to the point …
@graham I’ll buy ur Ford GT
Talk about a used car salesmen. What you say has some merit, but HOW you say it? There is a level of privilege exercised here?. Glad for you. It must be nice
your voice makes me wanna stab ice picks in my ears to make it stop.
But rates are up
My car just died for good. Can’t afford a new car or a used car. Hopefully car prices drop fast.
The nice thing about owning a dealership, is that most people 90% finance cars they can’t afford just like everything else. People let themselves be sized up into debt by dealers and mortgage banks, then they trade their car like its a cell phone, and its a win win twice for the dealer ship once of the trade in and 2nd on the sale or lease… so people keep getting the things you want and not the things you need. You will be a slave to the bank and your employer for the rest of your life, and never open up a business so you never get the same tax advantages as business do… muhahahahaha…..
Glad I’ve been driving the same 93 cherokee thats paid off and gives me absolutely zero issues
My guy moves his arms more than anyone I’ve ever seen
can u not move your hands every half second? its kinda annoying.
I love that Dave made an appearance.
bought an 18 GTI for 26k in September and put 15k miles on it.
i sold it last month to carvana for 27k
No matter what happens to the car market, I will still continue to use my ever-dependable 2010 Toyota matrix. It has served me well and safely thru harsh Canadian winters. Never felt the urge to buy a new one, think it is an advantage to be not a gear-head or car enthusiast . . . .
Yep holding on to my 2000 Toyota Tundra with 150k miles with freezing cold air conditioning and runs strong
I just learn how to fix my vehicle by working on it and watching YouTube videos and going on forums. Talking to other owners of the same vehicle who’ve already done the work so they usually have some good tips.
Also most people can perform an oil change themselves and if you invest in a couple things for oil changes it pays for itself over time.
The only issue with working on my own vehicle(and apparently professional mechanics too)is dealing with crappy or incompatible parts.
That plaid exterior looks awful. Interior is 🥰 tho
I have a feeling the higher ups don’t want us driving gasoline vehicles….
Let it fucking die, im a car enthusiast with 20 grand and a dream and papas tryna get a discount
What about the effect of gas price increase on cars? Has that reduced demand for gas cars, bringing down the price of used cars too?
Lmaooo so the 2008 mortgage crisis but now with cars?
Remember kids….that APR is YEARLY for the life of the loan. So the longer the loan the more you pay.
You may pay 4K for every 10k you borrow.
👍🏻
Well, the idea is to put taxes into PT (Public Transportation), which can be anything (trains, trams, eBuses, eCars, etc.)! Just saying it will be much cheaper than buying a car…
People are stupid, that explains most things
Why you need a car loan be smart and don’t get in debt
I could use a newer truck…I’m not buying just out of principle.
Please don’t scratch my future car thank you 😊
Saw a Dave Ramsey video today. A guy wanted to buy two new Subarus. Because they offered him ” a deal ” on TWO cars. LMFAO
To whoever reading this , never stop chasing your dreams you can do it . Keep pressing and thriving you will make it ! Consistency is the key to achieve your goals.
Investment is the quickest way to acquiring wealth
I have seen a lot of positive comments about Mrs Gabriella on top comments of some YouTube videos
I’m a money magnet , money flows to me , I will be a millionaire soon
absolutely 💯
I recently got into forex trading and I’m already marvelling over the profits am making I’m like ” how the hell have I been sleeping on this
Last year a teen rear ended me at a stoplight and totaled my 2013 equinox that had been paid off for years. ( did not even have 100k miles on it 😭 bought it new) I’ve been holding on to the insurance pay out as all cars new and used overpriced. It was our third vehicle and we’ve made it work with our van and older truck. But we need a third car gas efficient for commuting but I’ll hold out till prices fall. Hopefully within the next year.
I own my car. It has about 20600 miles.