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THE CAR MARKET BUBBLE: Thanks to @CarEdge and @LuckyLopez777
The website CarGurus found that prices are down almost 1% in the last 30 days. The biggest decline came from none other than Tesla, with prices now 33% less than they were a year ago. It’s also worth noting that – year over year – crossovers are down 6.3%, hatchbacks are down 9.14%, Wagons are down 9.79% and vans are down more than 10%.
THE CAR DEALERSHIP PROBLEM:
Because Auto Dealerships buy cars on loans, rising interest rates are causing their inventory to become significantly more expensive to hold than it was in the past. As a result, many of them are making much less money than before and very motivated to sell.
THE AUTO LOAN BUBBLE:
Many banks and lenders issued loans on cars that were selling much higher than they ever should’ve been, simply because demand was high, inventory was low, and money was cheap. But today, buyers are underwater by an average of $6000 when they trade it in – meaning, they owe $6000 more on the car than the car is worth.
CAR REPOS ARE INCREASING:
Bloomberg just recently reported that “Car Owners are Falling Behind on Payments at Highest Rate on Record.” According to Fitch Ratings, “The percent of subprime auto borrowers at least 60 days past due on their loans rose to 6.11% in September, the highest in data going back to 1994.”
BANKS ARE PREPARING FOR DEFAULTS:
Banks are now a lot more cautious about who they lend money to – this means that getting an auto loan is much more difficult today than it was a year ago. Auto Loan rejections are also occurring at the highest rate in 10 years, with banks now writing off some of their loans as complete losses.
According to CNN, “analysts predict that auto loan delinquencies will continue to rise into 2024 and peak at about 10% before they start to fall.” The bad news, however, is that car prices are still 33% more expensive than they were, prior to the pandemic – it’s unclear if prices will fall below that level anytime soon.
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Here is a link containing the source material for each piece of research cited. I do my best to make my videos as accurate as I can, and the additional resources should help anyone who wants to look into them further – enjoy! https://docs.google.com/spreadsheets/d/1ZqGTRoT6bJquL-yzKL9W-smQL4416zmKz5lHFT0Rjbw/edit?usp=sharing
Why are you saying whats up graham its guys here?
Did you dye your hair ?
Thanks for the sources!
What do you think about buying good and silver?
I do have to ask, do you plan on selling the GT?
What’s up graham it’s guys here 😂
Part of the price problem with cars is not just the chips and interest rates but the decision to start pushing electric cars and get away from building highly fuel efficient sedans. My 1995 Saturn SL got 47mpg on the highway and about 37mpg around the city. That car is nearly 30 years old! So, why is the push for electric??? Now, you can only get a Malibu from Chevy and Ford has no sedans. The closest thing you can get is an expensive suv which also is no where near as fuel efficient.
Bought my vehicle before the pandemic and paid 7K. The same model right now with similar specs is going for an extra 4K.
Im very close to defaulting on my truck. Went and found a higher paying job to compensate but everything else increasing gobbled up my extra income. Times are tough.
Finally!
People keep talking about the housing bubble causing the economy to crash but really it’s going to be the auto sector with ABS and collateralized loans
So I sell cars at a Honda dealership in Cali. Lemme say everything Graham said but in short: We still don’t have new cars so it’s MSRP or bust, or you can wait and see and hopefully we get more cars to lower prices. Your rates are based on your credit so if you have bad credit, guess what? High rate. Good credit, low rate. Simple. Don’t get jipped by knowing your budget and and go to a trusted dealer.
good im trying buy a 2020 for 20$
Question what about cheap used car sale such as myself? I like selling anything under 5k my target price is 3500$
I’ve liked and subscribed, so tell me Graham… how do I get rich?
Good Ill be able to get a new truck for way less.
Soooo good time to buy a car or no? 😂😂
What’s up Graham, it’s guys here lol
I’m a semi truck driver I listen to nothing but doom and gloom headlines. But I’ll ride into California and see dozens upon dozens of $90,000 Ford F250s hauling $50,000 campers as they pay $7/gallon for diesel. And I’m just looking at these people when all of the wages pay $40k/year like, “how in tf is your existence mathematically possible?”
“What’s up Graham, It’s guys here”
My first vehicle was a 1975 Chevy K10 that I bought for $1500 the year was 2015. It ran but needed a carb rebuild. So I got on YouTube watched a video and learned how to work on it. Fast forward to today and I’ve now bought and sold multiple older vehicles since then and never ever spent more than 5k on a vehicle, never had a car note, and never gone without a dependable daily driver. I don’t feel sorry for anyone who falls into the trap of financing a car because the information needed to keep an old cheap car on the road is readily accessible right here on YouTube for anyone willing to look for it.
My favorite make and model of car are the ones for sale from $0-$300. It’s been several years since these cars have been readily available. Hopefully there will be more in my price range soon.
if a car sits on your lot for 180 days you have to pay the balance of that car essentially losing your profit if its on the floor line that long.
The opening
7:45 😅 $35k average transaction of new car in 2017
Should say “For middle America and below… “ Classic cars and exotics in the $200k range continue to hold value and increase respectively as people move liquid assets into tangible goods “just in case.” I can only imagine how much a Grand National GNX will go for in 2035 with so many electric car only proclimations.
I still see a seller’s market. Waiting the turn for so long and I have to take the bus. Now, I just love the bus ride. Even with Uber for grocery shopping, still way cheaper than car and insurance together.
“What’s up Graham, it’s guys here.”😂😂😂
LUL no ones gonna talk about the switched up intro?!
His head is too big for his body, once you notice it you will never forget
One of the really big factors when purchasing a vehicle that people overlook is insurance! The biggest excuse for rate hikes is “inflation” from insurance agencies. This becomes a huge problem when all you’re paying attention to is the car payment amount per month. Suddenly your insurance hikes your payment and you start to understand you can’t actually afford that vehicle.
I remember paying 150 for full coverage 10 yrs ago. Now it’s 220 smh….
And then there’s registration….
@@juansantana7041I pay 275 a month for three vehicles under full coverage and I’m in Michigan which has a high rate for car insurance
Graham about to get sue by Ford for bringing down the value of Ford gt.
Screw Tesla for dropping prices and making my Tesla worthless now.
It was so cool to have you greet me directly in the beginning of the video, never had that happen before 😂
I’m 2018 I bought a used Jeep renegade with an monthly payment of $340. I thought I may have made a mistake. Now I’m pleasantly surprised and happy that I bought a car before all the nonsense now.
Never ever finance or less a car. You’re paying interest every month on an asset that decreases in value with every mile you drive.
Loved the video and the info. Thanks! Also, there is another very important factor, especially for younger millennials; student loan payments just started up again two months ago. So now families are really feeling the burden of the extra loss of income per month. Especially in families where both parents have student loans. During the pause they got used to having extra money to pump into the economy through their day to day lives and many bought cars with that extra income. Now, they’re feeling the pain. We will see less people able to buy cars and other things that stimulate the economy in the very near future. We can expect more big companies to make less profits, cut more jobs, cut corners, and raise prices even more than they are already have.
and lo the cycle shall repeat, because the people in power are too corrupted by big business lobbyists to regulate the systems that perpetuate the problem.
Yay! he said It! I know its gonna be a good video when “Guys” introduces himself.
Purchased a 2014 Silverado LT 4×4 in May of 2020 for $21k. I’ve put 30k more miles on it and it’s 3.5 years older now and I could still get more than what I paid for it in 2020. Insane!
He always says a market pops or bursts and it never does 🤮
Lots of hellcat owners are shaking in their boots
My car’s only expenses are gas and 20 old parts failing for the first time needing replaced.
time to buy that mustang I was looking for!
I’m happy it’s about to pop. A mortgage on a car is crazy af.
I knew the auto market was messed up when they told me they wouldn’t budge on the price for a BASELINE Honda Civic for $33k because “someone” would buy it 🙄😒
gg
Great video!!! What kind of damage to your credit score when a repo occurs?
Great video, Graham, but kind of hard to take. The cars are a depreciating value bit with that Ford GT behind you the whole time🤣
My ‘18 civic type R is still holding its value STRONG. Glad I bought the best possible car I was able to a few years ago when all the money was flowing. Any other car would’ve lost thousands more value by now. This car only depreciates like 2k a year which is nothing considering it makes me income.
Really? Where??
@GrahamStephan I would appreciate a review on the new Acorns Mighty Oak Card. Please and thank you! Love and trust your opinion.
which is the last analog car?
What’s up graham it’s guys 🤣
This is why I am glad I bought my car when I did. It’d have been so much more expensive. Paid $7k for a car that I see worse cars selling for $10k or more. lmao
lol. If your car payment is exceeding your rent, you bought the wrong car and you’re dumb.
All I want is a new car that’s 350$ a month with 300 for insurance
how many times did you practice that intro 🤨
Thank God. Now all of us car guys can start paying reasonable prices for cars we’ve known aren’t worth it for the last couple years.
All I could think about when I saw this title was “It” (the clown) going “pop pop pop.” Thanks for helping me relive my childhood trauma lmao
whats up graham its guys here ….. buddy needs more coffee in his life
still disgusted by the $100K rav4, ridiclous
have not!!! a dang corolla is still 8000% higher than it was in like 2019..
Let’s go Brandon
I don’t think it’s all about pricing though. Used Cars selling for more- I believe the reason is because every single new car I know about is inferior to it’s predecessor. Touch screens, mandatory internet/software update, subscription options, lower quality with designed to break components, plastic everything (in the engine!) and the anti-repair practices that make it hard to work on newer Cars. There’s SO many reasons that new cars are terrible- they also all look the same other than maybe Color- but even then it’s all greys, black, whites and browns everywhere… I’ll stick with my pre-2010 vehicles and even many of those are crappy. The 80s partiall but really the 90s were the Golden Years- perfect mix of mechanical/digital so that many Vehicles are easy to fix, last forever and are a lot of fun to drive- real manual transmissions still existed. I really hate EVs as well but hybrids are a different beast- I think they’re the ideal solution
That’s why I hate everything new, soooo many reasons. I get why New Vehicles cost more, they’re all junk.
Yay it needs to pop.
There is a big market for affordable reliable vehicles that are good on gas mileage
Build a simple car with less computer bullshit
Not me still holding my 2008 Honda patiently waiting for my moment to strike
It’s crazy how many people sign away on the dotted line for $70k plus vehicle that they are in no position to. Look I make good money for where I live. Just my job I make close to $90k a yr. I own old vehicles a 93 mustang (project) 93 ranger (another project) 96 ram w/cummins (work horse) and my 08 jeep grand Cherokee (daily) all together I pay $120 for insurance no payments. Yes I have higher up keep but still way less than any payments. I own an affordable house too. I’m able to do more than most of my friends when it comes to going on vacations, outings, dining out all with having a family. Plus no student loans. I’ve position my career so I’m in a safer position when it comes to losing it in most markets. And before I’m accused of mommy and daddy money believe me there was no money. I learned very fast that I had to make my own path.
Epic click bait! 😮
“In the face of higher unemployment” recently??? Have you liked at ANY data about that?
Times are hard, but it’s not because of high unemployment.
In Lithuania (EU) you are not allowed to walk away from any type of loans. They will take your car or house away and you still have to pay the rest of the your dept.
Hey Graham , did you refund any of those you screwed over with FTX????
Let them fail, no bailouts
I really wanted to watch this, but your constant arm and hand motion was very distracting.
Buy cash, never buy anything made after 2010, do regular maintenance , and your vehicle will last, my 08 Civic SI has 200k mi, same clutch for 100k mi, only replaced starter , and cv axles, do regular tune ups , I’m not going to sell it , I’m about to buy a spare engine and transmission parts.
As a car salesman…it’s worse than you could ever imagine, every single person I’ve talked too is BURIED in their car loan.
2:10 just one correction, automotive manufacturers didn’t get starved out of chips by other companies. Rather, it was a problem of their own making. For a little background, when you are a large purchaser, you typically order chip a year or two out to give the chip manufacturers time to adjust production capacity. In early 2020 the automotive manufacturers figured there would be a sharp reduction in the number of cars purchased, and immediately cut their chip orders for the following year. However, at the end of the year they turned around and tried to buy all they could, even though they had not provided the typical lead times needed. This essentially meant that their demand doubled in a period where they had previously told chip manufacturers they weren’t going to be buying any chips, and as a result the chip stocks for common popcorn parts quickly ran out, sparking a massive shortage until chip manufacturers could catch back up.
Great content
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Really be going to far with the click bait
Now is still a terrible time to buy a car keep holding on to your cars people. A pickup truck should cost $30,000 at most. If people stop falling victim to bad deals the economy will change for the better
The auto market bubble may have popped but the delusional sellers still holding on to the bubble. 😂
Graham, you always look so constipated or sad in ALL of your YouTube pictures.
How many times over the last 15 months have I seen THIS video. DRTC
I got a car for 24k on last year on March and now it’s worth around 19k. I should’ve just kept the cash I put for down payment and gotten something cash with today’s market.
What’s up Graham it’s guys here … 😂
What’s up Graham it’s guys here. LOL. That’s what happens when you talk so fast and have a lot of stuff on your mind.
Gram: “cars do not go up in value over time”
the ford gt behind him: 😢
“What’s up Graham, it’s guys here”. Is this your new intro, going forward? 😛
My health insurance is more expensive than my HOUSE payment, and I’m not even 60 yet. It’s basically catastrophic insurance too, and doesn’t pay out till I exhaust close to 10k out of pocket.
“What’s up Graham, it’s guys here!” 😂
All of that is very true! As head of finance for a bank, we are seeing a drastic, concerning increase in charge offs and repos. We just increased credit score requirements for loans too.
Shout out to my boy elon 🙌🏾
Great coffee! Interesting video!! Thank you!!
I know people that were paying $150k for a plaid… now you can buy them new for like 90k .. imagine the money they have lost after driving it for a year.
lol. Did anyone else catch the “whats up Grahm.. its guys here”. Dont fix it. Keep it real.
Anyone else hear the flipped intro😂
“Whats up graham its guys here”
Personally my favorite YouTuber, always authentic and it shows!
“What’s up Graham, it’s guys here” lmaoooo
While I do agree with almost everything, don’t vilify Tesla too much about adjusting production to maintain favorable pricing – that happens in commodity markets. Also, it’s perfectly legal (and nothing wrong with it either), however can be an obvious issue if found to do this with a competitor to substantially affect the price (collusion).
Please note – not a fan of Tesla (including Elon), and very much not trying to defend them. Just wanted to clear it up a little bit for the supply/pricing issue (3:00 starts it in this video)
I don’t understand how anyone making less than 100k a year can afford a $1000+ car payment on top of insurance🤯