It doesn’t take too hard a look to realize the automotive industry in the United States is in a bit of a weird place. Not only are product plans and regulations seemingly in a state of constant flux, but the price of a new car has never been harder to swallow. In fact, according to a new report from the Consumer Federation of America, U.S. buyers currently owe more than $1.66 trillion in auto-related debts.
The auto debt situation is nothing new, as Americans on the whole are generally dependent on vehicles that are too expensive for most people to buy outright. Combine that with the fact that the average prices of both new and used cars are higher than they’ve ever been, and it’s no surprise people are forced into borrowing large sums. That said, this recent report points out some concerning trends.
According to the report, the average car payment in the States is now around $745, with average loan amounts totaling over $41,000; nearly 20 percent of buyers have found themselves with payments of more than $1000 a month. Loan terms are also creeping back to rates similar to those before the Great Recession, with one in five buyers stretched out on a seven-year term. We’ve even seen the return of the eight-year loan, which all but disappeared following the sub-prime lending crisis.
Speaking of the Great Recession, auto buyers are also defaulting in their payments in ways we haven’t seen since 2008. Delinquencies on payments are almost on par with pre-crisis figures, and have dramatically outpaced the rates experienced during COVID. An analysis of the New York Fed’s consumer credit panel found that buyers in 2024 with an above-average credit score (620-679) were twice as likely to fall behind on payments than they were prior to the pandemic. That’s particularly true of buyers aged 18-29, who, according to the report, are falling into serious delinquency (90 days late or longer) more than older generations. Repossessions were also up 43 percent from 2022 to 2024, representing the highest rates since 2009.
Things aren’t much better on the used car side of things. Prices were up 6.3 percent year-over-year as of June, continuing the trend started during the supply constraints of the pandemic. Furthermore, one-in-four trade-in vehicles have negative equity attached, meaning that people are upside down on a large portion of the cars on sale today.
About six months ago I went to go look at a 2025 Ranger XLT. Ive never owned a new vehicle before, and I was mostly willing to bite the bullet and just get a new vehicle. Ill be getting my Master Plumbing license soon and need something I can work out of. Since Im just starting out, I dont need something large, hence the mid size.
2025 Ranger XLT with 11 miles on it was 42k, plus a fucking 8K dealer markup.
Fifty fucking thousand dollars for a ‘mid sized’ pickup. After factoring in financing, it would have been about 55-56k. I did not buy it. Instead I got a used 2022 Ranger with 40k miles on it for less than half the price. Im making payments on it thru my credit onion, 350 a month. Ill likely never buy a new vehicle if thats how they all are now.
Someone who actually does “need it for work” and they’re a
poster, hell yeah.
Also
heh
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Congratulations btw!
Thank you!
18,000 hours (9 yrs of 40 hours weekly, 51 weeks a year) on the job and a couple hundred hours on continuing ed. It’s about time.
I was curious, and it looks about the same for their vans (not that I know how practical they would be for someone - I’m a dumb email job guy), too. They killed off the smaller Transit Connect, and the full size van costs compare to the Ranger you mention.
The shop I’m at right now I have three trucks I rotate out depending on what I’m doing. A transit 250 van for smaller service stuff, a transit 350 HD with a traditional styled bed but boxes on all sides for utility and dirt work, and a Chevy Express 1 ton for when it’s raining,or I’m running copper or threading iron pipe, or I have things left over from a job I need to keep prying eyes off of. I carry joints of copper pipe (joint is 20 foot) of varying size, 1" up to 6 or even 8 in sometimes. 20 foot of 6" copper runs about 1,100 USD so it’s a very high theft high profit item.
I like the transit connect but it’s just a bit too small, and the transit vans in my area have too much of a markup even at the fleet sales places. They’re in demand here, and the price shows. A truck was the affordable, maneuverable but not so small I can’t carry anything compromise.
It’s what it is, I can schedule delivery of materials for big jobs and my truck will hold all the smaller service items like shower valves, cartridges n whatnot.