My theory: people have less money.

More people are falling farther behind.

Stay on top of rents. Do NOT let them fall behind. Car loans are seeing more defaults. We are too.

-Brad

Today' news:

"Experian, a data analysis company that helps lenders manage risk, issued a report Wednesday showing that the percentage of auto borrowers who are at least 30 days behind rose 3.7% between July and the end of September from the year earlier period.

Those who are 60 days or more behind jumped 8.6% from a year earlier."

>>So far was never able to buy a new vehicle. Right not driving a 2007 Ranger. New cars and trucks are lasting longer so it is not uncommon where there is 700,000 to 800,000 kilometers on the odometer and some have made to million kilometers<<

I have two daily drivers I alternate between; a 28 year old BMW and an 18 year old Lexus. Perhaps I'm extreme, but both of these cars are solid reliable drivers and if either one of them gets totaled, it's not a financial disaster as I can easily put together $ 2000 or $ 3000 to get another. The tenants have far less resources than I do and thus more reasons to do what I do. I dare say that that if more thought that way, they'd save themselves much grief. Unfortunately, advertising shapes behavior and I suspect that tenants spend far more time watching TV getting programmed to buy than I do.

Not surprising, the buy here pay here car lots are changing the business and need a few defaults to make money.

If you break those numbers down I bet almost 100% of the increase/defaults are from those kind of loans, and not say GM's 0% interest for 60 month specials they always run.

Funny - I just spent an hour at Ford looking at new cars. $57,000 to replace my truck plus $5,000 tax! $62,000!

Yeah, I can't believe vehicles cost more than houses in some areas. It's crazy.

99 Toyota, 293,000

I'm actually planning on putting my 1982 back on the road.

I really don't have the time to drive a normal car. It is a shame the more people don't take the route of buying a simple car.

We have written about people moving into the cities and avoiding car ownership altogether, and that is why I mention the cars above.

I wonder if it is fruitless to try to buy rentals homes that are on bus routes etc. Will expensive cars always be available to the lowest wage earners?

Here again, to jump over to another subject. If cars are that expensive, are we going to get eclipsed by imported electric cars the way we did with Japanese imports in the 1970s?

(LTD, You just hush, just keep lining up the sight and polishing the Colts. All you know about the 70's came from late night reruns. You weren't even born then).

My residents will pay for their car before their housing.

So if more are defaulting on their cars, this explains why we are seeing so many default on their rent.

>> I wouldn't buy a $60,000 vehicle today for any reason, unless I won the lottery, maybe. --50.129.x.xxx<<<

Same here. Although I like cars, there's no way I'd spend that kind of money. I'm not even open to spending $30,000. That's not to suggest that I haven't bought new cars before, but my thinking on the matter has just changed a lot. A lot of the change in thinking has to do with avoiding the other rip off when it comes to cars--mechanics. I learned how to do basic things myself and as I learned to do them, the "mystery" of how cars work was removed. Thus, I'm able to drive older cars because I do a lot of the work myself. I happen to like the older BMW's and they happen to be pretty easy cars to work on, so that's what I drive them. I paid $ 900 for the one I drive daily. My wife also has one she drives. These cars will rust out first before they go mechanically and parts are cheap. Same applies to the old Mercedes. The Lexus was 10 years old when I purchased it used and it's easy to work on and like the BMW, will last a long time. Insurance is less, parts are less and no car note makes buying a used car a no brainer. However, that's not marketed. New car buying is what's marketed and the folks who can least afford it are the ones doing the buying.

Husband's car: 2001 Toyota Sienna minivan, 240,000 miles. Mine: 1997 Honda CRV, 215,000 miles. 2000 Toyota Corolla for my daughter, 90,000 miles, and she has damaged the engine by failing to change the oil, but if the car conks out, we're only out $6,000. I'm definitely in the school of buying used and driving them until they drop. It saves many thousands of dollars. Recommended in the book The Millionaire Next Door, but we have been doing it for a long time.

All of my kids have car loans GRRRR!

We personally were extraordinarily lucky in that in our married lives, we drove 'company cars' for 90% of that time, and the rest was subsidized (miles reimbursed above true cost.) Never had a car payment.

Currently we have a 2004 Volvo wagon (work horse) with paint spilled all over the trunk area ;) and a 2008 Prius, both purchased from my deceased FIL (he liked to trade up every few years, we always bought his cast-offs at trade-in value...) Oh and we have a 1997 Toyota pickup that we use for trash runs and such.

FIL passed in 2009 so no more almost-new cars coming down from him...

One problem in car buying today is interest rates. Would you rather pay 0% or 9% or 12%? Buying used, you pay the HIGH interest rates which is just money for nothing (and the chicks aren't free.) If you buy new at almost 0%, do you get a better deal?

More people moving back in with mom & dad too. The car default numbers do not give me the warm fuzzies.

My renters will pay a car before they pay housing too. More important to them to have mobility.

Car = freedom to many many people and also ability to work.