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re: If our government capped auto financing at 60 months would car prices come down?
Posted on 12/22/25 at 11:27 am to tigereye58
Posted on 12/22/25 at 11:27 am to tigereye58
Ford, which gave up on cars (except for the high profit 'tang) and concentrated on high profit trucks (after resurrecting, high profit SUV's) does this because it's what the public wants... or so we are told.
2
Posted on 12/22/25 at 11:34 am to tigereye58
Or government could fix the curriculum in public schools requiring basic level personal finance classes along with civics and economics among other things versus the nonsense taught in high school.
Posted on 12/22/25 at 11:36 am to captainFid
Car prices come up for all kinds of reasons, some greed, some government mandated and some price of labor and materials. The EPA is a huge cause for alot of it their standards and regulations make it more expensive to produce what consumers want. One thing for sure though the market determines everything, we decide for them what they will build if they want to be profitable, works that way every time. Nobody is forcing anyone to buy an 80k dollar truck or SUV they don't make what they can't sell.
This post was edited on 12/22/25 at 11:38 am
Posted on 12/22/25 at 11:41 am to captainFid
Agree here. I think Ford realized they could finance higher priced cars by adding a IPad to the dash and putting leather seats. And BAM charge 30k more and finance it for 72 months.
The alternative to no finance regulation is a bailout of epic proportions on the back of responsible citizens. The bubble coming is the American debt bubble. Our society is built on debt. Overextended house notes and upside down cars, overpriced medical services.
The alternative to no finance regulation is a bailout of epic proportions on the back of responsible citizens. The bubble coming is the American debt bubble. Our society is built on debt. Overextended house notes and upside down cars, overpriced medical services.
Posted on 12/22/25 at 11:42 am to Pragmatist2025
quote:
If our government_______
Whatever verb you insert here will create more problems.
The scariest th8ng you could hear is "we are from the government and we are here to help"
Posted on 12/22/25 at 11:46 am to tigereye58
Eliminate ethanol subsidies. "Build a Ford and a Chevy, that's lasts 10 years like they should" - in my best Merle Haggard voice.
Posted on 12/22/25 at 11:48 am to CleverUserName
I can afford it and don't do it. I paid my current car off, a new purchase, 1 month shy of 3 years ago. Every month since then I pay the same amount into an investment account dedicated for repairs, tires, maintenance. Unless something requires a major overhaul (only have 54k miles on it) then by this time next year I'll have set aside somewhere between $40k-$45k to plunk down on a new car, plus a decent trade-in but still would likely buy slightly used and sell my current car directly or give it to a family member.
Posted on 12/22/25 at 11:59 am to deltaland
quote:
Buying a new car is a terrible purchase. Cars these days are made to top 200k miles easily and anything under 80k miles that was maintained properly is basically like new. I buy used with under 40k miles never finance longer than 4-5 years , and am never upside down on it.
Is the type of owner who has to sell their car at 40k-80k miles the kind of owner that was on top of routine maintenance like oil changes at recommended intervals?
It’s one thing to claim you’re avoiding the depreciation, but don’t forget why starting with a brand new car is pricier - you’re also pricing out the risk compared to buying used.
Buying vehicles with 3-6 years of ownership also means you’ll be driving a vehicle without the more advanced safety features for you and your family.
Buying a used car can be a good financial purchase if you don’t value the things that new owners value, and as long as the prior owner that had a need to sell wasn’t as careless in their maintenance decisions (which tend to be financial) as they were in their other financial decisions.
Posted on 12/22/25 at 12:01 pm to Iron Lion
quote:
It's not the government's responsibility to keep stupid people from doing stupid things
Agreed. But financing is already heavily regulated. This would not be the government diving into a new arena.
Posted on 12/22/25 at 12:06 pm to tigereye58
Yikes! Our government doesn’t CAP amortization terms on mortgages!
It buys 30 year fixed mortgages that meet Fannie, Freddie, VA, FHA, etc. underwriting standards.
The interest rate risk due to repricing and a one sided call option (negative convexity) would wreck bank balance sheets like they have done in the past so many financial institutions wouldn’t offer a fixed rate 30 year product IF the government didn’t buy them. Some still would and hedge the IRR with balance sheets derivatives.
Lenders will learn a hard lesson on these auto loans. It’s not a big enough market to cause bailouts but a quick turn in the economy could take down some big auto lenders and credit unions.
It buys 30 year fixed mortgages that meet Fannie, Freddie, VA, FHA, etc. underwriting standards.
The interest rate risk due to repricing and a one sided call option (negative convexity) would wreck bank balance sheets like they have done in the past so many financial institutions wouldn’t offer a fixed rate 30 year product IF the government didn’t buy them. Some still would and hedge the IRR with balance sheets derivatives.
Lenders will learn a hard lesson on these auto loans. It’s not a big enough market to cause bailouts but a quick turn in the economy could take down some big auto lenders and credit unions.
Posted on 12/22/25 at 12:11 pm to deltaland
quote:
Buying a new car is a terrible purchase.
Cars these days are made to top 200k miles easily and anything under 80k miles that was maintained properly is basically like new. I buy used with under 40k miles never finance longer than 4-5 years , and am never upside down on it. I’ll usually have it paid for before I need a new one as I keep a truck for 6-8 years or 175k miles whichever comes first. Trade in, add another 10-15% down payment on top of trade in and finance the remainder.
As someone who drives less than 10,000 miles a year and keeps their vehicle for 12+ years, I disagree. Buying new is smart for me. Even smarter when they are offering 0% for 72 months.
Also, you are putting 17k to 22k miles a year on your truck?
Posted on 12/22/25 at 12:27 pm to tigereye58
There's a limit to how much stupidity the government should and can prevent.
Posted on 12/22/25 at 12:38 pm to tigereye58
Maybe if the government stopped taxing the shite out of everyone, we'd have a little more money on hand to buy things...you know, rather than turning to banks for loans made possible by the government loaning money to banks
We are all being played
We are all being played
Posted on 12/22/25 at 12:41 pm to BamaScoop
According to Edmonds in 2Q 2025 84 month car loans reached an all time high of 21%
70% of car loans are for 60 months or more.
Auto companies are more in the lending trade than the car manufacturing trade. How many cars will last 60+ months.
With warranties running out the game to be in is the extended warranty or auto shop.
70% of car loans are for 60 months or more.
Auto companies are more in the lending trade than the car manufacturing trade. How many cars will last 60+ months.
With warranties running out the game to be in is the extended warranty or auto shop.
Posted on 12/22/25 at 12:55 pm to tigereye58
quote:
I think prices drop dramatically if Trump ends epa standards and caps financing at 60 months
Wasn't Trump pushing 50 year mortgages or something like that recently?
Posted on 12/22/25 at 12:59 pm to 4cubbies
quote:
Wasn't Trump pushing 50 year mortgages or something like that recently?
Yes however these are two different types of assets. One of them appreciates and the other depreciates.
I’m not advocating for the wisdom of 50 year mortgages mind you but financing a home and a car are not the same thing.
Posted on 12/22/25 at 1:00 pm to Bonkers119
quote:
Good luck finding Americans that can afford a $850+ dollar note ($50,000/60 months) every month.
Maybe they should not be purchasing a $50,000 vehicle.
Posted on 12/22/25 at 1:05 pm to GoAwayImBaitn
quote:
Maybe if the government stopped taxing the shite out of everyone,
The government really only taxes the top 20%.
Posted on 12/22/25 at 1:10 pm to Antonio Moss
quote:
Maybe they should not be purchasing a $50,000 vehicle.
Average cost of a new car.
They might not have a choice. Even the average cost of used car is $27k. The car market is just unaffordable in it's present state. People have no choice but to take out longer loans.
Posted on 12/22/25 at 1:12 pm to Robin Masters
quote:
I’m not advocating for the wisdom of 50 year mortgages mind you but financing a home and a car are not the same thing.
Fair point. Both seem foolish, though.
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