"That's why we can't have nice things"

Hi everyone, 

I decided to shift my focus from auto finance to talking about the decline of personal vehicles. Why you may ask?   If you read my last post, I believe that’s where America is heading toward… becoming an urbanized Europe. What’s the point blogging about car loans if personal cars will decline? Things will change once the "baby-boomers" are not in charge of anything anymore. The mentality of hoarding less "stuff" is growing. I will talk more about it in another post.
 

It will be awhile before we see a dent in personal cars, but it’ll happen sooner than you think. We are not talking about worldwide decline, the BRIC nations will still have an appetite for material goods like the United States. China is going through what America did in the early 1900s, period of corruption, monopolies, counterfeit, high growth, and most importantly, CONSUMERISM.    

I hope you understand and continue to follow my blog. Lots of changes in the coming years.

　

　

　

Hipsters...

Some will argue car sharing, such as Uber/Lyft and autonomous cars (Google car) will be the future of transportation. As more yuppies and hipsters move to urban areas, there will be a greater need for public transportation. The Economist wrote a good article about it. I can see personal car use decline (a real threat to auto finance industry), but this blog isn’t about that.

 

 

 

It’ll be 20 years at least before regulation and infrastructure in the U.S. is up to speed. I’ll give my 2 cents a different day.

Be sure to check out the hipster video, good explaination.

Bad Credit? No Credit? No down payment? No problem!

Auto finance you say?  Sure it’s a boring subject, there is no romance, tragedy, action, hopefully a little humor but I hope you'll find it interesting anyways.  You just graduated from college, $50,000 in student loans and have a job offer for a measly $45,000 salary?  Most likely you don’t have any savings, if so, good job!  Now, you need a car you say?  Unless you are buying a cash car, you will most likely finance it.  This is why the auto financing industry is important, it gets you to work to make that $45,000. 

I created this blog to give my insight of the industry.  It’s a changing industry, not because of new technology, but a changing economy.  The average college student is graduating with $35,000 debt which isn’t bad if you can live with your parents, but that’s not an option for everyone.  That $45,000 won’t seem much once you deduct taxes, housing, car payment, student loan repayment, food, and other miscellaneous expenses.  Sure I can write about student loans, but the auto finance industry interest me more. 

Many recent college graduates will buy a car after graduating or will within 3 years.  Unless you have a good job to take advantage of new car financing promotions, many won’t be qualified.  This is where subprime financing comes into play.  This is where you go to a dealership and pay an interest rate of 15% to as high as 29% (depends on state) on a USED car.  They will still require a down payment or trade-in though.  What if you have neither you say?

If you can borrow money from your grandpa or dad for down payment then great, otherwise your last shot is BUY HERE PAY HERE shop (in-house financing).  This is where the dealership finances the vehicles themselves for you and you pay the dealership directly instead of going through a bank.  They will offer a vehicle at a ridiculous interest rate on an overpriced vehicle you may not like.  Of course you will take it, you have no choice. How else will you get to work or party with friends?

So my friends, this is where I think auto financing is heading toward... subprime banks and in-house financing.