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Americans are getting into debt to afford food, gas
marketwatch ^

Posted on 06/20/2014 2:39:59 AM PDT by Red in Blue PA

ut please appreciate how stretched non-discretionary car financing has now become. The following is per the Wall Street Journal:

“[The] average automotive loan term [reached] 66 months for the first time. According to Experian Automotive’s latest State of the Automotive Finance Market report, loan terms in the first quarter of 2014 reached the highest level since the company began publicly reporting the data in 2006. The analysis also shows that loans with terms extending out 73--84 months made up 24.9% of all new vehicle loans originated during the quarter, growing 27.6% since Q1 2013.

“The average amount financed for a new vehicle loan also reached an all-time high of $27,612 in Q1 2014, up $964 from the previous year. In addition, the average monthly payment for a new vehicle loan reached its highest point on record at $474 in Q1 2014, up from $459 in Q1 2013.

“ ‘As the cost of purchasing a new vehicle continues to rise, consumers clearly are stretching the loan term to help lower monthly payments, keeping them at a manageable level,’ ” said Melinda Zabritski, Experian Automotive’s senior director of automotive credit.

With maturities of seven years or more, car loans might better be called car mortgages. But as the Wall Street Journal report makes clear, it isn’t just lengthened terms that have been required. The report also said that lenders have lowered credit scores while lessors have introduced lower mileage caps. Just as we saw in housing at the top, lenders are doing whatever they can to lower the monthly payments to consumers.

Two weeks ago, I read a quote from the CFO of America’s Car-Mart in which he offered: “Our customers have never been more stressed, yet they have never had more aggressive financing options.”

(Excerpt) Read more at marketwatch.com ...


TOPICS: News/Current Events
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1 posted on 06/20/2014 2:39:59 AM PDT by Red in Blue PA
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To: Red in Blue PA

2 posted on 06/20/2014 2:42:18 AM PDT by Diogenesis
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To: Red in Blue PA

You can’t keep layering more and more burden on the consumer. Eventually, somethings gotta give.

Wages have been stagnant for the past six years, but in that time, the consumer has had to absorb the costs of the following policies:

Biofuel Mandate increasing cost of both Gas and Food
Additional required equipment on automobiles
Artificial shortage of used cars caused by Cash for Clunkers
Obamacare
Artificial water shortages in agricultural areas
Rising electric rates from the War on Coal

For people living paycheck to paycheck, these costs wind up on the credit card, because there is no other way to pay for them.


3 posted on 06/20/2014 2:48:55 AM PDT by Haiku Guy (Health Care Haiku: If You Have a Right / To the Labor I Provide / I Must Be Your Slave)
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To: Diogenesis

Nice graphic, but it’s more like a flood up.

Actually, I don’t attribute our problems to communism. Our problems are due unemployment due to stupid trade policies. We lowered the import tariffs till they are almost non-existent. We tariff 1% but tax domestic producers 10% on labor. So there is a large tax incentive to off-shore.

Nevermind that it’s stupid to have free trade with countries that have massive amounts of unemployment. You’re just asking to have your industries devastated and to import their unemployment problem.

And then there’s immigration, illegal and legal in a period of high unemployment.


4 posted on 06/20/2014 2:49:07 AM PDT by DannyTN
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To: DannyTN

On the whole, the economy has been screwed up for over a decade....going back into the Bush administration. When the North American Free Trade deal went through.....it dissolved various small industries around every state and destroyed all of those $10-to-$15 jobs that existed. In my home county area where I grew up....the paper mill finally shut down. The 1,000 employees were all local guys who grew up....had only a high school diploma and were pulling in $40k a year starting out (union wage) and the guys in the 50’s were making $75k a year. Their lifestyle is gone, and most were stupid enough to spend every penny they ever made.

The 2008 economic fall? The recovery? Non-existent. Look around at business operations shut down and banks that used to exist which no longer exist. Folks run their cars another two to four years longer than they used. No one buys magazines at the grocery anymore. The ten-day vacation era is long gone, and the best you might hope for is one extended three-day weekend at some non-expensive hotel in Reno or Orange Beach.

It is a full-blown depression, but they made such a happy event out of it....that you just won’t admit it’s that bad. And the fact that Wal-Mart continues to make profits ought to tell part of the story.


5 posted on 06/20/2014 2:56:56 AM PDT by pepsionice
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To: pepsionice

It’s been screwed up longer than that. We lowered the tariffs in the 60’s. Our real wages have stagnated since then. It’s just that free market economies do a pretty good job of reallocating labor to either the next most productive thing, or to new technologies.

We’re to the point now where new technologies are instantly exported. We shored up the economy during the Bush administration by lowering interest rates and credit standards to help housing. That created a mini boom in refinancing jobs. But that party couldn’t last forever. And an oil price shock took the legs out from under it.


6 posted on 06/20/2014 3:03:42 AM PDT by DannyTN
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To: Red in Blue PA

But...but.... but... we keep hearing from the press that the economy’s bouncing back.


7 posted on 06/20/2014 3:13:36 AM PDT by Jack Hammer
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To: Red in Blue PA

Not surprising. When you take a great portion of the middle class and relegate them to low-paying service jobs by shipping manufacturing overseas, this is what you get.


8 posted on 06/20/2014 3:19:33 AM PDT by Wolfie
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To: Wolfie

“Not surprising. When you take a great portion of the middle class and relegate them to low-paying service jobs by shipping manufacturing overseas, this is what you get.”

Agree. But, it’s concerning to see people financing autos for as long as 72 months and much longer. These people will never be right side up on these autos. By the time the note is paid off the car will be junk and worth little to nothing. It does say something about the sense of entitlement that permeates throughout our country though. Whatever happened to the notion of deferred gratification?
Starting with an old beater, then as one’s financial circumstances improves progressing to a better used car, then perhaps to a new one, etc, etc? Answer; gone baby gone.....


9 posted on 06/20/2014 3:47:22 AM PDT by snoringbear (E.oGovernment is the Pimp,)
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To: Wolfie

“Not surprising. When you take a great portion of the middle class and relegate them to low-paying service jobs by shipping manufacturing overseas, this is what you get.”

Yeah, you’re right. But, manufacturing companies must maintain cost and price competitiveness to stay in business. But, there is hope; should we (GOP) take back the senate during the midterms and then the presidency in 2016, perhaps we can open up drilling on public land, build the Keystone Pipeline, staff EPA with people with a brain, congress write some business friendly and growth enhancing tax laws, etc, etc. if this should happen then you would see manufacturing return to the US in droves. Hey, a guy can dream can’t he? :)


10 posted on 06/20/2014 3:57:44 AM PDT by snoringbear (E.oGovernment is the Pimp,)
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To: Wolfie

“When you take a great portion of the middle class and relegate them to low-paying service jobs by shipping manufacturing overseas, this is what you get.”

A lot of this is inflation as well; the government denies it exists to suppress Social Security increases, while at the same time cheering minimum wage hikes to deal with it.

The worst thing is that this story could’ve been released five years ago, but was deliberately suppressed. Anyone with eyes saw this happening, and either voted in response to it or bought the media lies about it.


11 posted on 06/20/2014 4:12:46 AM PDT by kearnyirish2 (Affirmative action is economic warfare against white males (and therefore white families).)
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To: snoringbear

“It does say something about the sense of entitlement that permeates throughout our country though. Whatever happened to the notion of deferred gratification?”

Owning houses, cars, or having children are a thing of the past for most American taxpayers; hopefully by now they realize this and react. In the meantime, they’ll rent apartments (who needs a home without children?), lease cars (always have a late model, but no title), and subsidize the children of the gibsmedats and illegals with their taxes.


12 posted on 06/20/2014 4:15:26 AM PDT by kearnyirish2 (Affirmative action is economic warfare against white males (and therefore white families).)
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To: Haiku Guy

I agree with you, but I’m hard pressed to look upon statistics related to new car financing as evidence of consumers in distress. It sounds more like the bigger problem is consumers who don’t know how to manage their own expectations.


13 posted on 06/20/2014 4:18:35 AM PDT by Alberta's Child ("What in the wide, wide world of sports is goin' on here?")
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To: Red in Blue PA

That’s impossible, there is no inflation.


14 posted on 06/20/2014 4:19:43 AM PDT by caver (Obama: Home of the Whopper)
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To: snoringbear; Wolfie; All
This article offers some interesting insight into the economic quandary American industries face. All of the comments everyone has made here about competition from foreign labor are good ones, but in this case we're discussing one of the few industries that still maintains a strong presence here in the U.S. and employs large numbers of working-class Americans. The products they make are increasingly unaffordable unless the buyers take on considerable debt.

This is the dilemma we're facing, and bringing industries back here to the U.S. isn't going to change that.

15 posted on 06/20/2014 4:24:43 AM PDT by Alberta's Child ("What in the wide, wide world of sports is goin' on here?")
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To: Alberta's Child

We have a huge BMW plant where I live and they are always hiring. A lot of related industries as well. I imagine BMW gets all sorts of tax breaks, though.


16 posted on 06/20/2014 4:32:39 AM PDT by ilovesarah2012
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To: Alberta's Child

“This is the dilemma we’re facing, and bringing industries back here to the U.S. isn’t going to change that.”

Umm, maybe. But, if the economic, fiscal and tax polices should bend the cost curve downward in favor of bring back mfg, then due to competition, prices would follow the cost curve. However, the most beneficial event would be the return of good paying jobs that would enable employees to return and/or remain in the middle class. Obviously, these higher wages earned would make various products, including autos, more affordable. That’s the theory anyway :)


17 posted on 06/20/2014 4:40:54 AM PDT by snoringbear (E.oGovernment is the Pimp,)
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To: Red in Blue PA

It was the same way under slick willie. They were on food stamps back then if they were below E9 and had a couple of kids. Retired Military have had 2 small COLA raises, same as SS COLAS in 5 yrs, yet the prices at the base commissary now match the local grocery stores. Exchanges are geared to the Brass rank for 90% of products. Who has $65 for a Polo collared T shirt, or $45 for a pair of Docker shorts, or $200 for a Vera $3 china made wallet? Shoes are only very expensive brands. Cost rival any mall. Just no sales tax.


18 posted on 06/20/2014 4:49:51 AM PDT by GailA (IF you fail to keep your promises to the Military, you won't keep them to Citizens!)
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To: Jack Hammer
But...but.... but... we keep hearing from the press that the economy’s bouncing back.

From the press?

For the purveyors of prevarication, the market has never been rosier!

19 posted on 06/20/2014 5:04:37 AM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing.)
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To: snoringbear

Don’t staff the EPA, eliminate it. Let Interior cover what is needed on Federal Land, and let the States handle the rest.


20 posted on 06/20/2014 5:06:22 AM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing.)
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To: ilovesarah2012

That is good to know in case the axe falls on me out in the woods of lower SC.


21 posted on 06/20/2014 5:16:00 AM PDT by wally_bert (There are no winners in a game of losers. I'm Tommy Joyce, welcome to the Oriental Lounge.q)
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To: wally_bert

Well, I’m in the Upstate so you might be on your own. LOL


22 posted on 06/20/2014 5:18:22 AM PDT by ilovesarah2012
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To: Red in Blue PA

My “non-degreed” pops got a job in his very early 20’s as a State prison gaurd and it allowed him to build a home and have a stay-at-home wife with 2 kids.

That same job today pays $18,000 a year.

And many of the applicants have bachelor degrees.

These people getting out of college now were all told that if they did not go to college they would be stupid and broke.

Then everyone from their own parents to the high school guidance counselor told these 17 year olds to “take, take, take” and just worry about it later.

Most of the Juniors in college can’t tell you how much they owe. No joke. The college counselors work to make sure they don’t really advertise it. Then you graduate and they, literally, hand you a bill.

It’s a big moment in growing up.

Then they get out, already in debt, and find out that the Obama economy is solely creating food-service jobs. And, oh hey - everything is about 300% higher in cost than when I left college.

Keep that cap and gown. You’ll need it to keep warm in the streets.


23 posted on 06/20/2014 6:57:56 AM PDT by Noamie
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To: Red in Blue PA

But obama declared all cars to be more effecient and coal fired plants closed. Problam solved.


24 posted on 06/20/2014 7:15:53 AM PDT by Organic Panic
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To: Red in Blue PA

The Economic Depression is going on its 6th year. When will it end? I don’t know. All I know is Obama is doing everything to make it worse and last longer.


25 posted on 06/20/2014 7:21:49 AM PDT by Freedom_Is_Not_Free (Free goodies for all -- Freedom for none.)
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To: Jack Hammer

But...but.... but... we keep hearing from the press that the economy’s bouncing back.


And, and....that there’s NO inflation. How can this be????


26 posted on 06/20/2014 7:23:52 AM PDT by Jane Long ("And when thou saidst, Seek ye my face; my heart said unto thee, Thy face, LORD, will I seek")
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To: Freedom_Is_Not_Free

Obama, his party and his media are all working in concert to ruin this country economically.

When the shtf, never forget who brought us here.


27 posted on 06/20/2014 7:28:11 AM PDT by Texas resident (The democrat party is the CPUSA)
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To: Red in Blue PA
"To them, higher borrowing, particularly credit card debt, suggests a rebound in consumer confidence stupidity is finally here."

There...fixed it.

28 posted on 06/20/2014 8:18:11 AM PDT by moovova
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To: Texas resident

100% true. My own opinion is Obama was installed by Soros to do the bidding of the UN, which is deprive the USA of its international influence, which means ruining our economy so we can’t afford to influence world affairs.

Whatever the reason, Obama is intentionally destroying our culture and economy and shoving us toward true socialism.


29 posted on 06/21/2014 7:43:25 AM PDT by Freedom_Is_Not_Free (Free goodies for all -- Freedom for none.)
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To: pepsionice
"On the whole, the economy has been screwed up for over a decade...."

I think it's been screwed up longer than that...back to the 60's when we lowered the import tariffs. It's just the effects of the policy change weren't felt immediately. Real wages stagnated. Industries started leaving back then.

Those dang labor unions tried to warn us. But in the 60's and 70's, they were evil and greedy. Pushing for wage increases the rest of us could not afford made them the bad guys. They tried to warn us about the North American Free Trade deal too. But we wouldn't listen. Free trade would result in specialization and comparative advantage and everyone would be richer.

Republican Henry Hyde tried to tell us. He warned us that England had had their industries devastated by free trade.

It is a full-blown depression, ....that you just won’t admit it’s that bad.

I agree that it's bad. The unemployment certainly reached depression levels. But the term "depression" had a specific meaning and measure that most, not all, economists agreed on when I went to college. It was based on GNP and a depression needed a 10% decline. GNP only had 6% thanks in part to the FED pumping. (and possibly bad reporting)

Government receipts dropped 17%, but that reflects some tax policy changes in addition to the recession.

30 posted on 06/22/2014 1:35:50 AM PDT by DannyTN
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To: Freedom_Is_Not_Free

Obama is intentionally destroying our culture and economy

I don’t think he has that power. We are doing it to ourselves every time we take a seven year loan paying $740 a month for a car and many other economically maniacal practices.


31 posted on 06/22/2014 4:22:30 AM PDT by Theophilus (Be as prolific as you are pro-life.)
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