I wasn’t aware of GS gearing up with the 7 year flivvers.
Wait until the warranties expire on these 7 year wonders, and the owners just walk away from the car. Or they drive their used car to dealers and leave it.
“Grampa Dave, the $35,000, 7-year loan flivvers are the next derivative scam.
Your friendly Goldman Sachs people are bundling the paper and selling them, just the way they did with those wonderful mortgage derivatives.”
If you are young and upwardly mobile, a seven year loan is security. The budgeted auto ownership expense is known and can be covered. As wages/salaries rise to inflation or merit or both, the ownership expense remains constant and a decreasing fraction of the total expense.
The low interest means that the inflation is money made and no subtraction need be made for the cost of interest. The inflation rate becomes earnings. The intrinsic value of the car might not depreciate at a rate greater than the compounded inflation. We read here of at least one vehicle that has maintained or possibly exceeded the depreciated used car purchase price.
Rationalization? Perhaps but it points to a different view if you are not old, curmudgeonly and tight. Left out of all the equations is pride of ownership. Owning a new car provides great satisfaction.
Anyway...... there is a different point of view
After Bubba totals out the $45,000 Hyundai SUV (I ain't kiddin') with 6.5 years left on the loan, and Achmed buys the salvage title from Progressive, patches the thing up on his frame-stretcher and paints it red, (after cleaning the blood off the Genuine Leather upholstery and making sure the USB port works,) wholesales it for $3500 on his shylock's floorplan to Wayne's Buy-Here-Pay-Here, who flogs it to Betty for $7995 on the never-never, our wonderful financial people will have potentially created three more derivatives.
Of course, the engine blows after this and Betty stops paying because with no car, she loses her job. But not to worry. A gay African POTUS will surface to guide us out of the quagmire. Allah The All-Wise will handle it. Perhaps with Chinese money?