From the report this is based on (pages 6-7), there are simply not enough cars to meet demand due to manufacturers constraining supply to maximize by price. Similar to new construction housing in the US. Tariffs make importing cheaper foreign made vehicles untenable. It’s an economic extraction doom loop.
Maybe some people need a car to get to work, plus maybe they also want good optics with it, not wanting to be perceived as "broke" by the rest, so they splurge on a new car without any thoughts on financial responsibility just to keep up appearances.
It mirrors perfectly the luxury fashion industry where more branded merchandise is bought by broke people than by rich ones (unbranded luxury goods are a different beast).
I think it's a really poor indicator for the future. America literally cannot function without cars, and if people cannot afford cars they cannot afford to work.
Let me introduce you to half of my block. And I live in a city with fantastic public transit where you don't even need a car. I see those loan notices in mailboxes....
Perhaps it's because I grew up around people who were good with their hands, but in my mind buying a used car isn't a scary matter - you visit the private seller, you look at the vehicle, you check for the things one needs to check for, and you know if it has problems or not. And if you can't do this, you've got a cousin or uncle who can.
But speaking to Americans, they make it sound like this kind of traditional working-class knowledge has been lost? A lot of folks seem positively scared of the second-hand market, and say that a $50,000 brand new car is going to save them money on maintenance.
Crazy high standards of living, in a sense!
I've bought exactly one new car: will drive it until the wheels can't be put back on. Before that, probably a dozen second-hand. I now make silly amounts of money, am American.
All this to say: used cars are best cars. Terrible purchasing experience.
New cars require less maintenance and usually come with 1-3 years of warranty.
One, there's a big urban/non-urban split in American culture. The former are far less likely to know anything about working on cars, nor are they likely to have a friend or uncle that can help.
That cohort is very over-represented on HN.
Second, there's a lot of shady stuff happening in the used car market, and you really do need to be on top of things to not get scammed. We're talking that's absolutely illegal, but also difficult and expensive to enforce, so if you get stuck on the wrong end of a deal, you're just going to eat those costs.
This has nothing to do with America. The rest of the world has this problem too. Not everyone is a mechanic outside of America.
toomuchtodo•2h ago