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).
Having a RAV4 when a Yaris would have done the job is optics. Sometimes having any car at all is about optics.
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....
Also the RAV-4 isn't a car, it is an SUV.
https://www.visualcapitalist.com/best-selling-cars-us-h1-202...
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: 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 experiences await regardless.
edit: "In for a penny, in for a pound", right? :)
New cars require less maintenance and usually come with 1-3 years of warranty.
> And the secondary market is more expensive.
Assertion #2
> New cars require less maintenance and usually come with 1-3 years of warranty.
The more people who purchase because of Assertion #2, the less true Assertion #1 is going to be.
So, yeah, as someone who has only twice purchased new (and regretted the financial hit both times), I actually am in favour of convincing more and more people to strain their finances to buy new, knowing that a lower demand in the secondary market means lower prices for me for the same used car.
If more people purchased within their means and bought secondary, I'd be paying a lot more each time I bought a car.
For example a 2025 Mercedes-Benz C300 is $48,450 but a certified pre-owned 2022 Mercedes-Benz C300 is $32,820, and you get whatever is remaining of the original warranty + 12 months. I'd say that's a pretty decent saving, especially considering that it's still the same model (current generation is 2022 and onwards).
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.
It is spending maybe $400-$500 to save potentially over $10000
I go on holiday 6 times a year for that money.
The 15 year old turd seems to go wrong less and cost less to fix when it does as well.
This has nothing to do with America. The rest of the world has this problem too. Not everyone is a mechanic outside of America.
The only reason the second-hand market works there is because most of the used cars come from Germany, and they have strict laws for checking the cars periodically. Once they roll on the EE roads for a few years, then the cracks start popping up which cause horrible accidents.
Just implying that EE is this amazing place where second-hand cars have no issues and Americans should follow the same model shows that you have no idea what you're talking about.
I still remember the first thing my bank offered me as a student in the US, a credit card, 25%+ apr, give that to a 18 years old clueless kid and you'll set them up for failure. The entire system is setup to make you think these interests rate are normal and that being in debt is a proper lifestyle
We don't have cars anymore, we have PlayStations with wheels. Even if you are able to properly diagnose the check engine, you may need to disassemble the whole engine just to replace a 20cent sensor inside.
For the most part you're not really looking for signs of mechanical or electrical faults that will develop, you're looking for signs it has been cared for. Service history, clean interior, tires with decent tread, oil and water levels okay and aren't contaminated, starts up and drives nicely from cold to warm. That's about it.
Someone with very little auto mechanic knowledge can do that. Sure an O2 sensor might give out in the next few thousand miles, but you have to allow for some maintenance cost beyond scheduled services for older cars.
You don't even need to do that. You can just find a mechanic to do a PPI on the car, so they'll check for any issues and read the errors codes to see if there's something funky.
You could do that, sure. Or you could get a respected independent assessor. Here in South Africa we have Dekra (and others) who wil do a test of the car more thoroughly than I can (road test till operating temperature is reached, examination of the car on a lift for chassis damage/signs of repairs, oil leaks, etc, examination of car for signs of accident repair, pulling of DTC, etc).
If you go to this place - https://www.webuycars.co.za/buy-a-car/18C404984 - you'll see a car that looks good for its age on the surface with only a few easily fixable things (tail lights, brakes, etc). But the attached report shows that the chassis is twisted and that there are oil leaks. These two problems are terminal faults that I, even with a background as a mechanic, will not spot because I cannot put the car on a lift when I go to view it.
It's not perfect, but at least I don't waste time test driving a car with terminal faults (chassis damage, transmission DTCs or problems, engines without compression, etc).
It means when I look for a car, I can dismiss dozens of cars based just on the attached Dekra report, and spend more time examining the remaining ones for faults that Dekra might have missed.
To me, that's the biggest reason for used-car prices to be low - the market is restricted to those who have cash. IME, the prices of cars that cannot be financed (older than 5 years) is severely constrained. I've seen a 5 year old model advertised for exactly twice the price as an almost identical 6 year old model, with similar mileage and similar condition[1].
I find that hard to reconcile with the other posters in this thread who observed that used cars are still too expensive. Maybe they are looking at used-cars that can still be financed (under $X years, for example)?
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[1] Condition of both was reported by the same independent assessor - see my posting upthread
I had good luck with taking a used car for a test drive, and (with the knowledge of the seller) dropping it off at a garage and asking a mechanic to spend half an hour checking it over.
Just didn’t want to chase down exotic material failure modes at that point and wanted the enhanced safety features available on new cars to protect my old body. I don’t own a lift nor an air compressor. I’d feel like a damn fool if I got hurt working on my own old car. Fixing my broken old body would be much more expensive than having a professional with the proper tools repair my old car. Can pass that dealer-maintained car with a clean conscience to someone who has the tools and expertise.
Nowadays, you can expect 20-30 years from a new vehicle, properly maintained. Especially in the desert. When you spread that buy-it-new premium over 25 years, it’s worth buying new just to know the exact provenance of the vehicle you’ll be driving over the next quarter century.
toomuchtodo•3h ago