The Car Market is Bankrupting Americans (And It’s About to Get Worse)
In this video we discuss the how the Car Market in 2025 is slowly crumbling. From high interest rates, high inventory, tariffs, and negative/underwater equity – nothing looks great for the car market. Useful Tool to compare Auto Insurance Offers:
On a positive note, that means cars may possibly get cheaper for new buyers entering the market in the middle of this year. Time will tell. Enjoy.
FINANCE:
▶️ See My Portfolio + Exclusive Videos:
🥧 Copy My 3 Fund Portfolio:
RESOURCES:
💵 Free Templates:
👾 Join the free Discord Community:
🐪 Hump Days Newsletter ➭
WHO AM I?
Hello 👋 I’m Humphrey, I used to be a financial advisor, worked in gaming/tech, and started my own eCommerce business. I make practical, rational content on investing, personal finance, the news, and much more with a data-backed approach. My goal is to help you with financial literacy and creating wealth.
PS: I am no longer a current Financial Advisor, any investment commentary are my opinions only. Some of the links in this description are affiliate links that I do receive a commission for & they help support the channel!
SOCIALS:
* Second Channel:
* Instagram:
* Twitter:
* TikTok:
⏱️ Timestamps:
0:00 – Start Here
0:34 -Recapping the Car Market
2:36 – Dealer Markups
3:53 – The Financing Problem
8:19 – Elevated Inventory Levels
9:09 – Industry Panic Levels
10:37 – Trump Tariffs
Let me know what you think below! I’ll have another Tariff situation update in a few days too <3
No need to update. We know there’s a 90 day freeze on tariffs right now.
@humphrey Great Video 😁👍
Was enjoying the video until Nissan, very ignorant to think or allude to the fact Nissan’s problem is the market. I agree the vehicle market is slowing down significantly, but Nissan’s problem is the decade of mismanagement.
I think Nissan was a terrible choice to use as a “panic” indicator.
@@sammyjammy6647 This freeze does not impact vehicles or parts coming from Canada or Mexico, or the steel and aluminum. It also maintains 10% tariffs across the board.
One of the reasons why cars are so expensive, is because people keep buying them. Because they want what they want, despite the cost.
That’s literally it – part of the American mentality, whether people admit it or not, is always having nice/new things. Getting into crazy unaffordable debt isn’t a concern for those kinds of people..
@@Luke_Mk6 exactly. We’re our own worst enemy. We can bring corporations to their knees if we just start living frugal lives.
Never bought a new car, and never will. My first job was as a salesman at a Chrysler-Plymouth dealership. I learned that new cars aren’t as nice as you think and they are too expensive. The dealer mark up is crazy. For context, I’m 61.
@@SPR_NAPALM you bear a striking resemblance to Jeremy Clarkson.
I kind of disagree with that. If you look at Brands such as Dodge with their hundred thousand dollar pickup trucks and Jeep with their Grand wagoneers that are 130,000, the pricing is just ridiculous. Nobody is buying a Grand Wagoneer for the cost of a Mercedes. Corporate greed has gotten the best of them, and that’s really all it comes down to.
Everyone wants their instant gratification no matter the cost. thats the problem, stop buying rediculously expensive cars that you cant afford and the price rises will stop
But Adaptive Cruise Control is so flipping cool though…
@@tf5pZ9H5vcAdBpa 10 year old car has that.
If you take excellent care of your vehicle, it should last you 15 to 20 years if you have a quality vehicle. The problem is, people want a new car every few years. Look poor and be wealthy!
The average age of cars in my country is 21, so even more than 20.
My car just turned 21. I can’t get rid of it now. It’s finally old enough to buy me a beer.
What’s crazy is if you keep up with like detailing and washing you can buy one car and make minor cleanings and repairs and look well off and be well off people only treat cars like beaters because they’re lazy but we already knew that
My car is more than 16 years old. I’d like a new car, but I can’t bring myself to go into debt. Repairs are cheaper than buying a new car, and the local mechanic thanks me for it.😅
I bought a used 2013 Prius back in 2019 for $8,000. It still works perfectly and it has never given me any real issues.
So I just went through the panic buy situation in the past 2 weeks.
I live in South Florida and owned a 10 year old Jeep Wrangler. After seeing a mechanic I found out I was going to have several hefty repairs that needed to be done in the near future. Based on his recommendation I decided it would be better for me to trade in rather than throw that large sum at my Jeep. I was also looking to swap to a safe more eco friendly family car.
I looked around for maybe a month or so at certified pre owned or the equivalent on several vehicles (mostly Toyotas). I found the used cars were very scarce in my area and often just as much or only $2k less than brand new. With the threat of tariffs looming I felt rushed to get a new vehicle before they got to be even more ridiculously priced.
I ended up getting a New Rav4 hybrid but because the new car inventory was also extremely low I had to source one from another state and am having to wait 4 weeks to get it! Now definitely does not feel like the right time to be buying a car if you can help it but as many other I was afraid of the tarrifs and due to my upcoming repairs on the Jeep I decided to bite the bullet.
Thankfully I have the mindset of holding on to this next car for 15 to 20 years and getting the absolute most out of its lifespan. I plan on paying it off within the first 6 months hopefully because nobody likes interest.
Thank you for your detailed insight
I’m sorry you have the need to buy a car at this particular time, but you are making the best of the situation.
Just bought a car 2 days ago if it makes you feel any better.
Well new cars realistically will last maybe 10 years now certainly not 20 to 30 years as for well maintained cars in the past and all largely because of advanced electronics which become bricked far too easily! That’s why you can see more and more perfectly fine looking vehicles in the wrecking yards: failed computers which become obsolete or too expensive to repair!
There’s still 2023 brand new cars sitting on dealer lots with virtually no discounts 😂
Where i work they’re short leasing a brand new Chevy Silverado from 2022 that the dealer still hasn’t sold
I tried to buy a heavily discounted 2023 Hyundai Tucson. The dealer didn’t want to sell it. Instead they offered me a 2025 at the 2023s price.
I didn’t get the rationale
Ford just announced employee pricing on almost every model…
@@DinoAbelAuto dealers have sales target and incentives for the newer models. Selling new vehicles helps them hit bonuses and clear out allocation space. They might be making a better profit margin on the 2025 vehicle. Which could be the reason why they sold you a newer vehicle for the same price as the 2023.
It get be a Multitude of reasons but i think its mainly due to that
@@Trevor-gu8bbbut then I have to drive a ford😂😂😂
Heres a trick to get you out of the car loan cycle Once you have a paid off car, continue making car payments to a high yield bank account as if you were paying a loan and then when you have enough money you will be able to just buy the car. You get to skip the interest of a loan and use the interest of the high yield savings account to work in your benefit. This is the method i use
a lot of americans dont have delayed gratification
The last time I bought a used car, the interest was so low; like 2% I think it was. It was just a 7k car, so rather than buying it, it was literally cheaper to finance it and let my money build interest in stocks. It cost like $150-$200 to borrow the $ by the time I payed it off in just a 3 years I think it was. It felt like it was basically free to just borrow the money. I could borrow it so cheap, due to having a great FICO score of course. Winter of 2018 I guess it was. I still have the car and haven’t put much into it. Nothing major has failed yet. A beater now but it doesn’t bother me. Good and reliable. Still rust free too. Honda Accord. Had a Civic before that. Going back to Civic, now they no longer make a 2 door Accord, plus I liked the better fuel economy and don’t need the slightly bigger car either. I’ll have this accord for 3-5 more years still though haha.
@@baoto03It’s not just Americans, it’s people in general. Provide easy access to financing in every country and you’ll find that a lot of people will use it.
The actual way to get out of the car loan cycle is not to have a car. Regardless whether you buy a cheap(er) car with cash, or pay off your car loan, cars are ridiculously expense but the US has gone mad in making sure you need a car.
@@Warrior_Resisting_Colonialism Dude I did the same thing and put the cash into Crypto. I made out like a bandit; paid off my car! Now the cash is in a high-yield interest bearing account getting 2% arbitrage over my car loan interest. I’m kinda pissed I’m about to pay it off :).
I bought a 10yr old hybrid for $5k out the door at public auction. It had 98k miles on it and I’ve put almost 70k miles on it in the last 5 years, now it has 165k miles. Replaced the a/c compressor with a used one for $150, put 2 sets of tires on it and a 12v battery for $200. That’s it so far, yes hybrid battery is weak, and I’ll be looking to buy a different car by the end of the year. But I won’t pay a penny over $16k for the next one. Looking to get something nice this time.
That’s awesome! I do the same thing deal shopping for a car that has my total cost of ownership below $1,000 a year. I bought my last car for $9k 5 years ago and just sold it for $7k, with only minimal maintenance. The joy of owning a car for 5 years that drove great for only $2,000 is something everyone should experience!!
You seem handy, it’s not bad to replace the hybrid battery yourself. Even Nissan leaf have 3rd party battery makers now that have 2-3k for battery. That’s not bad for a new battery compared to oem which is double.
ALWAYS buy vehicles 3-5 years old.
Biggest drop off in price, all the new gadgets for the current tech era and then all issues are usually ironed out by then.
It’s saved me a ton of money over my 20 years of driving 🤘
Even though I’m totally in agreement in buying in the 3-5 year range as well, I just can’t bring myself to pay more on a used car AND get hit with a 7% interest rate even with solid credit. I’m waiting for things to cool down! Hopefully sooner rather than later!
I personally don’t like the tech in my car, but it is going to be hard for me to keep doing that since those care 15-20+ years old. The tech can make the car harder and more expensive to repair.
100% and pay cash if you can. At least with these rates
@@scott8934 yup, full cash upfront always!!
It depends, the price may be lower, but the financing may be higher. If you can pay cash it’s great. That said, this only applies if you don’t suffer from FOMO or are ok with driving an old vehicle.
i love how rolling your underwater debt into the next car is allowed right now. people are paying mortgages on cars now. wild.
It’s a good thing we built our cities to be as car dependent as possible so people need a car to do anything. Strapping everyone with thousands in costs annually, even those who simply aren’t paid enough to maintain a cars high cost.
Most of that can be done in a compact sedan. The cost of these has ~matched inflation. Costs spiked because people want trucks and SUVs.
if you bought a bronc for 80k , you are part of the problem
If you bought a pickup truck for 120k
LOOL
The people buying a Bronco for 80k or a pickup for 120k probably do have the money for it, it is usually subprime loans that go bad, and subprime is people with a credit score below 620 so they are not buying these expensive new cars but instead they are buying used cheap cars. That’s really who is failing to make payments right now, not new cars, it is used cheap cars. The data can be very misleading becasue the US car market is split in 2, prime and subprime so need to look at it that way
As a european it amazes me how the car market is in the USA. A lot off people are unable to pay their rent but everyone has a fat car loan.
It’s not as bad as you think. Most people pay their rent and chances are high that if they can’t pay their rent they also can’t pay their car loan. Also you can break your lease and pay whatever penalty, your car loan is a different story.
That said, people will buy things they really can’t afford. They get caught in the trap of financing everything. They focus too much on the payments instead of the price.
Americans are terrible at finances
Americans are posers.
Repo man stay busy in the US, too.
The US requires cars because our public transit is lacking. Having access to a car can relate to being able to work, visit family, go to the store, and live life.
Still driving my 2009 Nissan with 80k miles on it. Paid off. $50 bucks a month for insurance.
Got it new 2009 versa manual trans, got 324k miles, hiway, oil changed every 5/6k Traded it in, it was starting to wear out was a good car thu !
How’s your insurance so cheap? Who do you have?
80k miles since 2009? You must have an enviable short commute.
Pat yourself on the back, clown.
Pat yourself on the back, more on.
I’m lucky to have a great career and am almost 40, I drive a 2004 Lexus RX and it’s the greatest car ever! I see people with new trucks and jeeps and Tesla’s and I always wonder how they can afford it… most of the time they can’t. Don’t let the things you own, start to own you
Aye I’m 26 and work in finance, also drive that car 😂 salt guard ripped off so there’s a cheap duct tape job but the car itself is great
@@EricParks-k9lit honestly feels like a super luxury suv compared to modern cars. The wood steering wheel, pull down arm rest, it’s all so nice!… and I actually use my tape deck pretty often.
@@johnsellers3692 if you had a brain you could actually feel the stupidity of your comment
@ meanwhile warrior and I are over here pumping money into stocks or real estate, exchanging a smug glance
I bought in 2022. My car is still negative and at this point I’m going to end up paying it off and keeping it until it doesn’t drive anymore. Last time I’ll buy a new car.
Honestly all the blame goes to the consumers, everyone nowadays wants to buy what they can’t afford with debt they can’t repay to impress people who don’t care.
Yup the poor people keep leading the billionaires astray
Absolute L take. Wow…
and they always get some shitty SUV or a truck… like why not at least get a cool or fun car if you’re going to bankrupt yourself anyway??
To an extent yes but let’s also be realistic, during the subprime mortgage crisis we wouldn’t call all these home owners who were given loans for houses they can’t afford irresponsible. Why? Cause the banks would lie and convince the owners they could afford more than they actually could.
If someone got into an accident and needs a new car, a bank approving you for a loan you can’t really afford can give buyers the illusion that they are making a reasonable financial decision when that’s not the case.
Let’s also remember that even used cars and insurance are ridiculously expensive. In America you NEED a car to function outside of a large city center (most places). So you may not want a new/expensive care but when used cars are equal to or more expensive than new ones what do expect people to do?
@@oshotz dude SUVs and trucks are way more fun than a car lol. Not that i would overspend on either.
Got scammed on an 08 accord 5 years ago. Started fslling apart (hidden salvage title).
Just git a 2025 civic hybrid. First new car ive every owned. Plan to keep it for 10+ years
This is why I take pride in driving my ‘09 Model T, sure it breaks down on me every other week but I don’t owe anything on it (minus the servicing).
-every other comment on these videos
I’d like to correct that there was a semiconductor shortage. The issue was their forecasts entirely. They reeled back their yield and others took their spot at places like TSMC. These are prior negotiated, and I think the time is like 18 months. They had to wait until they could put new orders in and could be scheduled.