Home » How The Pandemic Doubly Screwed Working Class Car Owners

How The Pandemic Doubly Screwed Working Class Car Owners

Tmd Car Mechanic
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Few people predicted the pandemic and how, via supply chain shortages, global vehicle production would crater. The only thing predictable about the car market, really, is how it always ends up harming poor people. There’s a new report out on aging cars and it’s good news for mechanics but bad news for people who need a car to work.

Plus, we check out the inevitable Tesla lawsuit, the unionization of robotaxi firms, and the sudden increase in battery capacity in the United States.

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Vidframe Min Bottom

A Double Whammy For Poor Car Owners

It’s now a matter of conventional wisdom that automakers shifted their production to more expensive models during the pandemic, causing prices to go up. At the same time, limited inventory meant that deals for new cars were hard to come by for budget conscious buyers. Even with lower interest rates, this meant that many buyers with limited incomes or poor credit were forced to either stay out of the market or take on longer loan payments (the average new vehicle loan for someone with a 500-600 credit score is about 74 months).

Vehicleage

And what about used cars? Used car prices also increased dramatically during the pandemic (about 40% higher than pre-pandemic levels). Unsurprisingly, this means that the average age of a car on the road has reached about 12.5 years, an all-time record. As mentioned yesterday, it’s now a better time to buy a new car and deals are finally out there, though higher interest rates are going to still make it difficult for some to buy anything, new or used.

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There’s a nice report out from S&P Global Mobility that addresses how this presents a big upside for mechanics:

Two years of short supply of new vehicles has driven consumers into the used-car market. Now, there could be a counterintuitive shift: Surging new-vehicle supply could further boost expansion of the used-vehicle fleet, bringing more high-mileage vehicles into service bays.

How is this possible? The aging car parc has already expanded the repair business sweet spot, which we consider as vehicles from six to 11 years old. Now 12- and 13-year-old vehicles are becoming a bigger part of the business – even though they were originally sold during the slow-sales years of the Great Recession.

None of this is surprising to anyone paying even limited attention. It’s also not surprising that cars that are over a decade old are now new enough that they’re likely to contain more sensors and be more expensive to fix than older vehicles.

Working class people taking it on the chin is sort of a tradition. Here’s where it gets super fun, though, as pointed out by S&P Global Mobility:

In addition, drivers of older, lower-priced, out-of-warranty vehicles are likely to drive more miles, because they may have jobs without a work-from-home option. During the pandemic years, vehicles from six to 13 years old – the new aftermarket sweet spot – will increase their share of annual miles traveled, outstripping both vehicles zero to 5-years-old and 14-years-plus, according to S&P Global Mobility projections.

The bolding is mine and it’s another obvious, but extremely important point. If you’re a working class person with a job that cannot be done from home you have to keep putting miles on your car. A Pew Research study from early in the pandemic found that 76% of lower income people couldn’t do their work from home, as opposed to just 44% of upper income individuals.

I think it’s plausible that, barring some huge economic upheaval, carmakers will start producing more affordable models and those will eventually become available as used cars, but that’s not going to be for some time. Until then, lower income individuals will have to contend with putting more and more miles on vehicles that are increasingly complex and expensive to fix.

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Cruise Probably Becomes The First Firm To Unionize

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I’m going to do this backwards and start with a sentence that made me laugh this morning, courtesy of this Reuters report on GM’s self-driving firm Cruise:

Reuters could not definitively determine if these are the driverless car industry’s first union agreements.

Obviously, it’s not the driverless cars themselves that are being unionized but the staff being used to maintain them, though that leads to the other funny note in this piece, calling the agreement:

…[A] significant milestone as unions and robotaxi firms have historically been at odds.

LOL. I mean, yes, of course. Automated systems present a real threat to organized labor and, in the absence of some sort of Universal Basic Income-type system, it’s not clear what happens if we automate everything. The deal is with the IBEW and SEIU and will cover “dozens” of workers.

Tesla Hit With A Class Action Lawsuit Over Range

Model 3 Range Hero Desktop LhdLike clockwork, the exclusive report from Reuters that Tesla created an entire department to basically ignore people who complained about the potentially overly optimistic range estimates of their cars has resulted in class action lawsuit in California. Since Reuters broke the news, let’s let Reuters chime in here as well:

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The lawsuit alleges Tesla breached vehicle warranties and engaged in fraud and unfair competition.

“Put simply, Tesla has a duty to deliver a product that performs as advertised,” Adam A. Edwards, an attorney at Milberg Coleman Bryson Phillips Grossman, the firm representing Tesla owners in the lawsuit, said in a statement.

The lawsuit’s three plaintiffs cite occasions when their Teslas didn’t achieve close to their advertised ranges and said they had complained to the company without success.

It’ll be interesting to see how much momentum this gains. Many of the earliest Tesla adopters were die hards who have a serious attachment to the firm, but now Tesla is just a car company that makes a lot of fairly affordable EVs.

How Much Battery Capacity Do We Actually Need?

Blue Oval City 2As far as successful legislation goes, the constant news about automakers and suppliers rushing to build battery plants in North America indicates to me that the Inflation Reduction Act has been a success. The big question, though, is how much capacity do we really need?

I ask this because there are two big pieces of news again this week. First, from Automotive News is the fact that LG Energy Solutions says the Korean company wants to build more than 300 gigawatt-hours of production capacity by 2025. That’s a lot. From the story:

LG Energy Solution has the most gigawatt-hour capacity among EV battery plants in North America that have been announced, are under construction or are operational, according to Wood Mackenzie, an energy research and consulting firm. Three hundred gigawatt-hours would be enough to supply batteries for 3 million to 6 million EVs, depending on their size and configuration, according to data from the Federal Reserve Bank of Dallas.

For comparison, in 2022 about 750,000 new EVs were registered.

We’re also learning this week that a joint venture between Stellantis and Mercedes called Automotive Cells Co. (it worked so well last time!) is considering building a battery plant in Canada. Here’s some detail The Detroit News:

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Mark Stewart, Stellantis’ chief operating officer in North America, said in October that Stellantis could need as many as four battery plants in North America by 2030 to achieve its goal of having at least half of its U.S. passenger car and light-duty pickup sales be all-electric. Stellantis CEO Carlos Tavares previously suggested ACC could expand to North America.

The train has left the station and, while some automakers like Ford are starting to consider more hybrids in the mix, it seems like most automakers are trying to shift to EVs as fast as possible.

The Big Question

How is is your daily driver? How long do you expect to keep it? How many miles does it have on it?

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Photos: Tesla, Skoda, Ford, Cruise

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Jsfauxtaug
Jsfauxtaug
10 months ago

Still driving a 2013 Chevy Volt as a daily. 187k miles, has about 27 miles on the GOM. I’ll probably be driving this into the ground, but so far, only had to do 3 oil changes in my ownership and brakes. (~90k miles of ownership)

Reauxtide
Reauxtide
10 months ago

I’m driving a 2015 Lariat 6.7 Powerstroke F250 with 142k miles. It’s my daily and pulls my 24’ enclosed trailer with a track car inside once or twice a month. It’s solid, I’ll be mad if it doesn’t hit 700k without major repair.

My wife is driving a 2009 Prius with just over 200k. I replaced the hybrid battery a year ago at around 180k with the project lithium cells. That car is a f’n rockstar.

We can afford newer and “nicer” cars. What would be the point? Our dailies have the utility we need.

I have ended up tracking a “in good shape” e36 M3 much longer than I intended. It was cheap when I bought it in 2017, but there is almost nothing reasonably priced to buy just for track days now.

Chemodalius
Chemodalius
10 months ago

My daily is a 2019 Miata Softop with some light mods (exhaust swap, some appearance stuff) and just under 90,000 miles on it (100 mile roundtrip commute plus never really worked from home during covid). Still loving it, but starting to think about in a year or two buying something else to daily (electric maybe?) so I can do some more serious mods (forced induction, etc) without risking being without a ride to work.

Just bought the wife a 2023 CX-5 6 months ago to replace her 2018 Mazda3 (somehow we accidently became a Mazda family) so we could give it to her parents.

Both cars have Mazda’s promotional 0.9% interest loans on them, so we’re going to run those loans all the way out. Though the CX-5 they’d only do a 3 year since the interest rates were/are so high.

Fordlover1983
Fordlover1983
10 months ago

Mine is a 2001 Mustang convertible. V-6 auto, unfortunately. I really wanted a convertible, it was cheap, and I figured if I liked the topless life, I’d upgrade it. 160,000.

The wife has a 2007 Focus, 270,000 on it. She’s wanting something new. She drives 20,000+ a year and worries. Has her eye on a Forester, and I’m to the point where I want to wrench because I want to, not because I have to. So, we’ll be buying our first NEW car soon. I’ll hang on to the focus and drive it as I modify the Mustang.

Daughter number one is in another 2007 Focus, 245,000 on it. She has a kid of her own, and I’m hoping to marry her off soon! She can buy her own replacement!

Daughter number two is in a 93 Ranger. The odometer has rolled over at least twice, could be more! We have replaced the engine and transmission. When she leaves community college and transfers across the state, we’ll get her something “better”. At that point, son number one will be driving the Ranger!

Ryan L
Ryan L
10 months ago

I am not sure there has been a better piece of marketing intelligence for David and Matt etal than the comments to this thread.

Pretty damn fine definition of the audience.

Probably a good idea to do some mining and create some expanded content on individual audience members mobility solutions, challenges, obstacles and solutions.

Andrew Pappas
Andrew Pappas
10 months ago

I have a ’14 focus se manual with 90k on it. Nothing out there is really available for what I want. GTI has a bad interior, GRC has markups up the wazoo, Civic hatch means overpriced base car or type R (see GRC issue) and the old focus runs too good to risk a more interesting other used car. I’m in basic car purgatory.

A Wrx hatch and I’d be there with a deposit today. I’d go for an Elantran N hatch, or a civic Si hatch.

Last edited 10 months ago by Andrew Pappas
Geoff Buchholz
Geoff Buchholz
10 months ago

As chronicled in Readers’ Rides some time ago, my daily is a 2000 Acura 3.2TL I bought new, sold to my dad five years later, and had given back to me in 2020. It has 243,000 miles on it, is now on its second transmission, and runs like a top. I will be its final owner.

Dan Pritts
Dan Pritts
10 months ago

Daily duties are split between my 18 TourX (35k, short commute plus pandemic), and a new to me 40k 02 Miata. TourX sadly unavailable with a manual or diesel, although I would pass on the brown regardless.

Bongo Friendee Harvey Park
Bongo Friendee Harvey Park
10 months ago
Reply to  Dan Pritts

I’ll take the tour x off your hands since you obviously don’t need it.

GoesLikeHell
GoesLikeHell
10 months ago

My “daily” is an 05 PT Cruiser GT. Bought it in spring of 22, while everything else was nuts for prices inflation skipped right over these cars. I found one in a color I don’t like with the chrome package I despise and the automatic transmission I didn’t want, so I bought it. Has 109k miles and is in great condition. It makes a decent parts hauler and lets me keep some miles off my pickup.

I’ve worked from home and/or commuted by train since 2017 so I’m not putting the miles on like I used to. If I was commuting more miles I would have something a bit more fuel efficient and fun to drive again.

Ian M
Ian M
10 months ago

I daily an 1998 Ford Ranger with 318k miles that was bought in 2017 for $800. It’s bland, it’s slow, and it’s not particularly comfortable, but it has enough room to (somewhat) comfortably sleep in the bed for some low-buck off-season camping.
After driving it for the past six years and ~150k miles, I’m genuinely curious how much further it’ll go without a serious failure.

MATTinMKE
MATTinMKE
10 months ago

My daily is a 2019 Civic Si. It has ~29k miles and is running great. Needs rear brakes. I’ve been looking around, not very seriously, and I figure I’ll need to keep this car past the point where it’s paid off, so at least another 2 years.

Strangek
Strangek
10 months ago

Fudge. We have a 12 year old Forester that keeps boringly doing its job. I’d love an upgrade, and would surely have gotten one by now in the before times, but these days I’m feeling pretty priced out of the game. Other daily is only a few years old, but I’d love a bit of an upgrade on that one too. Problem is, for the same monthly expense, I’d likely find myself in a worse car.

Last edited 10 months ago by Strangek
Spike
Spike
10 months ago

I used to daily my 90 Comanche until I got rear ended last week. Need to sort out its future with insurance but for now I am back to driving my “appliance” 2013 Mazda 3. I’ll probably run it into the ground, which may be coming up quicker than I had hoped.

Slow Joe Crow
Slow Joe Crow
10 months ago

2016 Mazda CX-5 53,000 miles, I expect to get at least 10 years out of it maybe more. My wife complains it doesn’t fit her well but it’s a very good car and was our first new car in 25 years.
The secondary whip is a 2002 F150 with 120,000 miles that I got in 2020 and expect to run until something major fails or I get a better truck. At 2-3000 miles a year it’s a cheap hauler that can sit for weeks but still handles the occasional long trip.

Col Lingus
Col Lingus
10 months ago

2009 Scion xB. 92K miles. Will probably keep till can afford a used Toyota Stout truck.

Jeeptopian
Jeeptopian
10 months ago

My DD is a 1992 Jeep YJ with under 200k miles, I plan to pass it on to my daughter who is currently 4yrs old. My biggest problem with my plan is getting it to pass CA smog every 2 years.

MtnCamantalope
MtnCamantalope
10 months ago

We have a 2020 civic that my wife drives, about 24kmi on it since she’s still working from home some days. We bought it in that sweet spot of time during the early pandemic days when automakers thought the sky was falling; less than $21k brand new and 0.9% financing from Honda. My wife loves it (cvt and all) so we’ll have it long after it’s paid off.

I alternate between my 2017 toyobaru with 25kmi (it stays in the salt free garage during winter) and my 2018 Ram 2500 way-too-much-truck-for-my-use-case-go-‘murica. Pretty sure that was the trim level. That’s got only 35kmi, and also a stick shift. Since the truck with that transmission is literally irreplaceable I’ll have to keep it forever. I still feel like a kid getting away with something every time a drive the 86 so that’ll have to stay as long as the feeling does.

I’ve also got a 2001 Land Rover Discovery with 204kmi, though to call it a daily…weekly…monthly driver is a stretch. I’ve got about 15 times what I paid for it put in so that one’s going to have to stick around for a while too.

I am, however, in the market for another car, since a four car family certainly has room to grow. I’m thinking something old and German…yeah, I’m definitely on the right site.

Peter d
Peter d
10 months ago

My DD is a 2011 Infiniti G37x that I inherited from mom. I meant to drive it for a year or two and then offer it to a niece or nephew or one of my cousins. It has been so nice that I have put 5 years and 45K miles on it (106K total). It is a fun-to-drive car. My significant other is begging me to get something new because of the cracking on the dash and some of the door panels and because the MAP sensor keeps throwing the service soon light, which I have learned to ignore (it seems this is an ecu programming issue that the dealer may be able to mostly cure, if I had any desire to go anywhere near an Infiniti dealer), but is sorta worrisome to those who didn’t get accustomed to driving POS cars at some point in their lives. And she thinks it is too small and we end up taking her bigger, newer, nicer car making her likely to exceed her lease allowed mileage.

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