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.
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).
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.
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.
Cruise Probably Becomes The First Firm To Unionize
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
Like 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:
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?
As 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:
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?
Photos: Tesla, Skoda, Ford, Cruise
2013 VW Jetta GLI with 125K. My commute just went from 20 miles to 6 round trip, which I do on my motorcycle 75% of the time.
The GLI has been remarkably reliable. Only non routine maintenance so far has been an intake manifold (covered under VW extended warranty), and dirty fuel injectors.
2013 Prius 151k. Need to get some maintenance done. Owned since new.
I always want to do my own maintenance, but then I also have a nightmare where it is Sunday night and I ran into some bolt I can’t budge and I’ll need to tow the car to a mechanic to shamefully admit defeat where they’ll then rip me off more than if I just brought it there in the first place.
My 1996 Subaru Legacy wagon has the unkillable EJ22 and a stick and is at 218K miles. I’ve had since 2000 and given it minimal maintenance over the years. It’s been abused, has a little rust, and I treat it as a beater, but runs and drives great, with original head gaskets and clutch. I’m preparing it now for a 4600-mile drive (Alaska to NH), so I obviously trust it.
My 2003 Legacy wagon, also with a stick is at 156K and has been parked in NH. I’ve had it since 2019, when I drove it from CA to NH a few weeks after buying it. It’s rust free and my nice car that I keep in perfect condition. I plan to drive it back to Alaska and leave the 1996 beater for use on the salted New England roads.
I have the buy and hold philosophy for cars like people do investments and have never sold a car though I’m now in my 50s (lost two cars to accidents, the last a caribou collision). I don’t plan to ever sell either of the Legacys, so I have incentive to do necessary maintenance and repairs. No such thing as “driving the wheels off” if you start with a reasonably reliable car and do the maintenance.
My Daily is a relatively new 2018 with jut under 50k on the clock. I plan to keep it until the wheels fall off.
My DD is a 2018 that I got new and it has just under 50,000 miles on it. It will be paid off around this time next year and then I hope to have it at least another 5-6 years after that. It’s a Mazda 3, so nothing fancy but it gets me to work and back and that’s really all I need right now.
My daily 12 Cruze Eco with a stick is at 233k miles. I recently wrapped up new suspension bits and a turbo replacement. The suspension bits were planned. The turbo wasn’t. It failed at the wastegate like every other turbo for the LUJ/LUV 1.4T eventually will. The OEM turbo was made in the UK by Garrett. The replacement was OEM since the aftermarket ones were likely worse. Looks like the engineers at Garrett are descended from the engineers of Lucas Electric.
2012 Prius v. 4th owner. 146,000 miles. Got two dashcams, 1.5″ lift, under-seat subwoofer, Android Auto-compatible aftermarket head unit. Hoping to run it into the ground, although with the known issues with Gen 3 Prii, that may be sooner than I hope.
I do work from home though, so I’m only putting on 10,000 miles a year or so for weekend visits to friends and family. Two more years til I’m bringing the average age of vehicles on the road up.
If anything happens to it, I’ll probably seek a 4th gen Prius, Camry, or wagon equivalent.
My previous daily drivers reach about 300k miles before I need to get another one. I expect that from my current ’20 AWD Prius. Since I am working from home, this car could be my last daily driver. Even my hobby or specialty vehicles are at 350k, 300k, and 200k miles.
The 2010 Lancer GTS ain’t broke yet (thank goodness). It’s somewhere over 198K.
I don’t know how long I’ll keep it. There’s still a few things it needs to do, like the Nürburgring. It has to do the Nürburgring before I even think about selling it. Even then, gosh, I don’t know. It’s still in pretty good shape, cosmetically and mechanically.
Also, I have no idea when I’ll have stable full-time employment again, so besides having two? laps left on my ‘Ring card and friends who want to stuff the Lancer in a container, ??? ????????. I want a Cayenne to tow the garbage race car sons, but do I want to get rid of the Lancer? Not really. It’s a good little car that’s probably worth -$3 as a trade-in anyway.
My only car, a ’14 Compass, is about to hit 66,666 miles. Bought it with just under 44,000. It’s doing ok, but I need to fix a few things. It mainly needs body work after some bro-dozer hit it and drove off. I also outta fix the lower inner part of my driver’s door since it’s starting to rust pretty badly. Besides the tires I’ll have to buy it next year, the random clicking I hear when it first sets off after sitting, and maintenace, I’m hoping nothing much else will go wrong with it. It was a non-salted PA car, and it was brought up in the middle of the summer and I rust proofed it before NY salted the roads that winter.
If I can afford to, I’d rather keep it as long as possible. The damn car does more than it ever should have to do, and it just doesn’t quit. It’s no Bentley, but it has remote start, heated seats, and all-wheel drive.
“How is is your daily driver? How long do you expect to keep it? How many miles does it have on it?”
My daily is a ’16 ATS-V sedan with a stick and about 50k on the clock. I am going to drive it until the wheels fall off. Then I will hope that the manual blackwings haven’t yet become unobtanium collector cars.
Daily and only vehicle is a 2018 Mitsubishi Outlander GT. I’ve been working from home since around 2016, so it’s only got about 27,000 miles on it and runs like a top. Thanks to the insane used car market, my car’s current value is really high for a Mitsubishi. If I were to sell this car, I could get more for it than I ever thought possible.
As tempting as that is, the problem I run into is what the hell I would replace it with, since the same factors that are making my car valuable are also making new cars obscenely expensive. Ideally I would like something a little bigger since my kids are growing and that 3rd row is really tight. But at this point I can’t quite justify the expense of a new vehicle given my income and cost of living. Honestly I’m lucky I have a good car to ride into the future. (And the 100k powertrain warranty adds to that peace of mind.)
If I were to come into some money, then I suppose I would look at a Pacifica PHEV or the new Outlander PHEV. I do want my next car to be more efficient.
My “daily” is a 2018 Ford Fiesta ST. I bought it in June 2018 and it just hit 35k miles, so I’m looking for many more years out of it even if I have to do some expensive repairs at some point. Part of that is because I love the car so darn much. I drove my previous daily, a 2002 Saturn SL2, for 16 years.
It doesn’t hurt that I also have a 2007 Suburban with just over 200k miles as my road tripping/outdoor adventure/utility vehicle. I hope to get that out over 300k miles and if it requires doing the engine or other major repairs (I’ve already done the transmission) I’ll do it because I simply can’t replace it inexpensively.
My bigger concern is my wife’s 2005 Acura MDX, which she uses hard. Honestly, if a replacement wasn’t so expensive I’d love to just go get her another car, but financially that’s not really in the cards right now.
“ How is is your daily driver? How long do you expect to keep it? How many miles does it have on it?”
My 2008 Honda Fit (with 277,000km) is still running fine. It’s showing its age in terms of rust and other things. Recently when rotating the tires, on the rear passenger side tire, when jacking the car up, the car went up… and then it went down as the jack went through the mounting point which is now made of rust, thoughts and prayers.
So when the rust gets to that point, that’s when I think about replacing it… which I am. I’m thinking of getting one more winter out of it and then replacing it early next year.
And I’d like to keep it so I can ‘use up’ the supply of oil filters I bought in bulk a few years ago. I also bought new tires for it at the beginning of this year and would like to get more use out of them if I can.
On the bright side, used Tesla prices are coming down nicely. So my next car just might be a used Tesla Model S. Or it might be a Prius if used Prii prices come down. Or it might be a used Ford C-Max.
But the used car market still isn’t completely normal and thus, I want to hold off as long as possible.
My use case is such that buying new or leasing is a non-starter, because I drive a fairly silly amount of miles per year (40-50k/year, year-in/year-out), mostly for business… but I also enjoy driving the rest of the time. I typically drive the wheels off, then reattach the wheels and keep on driving…
The last time I bought something new, back in the early 2000s, I kept it 11 years/ 325k miles, then sent it down the road (but bought it back a couple years ago). At the moment, there’s very few things I’d even consider buying new, as the idea of an SUV/crossover sort of thing has zero appeal, and few manufacturers are making actual cars these days, especially upscale-ish ones.
At the moment, the daily driver duties are shared by an ’04 Jaguar XJ8 and a Saab 9-3 combi (manual gearbox!).
The Jag has been a delight–quite reliable and reasonably straightforward and fairly economical to keep on the road, since I do my own maintenance and repair work. I’ve piled more than 60k on it in the past 2 1/2 years, cresting the 200k mile mark a few weeks ago (and 205k by the end of next week). The aluminum body and solid mechanicals means it will continue to look terrific and be rust-free, so I should be able to keep it in service for quite a while… and it just drives soo well. I had bought another XJ8 as a possible replacement this spring, but ended up sticking with the current XJ.
The Saab is enjoyable in its own right, but I’ll need to take it out of service this fall to fix a bunch of things that have accumulated (bought it about the same time and mileage as the Jag, and that one’s right at 200k miles, as well). There’s at least one car beyond that in the fleet that can stand in as a backup ride, if needed.
Maybe planning the entire economy around everyone needing a car wasn’t the best plan.
I recently bought an E-bike to improve my motivation to exercise. Getting old and nice to have some help on hills etc…I ride 10x more than I used to and I even find myself jumping on the bike to make a quick run to the store. Energywise it uses next to nothing and can get me anywhere I need to go within 5 miles, probably as fast as jumping in the car. Realistically we are not going to reduce car prices or increase wages, I think our future will include a lot more public transport, ride sharing, and e-bikes. Somewhere in that mix might be very basic, low range, low cost EVs. Bikes don’t always work great for people that have families or places that have weather :), but I think it’s also silly to expect everyone to buy a 100 kWh EV.
Daily is a 2015 VW Sportwagen TDI (the last year of VW diesels in US) with 150k miles. It is the ‘SE’ trim, so it has all the amenities I need, I serviced the timing belt & WP at 120k and I don’t expect to have anything else to do to it until 240k miles when the next one will be due. If no one t-bones me by running a red light, I expect to be buried in it.
My other daily is a 2023 KTM 390 Duke, and the ‘fun’ car is a 2017 GTI with lots of mods for track use. I expect the GTI will be the first to need replacement when I either roll it or blow it up at the track.
All my cars are manuals, so I don’t have DSG service to deal with.
I have a 2016 Touareg TDI – 135,000 miles. I wanted to buy a Sportwagen, but VW discontinued them so I bought 2016 Touareg. These ended up as the last year if VW diesels in the US.
My daily (and only) is 9 and I hope to keep it until I can’t drive, then donate it to Honda.
At 68, I hope that’s still a while.
2015 Fit EX.
I got a renewal for my auto insurance this week (Progressive) and it was almost twice as much as last year. My agent tells me that part of this is due to living in Florida, but also that policies are going up nationwide as a result of cars costing more to repair/replace. If that’s the case, then it means that even folks who aren’t buying a “new” car yet are potentially getting screwed by increased new/used car prices.
It doesn’t help that rates rise geometrically after 65.
Like in the shape of a triangle or … ?
This is the same for me. Progressive sucks. I sold my second car which had full coverage. Called Progessive to cancel the insurance on it. Saved 40 fucking cents! No shit. Screw them.
I sold my “expensive” newer cars to a dealer broker during the pandemic for more than they were worth to me and started driving my older stuff figuring I would pocket my payments and wait until things settled down to buy new again. Since then I fell completely out of love with the idea of buying anything new. It is complete madness. My 200,000+ mile vehicles will do for now as I do all my own maintenance and have a 2 post lift I bought with the saved payments.
Daily driver is a 2016 Chevy Cruze; it’ll be 8 years old this September and I’ve put 156,000 miles on it since I bought it new. I used to travel a lot for work the first few years of my career, and I also like taking road trips all over the country, hence the high miles.
It’s higher miles and getting up there in age but I’m having a hard time letting it go. It’s been reliably serviced, I know the complete history of the vehicle and the thing has been mechanically absolutely rock solid over the course of my ownership. Even living in the salt belt that is Detroit, the body is rust-free and the underbody is nearly so (wash your cars in the winter frequently, it seriously helps). I’m looking to upgrade my next car in size and capability (midsize to large crossover) and I’m particular about what I want, so anything new is probably going to be $40K+. Anything CPO, under 30K miles and less than three years old will be $30-35K.
It may sound unreasonable and privileged but I’m just at a stage in life where I’m not willing to fish any further downstream than that unless it’s a vehicle from someone I know and trust. If I’m going to drive an older or high mileage car, it’ll be one I have history and lived experience with. I live pretty frugally, have a good career and have been able to “afford” such a car on paper for quite some time. It still makes me feel a little physically ill to drop that much on a long-term consumer good though, even with a decent down payment and interest rate.
Plus, I’ve grown sentimental of the little Cruze in all time we’ve spent together and part of me wants to see how long I can ride things out. It can also realistically do everything I require of it, including towing my sub-1,000 pound camper and a utility trailer for larger/bulkier items. My fun/enthusiast cars also help scratch a bit of the “new car” itch. Basically in wait and see mode, no particular rush unless something catastrophic happens.
My DD is a 2023 Maverick XLT (Ecoboost, not hybrid) with just under 3k miles. It’s my first car that cost me more than $1,200 and I love it and hope to keep it a very long time. If plans change though I optioned it in a way that I think will maximize it’s resale value in my area.
Thinks I like the most:
-plenty of power for everyday driving
-despite what the haters say having a pickup bed is very useful and I use it all the time
-the interior is very comfortable and livable, especially for the price
-imo Ford saved money in places that make sense, and for the most part devoted resources to important things
-the size, the one caveat being that the interior is just barely big enough (I have a 13 mo baby) I knew this going into it though so I’m not really bothered by that
Things that bug me:
-infotainment can be slow and buggy. The biggest issue is there’s a volume difference between android auto and radio, so if I unplug my phone before turning the volume down and turn the radio on it’s very loud. The volume knob is an encoder and does nothing if the radio is off
-The dash screen is too large and while the available information is useful to glance at, it doesn’t offer a lot in terms of constant use data, so you end up driving around with this 4×6 screen that’s pushing the other dash dials off to the side while pretty much being used only for the digital speedometer, which then makes you wonder why it needs both a large digital speedo and a normal dial speedo.
-The suspension, especially the rear, is quite stiff.
Does the stiff rear mean that the Maverick is a “real truck” after all? Throw some junk in it to squat it a bit!
2022 Accord Sport SE (1.5t) with 6,700 miles. My intention is to keep it, at least in the family, for many years.
Wife has a 2016 GX460 with 134k and the driving kid has a 2014 Avalon Hybrid with 133k – both still feel new and have ample life remaining.
2004 Ford Sport Trac, 167k
It runs fine and I love it, the underbody is badly rusted and at some point that will kill the car.. plan to keep it until then. Usually keep a car until it’s at least 20 years old..