Cars can be lovely, but they can also be painfully expensive, especially when you bite off more than you can chew. A new report found that more than a quarter of all trade-ins from April through June were underwater. In an era of sky-high car payments, that’s terrible news for consumers, and it’s likely a knock-on effect of the disruptions we saw four years ago.
At the same time, Stellantis expects a ten-figure hit during the second half of this year thanks to tariffs, Maserati’s head of engineering wants a stick-shift halo car, and 2026 is reportedly the last model year for the beguiling Lexus LC 500.
Once again, Matt’s out on vacation, so I’m here to bring you The Morning Dump. It’s our round-up of bite-sized car news stories you should read, so grab a cappuccino or a proper meal depending on what time of day it is where you’re at, and dig in. Don’t worry, your boss probably isn’t looking.
That’s Some Serious Negative Equity
When the new car market got all topsy-turvy a few years ago, everyone asked when things would be back to normal. The short answer? Possibly kinda never, depending on how you define normal. While new vehicle supply has mostly returned to normal minus a whole bunch of actually affordable options, we’re getting reports of a negative equity extravaganza play out across America as a whole bunch of factors have absolutely hammered vehicle affordability and left loads of drivers underwater, owing more than their car is worth.
According to Edmunds’ story Underwater Car Loans on the Rise: More than 1 in 4 Trade-ins Had Negative Equity in Q2 2025, the average trade-in age has returned to pre-2020 norms of 3.8 years old, but the number of trade-ins with negative equity and the average amount underwater is troublingly high. We’re talking 26.6 percent of trade-ins in the second quarter having negative equity, “the highest share Edmunds has on record since Q1 2021.” Of these upside-down loans, the average amount owing stands at a “historically high” $6,754. Yikes. What happened around four years ago to put people this far underwater?
Oh, right, the chip shortage. Just to jog your memory, here’s the short notes on what happened. A black swan event occurred in 2020 that made automakers slash production. Since the vast majority of automakers use just-in-time production, orders for parts dried up at the same time a consumer electronics boom happened. When things started back up a few months later, silicon chip production for cars was bumped to the back of the queue, exacerbating a shortage of new cars. Short supply plus high demand equalled high prices, with many consumers paying above sticker price for normal cars and many automakers offering only the expensive models. Add in the end of the near-zero-interest rate era putting higher interest atop higher principal, along with trimflation focusing production on high-margin trims and general headline inflation also driving up the price of the average new vehicle, and you have the conditions for lots of people being underwater once new car supply eventually “normalized.” At the end of the day, the person getting screwed is the consumer, as Edmunds eloquently puts it:
“Consumers being underwater on their car loans isn’t a new trend, but the stakes are higher than ever in today’s financial landscape,” said Ivan Drury, Edmunds’ director of insights. “Affordability pressures, from elevated vehicle prices to higher interest rates, are compounding the negative effects of decisions like trading in too early or rolling debt into a new loan, even if those choices may have felt manageable in years past. And as buyers take on new loans with much higher interest rates than those from just a few years ago, even potential tax deductions can’t meaningfully offset the thousands more they’ll pay in interest. With a growing share of upside-down owners thousands of dollars in the red, many are at risk of getting stuck in a cycle of debt that only grows harder to break over time.”
While higher new car prices let consumers roll more negative equity into new loans while staying within lenders’ approved loan-to-value ratios, it’s often best to either stick out the payment term on your current ride until you’re no longer underwater, or if the car you’re underwater on is starting to break often, roll that negative equity into a cheap lease for a lower payment and a faster pay-off time. Gap insurance is also a good idea if you’re rolling negative equity into a new contract because if that new vehicle gets totalled, gap insurance should make you whole.
Stellantis Predicts A Terrible, No Good Tariff Hit
Dodge can’t dodge tariffs, and neither can Chrysler, Jeep, or Ram. While the impact so far of the White House’s new trade strategy on new cars has been fairly slim, all signs are pointing toward a serious ramp-up. As Automotive News reports, Stellantis expects a financial impact of $1.4 billion in the second half of this year due to tariffs alone.
Stellantis’ main exposure comes from 25 percent tariffs on vehicles built in Canada and Mexico and sold in the U.S., but it also exports some vehicles from Europe, including models from Alfa Romeo, Dodge, Maserati and commercial vans.
Last year, more than 40 percent of the 1.2 million vehicles Stellantis sold in the U.S. were imports, mostly from Mexico and Canada.
Well, sort-of. See, for a passenger car to be USMCA-compliant, 75 percent of its value must now consist of parts made in North America, a minimum of 70 percent-by-value of an automaker’s steel and aluminum must be purchased from North American producers, and 40 percent of a vehicle’s value must meet high-wage expenditure requirements. However, the non-USMCA-compliant content of parts in cars made in Canada and Mexico is tariffed at 25 percent, and that’s where the big impact is.
Partly due to these tariffs and partly due to Stellantis shooting itself in the foot under the previous leadership of Carlos Tavares, North America now hangs like an anchor around the neck of the global automotive giant, being the only region to see a proper decline in adjusted operating income. Europe is essentially flat and the MENA and South American markets are up, so it’s critical that Stellantis gets its North American house together.
Maserati Wants To Bring Back The Manual
Actually, here’s something that might help a little bit, even if it probably won’t be USMCA-compliant. While Maserati’s been seemingly swimming in circles over the past decade or so, the demand for cars in which you shift gear yourself is high enough right now that in certain cases, stick-shifts command a premium over automatics, especially at the top end of the market. Speaking with Autocar, Maserati head of engineering Davide Danesin expressed enthusiasm for the idea of offering a manual gearbox on a halo car.
He said: “A manual gearbox is an opportunity. I don’t see that in big series [production], but why not do a special version with a manual gearbox? No reason to say never. It could be the right choice for a limited edition of a car.”
He added that a manual gearbox would emphasise the ‘pure’, analogue ethos of a Maserati supercar. “By doing a purely mechanical car, it does make sense to have a mechanical gearbox with a shifter,” he said. “So why not? It fulfils perfectly the brand. It fulfils perfectly our approach and the mindset. So honestly, I think one day we’ll do it.”
The last stick-shift Maserati was the Coupé GT and Spyder GT of the early-to-mid 2000s, so even if a row-your-own option returns as part of a limited-run model, it would effectively be the first manual Maserati in two decades. Plus, reading between the lines, there’s something oddly tempting about a three-pedal super-GT car because nobody really makes anything like that anymore.
It’s Reportedly Your Last Chance To Buy A New V8 Lexus
It’s always a heartbreaker when you hear word of a car you love being set to end its production run, and doubly so when it’s one of the loveliest cars on sale today. While we sort-of knew the direction the wind was shifting with the JDM Lexus IS 500 Climax Edition, it’s not just V8 sports sedan production that might be ending soon. A new report from Automotive News states that “Brand officials have announced that the LC will end production in 2026.”
Man, that sucks, but I guess the LC 500 has been in production for eight years now. Still, it’s the sort of breathtaking car worthy of a Peter Schutz moment. You know, the CEO of Porsche who looked at a timeline of models on a chart hanging on the wall, noticed the 911 lineage stopped in 1981, grabbed a marker off lead engineer Helmut Bott’s desk, and extended the line for the 911 across the page, down the wall, and out the door. The LC 500 is one of the few modern cars I wish could be made essentially forever, because it really is essentially perfect. Stunning looks, a sumptuous interior, a downright musical soundtrack, ride quality up there with the greatest GTs but just enough agility to cut a rug or torch a pair of Michelins if needed.
Thankfully, there will be a 2026 LC 500, but I’d recommend getting your order in now if you want to spec one. I have a feeling Lexus’ V8 grand touring coupe of the 21st century will be looked back on as one of the all-time great cars of its era. Of course, there’s also a chance some wires got crossed in this report, given that it claims the LFR will be electric, but Automotive News is a credible source of information when it comes to soon-to-be-discontinued models, so consider this the five-minute bell for five-liter Lexus exhiliration.
What I’m Listening To While Writing TMD
Every so often, an underground track comes along that’s hugely influential to the musical landscape over the next few years. “Iced out Castles” by Black Kray a.k.a. Sickboyrari from 2013 is one of those tracks. With DJ Smokey production floating an ethereal sample over thumping beats and vocal processing that set the benchmark for the Soundcloud generation, I feel like this is one of those joints that deserves more love because it was just ahead of its time.
The Big Question:
What currently available new car will you be saddest about when it gets discontinued?
Top graphic images: depositphotos.com; Toyota
What is that old saying… Oh something about the Miata. The current Miata is lightweight and relatively simple for a new car. The next one will almost definitely not be as light or simple.
Current gen Nissan Leaf. It didn’t need to be replaced by yet another technophilic Model Y knockoff, it needed NACS instead of CHAdeMO, and perhaps some other cost cutting measures to make sure that cheap BEVs are still available in the US.
I doubt (hope?) the new one won’t be terribly much more than the current one. It still has to sit below the Ariya and will be FWD-only. Also despite the shape it has much more cargo space than the old one overall which is nice (55 cu ft to 30 before, but 3 less with the 2nd row up). I think it looks pretty decent for what it is and could give everyone a run for the money if it’s cheap enough. I’d definitely take it over any GM, VW, or Ford product.
Point is I doubt it’ll be cheaper than the current Leaf.
Another article with no investigation on why. People paid twice what the cars were worth and now trying to trade the. In less than 4 years? Car loans for 7 years a basic person knows based on a car when they are underwater, it should be something required on a monthly loan statement and on the original loan papers. How morons decided to trade in underwater cars and buy new until car dealers are giving them away mystified me. It should be illegal to give a loan for more than the new car and keep dumbass from trading it in. But everyone says it’s a choice. Then billions of car loans go bust and taxpayers have to go and do a bailout
Never thought I’d see the day when you were advocating for increased regulations, but here we are.
The ever lengthening loan terms are definitely a big reason that the number of people being underwater is climbing.
However when you look at the rest of the data in the Edmunds article this certainly isn’t a case of the sky is falling, and only looks bad compared to the time period when used car prices were still inflated. If we look back at 2019 and 2020 34.6% and 37.2% of trade-ins were underwater. Add in that those 3.8 year old vehicles were purchased when incentives were rare, ADPs were common and the 7 year loans many people took I’d actually say those numbers look pretty good all things considered.
The other question is how many of these people are serial rollers and how much did they roll into the current loan. I ran a quick example and rolling in $5k on a $40K car means it will take about a year before your stop paying off the old loan and start paying off the now 1-year old car.
I thought the Lexus was ugly. Then I saw one on the street. Eee Fecking Ghads!
I’d say the Toyobaru twins would make me the saddest.
Consumers do it to themselves since finances and basic budgeting are not taught in schools or at home by many families. Because it is great to manipulate people when they are beholden to the banks and corporations they work at. Keep older cars folks, and if you can, buy a cheaper car with cash to get out of the debt cycle of death. It also doesn’t bode well that modern vehicles are more complex and expensive to repair, often also needing a dealership.
Financial literacy is definitely an issue, but there’s a poor trap here too. If you’re living paycheck to paycheck and your car needs $2500 in repairs, you’re screwed even though you know paying that would keep your car running for years. You can’t borrow that, but you can roll your existing loan into a new car and finance it all. Terrible financially but it gets you in a car.
Damn, I just checked a couple of low-cost cars and the lease deals kinda suck. I was going to say that if you are poor you should really work as hard as you can to keep a decent credit score so you can lease a low cost car and have free maintenance – but this is getting more difficult. Driving old-cars creates unexpected, large repair bills that are tough to plan for.
Yeah, it’s a tough squeeze either way. At least the insurance and registration is lower on older cars.
I check Lease Hackr every now and then out of curiosity. Seems there are still some dirt cheap leases out there, but you better be able to live with an EV. And you better read a place like Lease Hackr to find out what is actually available, no dealer website is showing the $200/month Nissan Aryia lease.
Gone are the days of the Buick Encore leasing for $120 month, which as you say, was a killer deal for someone short on cash to have a reliable (with a warranty if not) vehicle for 2-3 years.
Oh yes, I’ve been in that trap more than once. Credit card debt to pay a dealership who didn’t repair the problem 3x and charged me $900 each time. *Looking at you Denver VW dealership circa 1999* I’m still salty about that financial pain and have found local independent repair shops ever since.
The Nissan Altima has no 2026 model year planned.
… where is all that energy going to go?
Kia and Dodge are top contenders based on what I’m seeing in my area
Nissan makes other cars ya know. Sentras, Rogues, Kicks, etc…
Oh no, anyway…
Unpopular opinion: It’s an ugly car and painting it “Moist Cinderblock” isn’t helping one bit.
I suppose they couldn’t figure out how to adapt the LC to their current design language and gave up. Have you seen the 2026 ES? Toyota’s designer apparently decided if we didn’t like their Predator grill, they would give us something even worse, WOOF.
I also think it is not a great looking car (although i think the interior is very nice).
I do think it is like a early Panamera though. Early Panameras were ugly and then without fundamentally changing much at all, a few key tweaks made it really good looking car. I feel like the LC is a few key tweaks away from being a really good looking car. Right now tho it just feels like it’s just not right and it has been not right long enough that I dont think it’ll ever get fixed.
I thought the early Panameras looked ok on the outside, I mean they looked like a Porsche, but the inside looked like a very large dog ate a sack of Nokia cell phones and puked all over the interior.
The most charitable way I can put it: “It is the best-looking Lexus in their current line up.”
I think they look a ton better when you stand next to them! Out of context, you don’t see how well the subtle curves work together in a compact coupe.
Look James Bond had an underwater car so I want one too, and it turns out we’re all preapproved!
Didn’t Elon buy it?
We bought our Pacifica in the middle of the chip shortage. Since I planned to keep this car till the wheels fall off, I bought an extended warranty and the loan is for 7 years. Never done something like that but the reason behind is that I am not planning to sell at all, it will probably be one of my kids car at some point.
Thats the risk I took for a multi purpose vehicle (It took us to Mexico twice from SE Michigan) and I am underwater since we put nothing down. 3 years so far and the car still works, no big issues. 4 more years and the car will be mine.
Playing the long game . . . good on you.
Being upside down doesn’t matter if you aren’t selling. And if you got a warranty, you have a hedge to ensure you don’t need to sell.
Bold of you to try that with a Pacifica. Any intake manifold gasket leaks yet? I love ’em and how they look, but I’ve heard nothing but horror stories.
I admit I’m lucky as I don’t have a car payment on a “fairly” reliable daily that could easily go another 4 years before a major service, but I’ve been searching for new cars and I can’t fathom some of the prices and payments.
But I’m seeing the prices some of these Lucid’s and LC’s are asking and I’m absolutely hoping a crash could knock another 25% off for a purchase. In my dreams unfortunately.
Truer than anybody realizes. About a quarter of the population in the U.S. is just above the poverty line for their given area. In the areas where the median income is much lower and the percentage of the population just above poverty is much higher than that 20-25%, personal transportation is critical. Many cars made after 2007 are being pulled off the roads completely instead of being sold used as the repair costs are higher than the cars can be sold for. There’s also the still prevalent inclination towards pricing CUVs and SUVs higher than their sedan or hatchback equivalents, and used car lots lean on this inclination hard. A Chevrolet Sonic might sell for $3,499 at the lot, but a Trax of the same year and mileage will sell for $5,999.
This is a downstream consequence of the two decades of puffed up margins for new CUVs and SUVs straight from the dealerships, and has been exacerbated by the death of any other body style and the ridiculous overlap in lineups. The manufacturer’s own cars are competing with eachother (Toyota alone has four SUVs/CUVs in the mid-size four door segment), and so they have to differentiate them via price or drivetrain power source. This disincentivizes the dealerships from going extremely low end or extremely high end or pushing for wider acceptance of EVs as they want volume sales. Meanwhile the lack of diversity keeps used prices high because all available examples are the same, and so there’s fewer “undesirable” models or configurations. This incentive for volume is in line with what the manufacturers should be pursuing, but they’ve misinterpreted things and have gotten tunnel visioned into believing that only the highest end matters, regardless of how often it actually sells. They’re gambling on having only a few yet massive hits, except with absolutely atrocious odds.
As for the daily question… I don’t care anymore. There are no small analogue cars left, and thus nothing I truly care about.
This is a great example of why I’m sticking to 2010 and older, no car payment, and have a spare vehicle.
One point you didn’t touch on here is insurance rates for these newer vehicles, which are significantly higher than equivalent cars at equivalent age just 5 years ago. Yes they’re safer overall, at the cost of most accidents totaling the vehicle.
If you’re trying to stay within 5 years of new for your daily driver, you’re living an incredibly lavish life these days compared to most.
I can’t recall which model it was, but an early 2000s Maserati was one of the first cars I ever exerienced a dual-clutch automatic transmission in, and it was violent and awful. The car was almost brand new, and was already on its second transmission, at a $9K repair cost (covered under warranty I’ll assume). A few years later, I drove a sporty Hyundai with a dual clutch unit mated to a 1.6 turbo four, and while it was better than the Maserati, it was still kind of clunky, especially at around-town speeds.
I’m sure DCTs are better today, but perhaps putting a manual back into a Maserati is a good idea, even if not every potential buyer knows how to use them.
PS: I’m forever torn between wanting the safety, quiet, and comfort/convenience features of a new(er) car, and the simplicity and low repair/maintenance costs of an old one. I’m doing the old car thing right now, but it’s only a matter of time before the pendulum swings the other way…
That wasn’t a DCT. It was an early single clutch automated manual, which was marketed as being an F1 transmission and called Cambiocorsa in Maserati applications. Those transmissions absolutely do suck and there’s a reason why exotic cars with them are way cheaper secondhand.
Modern DCTs are light years better, but they’re certainly not as smooth as a torque converted automatic is, especially at low speeds. They really only make sense in performance applications, where most buyers will happily sign up for the eccentricities in the name of lightning fast shifts and a higher level of engagement than a traditional auto.
Thanks for clarifying that Nsane… I thought the Maserati had a DCT, but stand corrected. 🙂 It was truly awful, and the Hyundai one only somewhat better. I haven’t driven a DCT or automated manual (if any are still made) in a while.
The interesting thing is that some european Hyundais and Kias (like the i30 or the Ceed) have a DCT (the i10 and the Picanto has an automated manual), while the equivalents for american (or maybe every non-european?) market have CVTs (with the base engine, at least). So I wonder if a DCT is a better fit for europeans, who had previously driven only cars with a manual, or there’s a little difference in efficiency that also makes a difference in CO2 emission?
(The other interesting thing is non-DCT automated manuals dominance in european tractor trailers.)
Every co2 gram counts in the fleet average, and the cvt-drone is probably quite difficult to get used to, when you are used to shifting a manual. And manual was the standard until recently.
We suffered a rapid/catastrophic alternator failure in our 2015 Odyssey this weekend, and spent the better part of 2 hours limping it into a random church on a 95-degree afternoon, now with a flat tire and a donut spare, then suddenly finding tons of awesome help from strangers (one thing I will never dismiss about people in small towns is the DIY ethic, and they almost always know someone who knows someone…we got it towed on a Sunday, then a free ride 30 minutes with a couple of church members to our destination, and the towing guy also runs a full service shop. We were back on the road at noon the next day AND made it to our destination on time). Only cost — besides the alternator/tire/tow — was a few Ubers along the way.
All this to say, there’s still nothing I’m itching to replace it with. Stuff happens, and you can’t really plan on an alternator. Nor am I going to get spooked and think that starting over at a $50k price point is a good idea.
Moral of the story, just build some buffers into your travel plans, and use Google maps (and local churches or community centers?) as a possible resource before calling AAA or guessing using Google. Humans helping humans!
I’ve helped strangers, and been helped by them too. Seems hard to believe that such things are possible nowadays, but of course it can happen. Half the crap I carry in my daily driver (fire extinguisher, first aid kit, water, tools, etc…) is there in case the need arises for me or anyone that I encounter.
Thankfully we had a jump box (used it 3x while the alt was slowly dying) and also a compressor to top off the spare tire — the original was unseated from the rim, but still ok.
But I don’t usually bring things like a floor jack unless it’s a really long trip. A small array of multipurpose tools, plus some emergency top-off fluids like oil and coolant.
And yeah, these are just as much for helping others as for ourselves. To date this is the “most stranded” by a car that I’ve ever been as an adult, and it was eye-opening (both good and bad).
Yes, I now have a small jump box and have used it more for others than for myself. They’re fantastic, and so cheap… I think mine was about $50 bucks off of Amazon and it only costs 1-2% of the battery charge to start a dead battery. I still have jumper cables too, but haven’t used them in ages. 🙂
Same with me – my emergency kit is more to help others than me.
It is hard to believe that such things are possible nowadays if you spend too much time online. But people are still mostly the same. Mostly willing to help out.
Power steering failed on my ’05 MDX on our trip to Ocean City MD two weeks ago. I muscled it around being mindful of parking ’till we got home. I added fluid once and it was gone in 2 turns and 5 minutes.
I live near a small town that has one grocery store, 2 fast food places, and 4 auto parts stores.
This is my biggest nightmare. I drive a 13 year old Volvo in the 110° F Southwest with nearly 180k on the clock. At this point if it hasn’t been done I think the next oil change may just be time.
My advice, based on nothing to back it up, and not fully related:
If you can sell your house and make a profit in the 6 figure range, do so now.
Take that money and buy Bonds.
Rent until after the bubble bursts.
Buy low.
If we are seeing this with cars, houses are not far behind. They are still selling at high prices. Once the economy collapses due to the very perfect, wonderful, biggliestly hugestly awesome policies being put in place, you will be in the best position to profit. Otherwise, you will be stuck where you are for a loooooong time.
Um, no.
The mechanism for the correction in used car pricing is that supply returned to normal after a shock.
Unless I’m very mistaken, there is no such correction coming for houses, on any reasonable time scale. There simply isn’t enough supply (or at least not in the right places) for the number of people who want to be homeowners.
There’s also no sign of delinquencies in mortgages, which are near historic lows.
https://fred.stlouisfed.org/series/DRSFRMACBS
Don’t be complacent, but I would not advise selling your home for purely financial reasons now. It’s more likely that lowering rates to combat a slowing economy will drive prices up, as people who were shut out by 7% mortgages become able to reenter the market.
That’s highly dependent on where you live.
Up in New England? Tough market, very supply constrained. There’s still bidding wars depending on where you go, but it’s stabilized a bit.
Florida, Georgia, Texas? Completely different story. Heck, some cities like Austin have prices down by some real numbers (40%+ sometimes) compared to peak pricing back in late 2022.
For most of the US it’s settled down. The south and southeast are seeing a real correction, and builders are increasingly offering incentives on freshly built inventory to get things to move.
Inventory is still nuanced. In some cases where inventory is up, you have to look at WHAT inventory that is. In some cases (again, south, southeast) houses are on the market so long that buyers are pulling them to “wait and see.” If general economic tightening continues, it’ll be interesting to see where things are in a year. Labor market went over the Beveridge Cliff for certain starting towards end of 24, and still to see where it goes.
Yup, I’m in New England, and it’s still very inflated. BUT, things are starting to settle a bit, which I kinda why I’m interested in just bailing now, to get while the gettin’s good.
Meanwhile, California is unobtanium. I did a bunch of research lately, and realized I’ll never live there while the equivalent house to mine is over $2million. I wouldn’t mind a simpler lifestyle, but everyone else in my family would.
California being “unobtanium” really depends on where. A lot of California has seen small reductions in price with an increase in inventory. Not much, but it’s correcting outside the metros.
It’s like Florida. You have some zip codes where prices are off 20-28% from the 2022 peak, and you’ll have directly adjacent zip codes where it might only be down 7% or only down 2%.
Agreed, but my last sentence says it all.
I don’t think trashing a 3.3% mortgage I’m less than 15 years from paying off is a great tradeoff for having nowhere to live, but that’s just me.
If you want to stay where you are and ride the wave out, then I agree. I”m in the 3’s right now too.
But, I could stand to make $300k profit. I can’t see how we won’t be in a full on recession or depression within the next 2 years. If that happens, my $300k might only be $100k. And, I’d be stuck.
Are you just thinking out loud or is your listing gonna’ go live on Zillow this weekend?
I’m very much in a psychological position to move somewhere else due to the job market having dried up for my skills.
And we are dreaming out
Loud about the Caribbean coast of Panama
If I was going to leave the country I would go to the Netherlands (if I could).
Fun factoid: you can go there and if you start a business with I think about 5000 you can live there and eventually be a EU citizen. Some unusual post WW2 treaty. When the dickwad was elected I joined International Living. It is actually with the hundred bucks and they have these tidbits and they are not pie in the sky about being an expat
It’s called the DAFT (Dutch American Friendship Treaty), and my wife already has a rough draft written up.
The great thing is, you don’t even really need to make a profit, just show you are making progress. There are whole companies set up to help people with the transition, and to manage the paperwork.
Interest rates on Dutch homes are still in the 3% range. Big downside is wages are basically 1/2 or less of what they are here, but you get free healthcare and lots of other social benefits.
Business in the major cities is done in english
Yeah, it’s pretty crazy. I lived there 20 years ago, and just visited this past spring. What a change. The Dutch are getting frustrated with it, from what my wife has been reading. IOW, there is starting to be a pushback. ASML, perhaps the single most important company in the world, has become HUGE, and as such has required an enormous amount of non-Dutch habitants. The common language, of course, being english.
The stuff ASML does is mind boggling.
You know that you’re going to pay taxes on that $300K profit unless you’re approaching old age and it was your primary residence right? And even then, you’ll still pay taxes on everything after a certain amount. Presumably, that profit is going to cause you to be in a moderately higher tax bracket the year you sell, so about a third of it is going to belong to Uncle Sam, with the remainder kept by you.
Also, don’t forget to deduct moving/storage expenses, realtor commissions, etc… from your profit either.
And then you’ll still need someplace to live, right? And if you decide to rent instead of buy/get another mortgage, you won’t have the mortgage interest deduction anymore, meaning you’ll pay even more taxes than you do now (all else being equal).
People are always thinking the bubble is about to burst/society is about to collapse, etc… and once in a while, they’re right. But even when/if true, you still need a roof over your head.
Exercising caution/financial restraint is always prudent. Don’t overdo it and impact your quality of life in an attempt to pre-empt the unavoidable ups and downs of the markets.
JMHO. Best of luck to you whatever you choose to do. 🙂
You’re right, and I agree with everything you said!
You only pay taxes on amounts over $250k, if you’re single, or $500K, if you’re married, assuming you’ve lived in the house 2 of the last 5 years. I bought a duplex in 2009, lived in it for several years, moved out when we had kids, rented it for three years after that, and sold it in 2016. Lucked out and got the timing just right. Made over $100k in profit and paid not a single dime in taxes on it.
Did the same with my last house. I’m 9 years into my current house, and married, so I’d be good.
As others have mentioned the current laws exempt the first $250/$500k, if it has been your primary residence for 2 out of the last 5 years. Above that is subject to long term capital gains tax rates, since you had to own it for 2 years. For most individuals that rate will be lower than their regular rates. (Note they are talking about increasing that amount of the exemption or eliminating capital gains taxes on primary residences.)
As far as the deduct-ability of mortgage interest and property taxes under current laws that significantly raised the personal deduction and capped the SALT deductions at $10k has effectively eliminated those advantages for a wide swath of homeowners. It does look like the SALT tax limit will be raised, so the advantage will return for some people primarily living in areas with high housing costs, high property and/or income taxes.
In this case it sounds like job opportunities are a big reason for wanting to move. So yeah it is time to sell either way. Moving to a new area and a new job it probably isn’t a bad idea to rent for a year of two to be sure the area and job is right for him and his family.
Sell your house and do what?Rent is at all time highs as are housing prices.House prices aren’t going to drop to depression era prices.
No, they won’t. But, you will also not be losing the equity we have all built over the past 10-15years. It would just mean you would be taking a hit on that housing investment for a few years. If I am wrong, you could just buy another house, assuming the rates magically go down.
That’s what we did! We sold at the top of the market (locally) back in 2023, because the house had doubled in value and the money that was in the house is now earning anywhere between 4% and 25% interest (depending on where it’s parked/invested) and we couldn’t be happier, and I used some of it to start a new business. We’re renting a house we could never afford to buy for about the same as our previous mortgage payment was, and I’m loving the high-end rental game. Nothing to worry about or repair is worth it to me. After the market crashes, we may look for a new place to purchase, or not, depending on what seems right at the time.
Thank you for providing the supporting evidence I didn’t have to offer.
“This guy get’s it” High five!!!!
Terrible advice.
Take 50% of your money and put it in the blue chips – Transatlantic Zeppelin, Amalgamated Spats, Congreves Inflammable Powders, U.S. Hay and then sink the rest into that up-and-coming Baltimore opera hat company.
Insert Homer GIF ROFL
Rich companies will buy up all of the houses. Don’t expect prices to drop.
I used to consider myself an enthusiast, but new cars are just so unaffordable that I don’t aspire to own any of them anymore. I really don’t care what stays or goes at this point.
Because of their longevity, I’d probably be a little disappointed if the Corvette, Wrangler, or Suburban were ever cancelled, but I’d somehow be able to get on with my life.
Being an automotive enthusiast doesn’t mean you have to be a fan of “software defined” crap.
I still love older cars, I just no longer get excited about new models coming out. When I was a kid, I’d pore over the new model year issues of Car & Driver, Motor Trend, etc, excited about what was new for the upcoming year.
Even owing a classic car though, I’ve lost interest in that idea too. I have two relatives that own classics, and they haven’t even taken them out once this year. The just sit in the garage. At least they have garages though, I don’t even have off-street parking.
” I don’t even have off-street parking.”
Definitely puts a damper on things. My cars have lived outside my whole life, but always had a driveway to wrench, and access to a garage with a lift for some years. At 61 now, I’ll still do brakes and struts/shocks, but that’s about the extent of it. Only buy very good condition, private parties used now.
From a lot of people I’ve talked to, that’s pretty common. It seems like crash era cars sapped the optimism out of everyone. Since 2008 we’ve only have like, five cars that people have been excited over. The Toyobaru twins, the Focus ST, the Hellcat twins, the LFA, and the 4C. Of those four of the five came out in 2013.
2017 Ford GT? Nah, nobody cared except the people laughing at John Cena. Lotus Evora? People mistake it for a Lamborghini (I’m not joking). S550 Mustang? Got about six seconds of attention before people forgot it came out. Hyundai Veloster Turbo? Cult favourite, but nobody outside the cult knows it exists. Grand Cherokee SRT Trackhawk? Thing’s a physical representation of the “You have to know the key phrase to get the password to be let into the club” level of obscurity.
Back in the day people used to buy Popular Mechanics of all things to get information on new cars and concepts because they were that interested. Nowadays a company could throw a week long party at the MGM Grand in Vegas and people wouldn’t even know it ever happened because who the fuck cares about the Chevrolet Equinox RST?
So agreed!
I’m with Hoonicus. Being an enthusiast doesn’t mean you have to be a new car enthusiast. I’m not interested in software defined vehicles or tablets glued to ugly dashboards being called interior design. As I have grown older, my tastes have also gotten older. There isn’t much out there since 2000 that I actually REALLY want to own. My list of cars to buy starts in the 70’s and goes backward.
If I had my way I’d daily a K5 Blazer. The 87-91’s had TBI EFI, so that would be preferable, but aftermarket EFI kits exist. I have a 60-mile commute, so it’s just not feasible. But if I lived in the same town I worked in, oh hell yeah.
I work with a guy who dailies a lifted GMT400 Dually with a 454 and 4wd. He says single digit mpg, but he lives around the corner, and it was his dream truck when he was a kid. It’s a badass looking truck.
I had the smaller blazer for a while – had to replace the TBI at one point and when I was replacing the idle-air-control valve I broke the threads (or was it a stud, I don’t remember), so that car drove around with a hardware-store c-clamp holding one corner of the idle air control valve in place. It was a decent car other than these issues and from burning anti-freeze – I just threw in some rabbit pellets and it seemed a bit better.
I’ve got a ’71 Travelall sitting on a 2003 Tahoe chassis and powertrain that I am finishing up right now. I expect it will get about 14 miles per gallon ish? We will see though. I also have a long commute of about 50 miles each way, all freeway. I will definitely commute with it occasionally, but I don’t love owning old cars, I love BUILDING old cars. Its the actual project that I’m in love with. Owning it afterward is just gravy.
That sounds awesome! I wish I had the skills and workspace to do things like that.
If you are interested, I have the build on Youtube. I’m only like….a year…. behind on posting videos, but most of it is there! 😀
https://www.youtube.com/playlist?list=PLcLCvU0_0IpllCBFH4IXKDrqJ9JP2XeBs
Awesome! I’m definitely going to check that out, I love stuff like that.
I largely agree about new cars. I appreciate the sometimes interesting things on new cars but the insane prices and the unnecessary complexity has me not wanting to buy new. My problem is I am also quite safety conscience (having a kid did that to me) so classic cars really don’t do it for me either, other than from a nerdy/informational/enjoy looking at them point of view. I used to drive cars from the 60s through early 90s as my dailies for years, but I just don’t want my kid in a car that either can’t really have a car seat installed or has essentially zero crash worthiness. I am really stuck with cars of the mid 2000s to about 5 years ago to be safe enough but not be super expensive/overburdened. Its not looking good for my long term car buyer prospects….
I’ve had the same thought about long term car buying. I wish I had the budget to but a 2024 4Runner (last of the 5th gens). Good chance it’d be the last vehicle I’d ever have to buy.
A lot of new guys on the 4Runner board say as much in their intro post – “I’m about to retire, I bought this 4R as the last vehicle I’ll ever buy”.
I have been seeing a first-gen MR2 around town – this is more intriguing to me than a new sporty car…
I’m always excited to see sporty cars from the 80’s still running around.
Sounds like less of a car problem and more like a personal finance and responsibility problem. “But I neeeeeeed a new car”
This.
The average age of a trade is 3.8 years old. WHAT??? To me that’s still basically a “new” car.
I haven’t owned a car that new since 2001, when I was a dumb kid living at home.
My newer car is 6 years old. My older one is 8 years old. I don’t honestly feel like either one of them is anywhere near ready to replace.
I bought mine at 6 years old, 6 years ago. I can see easily getting another 5 years out of it. Luckily 4Runners are pretty much immortal if one can keep the corrosion at bay.
My newest car is 21 years old, and my oldest is 36 years old, but I’m a curmudgeon. 😉
But I’d be lying if I said that I didn’t sometimes wish for modern levels of safety/quiet/comfort, a 360 degree camera, and automated emergency braking.
Sides the commuter we are all in on last century cars. A 99, an 86, a 94. I would rather spend the bucks keeping a paid for car going than jump into the world of subscriptions. Electric car depreciation, digital and computer degradation and cratering and of course paying interest for the joy of it all
My daily is 19 years old, the other family cars are 19 and 26 years old. I would drive any of them across the country after just a good fluids and tires check. Camera systems can be added. Air bags can be installed. Sound deadening added. You can’t get all the way to fully modern maybe, but if you put in some effort you can definitely improve on whats there.
Exactly, our “newer” car is 11 years old . . . lol
Yup. Mine is 12, and I plan on keeping for another few years at least.
13, and it had better live to 30. Volvo’s aren’t cheap to service, but if you fix them they just keep going.
I feel like this no longer applies to newer Volvos. I see all the tech in them, and the twin charged engines, and I think they must be nightmares.
I DO kind of want a 2012+ XC70 with the T6 as a DD, though I think that’ll barely get better mileage than my 4Runner.
I loved my 07 XC70, it was such a nice car to drive before I put off too much maint and it got old.
My daily is a 2011 (Scion XB), an aftermarket touchscreen and backup camera and it feels current in the ways that matter. I also have a first-gen Tacoma that I’ll be keeping until one of us dies (since it only gets weekend use, my money is on me going first).
My wife has a 2020 Rav4 (bought in that glorious window when everyone thought people weren’t going to buy cars and incentives still existed) that’s under extended warranty (mainly in case electronics went weird) for another 3 years so it isn’t going anywhere. She has an irrational fear of vehicle breakdowns and will likely be in the market around 2028.
I’m rooting for you over the Tacoma.
Thanks, I think…
My sister bought a VW during that perfect window in 2020. She got 0% finance and free maint for a few years.
I thought she was crazy buying a VW, but she’s got close to 100K on the thing and it’s actually been very solid.
The only reason we bought new (2019 in 2020 LOL) because Hyundai, right before Covid killed everything? gave us a no down payment 7 year interest free loan on our Ionic Hybrid. We are paying back A 2019 ‘asset’ with reduced value dollars. Also the 15 year refi down to 2.5% on the house. I think we are staying out and driving the commuter car till it dies or we do
Sounds like a great deal! Hard to argue with 0% interest.
I’m quite happy about this at a microeconomics level.
Someone else’s depreciation is my affordable new (to me) vehicle that will last 10+ years.
Macroeconomically, this is probably bad.
The shortsighted “Can I make swing the monthly payment?” mentality lures people in the deep end of the pool without a floatation device.
It’s unbelievable how common that mindset is.
The dealer “four square” exists for a reason.
“What’s the most common vehicle driven by millionaires? A Ford F-150”
I’m sticking with my 2008 Avalon until I can’t get parts for it, or the unibody rots out. 255k miles and counting. I’m fortunate enough that I could buy brand new thanks to good income and stellar credit, but why? To light money on fire?
Right, I can afford a new car. But I’d rather drive my old one and retire a year or two sooner.
Exactly. The only new ‘vehicle’ I’ve ever bought was a flatbed car hauler trailer. Don’t plan on buying anything else with wheels new the rest of my life.
I’m genuinely shocked that the average trade-in is only 3.8 years old. No wonder so many loans are underwater. Just lease if you want a new car every 3 years. I tend to keep my used cars at least 5 years. Most new I plan on 8-9 years. I have leased quite a few times too when there have been exceptional employee deals that I ticked all the incentive boxes for. The quickest I’ve ever dumped a new car was in about 4.5 years, and it’s because it was nothing but trouble and kept breaking on me and I wanted rid of it before the powertrain warranty was up.
The average age of my cars/bike is almost 17 years old. Outside my cheap company lease, I have only had two new cars. One is now 13 and the other VW bought back years ago.
I dread ever getting a new car now.
In a lot of ways, the older cars are better and easier to work on. I pretty much daily a 2006 in the summer without any concerns. My son dailies a 2016, also with no concerns. They were both around $10,000 cars that we bought for cash. If you keep up on maintenance and buy things right an older car can be just as dependable as a new one. We have 2 newer cars (both 2021’s). I got a new truck in 2021 because it was just marginally (about $1500) more expensive than a 2-3 year old used one during the craziness of Covid. A 5 year loan means I have a ton of equity in it, but I plan on keeping that for at least 8-10 years. I only put about 8,000 miles a year on the truck, and about 40% of that is towing. Our other “newer car” is the wife’s PHEV that was bought used in 2022. I won’t keep that past the 8 year battery warranty, but it will be paid off in about 6-8 months.
the saddest loss for me will be the CT5 Blackwing with a manual trans and supercharged V8. I got to guess they will go away soon, but until they do, I will still lust after one. I am a bit worried the oil catastrophe on the 6.2 will bite me when I find one affordable enough, but at least the manual trans means no AFM or DFM systems to fail as well.
The oil problem is only on the naturally aspirated truck 6.2, not the LT4, at least as far as I’ve heard.
I will be gutted when the manual transmission goes away.
I was kind of wondering why the DCT companies don’t make one that can be ran manually to at least mimic the true manual for a while longer. Let the clutch pedal engage the electronic dual clutch system and then use a mid mounted shifter to engage the trans shifting. Basically do away with the paddles or offer both in a single car? Big question is price and how often you would actually do it pseudo-manually if given the choice?
Most customers want console room for their phone and drinks more than they want a shift knob. Those that actually care about manually shifting an automatic are happy enough with F1 flappy paddles. Thus you get 98345 cup holders, flappy paddles, and a dct. It sucks being the >5% portion of the market.
Can I pretend it is ten years ago? I am still sad that the Xterra has left the chat.
“What currently available new car will you be saddest about when it gets discontinued?”
Any and all cars smaller than a full size.
I don’t even think it should be legal for dealerships to take cars with negative equity as trade ins unless the consumer or dealership pays the difference in cash as part of the transaction. I get that this wouldn’t be great for our well oiled trickle-up, debt based economy that’s working as intended but it seems like a common sense consumer protection that would benefit everyone involved to varying degrees.
It would be easier in practice to ban loans for over 100% of a vehicle’s value, but that would probably get in the way of selling extended warranties and nitrogen fills.
I like this idea a lot
This. I have been underwater precisely one time on a car, and I needed to sell it because it was a terrible car for my growing family, so I spent months finding the right car, and found something that the dealer had been sitting on for months that they were selling well under value at that point, so I was able to roll the negative equity into that but still only had to finance like 90% of the value of the new car. It was hard to find that, but I was not willing to go from bad to worse so it was well worth the efforts.
Nah. They’ll just pull the Kohl’s trick. MSRP is this but you get it for 30% off!
On everything. So you feel like a winner.
That’s why the key word in the statement is “value” and not “MSRP”
It is not like we did not see this when the stealerships were calling up people with 2 year old trucks, offering full price for a trade in that would come in a few months and then sell the used stuff for more than new. I am just glad I was not put in a place that I absolutely had to wade into that market at the time. I feel a little less bad for those that chose to.
I saw this during Covid. Guys was at the parts store, was really happy he traded his F250, got 75K and got a new one for over 100k. Not really sure why that was good
in y experience they would sell the replacement to the customer at list price and if they declined it when it arrived, they would mark that tuck up 20 percent or more. But yeah, due to demand the replacement was almost always more. but since they got full money back on the used truck they had 2 years worth of payments essentially returned to cover the difference.
Sounds good in theory, but it would absolutely cripple someone that’s forced to replace an underwater vehicle. Loss of income, medical event, or family tragedy are all common ways people get their lives turned upside down, and this would bar them from swapping vehicles unless they could afford to pay off the loan.
The real problem here is approving the loans with ever increasing (over 1:1) debt to value ratios.
CFPB is on its way out, cause it doesn’t benefit the capitalism crowd.
There are always exceptions, but for most people who are underwater on a car loan, the best answer is not to trade your car in, but to keep driving it.
I’m actually curious as to why people are doing this in the first place. I get sometimes life circumstances would necessitate a new car (e.g., “I bought a 911 and now I’m pregnant with twins!”). But overall it seems like such a bad move …
Financial literacy is not a strong suit for much of the Western world.
By design, and working exactly as planned.
That’s trickle up economics for you….
There was a question on Jeopardy the other night, the answer was “Horse and Sparrow Theory”, an earlier term for trickle-down economics.
The theory was that if one feeds the horses enough oats, eventually there will be something left behind for the sparrows.
Seems accurate, for all they care us “sparrows” can eat shit.
I’ve always stuck to what I believe is the original term-voodoo economics. Trickle down makes it sound nice and gentle, which it certainly is not. Voodoo makes it sound menacing and implies that it would require a belief in the supernatural to make it make sense…which all seems pretty correct to me.
It’s a good name. I liked the horse and sparrow term though. I looked it up, and it’s largely credited with the panic of 1896. That it dates back to a time of epic income inequality is telling.
I love this comment and am going to steal it. OK?
Steal away my friend
Indeed
The school boards continue to refuse to teach finance.
Looking back to ~4 years ago based on the average age, I’m theorizing that maybe it’s people that took what they could get at the time, be it new (hard to find) or used (overpriced), and are trying to get out of it as they see inventory is out there. But in the past, switching for the sake of doing so might have been offset an okay interest rate or a decent amount of cash on the hood. Neither of which is all that true now.
Many people struggle with financial literacy AND long term planning. Lines I’ve been told several times include:
Yeah that’s fair. To be honest, I like to drive new cars because I feel more comfortable being in warranty (fine I also just like having a new car!). I can see a scenario where someone can’t really afford it but they convince themselves it’s “worth it.”
The CT4/5 and especially the Blackwings represent the last of so much:
Last sedans made by GM
Last applications of the TR6060
Assuming the IS500 goes as well, the last V8, RWD sedan made by anyone
Presumably the end of GM’s non-Corvette, non-SUV performance offerings
Anyone not agreeing that this as the number one answer is wrong.