Would make sense - why protect a market that no US manufacturer seems to want to support!
Of course the US manufacturers are hoping that you'll just take out a loan, preferably with them (this is how they make their profit - financing and servicing) and buy something far more expensive than you want/need.
I'm assuming this is the Mirage, which is one of the cars we own for the family (the other is an old Odyssey to fit all the kids). The Mirage is an absolute joy to own: its simple 3cyl engine gets 50mpg if I'm careful. We live in a very rural area (i.e. walking and biking for a big family is impossible and dangerous), so having something economical to drive is a huge help. We drive it any time we aren't taking the whole family somewhere!
Of course in the article, I see the Mirage is noted as discontinued. How frustrating.
It's pretty simple (in the US, can't speak for elsewhere).
There are 2 big factors at play:
1. Margins. Manufacturers make huge margins on expensive vehicles and very slim margins on cheap vehicles. The numbers differ, but I think even in the lead up to the 2008 crisis automakers had to sell 5-10 "econobox" cars to make the profit they made on one luxury car, SUV, or truck.
2. Normalization of debt. For many Americans, having a monthly car payment in perpetuity is considered acceptable. Car loans have their place and can be used responsibly, but due to marketing, sales tactics, and cultural sensibilities what often ends up happening is that people start from a monthly dollar amount and then work forwards to buy the most expensive vehicle they can, even if it means taking the loan term out to 72 or 84 months. It's also very normal for people to never pay off their car, instead trading in the vehicle after 3-5 years and rolling equity in the loan over to their next car. Obviously, this consumer habit is great for dealers, manufacturers, creditors and buyers of consumer debt, as well as the US Government and investors -- it's just not ideal for the consumers themselves if they're trying to preserve wealth and build savings.
These two factors create an environment increasingly hostile to the cheap entry level car. Consumer demand is low since most don't spend responsibly, and automakers don't really want to make or sell them because the margins are so slim.
>having a monthly car payment in perpetuity is considered acceptable.
I think that really depends on what part of America. At least where I grew up around a bunch of middle class conservatives listening to eg Dave Ramsey (who has other problems IMO) most people think of you as reckless/irresponsible for doing that sort of thing.
I think the bigger issue is the need for a car. In most of the US, everything is built with the assumption you'll be driving to it (workplaces, stores, facilities, etc).
So everyone has to have a car. So your social mobility is limited by the fact that you need to have the money for the expenses that go with it in the first place.
3-4 cities with decent to good transit are the exception, but the fact that they're so desirable and with such high housing prices means that they aren't really accessible either.
My reptilian-brain logic prevents me from even considering getting a loan for car. Houses increase in value, therefore it makes a certain amount of sense to get a loan / mortgage for the purchase of a house (but mainly because no-one - in the world in which I live - can afford to buy one cash).
Cars decrease in value, very quickly. Getting a loan for a car is throwing more money away than buying a car in the first place.
Having said that, I'm immune to a lot of 'social norms' so I've been fine driving my tired-looking 20-year old Outlander soccer mum car or our 10+ year old grannymobile Nissan Leaf.
There are situations in which a loan for a car may be necessary, but I'd have to be a really tight spot to consider it, and I'd be absolutely minimising the size / length of it.
Getting a loan for a car seems quite natural to me. A car provides service flows over a long period, so why not pay for it over a similarly long period? In the first year or two the car's value is probably below the outstanding loan amount, but beyond that it's likely to rise above it, so you're free to sell and walk away from the arrangement.
Granted, high interest rates might make this a bad deal, but the principle seems sound. I bought my previous car on a 7-year bank loan at 2.5% and didn't regret it.
In Europe, the average age for buying a new car is 50.
This means that most of the cars sold are second-hand.
Most people think that the car is a luxury and prefer to focus on their home first, then their family, and after that, their car.
I am from Brazil and although most cities are 100% built around cars, public transportation IS an option and mostly works and is (somewhat) affordable.
Unlike the US, if a place is 1km away as the eagle flies you can get there by walking ~1.5km max. And there are bus services and although often overcrowded or with low service, they do run and you can plan your life around them.
Yet everyone still buys a car as soon as they can afford one (or often if they can't). And they use it for commuting to work every day.
To get to the point that Europe is in where even rich people don't want cars or if they have one it is for weekend trips. You need to do a lot better than this.
Unfortunately getting the US to be like Europe in this regard is not really viable, but it could get to the point where Brazil is where the poorer people can afford to not own a car.
In some big cities in Brazil they do a lot of low-cost things like dedicated bus-lanes that actually make some high-demand trips shorter by bus. Progress in this area needs to be incremental, there is little point in investing crazy amounts of money in one big project. Instead the investing should be lower and constant.
sometimes one big project can make a big difference, like a new rail-bridge or metro. But in general getting people into busses is more efficient even if that means rich people still won't want to get into that bus.
That's the answer here. They can build cars better, cheaper, faster than we can.
Instead Ford wants to sell a 80k SUPER F-250 BIG MANN TRUCK. All for what, you to drive 10 minutes to Walmart, buy groceries and drive back.
The best car is the one you don't own. No payments, insurance, parking tickets.
Unfortunately most American cities are centered around driving. So much money , and space wasted on these multi ton metal boxes. In many places most(much) of the city is literally just parking spaces.
F-450 King Ranch Super Deluxe.. all made from plastic and guaranteed not to last longer than 8 years. Most engines of new vehicles are sleeved and cannot be rebuilt in the spirit of designed for manufacturing and profits > designed for durability.
Cars are a reflection of ones personality here in the Midwest. Some grow out of it or never subscribe to the mentality. It's certainly cheaper to bicycle, weather and health permitting.
Though car driving and ownership are a big cultural phenomenon, especially among men 18-50.
We do want affordable Chinese EVs, the same way we want Honda, Toyota, Nissan, Kia, Hyundai, Subaru (all among the best selling auto manufacturers in the USA every year). You can't buy them because the government and domestic car companies don't want you to.
I'm always a little surprised anyone buys American cars at all. For a while they used to make larger trucks than anyone else did but even that's not really the case anymore, it's all just overpriced garbage with a popular brand.
You're not wrong, but I think there's another factor, too. (And I drive a 2017 F150)
I would love to sell my truck and get something smaller. But I just got a repair estimate of almost $2500 to replace the from facing camera in my wife's Odyssey, and the Bluetooth stack in my truck has never really worked properly for phone calls. With cars becoming increasingly. "Software defined vehicles" I don't feel comfortable purchasing a $50k+ car that might have software bugs, or may not be supported for over 5-10yrs. I'm currently thinking very seriously that the best options are either to buy used or to lease.
Moreover, I'm thinking the overall percentage of private vehicles that are leased is going to continue to increase as time moves on, until the big mfrs are essentially acting as huge rental fleet operators.
We hardly put any miles on it (maybe 15k a year). To get around locally we ride our bikes mostly here in the city.
We do use it for our small business (essential) and also to to a large RV trailer which we use to live in 2-4 months a year visiting loved ones and just decompressing.
The things people don't usually talk about is the total cost of ownership.
One can buy a new F250 diesel for $80k, drive it for 6 years towing heavy loads and working hard. And sellnit for more than half what they paid for it. During that time the only costs are routine maintenance, no major repair bills.
One can also buy a luxury car or SUV, say a BMW, for the same price and 6 years later it is most certainly not worth half what they paid for it, and they typically paid tens of thousands in repair costs.
The next argument people make is that a big truck is inefficient. The simple fact is my F250 diesel gets the same as your BMW M3. But it can be used for work, and is.
Financially, I would argue that it makes no sense to buy a new vehicle above $50k that isn't a diesel pickup.
Not a dig at the vehicle; that's a different thing. Rather, I notice that this truck doesn't seem to spend much time as a, ya know, truck.
With other trucks it's less obvious because they don't have a built in bed cover. I suspect many of them also spent very little time trucking, at least here in this suburb. Perhaps it's different in more agricultural areas.
I've been watching WheelsBoy youtube channel a lot, he covers Chinese cars in China: https://www.youtube.com/@Wheelsboy - I don't know if this is the best source, but it's been eye opening to watch.
Regulations prevent the sale of small, cheap trucks in the US. I'm so sick of "BIG MANN TRUCK" being blamed on ego. The kind small basic of truck you used to be able to buy just doesn't exist any more and it's been regulated out of existence. The Maverick doesn't even stand-in very well for this and Ford can barely keep up with the demand.
Note that those rebates would be entirely killed under the current Trump budget bill [1], so we'll see what happens.
I also love the concept, it's a bunch of things I've been looking for but unable to find in the US market. The final price/availability as well as repairability are going to be the dealmakers.
it’s a shame that they’re spending so much of their capital on manufacturer side customizability. An electric vehicle is a firmware update away from being a stick welder already; make the truck one way and ship it with a pair of jumper cables, a box of 6011, and a pallet of tube steel.
I may be cynical but I think this is all marketing. From what I've seen there is so much upselling built into the concept that if this ever comes out that I don't think many people will be driving around the 20K model.
Aka how to shoot yourself in the foot and hand over the market to Chinese manufacturer. In Europe, only Renault created a low cost brand (Dacia).
Once chinese brands become commonplace everywhere, tradional carmakers will have a hard time taking back market share. In Europe they closed or are closing the last HCOL factories, killing any remaining brand loyalty.
Yeah, a better title for the article is how western automakers are going to go extinct. Sure the US might decide to block Chinese cars (apparently the EU isn't), but they can't force the rest of the world to buy $65,000 American built cars when the alternatives are less than 1/3rd of that price.
A larger question is how much the cheap Chinese cars are dependent on a long chain of government subsidies from the mines to the local infrastructure and what happens when China's investment driven growth cycle comes to an end. If the solar panels are any comparison, the Chinese automakers are losing a lot of money despite grandiose subsidies.
The sad thing is it'll be a slow death. As American / German / Japanese still hold cultural cachet over Chinese/ Vietnamese cars, the companies will delude themselves into going off a cliff till a new gen comes and doesn't care about that cachet and just cares about price
I don't know. Lately the basic expectation even for Temu Chinesium it to work and work well. So I have been taking chances on bigger and bigger ticket items that are made in china and are of good quality for a fraction of the price of the western things. Made in China doesn't carry such big stigma lately. So I don't think that the headwinds toward them (unlike everything изделано в СССР) are that strong. I mean can't be worse than a Renault.
In the US, if they were allowed and priced as low as I hear they can be (without excessive tariff, etc) then I'd expect it would only take 5-10 years. Assuming they are in fact similar on quality/reliability to what we're used to. The people willing to take a risk to save money or get more for their money would start the wave, word would spread, then people who can afford any brand will jump on board as they've heard it is not really risky as they expected.
Problem is, we'll probably never let Chinese vehicles in as it is an existential threat to the US auto industry. It's odd because we allow Japanese, Korean, etc. but we have political beef with China as a global power rivaling ours.
> In Europe, only Renault created a low cost brand (Dacia).
Dacia did force other european auto makers to maintain at least one low cost ish model. Not an entire brand but still. Sometimes just for the eastern european market. Skoda Rapid comes to mind.
But even Dacia is succumbing to the auto manufacturer mindset. Every year the models get larger, more default features are added and the cars get more expensive.
There are a growing number of electrical cars priced below 25K euro in the EU and a few below 20K even. I mention electrical cars because that's where all the growth is. Electrical cars are now becoming cheaper than the cheapest ICE cars. You mentioned Dacia. VW is bringing out the ID2 next year. There's a few Stellantis models from e.g. Citroen. And of course BYD is now selling cheap cars in the EU as well. And those are just the vaguely European cars (lots of Chinese components involved). Japanese, Korean, and Chinese manufacturers are also growing their EV market here. Notably absent (except for a handful of Ford compliance cars and Tesla) are US manufacturers.
The article is specifically about the US market, which because of the tariff situation is becoming highly distorted. The local producers are making what are increasingly US only models that can't really compete internationally. This excludes mass produced small cars because they can't do them competitively any more as that would require high volumes and export markets. But mostly US car makers are struggling with export markets. There are a few exceptions to this of course.
In China, the competition is pretty brutal right now and it's starting to spill over to other markets. That's all about budget cars and redefining what a budget car actually is. Any export markets where US manufacturers still have any ambitions are being affected by this. BYD and other Chinese manufacturers are gaining market share (at the cost of other manufacturers) all over Asia, Central and South America, Australia, Africa, Europe, etc. Even Mexico and Canada are not off limits and these are the primary export markets for GM and Ford.
Everything in here matches with my experience in the auto industry, but I don't think it gets the whole truth. Car companies, particularly the American and German brands, make the vast majority of their money from new car buyers and leasers, not the used car market. Over the past few decades, OEMs have focused almost exclusively on serving those customers, to the detriment of virtually everyone else. Those are very different customers than the people who want to buy $25k cars. Worse, even if you do sell that kind of vehicle, it depreciates and goes right back into circulation on the used market competing against the new cars because the customers are ultimately very utilitarian and lack brand loyalty, unlike the higher end customers. You can't even count on those higher end customers to reliably purchase the higher trim models because of the "status" aspects of a cheap car.
It's a tough market that OEMs don't want to be in, so they cede it almost entirely to foreign OEMs that haven't moved upmarket yet. Foreign OEMs are structurally incapable of selling cars at those prices (by design), so the bottom end of the market gets hollowed out to nothing but a few "loss leader" vehicles.
One fact not mentioned in the article - Americans now owe $1.64 trillion in auto loans, and cars make up 9% of all consumer debt in the country. In fact we now owe more on cars than student loans. The average loan term is rising - almost 6 years now. 60-day delinquency on auto loans is at 6.6%, the highest ever recorded, and is as high as 9% in some states.
So while car prices keep going up, people also keep going deeper into debt to buy one they can't afford.
You can blame manufacturers or banks, but ultimately the problem is unchecked consumerism and treating cars as a status symbol, which is sadly pervasive in this country.
Problem is if the US consumer had the “moral awakening” you propose (and to be clear you are claiming that basically we are in this situation due to the weak moral character of the average American) then coincidentally our entire economy would begin to crumble.
It’s not just car loans, our entire economy works because of debt, and has for at least the last 20 years.
The idea that nearly every one benefits financially from this behavior and yet we see this behavior at scale solely and coincidentally because of a sudden mass moral failing is a bit hard to believe.
Sure, status is a factor. But for people who do a lot of driving, having a nice car really benefits their quality of life. No one wants to spend hours every day in a miserable little penalty box.
The thing you're missing here is that the automakers have spent billions upon untold billions of dollars lobbying politicians and on PR campaigns targeted at the public to convince people that literally the ONLY way American cities could possibly exist is in a form that is utterly dependent upon the automobile.
Transit ridership in the US was higher in the 1950s than it is today and it was the automakers that killed public transit. They literally bought up popular and profitable public transit companies just to shut them down so people would be forced to drive.
The problem isn't "Consumerism" it's a culture of car dependency that's largely the result of intentional action on the part of the automakers to grow and protect their profits.
The reason there's so much auto loan debt in the US is people literally HAVE TO OWN a car just to get to work to support their families in the vast majority of US towns and cities. People don't want to go into debt just so they can buy some shitty fucking KIA so they can sit in traffic for two+ hours a day so they can get to one of their three minimum wage jobs, but when the alternative is being unemployed and homeless, a lot of folks will do what they have to do to provide for themselves and their families.
welp, guess my corolla needs to last until I die. I spent about $9k usd (in australia though) on it second hand pre covid and I'm just gobsmacked at the prices of vehciles now even years post covid. I make good coin and I just can't see how non-"enthusiasts" can justify spending so much money on their vehicle. there are houses in my suburb with 3-4 of these expensive, new model cars out front.
The sweet spot has always been a 1 year old used car with low miles. There’s lots of those for less than or about $25k. Honda, Toyota, and Mazda have models in those ranges that will easily last a decade.
I've bought a couple of those and never again. They're usually former rental cars and people best the shit out of them. I've had so many stupid things break
Even better, a 3 year old used car with low miles.
In 2016 I picked up a 2013 320i Sport w/ 22k miles on the clock for $18.5k. The sticker on the car was just over $36k. I did have to fly to a relatively remote town (Ogden Utah) and drive it home to San Diego, so that was an extra $320 for the plane ticket/shuttle/gas and 14 hours out of a saturday.
It was almost out of warranty, so pre-purchase I paid a local shop $110 to do a similar inspection to what BMW does for CPO and it only needed brake pads. Aside from the brake pads and scheduled maintenance, eventually replaced the tires, so about $2000 in maintenance over that period. Sold it for $14.5k w/ 50k on the clock 6 years later.
Could have held onto it much longer but was eager to do the nomad thing as covid was clearing up.
If you don’t drive much yourself, “low miles” after a couple years doesn’t matter quite as much. e.g. I bought my car at a couple years old with 40k miles already, but in the following twelve years I’ve only run it up to about 115k miles, so I’ve turned it from a “high-mileage two-year-old car” into a “low-mileage 14-year-old car”.
Why would anyone sell a good car with one year old and low mileage? It's a lottery ticket: it could go well, or the car might be already damaged. I personally know a bunch of people that bought second hand and are "my car is only a couple of years old, and I found the engine / gearbox / frame is damaged. Lets repair it barely and sell it ASAP to recover some money". But weirdly, they go to the second hand market again, thinking they are the only smart ones doing that. They all know a mechanic that ensures the car is OK, just like they did with the first one.
I was very disappointed when searching the used car market for cars with low mileage, only to found they are almost as pricey as new but I don't know how they have been taken care of. A lot of them come from the rental business. I paid a bit premium (2K or so) for my new-zero-kilometer car, and after 6 years is as good as new, as it is cared like a baby.
In 2014 I got a very nice and very basic brand new sedan for about $14k. That's not so long ago, but the car market in the US seems to get worse every year. (cost, newer models are bloated and overly-expensive, etc.) My only advice would be to buy now (ideally something used) since I can only imagine things will be even worse in a few years.
Yup, we bought a new base model Corolla in 2016 and there’s no sensible way to upgrade or get something nicer. We put 70k miles on it in 9 years. We’ve looked into upgrading more than once, we could easily afford it, but anything that would be a true upgrade (bigger and nicer) is just such a ridiculous waste of money given how inflated car prices have been since Covid. Add to that that the nicer car will then also be much more expensive to keep on the road…and it just makes no sense.
The closest thing to affordable and comfortable I could find this past year after maintenance costs pilling up on my ‘15 Ford Fiesta (that I got for a staggering $14k post college) was a Honda HRV Sport. Has all the basics, incredible sensing system, lots of space decent gas mileage and drives well at around 28k in Ohio. My partner has an Accord and honestly its a better car. Incredibly good gas mileage, reliable, perfect for an A to B person that doesnt want to worry about their car.
They don't mention the amount of mandatory additions to the car from government regulations. Obviously not the only factor but it's certainly a factor. Cars now have 6 to 8 airbags, backup cameras, more high strength steel, automatic breaking systems etc etc. I love the safety that those all bring, but it's not free.
I wonder if there's a business model in leasing cars from Mexico to Americans and swapping around once a year to get around the problem of having Mexican plates. Then you can get Chinese cars into America.
This made me laugh out loud thank you. They will clamp down on this so fast though. If its something that will help the average joe it will never get done but something like this threatens leadership so it will get shut down in record time.
If theres any Chinese entrepreneurs that have a line into their EV companies reading this, use some of that China speed and get on this now. You might as well squeeze out a little profit before they clamp it down! :D
The reason the US car industry does not want a $25k car is that the financing opportunities are crap for a car of this low cost.
In the same way that airlines exist to offer you a miles based credit card, the US car dealerships survive by offering you a loan for the car. Or perhaps, a car to go with your structured finance opportunity.
proud owner of a financed 2024 manual nissan versa here :) but yeah the dealership made almost no money and I put down a deposit when it was a couple months from coming in at a location far from where I live. it's a $20k car though.
unless there's illegal collusion, someone will see a market opporunity and step in to fill it.
That said, a quick search for new cars under $25k: Chevrolet Trax $20.5k, Nissan Versa $17.2k, Hyundai Venue $20.5k, Kia Soul $20.5k, and Nissan Kicks $22k. Other options include the Toyota Corolla $22.3k, Hyundai Elantra $22.1k, and Volkswagen Jetta $22.5k
It was a funny experience going to buy a used car with my partner a few years ago. Being a little naive I'd assumed being a cash buyer was a plus as they'd guarantee a quick sale, but as soon as the salesman realised he wasn't going to be signing a finance deal you could see him lose interest entirely. kinda funny to think they're in the business of selling loans rather than cars.
This is exactly true. Dealership profit centers are loan origination and extended warranty origination. Parts/Service is designed to pay the bills. (Source: My dad has been selling new cars for 40+ years)
(This is kinda like the Costco model where they aim to break even on all sales with profit only being the membership fees).
Americans like to upgrade their cars, not unlike their cell phones, and they often have a monthly car payment (or two) that never permanently goes away.
That makes some sense to me, but if the goal is to always have a nice car, doesn't it makes much more sense to lease? The monthly payments will be a few hundred bucks less and you can upgrade every 2-3 years. And from what I understand, leasing agents like to give incentives after your first lease to keep you in the cycle.
Personally, if I were aiming for the most economical option, I'd lease a Nissan Leaf for ~$300/mo.
> ... but if the goal is to always have a nice car, doesn't it makes much more sense to lease? The monthly payments will be a few hundred bucks less and you can upgrade every 2-3 years.
Leasing a car always includes an initial payment (in the several thousands) and typically have severe penalties for exceeding allotted mileage, any damage (even if only cosmetic), and/or if mandatory dealer maintenance is not adhered.
The monthly payments are not as disparate as one might think when the initial payment is amortized over the course of the lease along with dealer maintenance expenditures.
in 2021 my beloved Honda Fit got totaled. I bought it new in 09 and only had 80K miles on it. They don't sell new ones in North America any more. So I bought a Kia Rio. They don't make those any more. I don't really like it but with the current chaos in the economy I'm not trading it in any time soon.
I was in the UK for the first time last month and was struck by how many hatchbacks and sedans they have that we don't in North America.
The dwindling of small hatchbacks in the US is so disappointing it’s difficult to put into words. They were the perfect little suburb grocery grabbers, and now you can’t buy them without overpaying for a used one. The next best thing is a sedan that’s longer and harder to maneuver and park despite having markedly worse cargo space and utility, and to get a hatch (not just a liftback) you’re forced into crossovers/SUVs which carry a chunky price premium.
What I wouldn’t do to bring the Fit and Yaris hatch back to the US market.
The closest Honda is probably what I replaced my 2007 Fit with: the hatchback Civic. It's a little longer, and has less usable cargo height, but otherwise is similar enough. (It tolerates my height better too.) Also available in fun, fast versions.
The UK is heading down the same path, the best selling car used to be the Ford Fiesta but it has been discontinued now. VW have dropped the Up. Skoda aren't replacing the current Fabia. The general trend is towards bigger SUV's.
The second hand market isn't great because we stopped making cars during Covid so there is a dearth of four/five year old models.
The only light at the end of the tunnel is EV's are now comparable to their ICE equivalents price wise.
I have one and it’s awesome. You also don’t have to worry about someone snatching items out of the bed.
The biggest downsides are (1) I’m reluctant to put anything gross back there (vs throwing a trash bag in the bed like I used to with my truck), and (2) people see a van, assume you’ll drive obnoxiously slowly, and preemptively cut you off in traffic lest they get stuck behind you.
IIRC, at one point Ford priced the Model T (which ultimately became the Ford Taurus decades later) to be at or near the US individual average annual income and maintained this price structure throughout.
With last year's lowest (by state) average annual income being Mississippi at $45k, there is little reason for any car manufacturer to produce a $25k MSRP vehicle.
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[ 4.0 ms ] story [ 94.9 ms ] threadOf course the US manufacturers are hoping that you'll just take out a loan, preferably with them (this is how they make their profit - financing and servicing) and buy something far more expensive than you want/need.
Of course in the article, I see the Mirage is noted as discontinued. How frustrating.
Not a horrible vehicle for the price.
Mazda 3 used to be a $20k car (and even less before that) but now starts just over $24k (sedan) / $25k (hatchback).
There are 2 big factors at play:
1. Margins. Manufacturers make huge margins on expensive vehicles and very slim margins on cheap vehicles. The numbers differ, but I think even in the lead up to the 2008 crisis automakers had to sell 5-10 "econobox" cars to make the profit they made on one luxury car, SUV, or truck.
2. Normalization of debt. For many Americans, having a monthly car payment in perpetuity is considered acceptable. Car loans have their place and can be used responsibly, but due to marketing, sales tactics, and cultural sensibilities what often ends up happening is that people start from a monthly dollar amount and then work forwards to buy the most expensive vehicle they can, even if it means taking the loan term out to 72 or 84 months. It's also very normal for people to never pay off their car, instead trading in the vehicle after 3-5 years and rolling equity in the loan over to their next car. Obviously, this consumer habit is great for dealers, manufacturers, creditors and buyers of consumer debt, as well as the US Government and investors -- it's just not ideal for the consumers themselves if they're trying to preserve wealth and build savings.
These two factors create an environment increasingly hostile to the cheap entry level car. Consumer demand is low since most don't spend responsibly, and automakers don't really want to make or sell them because the margins are so slim.
I think that really depends on what part of America. At least where I grew up around a bunch of middle class conservatives listening to eg Dave Ramsey (who has other problems IMO) most people think of you as reckless/irresponsible for doing that sort of thing.
So everyone has to have a car. So your social mobility is limited by the fact that you need to have the money for the expenses that go with it in the first place.
3-4 cities with decent to good transit are the exception, but the fact that they're so desirable and with such high housing prices means that they aren't really accessible either.
Cars decrease in value, very quickly. Getting a loan for a car is throwing more money away than buying a car in the first place.
Having said that, I'm immune to a lot of 'social norms' so I've been fine driving my tired-looking 20-year old Outlander soccer mum car or our 10+ year old grannymobile Nissan Leaf.
There are situations in which a loan for a car may be necessary, but I'd have to be a really tight spot to consider it, and I'd be absolutely minimising the size / length of it.
Granted, high interest rates might make this a bad deal, but the principle seems sound. I bought my previous car on a 7-year bank loan at 2.5% and didn't regret it.
Unlike the US, if a place is 1km away as the eagle flies you can get there by walking ~1.5km max. And there are bus services and although often overcrowded or with low service, they do run and you can plan your life around them.
Yet everyone still buys a car as soon as they can afford one (or often if they can't). And they use it for commuting to work every day.
To get to the point that Europe is in where even rich people don't want cars or if they have one it is for weekend trips. You need to do a lot better than this.
Unfortunately getting the US to be like Europe in this regard is not really viable, but it could get to the point where Brazil is where the poorer people can afford to not own a car.
In some big cities in Brazil they do a lot of low-cost things like dedicated bus-lanes that actually make some high-demand trips shorter by bus. Progress in this area needs to be incremental, there is little point in investing crazy amounts of money in one big project. Instead the investing should be lower and constant.
sometimes one big project can make a big difference, like a new rail-bridge or metro. But in general getting people into busses is more efficient even if that means rich people still won't want to get into that bus.
That's the answer here. They can build cars better, cheaper, faster than we can.
Instead Ford wants to sell a 80k SUPER F-250 BIG MANN TRUCK. All for what, you to drive 10 minutes to Walmart, buy groceries and drive back.
The best car is the one you don't own. No payments, insurance, parking tickets.
Unfortunately most American cities are centered around driving. So much money , and space wasted on these multi ton metal boxes. In many places most(much) of the city is literally just parking spaces.
Though car driving and ownership are a big cultural phenomenon, especially among men 18-50.
> male ego/phalus comment
> car-centric cities
> "N-ton metal box"
I'm 1 square away from a Strong Towns reader bingo. Do you happen to know who invented the concept of jaywalking?
If that was true it wouldn't be illegal to sell them.
I would love to sell my truck and get something smaller. But I just got a repair estimate of almost $2500 to replace the from facing camera in my wife's Odyssey, and the Bluetooth stack in my truck has never really worked properly for phone calls. With cars becoming increasingly. "Software defined vehicles" I don't feel comfortable purchasing a $50k+ car that might have software bugs, or may not be supported for over 5-10yrs. I'm currently thinking very seriously that the best options are either to buy used or to lease.
Moreover, I'm thinking the overall percentage of private vehicles that are leased is going to continue to increase as time moves on, until the big mfrs are essentially acting as huge rental fleet operators.
We hardly put any miles on it (maybe 15k a year). To get around locally we ride our bikes mostly here in the city.
We do use it for our small business (essential) and also to to a large RV trailer which we use to live in 2-4 months a year visiting loved ones and just decompressing.
The things people don't usually talk about is the total cost of ownership.
One can buy a new F250 diesel for $80k, drive it for 6 years towing heavy loads and working hard. And sellnit for more than half what they paid for it. During that time the only costs are routine maintenance, no major repair bills.
One can also buy a luxury car or SUV, say a BMW, for the same price and 6 years later it is most certainly not worth half what they paid for it, and they typically paid tens of thousands in repair costs.
The next argument people make is that a big truck is inefficient. The simple fact is my F250 diesel gets the same as your BMW M3. But it can be used for work, and is.
Financially, I would argue that it makes no sense to buy a new vehicle above $50k that isn't a diesel pickup.
Not a dig at the vehicle; that's a different thing. Rather, I notice that this truck doesn't seem to spend much time as a, ya know, truck.
With other trucks it's less obvious because they don't have a built in bed cover. I suspect many of them also spent very little time trucking, at least here in this suburb. Perhaps it's different in more agricultural areas.
The US wants them so much that it requires 100% tariffs to keep them off the market.
With rebates a 20,000 truck. Who knows what it will cost when it actually comes out. But I love the concept.
No rebates
US automakers are so ridiculously far behind
I also love the concept, it's a bunch of things I've been looking for but unable to find in the US market. The final price/availability as well as repairability are going to be the dealmakers.
[1] https://electrek.co/2025/06/28/republicans-are-trying-kill-7...
Once chinese brands become commonplace everywhere, tradional carmakers will have a hard time taking back market share. In Europe they closed or are closing the last HCOL factories, killing any remaining brand loyalty.
A larger question is how much the cheap Chinese cars are dependent on a long chain of government subsidies from the mines to the local infrastructure and what happens when China's investment driven growth cycle comes to an end. If the solar panels are any comparison, the Chinese automakers are losing a lot of money despite grandiose subsidies.
Problem is, we'll probably never let Chinese vehicles in as it is an existential threat to the US auto industry. It's odd because we allow Japanese, Korean, etc. but we have political beef with China as a global power rivaling ours.
Dacia did force other european auto makers to maintain at least one low cost ish model. Not an entire brand but still. Sometimes just for the eastern european market. Skoda Rapid comes to mind.
But even Dacia is succumbing to the auto manufacturer mindset. Every year the models get larger, more default features are added and the cars get more expensive.
The article is specifically about the US market, which because of the tariff situation is becoming highly distorted. The local producers are making what are increasingly US only models that can't really compete internationally. This excludes mass produced small cars because they can't do them competitively any more as that would require high volumes and export markets. But mostly US car makers are struggling with export markets. There are a few exceptions to this of course.
In China, the competition is pretty brutal right now and it's starting to spill over to other markets. That's all about budget cars and redefining what a budget car actually is. Any export markets where US manufacturers still have any ambitions are being affected by this. BYD and other Chinese manufacturers are gaining market share (at the cost of other manufacturers) all over Asia, Central and South America, Australia, Africa, Europe, etc. Even Mexico and Canada are not off limits and these are the primary export markets for GM and Ford.
Small cars are booming everywhere. Except the US.
It's a tough market that OEMs don't want to be in, so they cede it almost entirely to foreign OEMs that haven't moved upmarket yet. Foreign OEMs are structurally incapable of selling cars at those prices (by design), so the bottom end of the market gets hollowed out to nothing but a few "loss leader" vehicles.
So while car prices keep going up, people also keep going deeper into debt to buy one they can't afford.
You can blame manufacturers or banks, but ultimately the problem is unchecked consumerism and treating cars as a status symbol, which is sadly pervasive in this country.
Problem is if the US consumer had the “moral awakening” you propose (and to be clear you are claiming that basically we are in this situation due to the weak moral character of the average American) then coincidentally our entire economy would begin to crumble. It’s not just car loans, our entire economy works because of debt, and has for at least the last 20 years. The idea that nearly every one benefits financially from this behavior and yet we see this behavior at scale solely and coincidentally because of a sudden mass moral failing is a bit hard to believe.
Transit ridership in the US was higher in the 1950s than it is today and it was the automakers that killed public transit. They literally bought up popular and profitable public transit companies just to shut them down so people would be forced to drive.
The problem isn't "Consumerism" it's a culture of car dependency that's largely the result of intentional action on the part of the automakers to grow and protect their profits.
The reason there's so much auto loan debt in the US is people literally HAVE TO OWN a car just to get to work to support their families in the vast majority of US towns and cities. People don't want to go into debt just so they can buy some shitty fucking KIA so they can sit in traffic for two+ hours a day so they can get to one of their three minimum wage jobs, but when the alternative is being unemployed and homeless, a lot of folks will do what they have to do to provide for themselves and their families.
It's remarkable in Australia how many people are borrowing and paying much more for them as well.
Driving a Corolla, Mazda 2, Kia Rio or something can save so much money.
These days these are remarkably good cars too.
In 2016 I picked up a 2013 320i Sport w/ 22k miles on the clock for $18.5k. The sticker on the car was just over $36k. I did have to fly to a relatively remote town (Ogden Utah) and drive it home to San Diego, so that was an extra $320 for the plane ticket/shuttle/gas and 14 hours out of a saturday.
It was almost out of warranty, so pre-purchase I paid a local shop $110 to do a similar inspection to what BMW does for CPO and it only needed brake pads. Aside from the brake pads and scheduled maintenance, eventually replaced the tires, so about $2000 in maintenance over that period. Sold it for $14.5k w/ 50k on the clock 6 years later.
Could have held onto it much longer but was eager to do the nomad thing as covid was clearing up.
I was very disappointed when searching the used car market for cars with low mileage, only to found they are almost as pricey as new but I don't know how they have been taken care of. A lot of them come from the rental business. I paid a bit premium (2K or so) for my new-zero-kilometer car, and after 6 years is as good as new, as it is cared like a baby.
Literal planned obsolescence!
If theres any Chinese entrepreneurs that have a line into their EV companies reading this, use some of that China speed and get on this now. You might as well squeeze out a little profit before they clamp it down! :D
The reason the US car industry does not want a $25k car is that the financing opportunities are crap for a car of this low cost.
In the same way that airlines exist to offer you a miles based credit card, the US car dealerships survive by offering you a loan for the car. Or perhaps, a car to go with your structured finance opportunity.
Whereby the profit shifts from the product itself to the differentiating value-add.
That said, a quick search for new cars under $25k: Chevrolet Trax $20.5k, Nissan Versa $17.2k, Hyundai Venue $20.5k, Kia Soul $20.5k, and Nissan Kicks $22k. Other options include the Toyota Corolla $22.3k, Hyundai Elantra $22.1k, and Volkswagen Jetta $22.5k
I think maybe the article is BS?
Totally. Cars are there available. The thing is consumers don't want small cheap basic cars.
(This is kinda like the Costco model where they aim to break even on all sales with profit only being the membership fees).
That makes some sense to me, but if the goal is to always have a nice car, doesn't it makes much more sense to lease? The monthly payments will be a few hundred bucks less and you can upgrade every 2-3 years. And from what I understand, leasing agents like to give incentives after your first lease to keep you in the cycle.
Personally, if I were aiming for the most economical option, I'd lease a Nissan Leaf for ~$300/mo.
Leasing a car always includes an initial payment (in the several thousands) and typically have severe penalties for exceeding allotted mileage, any damage (even if only cosmetic), and/or if mandatory dealer maintenance is not adhered.
The monthly payments are not as disparate as one might think when the initial payment is amortized over the course of the lease along with dealer maintenance expenditures.
I was in the UK for the first time last month and was struck by how many hatchbacks and sedans they have that we don't in North America.
What I wouldn’t do to bring the Fit and Yaris hatch back to the US market.
The second hand market isn't great because we stopped making cars during Covid so there is a dearth of four/five year old models.
The only light at the end of the tunnel is EV's are now comparable to their ICE equivalents price wise.
The biggest downsides are (1) I’m reluctant to put anything gross back there (vs throwing a trash bag in the bed like I used to with my truck), and (2) people see a van, assume you’ll drive obnoxiously slowly, and preemptively cut you off in traffic lest they get stuck behind you.
Overall, the pros outweigh those 2 cons for me.
With last year's lowest (by state) average annual income being Mississippi at $45k, there is little reason for any car manufacturer to produce a $25k MSRP vehicle.