A piece popped up on the newsfeed quoting the uber hacks at Edmunds.com regarding the escalating price of new cars. Not one word in the piece about the cost of government mandates – hence my use of the term uber hack to describe those who produced it.
Noting that the average car loan is now 69.3 months, or six years – which is the longest average for car loans in the history of the car business – and noting further that a large and growing number of people who are hag-ridden by this endless debt never actually pay off the loan but rather fold it into their next loan – the column’s chirpy birdie author explains that it is all due to . . .
This after having noted in her own column that people – “consumers,” to use her ugsome term – aren’t paying up. Instead, the remaining balance on the first six-year loan is tacked on to the principle of the next six-year loan. Thus:
“You hear stories about someone driving a $40,000 Camry,” explains Caldwell. “That’s where that comes from.”
But where it really comes from is the cost of every new car being – wait for it! – expensive. And why are new cars expensive?
This column has explained why on numerous occasions. Yes, part of it has to do with the gadgets most new cars either come standard with or offer. But the majority of these are not particularly expensive because they are generally just electronic baubles such as LCD touchscreen displays and good stereos – the price of which has gone down over the past 20 years. An iPad – basically the same thing as a car’s LCD touchscreen – is about $400. It is not a big deal, money-wise.
Neither are things like air conditioning and power windows, both of which have been around for decades and the parts involved are now much cheaper to manufacture than was the case when they first appeared as high-end luxury car features many decades ago.
But getting a car’s body to meet the latest bevy of roof crush/side-impact/pedestrian impact standards entails major R&D work, which is not cheap. It also entails lots of structure – also not cheap.
Neither are the bare-minimum six air bags every new car comes with. And it is not merely the bags themselves. It is that these bags must be embedded into the car’s structure, designed-in. The entire cabin has to be built around the bags – down to the last dashboard trim bit. Which entails more R&D.
Price a modern car’s airbag-equipped steering wheel/column and then check out what it cost to replace (if you ever needed to, which was usually never) the steering wheel/column of a pre-airbag car.
But the savings don’t come cheap.
Nor the investment in technology needed to reduce a new car engine’s exhaust emissions by another quarter of a percent (this is not an exaggeration) before the government will grant the company that makes it permission to sell it. Most new cars with four cylinder engines have at least two catalytic converters (along with two oxygen sensors) and while cheaper generic aftermarket replacements are available, the ones that come with the car from the factory are not cheap. They add much more to the cost of the car at point-of-sale than an LCD touchscreen.
How much does it cost to add direct injection to an engine? It is probably at least $1,000 more than a throttle body (TBI) injection system. But the TBI system was merely 97.5 percent “clean” and that is not quite “clean” enough.
To squeeze an extra 2-3 MPG out of a car – demanded by the Feds’ fatwas – takes a $5,000 ten-speed transmission. Auto-stop/start systems that cut the engine off when the car isn’t moving – then automatically re-start it when it is time to move – require high-torque starters and in some cases a primary and a secondary battery to keep things auto-stop-starting. How about “active” grilles that open and close – to say fractional amounts of fuel? Aluminum bodies…?
None of which the hacky “analyst” at Edmunds mentions. Instead, she blames the greedy “consumer” for biting off more than he can chew.
Why not mention, instead, what is being forced down his gullet?
There is almost perpetual derision of “conspiracy theories” by mainstream hacks. But the conspiracy isn’t a theory. And it is being perpetrated by them. The hack automotive press has apparently agreed in secret conclave to never publicly discuss the real reason why it has become routine to spread a car loan out over six years. Nor give the true reasons for the sudden stampede (with them cracking the whip) toward “transportation as a service” and “mobility” replacing driving.
The hack press are basically courtiers. They go to the same parties as the fatwa-spewers, often live in the same neighborhoods in the Inner Party areas of Washington, DC and New York.
They are of the same mindset.
It is an irony of our time that the car press, generally, neither understands cars nor likes them very much. You can’t expect such “analysts” to be of much use, then, in telling you the straight dope about cars.
Much less why the business has gone toilet-licking batshit crazy.
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