The Car Market Is On The BRINK Of Collapse

TL;DR

The U.S. car market is collapsing under $1.6 trillion in auto debt, record delinquencies, and a system built on planned obsolescence and predatory lending.

Key Points

• 1.Average new car prices have surpassed $50,000, with typical monthly payments near $800. Auto loan delinquencies are at their highest rate since 2008, and repossessions mirror the financial crisis era.
• 2.Alfred P. Sloan's GM model introduced planned obsolescence and auto loans to drive consumption. Today, 66% of Americans trade in vehicles every 5 years or less, and Americans collectively owe a record $1.6 trillion in auto loan debt.
• 3.Nearly 20% of new car buyers now take out loans lasting 84 months or longer. Over 31% of drivers are underwater on their vehicles, and dealerships routinely roll negative equity into new loans, trapping borrowers in perpetual debt cycles.
• 4.Dealer franchise laws prevent direct manufacturer sales, inflating prices 56% above 1963 levels adjusted for inflation. Lenders have expanded subprime auto lending, packaging risky loans into asset-backed securities sold to investors — echoing 2008 mortgage dynamics.
• 5.Manufacturers are monetizing basic features through subscriptions, including $495 for the Ford Maverick's frunk and $10/month for heated seats. GM's OnStar allegedly collected driving behavior data and sold it to insurers to adjust or deny coverage.
• 6.Geopolitical conflict threatening the Strait of Hormuz — through which 20% of global oil passes — could push crude toward $100–$120/barrel. Every $1 increase in gas prices adds $500–$600 annually for the average driver, compounding existing auto debt pressures.
• 7.Nearly 30% of the American workforce still earns less than a Ford factory worker made in 1914 ($5/day, ~$163 adjusted). The 1919 Dodge v. Ford ruling legally established shareholder primacy over worker wages and reinvestment, setting the ideological foundation for today's crisis.