A Metric of the Situation

  • December 18, 2023

People who couldn’t afford a new car used to buy used cars. But used cars have become so expensive that many are beginning to rent them.

Honda now offers leases on “certified, pre-owned” vehicles up to six years old. Because new Hondas cost what a used Acura used to cost just a few years ago. The least expensive new Civic starts just shy of $24k – not counting the taxes, tags and “processing costs.” Not counting the insurance – and the property taxes, in states where they mulct you that way, too.

A $24k car is closer to a $26k car when the incidentals are added up and then there’s the monthly payment – for the insurance, which typically runs a couple hundred per month on a brand-new $24k car (assuming you have a “clean” record, by which is meant you’ve managed to avoid a conviction for “speeding” or some other trumped-up charge that becomes a pretext for further mulcting) in addition to the monthly payment on the loan for the car.

Well, $26k is about 50 percent of the average person’s annual pre-tax income. Before he pays the rent on his apartment (or the rent-in-perpetuity styled property taxes on the home he likes to think he owns).

The Civic used to be a very affordable car. It is now Honda’s entry level car. The distinction is important.

In 1990, the Civic’s base priced was $8,695. Even adjusted for the devaluation of the buying power of the money we’re forced to use by the private banking cartel that bought the government back in 1913, that was still just over $20k back then – in today’s corrupted dollars. In other words, a person who wants to buy a Civic today must have about $4k more to spend than he needed to have back then.

Many haven’t got it.

Let alone the additional dinero they’ll be forced to spend by the insurance mafia that also bought them some government.

And because new car prices are higher, so are used car prices. The latter cost more because there is more demand arising from people priced out of new cars. But there comes a point when people can’t afford the used ones, either – and it looks like we’re there.

A lease on a car is just like leasing an apartment in that you pay to use but do not own. At the end of the rental period, you have exactly nothing to show for what you spent. You will own nothing.

Will it make you happy?

What it will do is paper over the fact that people are being priced out of car ownership – now and ongoing. Honda says that leasing used cars to people who cannot afford to buy a used car “offers flexible point of entry for young, first time buyers,” says the press release.

Except they’re not buyers.

Buyers own things.

Words matter because it is how we think about things. Change the meaning of words and you change the way people think about things. To call someone who rents a buyer is like calling a tax you’re forced to pay a contribution.

“Honda Certified Pre-Owned (CPO) leasing is the latest option for Honda used vehicle shoppers, offering even more choice and a flexible cost of entry into the brand for young and first-time buyers, including an attractive monthly payment and shorter term options. ”

Note the slight change of wording (the above is from the text underneath the headline text quoted in the paragraph prior).

What Honda means is that renting a car entails a lower down-payment cost – because you don’t make a down payment on something you’re not buying. You just make payments.

The inaccurate wording about “first-time buyers” is then repeated.

This isn’t to single out Honda – because it’s not Honda’s fault that its cars have become so costly people – especially young people – can no longer afford to buy them. It is an industry-wide problem that has its roots in government forcing the car industry to build cars with features such as air bags that buyers are (effectively) forced to pay for as well as the compliance costs of building “safe” and “fuel efficient” and “low emissions” cars.

“Safe” not meaning cars that are safe to drive. “Safe” meaning cars that are equipped with the various equipment mandated by government, such as air bags and back-up cameras and tire pressure monitoring systems, among other things. These do not make a car “safer” – that is, less likely to crash. It is an important distinction (and we’re being made to pay for it).

“Fuel efficient” meaning achieves higher city/highway MPG numbers on government tests used to determine compliance with government-mandated MPG minimums. In order to achieve compliance, simpler, less expensive engines without such things as direct injection, turbochargers.cylinder deactivation and 48 volt/hybrid-assist “technology” have been replaced with more expensive “efficient” ones that have such things; less expensive manual transmission have been replaced with more expensive “efficient” automatics that have eight, nine and even ten speeds (and we’re paying for all of that).

“Low emissions” does not mean the car generates less pollution. Not in any meaningful sense. Cars have been nearly zero emissions since the mid-1990s. But the government insists on zero – no matter how much it costs – and never mind that almost-zero is more than enough to eliminate any meaningful issue as regards pollution.

The sum of it all is – people can’t afford all of this. And that’s the lever by which people are being pushed into renting what they used to be able to afford to buy.

. . .

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