Former Ford CEO: You Need To Make $100K To Buy A New Car TODAY!

new car pricing is way out of control. How's everybody doing? My name is Anthony Brian Logan. And today we got to talk about former Ford CEO Mark field saying that you need to make over 100,000 us dollars per year to afford a brand new car. And this year 2023. Now that is a ridiculous number. All the way back in the day during the Al Bundy married with children 1970s 1980s early 90s days, you could work a regular job and get a brand new car. And it wasn't a big deal. I think my dad bought a Toyota truck in the early 80s for like $4,000 brand new cash $4,000 try to get a new truck nowadays, even like a Tacoma it like the lowest end truck with no options you paying at least $45,000 bare minimum, bare minimum for a new car. Now you can get a used car for a little bit cheaper. But since there is a shortage of used cars, because it's like why would I sell my used car or give it away whatever traded to get a new car if I can't afford a new car, I'm a hang on to my old beater until the wheels fall off. Same thing with the housing shortage going on right now. But that's a different story. And I digress. Let's get into the video. My man saying that you got to make 100 $100,000 a year to afford a brand new car in this year 2023. And of course, as always, I will link to the video in the description. If you're an edgy visit a link in the bio go to the corresponding article on the website. But without further ado, let's go ahead and roll it. If I expand this out more broadly to pricing, particularly here in the US, it almost feels like the auto industry is going through something kind of similar to the housing industry. It's a sector that tends to be more called it didn't interest rate sensitive because people are taking out loans against new and used cars. You've had these supply demand imbalances with supply not there in recent years in the pandemic, and it seems to be holding up Yes, prices are down if we look at Mannheim year on year, but still so elevated versus just a couple of years ago. Where do we go from here? And I guess how does that factor in then to let's just start there. Where do we go from here? I think overall, Morgan, what you're seeing, you're still seeing a lot of pent up demand in the marketplace. I mean, with the supply chain issues over the last couple years, inventories right now are still nowhere near where they're usually are at at this point in time of the year, although they're up 70% more or less from last year. And that's why you're seeing some of the automakers increase incentives. But I think to your point, when you look at what's happened with pricing, I mean, the average new car loan is over $760, which is up about 30 to 35% versus where it was back in 2020. So I'm thinking is he saying that's your it's your car payment per month 760. That's that's crazy. That's that's high for the average. That's a lot. And the same thing for used cars. So you have a situation in which affordability literally you you have to make over $100,000 a year just to afford a new car. And what you're seeing in the marketplace and what you started to see in just this past couple of months, you're seeing prices start to come down the average transaction prices are off their highs that you saw in December and September of last year. And I think you'll continue to see that but it's all buttressed by a lot of pent up demand that's still out there in the marketplace and will bleed off over time. And you know what was making the average price of vehicles increase is the electric vehicles, these are going to be more expensive than your internal combustible engine is going to be more expensive. So that's going to make the prices even higher. And as states try to require you to purchase EVs, those states are going to have much higher transaction averages than other states. It's crazy. But we're being told that it's for our best interest. How is it for our best interest when it's going to really hurt my wallet? Oh, and something else to talk about charging and all that kind of stuff. You know, when I go to these gas stations to have the EVs sections, people are like trapped in their cars, it takes a long time to charge these vehicles. I could put gas in my car and under five minutes, and just pull up to the pump, select what I want, put the pump in the tank, fill up and go about my day. You have a Tesla or some other fully electric and you got to go to a charging station. Good luck. You're going to be there for a while. I've seen people in their cars looking just crazy like like they've been held hostage on a computer. I mean, it's a mess. You might as well just leave your vehicle and a charger and go watch Oppenheimer and come back and might be done. I'm exaggerating, but you understand what I mean. The technology is not really there. And they're expensive, which is going to drive the price through the roof. Mark, zoom out for me here. Talk about the US automakers. If I were an investor, I'd be afraid to buy the domestic automakers when EVs are the future. They take fewer people to make. But the United Auto Workers are pushing for a contract here that one might argue is going to create some structural challenges for the US based industry. What's the counterargument? Well, first off, again, when you look at the transition to EVs, and you look at the the average age of what they call the vehicle park or the population of vehicles here in the US, it's over 12 and a half years old. So that will get turned over over time. Vehicles are getting older, they need to be replaced. To your point, John, when you think about the UAW contract coming up, you know, labor represents plus or minus around 10% of the cost of a vehicle. That being said, these negotiations are pretty pivotal. Because when you look at the all in labor costs for let's call it the Detroit three, they're about $65 an hour versus the the import non union companies, which are about $55 an hour versus Tesla, which is about $45 an hour. So when you look at what the unit UAW has been asking for, which is over a 40% increase over the life of the contract. And when you add up some of the other things and benefits that they've come in with their opening position, I mean, you're, you're, you're looking at widening that disparity, you know, significantly, and the automakers what about how to afford them? Can they get half of what they want? And it's still pencil out? It'll still pencil out because when you think about it, john, the Detroit three sell a lot more large SUVs and full size pickups than some of their import competitors. And those have quite nice profit margins But at the end of the day, as this transition to EVs happens, I mean, let's face it EVs right now, with the exception of Tesla, nobody's making money. And as the automakers, the legacy automakers ramp up, they're going to have to work down the piece costs to get those EVs to an acceptable margin. So you could argue there's for a period of time, there's going to be a restructuring of their margins. And that's why every penny counts in building a car. And that's why I think the automakers are going to be quite strong in pushing back on some of these demands from the UAW in there. Now let's let's talk about that part. Okay, we got a restructure the profit margin, we got a restructure. Okay, what's going to end up happening as I close, what's going to end up happening is that as there's more requirements, more states, they say you got to have electric vehicles, or it could be a federal government thing, we got to have x percentage of electric vehicles by x year. As that happens, you're going to see the average price of all vehicles go up as a result. It's going to happen because you said it right there. Nobody makes money on EVs out from Tesla. And I'm not quite sure if they're making any money. But if the big auto manufacturers don't make money on EVs, the only way for them to make money is to raise the cost of the vehicles. That's it. Either they're going to raise the cost of the vehicles, or they're going to lower the cost of the labor and that's not going to happen. You get the UAW talking about it could be a strike because of the current cost of labor. So that's going to go up and so shall the cost of the vehicle. So you got to make 100 grand or more to afford a new vehicle right now. Well, that's going to go up. As long as we keep pushing toward EVs in this green new deal carbon up. As I close, I want to say this. Inflation is a real thing. That's part of this. The C-19 scandemic supply chain shortage all that is leading into everything costing more not just vehicles, but food, clothing, shelter, everything right now costs more. And when there's a raise or there's an added title to your job is like, okay, how much am I making? How much more am I making than what I made before? When I'm looking at how much things cost right now? Did I get a raise? Or am I still losing money? But I think I'll leave that right there for now. And what say you what's your thoughts on the cost of these new vehicles? I mean, I've seen some crazy prices. I mean, you talking about Mustangs going for almost $100,000. I mean, like I've seen quite a few vehicles listed for over $100,000. And talking about some of the supercars, Ferraris and whatnot. I'm not talking about that. I'm talking about BMWs, nice cars, but I'm not paying $135,000 for a BMW electric SUV or a hybrid or whatever to call it. I'm just not going to pay that. Why would I ever to spend 50 grand on a car is a lot. That's a lot for me. That's luxury status for me. New use on care 50 grand. That's like the max I will ever pay $100,000 for a car. I mean, I remember back in the day, there were houses that were nice houses listed for 125 135. Back in the day, as I closed for this time, I was probably in my mid 20s. I was trying to find a house just seeing what was going on. Curious looking I could not afford at the time, but I was looking and I was coming across nice houses, decent houses in okay areas for like 135,000 145,000 now cars are costing that people have car notes of $1,500 $2,000 for a minivan. This is totally ridiculous. And I'm not really sure if it's going to be fixed anytime soon. Because again, people that work in the auto industry us, you got to get more money. electric vehicles are expensive. They're going to need more money to pay for those. And they're already expensive. So I think the only way up from here is up. If you have a used car, baby, take care of it because that is going to be worth a lot of money in the future, in my humble opinion, but whatever your thoughts are, please let me know in the comments below. And that's all I got to say for this video. If you like what you heard, please comment, rate, share and subscribe. Peace