What I Saw at the Car Dealership Today Shocked Me

Added: 2026-05-31

[00:00:00]What I just learned at the car dealership explains everything. Hey everybody, let's get right into it. Went up and got my car smogged. The smog in California, you have to get your car smogged every two years. So, we have to go in there. They test the fumes that come out of the pipes. If you're in California, you know all about it. Um, I think a few other states may do it, but I think most states do not do that. So, just thought I'd quickly explain that.

[00:00:22]You have to test the smog or test the exhaust coming out of your car to make sure your car is not putting out too much pollution. and you have to pay cost me $45 today to do the smog test. So every two years you pay that. That's on top of every yearly registration.

[00:00:36]Anyways, I won't get into that too much.

[00:00:38]Up there getting my car smog. Two other cars ahead of me. So I'm walking around.

[00:00:41]There's a car dealership right next door. Walk right over there. The same building actually. And start looking around. This guy comes out of course salesman sees me looking around. Of course they're going to come out and ask me what I'm doing, what I'm looking for.

[00:00:54]Like I was just wasting time getting a car smogged. Started asking a few questions. Nice guy, by the way. Asked him a few questions. How's business?

[00:01:01]How's everything going? He said, "Great." He says, "Everybody's getting qualified." He pointed to a sign that said, "Nobody gets turned down for a loan." And I was like, "Come on. You You can't be serious. Not everybody can get qualified." He says, "Everybody gets qualified." The sign that they had up that everybody gets approved for a loan is correct. They do in-house financing.

[00:01:24]I'm like, "Wait a minute. You tell me somebody that just filed bankruptcy, no down payment, right? Banged up credit score, 500 credit score, gets approved for a loan.

[00:01:34]He said, "Yes, it might be a high interest rate, but everybody gets approved." And I was like, "Wow." So, business is good, folks. And that's what's leading to this next bit of news.

[00:01:43]I have more people now have $1,000 car payments and higher. And we saw the numbers at the beginning or at the end rather, of 2025, but it just got worse.

[00:01:54]I mean, it just keeps going. People are still getting these loans, thousand plus dollars a month. Take a look at this.

[00:02:01]And the numbers for the first quarter 2026 are out. And the trend continues.

[00:02:07]More people getting into these elevated payments. I mean, elevated, pick your word. $1,000 a month. Used to be that that was a mortgage. Now, you're lucky to get a mortgage for $1,000 a month.

[00:02:17]More monthly auto loan payments are above $1,000. And we'll talk about delinquencies and defaults coming up.

[00:02:23]and most are not for luxury models.

[00:02:26]Experian automotive analysis of more than five million open auto loans and leases in the first quarter shows nearly 19% of new vehicles include a monthly payment of $1,000. Almost 74% of the auto loans requiring autos to pay auto owners to pay $1,000 or more every month are for nonluxury vehicles. So threearters of these thousand plus payments are non-luxury vehicles. We're talking about Hyundai Accents, Ford F-150s, Honda Accords, you know, basic vehicles.

[00:02:59]The top five models for $1,000 plus payments were popular pickup trucks, including the F-150, Chevy Silverado, the Ram 1500, according to Experian. So, people always wonder, how are people getting by? Everything's so expensive.

[00:03:14]You know, the savings rates near an all-time low. Half the country doesn't have a $500 emergency expense. They can't afford it because they don't have the money. How are people getting by, folks? It's this. It's easy money, easy financing. In a country where big trucks are a big deal, these pickups and SUVs represent the big percentage of auto loans. They come with a sizable monthly payment, more than $1,000 a month. And that's another thing, too. With gas prices where they're at, people are still buying big trucks and SUVs. It was just it was a lot different back in 2008 when gas prices jumped up before the financial crisis. It was a lot different. People were scared of six-cylinders and V8s because of the gas consumption. Now it's like nobody even cares, right? There are a lot of people going to electric cars. That's have actually dwindled a bit as far as the electric cars being sold. Uh people act like they're not concerned at all even though half the country doesn't have hardly any money in the bank. Um Experian Automotives analysis of more than 5 million auto loans revealed that the trend is increasing.

[00:04:15]uh the percentage of people with $1,000 plus a month payments is up over 17% year-over-year. So, not only is easy money still happening, it's just increasing and it's the bottom of the barrel. Again, people with no down payments, banged up credit scores getting these huge monthly payments as long as they have a job. Uh the assumption I forgot to ask the guy about that. I should said, okay, what if somebody's unemployed, no proof of income? There's got to be somebody that gets turned down. But I guess if you don't have a job, you're not even going to go shopping for a car. So maybe that's what he means. The assumption is that it's all luxury. It's highline and high-end. But that's not the case, said Melinda Sabrinsky, head of automotive financial insights for Experian Automotive. So folks, where does it end?

[00:05:04]I mean, people aren't afraid to get into any level of debt, it seems like.

[00:05:09]And with the way things are going right now, with the way companies are just looking to get rid of many as many people as possible and replace them with AI, it just seems like people would be more concerned and more cautious about taking out these huge loans. Imagine paying $1,000 for a Ford F1, $1,000 a month for a Ford F-150, basic pickup truck. Um, nobody's concerned. Nobody's afraid that they're going to lose a job. Nobody's worried about AI taking their job. Nobody's afraid that the economy is going down down the tubes, so to speak. No one's afraid. Um, and it all seems good and sustainable until it's not. Until something happens, until that moment comes where something breaks and then the domino effect starts rolling. A lot of people have been waiting for that domino to start knocking down the other dominoes for years and uh prices are at levels that nobody ever thought prices would get to this level. I remember back in 2019 on this channel, people were talking about the bubble is going to burst. Prices are going to come crashing down. Prices are higher now than they were back then. But what they didn't know was that easy money loose lending uh currency debasement could keep the bubbles inflated longer than most people expect. And when it comes to automobiles, even vehicles being repossessed at very high numbers is not turning off the easy money spot. Used to be that banks once they saw defaults increase. Banks will start tightening up the lending, it became very difficult to get a loan. If you've been around for even a little while, you saw that back in the housing bubble, the housing crisis. Very difficult to get a loan for at least two two years. Uh coming out of 2008, 2010, 2011 started getting really uh loose monetary uh loose lending. After that, of course, rock bottom interest rates, everything else that led the bubble to where it is right now. Uh but right now over three million vehicles were repossessed at the end of 2025 and 2026 is starting off at even a faster pace as repossessions.

[00:07:15]In 2025 2025 it was 3 million vehicles repossessed. That marked the highest volume of auto recoveries since the 2009 great recession. This surge was driven by record vehicle prices. Surging insurance premiums. That's another thing too. Soaring auto loan delinquencies affect both subprime and prime borrowers both. But here's the thing. As long as there's new buyers waiting to take out a thousand dollar a month car loan, the repossessions don't matter because they can just recycle the car or run it through the auction. The dealer buys it again from the auction. In some cases, it's the same vehicle they sold, buying again at the auction to a new buyer now, someone getting a loan. And just repeat, rinse and repeat, right? The cycle repeats. Total assignments over 7.5 million recovery authorizations were issued to agencies by the fourth quarter 2025 reaching a record high of more than 10.5 million for the year. These were assignments. So the beginning of the repossession sounds like and that was a record even worse than a financial crisis. completed repossessions. The number of actual recovered vehicles crossed the 3 million mark by the year end.

[00:08:28]Nearly 60% of all national repossession volume took place in just 10 states. And the biggest states are the states with most repossessions. Looks like it's just based on the states that have the most population because it's going to be bigger numbers in those states, right?

[00:08:43]Texas, Florida, California, Georgia, North Carolina, Ohio, Michigan, New York, Illinois, and Pennsylvania rounding out the top 10. And we have this that further backs up the suspicion or the fact that people are just going further into debt. And this whole economic uh all this economic activity, the economic growth as it's being called is on the back of just people borrowing money and spending money they don't have. So what are we seeing folks? US consumer debt hits 18.19 trillion in the first quarter. So all this economic growth, most of it anyway, the large bulk of it is on the back of people taking out loans and going in to debt.

[00:09:28]Of course, the big chunk of it is auto loans, mortgages, and student loan debt.

[00:09:36]And it's just going to keep going, folks, because we have the ability to do that as a country. I mean, there's no limit to how much c how much money we can borrow. And it appears it's like that for the banks as well.

[00:09:48]So, the countries and almost 40 trillion in debt now, the United States. And it just seems like there's no limit to how much debt can be issued. Um, and they're not worried about people paying it back because then you can just keep recycling the same vehicle and get the next new buyer in the door.

[00:10:07]And on the back of all this easy money loose lending, we now have inflation, the highest in three years, came in at 3.8% in April. And that's according to the uh the gauge known as the PCE, uh personal consumer expenditures.

[00:10:25]That's a year-over-year number.

[00:10:28]Um the two the target was actually 2%.

[00:10:32]So we're almost double, folks. We're almost double double double. We're almost double the target. So, obviously, they're not going to cut rates because they're already missing the target. But in order to help people along and all these delinquencies, they need to cut rates. So, they're basically stuck between a rock and a hard place. Um, the question is, how long can this last before something breaks? uh US inflation increased at its fastest pace in three years in April, driven by higher energy prices due to the war and cementing economist views that the uh the bank would hold interest rates unchanged well into next year. Surging price pressures are eroding household income and threatening to restrain consumer spending and economic growth this year.

[00:11:21]Also, something else that came up today that I didn't know, I should have known, but didn't know, but I learned that a credit card that that I have is 24% interest rate. And my credit score is like 825 or something like that. Uh, my credit card allows me to see my credit score each month. 825 credit score.

[00:11:42]Pretty good. Pretty good score. But what good is it if my credit card interest rate is still like almost 25%. Right?

[00:11:49]And at this point, I don't care about the high interest rate because I do pay the card off each month. But what if I down the road, what if I have an emergency or medical expense and I can't pay it off in full? I'm paying a 25% interest rate on a credit card and I've got an 800 something credit score. So, please let me know down in the comments what good is a high credit score. Allows me to borrow more money probably. Maybe that's good. Auto loans are cheaper, though. I mean, I got a under a 6% auto loan like three years ago, which is pretty good with today's rates. Um, so I guess it could help the car loans, but it doesn't help with credit cards. But anyways, hope everybody's doing good.

[00:12:27]Hope you guys like this report. What do you think about the defaults, the delinquencies, everybody gets approved at this car dealer. Um, almost $50 to smog my car, right? What a sham. What a scam. Especially when companies and manufacturing facilities are leaking toxic uh spills. like up in Orange County, we had a huge toxic spill, but they're worried about cars driving around. All right, maybe it's giving us cleaner air. I don't know. But anyways, hope you guys like this. Let me know down in the comments your thoughts and we like to hear from you. And we'll see you in the next one, everybody. Peace.