Few people predicted the pandemic and how, via supply chain shortages, global vehicle production would crater. The only thing predictable about the car market, really, is how it always ends up harming poor people. There’s a new report out on aging cars and it’s good news for mechanics but bad news for people who need a car to work.
Plus, we check out the inevitable Tesla lawsuit, the unionization of robotaxi firms, and the sudden increase in battery capacity in the United States.
A Double Whammy For Poor Car Owners
It’s now a matter of conventional wisdom that automakers shifted their production to more expensive models during the pandemic, causing prices to go up. At the same time, limited inventory meant that deals for new cars were hard to come by for budget conscious buyers. Even with lower interest rates, this meant that many buyers with limited incomes or poor credit were forced to either stay out of the market or take on longer loan payments (the average new vehicle loan for someone with a 500-600 credit score is about 74 months).
And what about used cars? Used car prices also increased dramatically during the pandemic (about 40% higher than pre-pandemic levels). Unsurprisingly, this means that the average age of a car on the road has reached about 12.5 years, an all-time record. As mentioned yesterday, it’s now a better time to buy a new car and deals are finally out there, though higher interest rates are going to still make it difficult for some to buy anything, new or used.
There’s a nice report out from S&P Global Mobility that addresses how this presents a big upside for mechanics:
Two years of short supply of new vehicles has driven consumers into the used-car market. Now, there could be a counterintuitive shift: Surging new-vehicle supply could further boost expansion of the used-vehicle fleet, bringing more high-mileage vehicles into service bays.
How is this possible? The aging car parc has already expanded the repair business sweet spot, which we consider as vehicles from six to 11 years old. Now 12- and 13-year-old vehicles are becoming a bigger part of the business – even though they were originally sold during the slow-sales years of the Great Recession.
None of this is surprising to anyone paying even limited attention. It’s also not surprising that cars that are over a decade old are now new enough that they’re likely to contain more sensors and be more expensive to fix than older vehicles.
Working class people taking it on the chin is sort of a tradition. Here’s where it gets super fun, though, as pointed out by S&P Global Mobility:
In addition, drivers of older, lower-priced, out-of-warranty vehicles are likely to drive more miles, because they may have jobs without a work-from-home option. During the pandemic years, vehicles from six to 13 years old – the new aftermarket sweet spot – will increase their share of annual miles traveled, outstripping both vehicles zero to 5-years-old and 14-years-plus, according to S&P Global Mobility projections.
The bolding is mine and it’s another obvious, but extremely important point. If you’re a working class person with a job that cannot be done from home you have to keep putting miles on your car. A Pew Research study from early in the pandemic found that 76% of lower income people couldn’t do their work from home, as opposed to just 44% of upper income individuals.
I think it’s plausible that, barring some huge economic upheaval, carmakers will start producing more affordable models and those will eventually become available as used cars, but that’s not going to be for some time. Until then, lower income individuals will have to contend with putting more and more miles on vehicles that are increasingly complex and expensive to fix.
Cruise Probably Becomes The First Firm To Unionize
I’m going to do this backwards and start with a sentence that made me laugh this morning, courtesy of this Reuters report on GM’s self-driving firm Cruise:
Reuters could not definitively determine if these are the driverless car industry’s first union agreements.
Obviously, it’s not the driverless cars themselves that are being unionized but the staff being used to maintain them, though that leads to the other funny note in this piece, calling the agreement:
…[A] significant milestone as unions and robotaxi firms have historically been at odds.
LOL. I mean, yes, of course. Automated systems present a real threat to organized labor and, in the absence of some sort of Universal Basic Income-type system, it’s not clear what happens if we automate everything. The deal is with the IBEW and SEIU and will cover “dozens” of workers.
Tesla Hit With A Class Action Lawsuit Over Range
Like clockwork, the exclusive report from Reuters that Tesla created an entire department to basically ignore people who complained about the potentially overly optimistic range estimates of their cars has resulted in class action lawsuit in California. Since Reuters broke the news, let’s let Reuters chime in here as well:
The lawsuit alleges Tesla breached vehicle warranties and engaged in fraud and unfair competition.
“Put simply, Tesla has a duty to deliver a product that performs as advertised,” Adam A. Edwards, an attorney at Milberg Coleman Bryson Phillips Grossman, the firm representing Tesla owners in the lawsuit, said in a statement.
The lawsuit’s three plaintiffs cite occasions when their Teslas didn’t achieve close to their advertised ranges and said they had complained to the company without success.
It’ll be interesting to see how much momentum this gains. Many of the earliest Tesla adopters were die hards who have a serious attachment to the firm, but now Tesla is just a car company that makes a lot of fairly affordable EVs.
How Much Battery Capacity Do We Actually Need?
As far as successful legislation goes, the constant news about automakers and suppliers rushing to build battery plants in North America indicates to me that the Inflation Reduction Act has been a success. The big question, though, is how much capacity do we really need?
I ask this because there are two big pieces of news again this week. First, from Automotive News is the fact that LG Energy Solutions says the Korean company wants to build more than 300 gigawatt-hours of production capacity by 2025. That’s a lot. From the story:
LG Energy Solution has the most gigawatt-hour capacity among EV battery plants in North America that have been announced, are under construction or are operational, according to Wood Mackenzie, an energy research and consulting firm. Three hundred gigawatt-hours would be enough to supply batteries for 3 million to 6 million EVs, depending on their size and configuration, according to data from the Federal Reserve Bank of Dallas.
For comparison, in 2022 about 750,000 new EVs were registered.
We’re also learning this week that a joint venture between Stellantis and Mercedes called Automotive Cells Co. (it worked so well last time!) is considering building a battery plant in Canada. Here’s some detail The Detroit News:
Mark Stewart, Stellantis’ chief operating officer in North America, said in October that Stellantis could need as many as four battery plants in North America by 2030 to achieve its goal of having at least half of its U.S. passenger car and light-duty pickup sales be all-electric. Stellantis CEO Carlos Tavares previously suggested ACC could expand to North America.
The train has left the station and, while some automakers like Ford are starting to consider more hybrids in the mix, it seems like most automakers are trying to shift to EVs as fast as possible.
The Big Question
How is is your daily driver? How long do you expect to keep it? How many miles does it have on it?
Photos: Tesla, Skoda, Ford, Cruise
My 2009 Honda Fit has over 130k on it. I need to replace the starter (sounds like a sticky solenoid) and shocks, but it’s been awesome to own. I’ll probably replace it with a beater Miata and a compliance EV next year
I have a 2010 vw passat 2.0 diesel that has been surprisingly reliable,except the 4motion system stopped working and some wheel bearings that needs replacement. Will probably keep it until it eventually becomes a financial liability. (which, because vw,could be anytime now)
DD is a 2022 Kia Carnival just coming up on 20K. I plan on keeping it until it’s paid off and at least until my kids are out of their giant car seats (5ish years).
Well, since I’ll be going back to an office soon, looks like I’ll be balancing between the ’21 Bronco Badlands (2.3, 10 AT) and the 2018 Porsche Cayman (2.0, 7 PDK). Just sent in for a personalized plate for the Cayman, and I’ll be keeping both for the foreseeable future unless something disastrous happens. 16K miles on the Bronco, just north of 20K on the Porsche (which I purchased used this year with less than 18K on it when I picked it up).
My daily is a 2007 Ford Focus (not ST), which I had really hoped to replace by now, but can’t for the reasons stated in the article. I do have a 1985 F150, and a 1996 XJ that I can use as backups when the Focus needs a repair that takes me more than a weekend. I had part of the exhaust replaced on my Focus during my last inspection for around $600, and the shop wasn’t sure I would want to put that much money into a car that KBB valued at $600. I told him I couldn’t buy another car for $600 so, we should just repair it and hope for the best. Every time I put tires on that car, I increase it’s value by at least 50%…
One of these days, I hope I can get a deal on a BRX/GR86, but so far I have had no luck.
2002 325xi touring with 183k on the clock. Not sure it’ll see 185k…
Unrelated: I’ve seen others comment about this, but I just noticed my real name was displayed as opposed to my username. Had to go into my account and change my name to what was my username.
I had the same thing happen. It happened with my account when I logged in on a different device.
Yeah, I don’t know if it happened to everyone but I saw a few people commenting about it and it happened to me. Kind of weird.
Test.
Yeah my name shows up instead of my user name. That’s fine. Sometimes a generic name is nice that way.
Daily duty for me is split between my 2014 GTI with 125k, and my 1996 Passat TDI with 253k. I try to take the Passat as often as I can, my commute is 60 miles round trip 4 days a week. The Passat costs me about half as much per mile as the GTI, plus it’s fun and has impressive fuel range due to the 18.5gal tank. I get 48-50mpg in it pretty consistently, so this means I only fill up 1 or 2 times a month.
2009 Jeep Grand. 110,000 replaced starter and water pump. No other problems to speak of.
My current daily is a 2023 Model 3with under 5,000 miles. I hope to keep this car until it can no longer serve it’s function as a car.
Until 2017, my daily was a 2009 Salsa La Cruz bicycle. It has over 18,000 miles on it and I plan on keeping it until I die. It’s a cyclocross racing bike so it is essentially a jack of all trades, master of none. No suspension, disc brakes, wide tires, steel frame and drop handlebars. It does pavement, grass and fire roads well. It can go on traditional MTB trails, but the lack of suspension really hurts it there.
I am thinking to replace my Polestar 2 lease next year with a Tesla Model 3, how you like it? I didn’t love the interior of the Model 3 but the specs seems great in paper.
I’ve been driving a Model 3 for five years and have loved it. That said, I haven’t driven in a Polestar 2 — so, don’t have a good first-hand point of comparison. I do have a second-hand point of comparison from a relative who recently test-drove both (well, a Polestar and a Model Y — but fairly similar), however, and said that the Model Y made the Polestar seem like a car from the stone age, fwiw.
I’m still loving it, but I’ve only had it since February. It took three years to go from love to hate on my last car. But that was due to repeated CVT failures while under warranty.
I have accepted the fact that Tesla has the superior EV powertrain but falls short everywhere else that defines a car. Road tripping only requires slightly more thought than an ICE vehicle because of the Supercharger network.
The screen controlling almost everything takes some getting used to. However, once you have all the settings the way you want them, there is barely any interaction with it. If you have driven anything that puts the speedometer in the middle of the dash, looking slightly right is easy to get used to.
The camera based adaptive cruise is great in traffic, horrible on Texas panhandle roads with nothing for it to see. Cruise control won’t allow the car to go faster than it can see. Without other cars as a point of reference, it gets confused. That triggers a lot of phantom braking events to slow down from 75 to 60. Once I set the cruise at 60, it drove great.
Is that the Salsa with the funky curvy fork? They made such awesome cross bikes. I lust after a Cutthroat.
Nope, it actually looks like it came out of the 1970s or 80s. I had at least one person ask me how I modified a vintage bike to add disc brakes and delete the downtube shifters. They did a great job on the overall design, too bad it only lasted a few years before they turned the La Cruz into a proper cyclocross race bike. I think more people used them as commuters than racers.
“my daily was a 2009 Salsa La Cruz bicycle. It has over 18,000 miles on it and I plan on keeping it until I die. It’s a cyclocross racing bike so it is essentially a jack of all trades, master of none. No suspension, disc brakes, wide tires, steel frame and drop handlebars. It does pavement, grass and fire roads well. It can go on traditional MTB trails, but the lack of suspension really hurts it there.”
I’m into 80s steel framed, road, touring and road touring converted/gravel 80s mountain bikes myself. I have several bikes all of which were between $100 and free not including upgrades.
IMO there is no greater bargain in local personal transport than a good used bicycle as long as there is the means and the will to use it.
I replaced my previous car, a 2012 Nissan Juke (Owned for seven years, and took it from 70k miles to 190k miles) after hitting a deer and totaling it. I replaced it with a 2020 Subaru Impreza last spring. It’s got around 39k miles, and I hope to keep it for as long as I can. At least a decade.
My last car (VW GTI 1.8T) I bought new in 2000, and put 285,000 miles on it before replacing it in late 2020 (2016 VW GTI Autobahn). I bought it used, but since I know how to maintain (and get a professional to do it when I’m over my head) I’m keeping it as long as I can.
My daily is a 2017 Raptor withh 48k miles on it or so. I do 30 miles/day round trip for 4 days a week. During the summer I take my motorcycle as often as weather allows. I plan on keeping both for another decade or more.
Do you live near the desert? I always fantasize about driving a Raptor in its intended habitat. Wheee!
2014 Fiesta St with 95k is my daily when not riding my 2016 Zero DSR electric motorcycle. Still on the factory battery and I have no idea if the CEL even works it’s been so reliable.
My commute is now single digit miles so put a deposit down on the Volvo EX30 to switch to electric.
“Still on the factory battery and I have no idea if the CEL even works it’s been so reliable.”
It may be worth picking up a battery desulfonator/trickle charger to keep that good thing going:
https://www.motortrend.com/how-to/impp-1105-battery-desulfators-fact-fiction/
Have you noticed any degradation of the battery in the DSR? Does it still have the same range as when it was new?
DD is my 22 Kona N purchased the first week of June last year with 8600 miles on the clock. It’s been great. It’s big and useful enough for any use case my wife and I throw at it because it’s a hatchback but it’s also small enough that it isn’t a challenge to use it in the city.
I have had absolutely no issues with it whatsoever. I got the break in oil out at around 2,000 miles when I took the stock P Zeros off in favor of performance all seasons and am now doing oil changes every 5,000 miles because it’s a high strung engine and it lives a hard life as a daily driver in DC that gets the snot beat out of it on weekends. It has a few more little nicks and dings than I’d like it to but it was never going to get through city duty unscathed.
I’m keeping it for a long time. It’s cheap as hell for what it is, it’s a great car for us, and it’s half paid off already. It’s also absolutely eaten shit value wise. No one wanted the Kona Ns so dealerships have been letting the last ones go for as much as $3,000 off MSRP and on the used market nice ones are currently going for $10,000 off of what they sold for new with less than 10,000 miles. Woof.
There’s absolutely no reason for me to try to sell it when the values are so damn low and I only have $6,000 in equity in it…not to mention the interest rate I have is 2.75 which is unheard of right now. I’ll be riding it out until she’s paid off and then likely much longer after that. I also think it’s a car that’s going to get a redemption arc down the road and that a lot of them are going to wind up clapped out. I imagine a well maintained stock one that was owned by a 30 something might be appealing for someone on Cars and Bids 5-10 years down the line.
I have a 2017 Mazda3 2.0 MT with just about 40k on the clock and I haven’t had any issues so far. I’m planning on keeping it until corrosion starts to be an issue, which I’m hoping is no sooner than five years. They’re particularly salt happy where I live.
My daily driver is a Y2K Dodge 2500 2WD pickup with the everlasting Cummins inline six diesel, of the 24-valve variety. (That’s a 24-valve pushrod engine, for those not intimately familiar with this particular bit of engineering madness…) It has somewhere over 300K on it, and enough rust that David Tracy would probably be strangely attracted to it. The air conditioning doesn’t work thanks to the condenser being smashed in a collision two previous owners ago, and I studiously avoid cleaning the dashboard due to it’s propensity to crumble into dust like so many other Chrysler dashboards of that era; at this point it probably is dust being held together by diesel grime. And it has a manual transmission, which explains why I’ll probably hold onto it until the body becomes one with the Earth again. At which point I’ll probably scrounge scrapyards to put together replacement bodywork… It’s one of those vehicles that’s cheaper to throw replacement parts at than to buy a whole replacement vehicle.
Also, I have no shame in pulling up into a nice corporate parking lot, wearing nice corporate attire, and step out of an abominable rustbucket. (Which is riding on disturbingly nice tires and sounds like it’s running as smoothly as a noisy Cummins diesel is capable of, so it’s clearly not completely neglected…)
To be fair, it’s only a “daily” driver three days out of every month when I’m required to show up in the nearby office, so that means it only ventures out for occasional Home Depot runs the rest of the time, which leads to more or less biennial fill-ups for the past several pandemic and post-pandemic years. But before that, it was a genuine daily commuter as well as all-around work truck. It’s always done Truck Things, like hauling two large rooms’ worth of heavy laminate flooring without even breaking a sweat, or hauling a trailer around to move even more large stuff.
Hell yeah, well put…awesome truck!
Disagree. Since the hollowing-out of the middle class in the U.S., there are a lot of manufacturers and retailers who have thrived by ditching middle class buyers and catering solely to the “professional class” and up. I see car makers doing that as well.
We’ve got a 2017 Chevy Volt with 52,000 miles. Had to put it in the shop last week. Check Engine Light came on and would randomly go/not-go into Drive. Dealer had to order a “module” and it comes in next week (under warranty). Suddenly, we are burning gasoline again at $3.59 and 9/10ths in Clarksville, TN. I fully support hybrids. There’s no way in God’s universe that we can suck enough electricity to power a population of 100% EVs. The hybrid keeps us from having range anxiety so we can get places. Well, we’re retired so we don’t commute but when we’ve taken longer trips we’ve never worried about getting home. Good ideas make headlines, but it takes experts to look at the long term impact of 100% EVs. Perfect has once again become the enemy of Good Enough.
“There’s no way in God’s universe that we can suck enough electricity to power a population of 100% EVs.”
Not without fully embracing nuclear anyway.
Good news is there’s enough green energy there to meet needs for quite a while.
Daily: 2015 Dodge Dart. Currently at 120k miles. Due to its worth (nothing), I’m keeping until it dies. It has been surprisingly reliable with only a few minor issues. Got lucky I guess?
Also drive a 2020 Dodge Charger Scat Pack. 24k miles. Fun, comfy loud car but I might trade it in for a manual RWD V8. Maybe a GT350 or Camaro.
2010 Chevy Impala with 121,500 miles is my daily, but I work from Home 90%+ of the time.
My fun car is a 1979 Triumph Spitfire with 101,500 miles.
The Family primary car is a 2017 Chrysler Pacifica with 79,000 miles.
All vehicles were bought Used.
High transaction prices for new cars as well as unnecessary features bundled together with big price tags and bland styling all add up together to me ignoring new vehicles.
Also, I am not in the limited income/poor credit category, but clearly have the same feelings toward new cars as this group.
Daily: 2023 Volvo S60 T8 Recharge (employee lease with a deal too good to pass up -1 yr. lease, $0 down, $430/mo, includes insurance, includes 28k miles/yr)
Wife’s Daily (she works from home so mostly a grocery getter): 2008 Honda Fit Sport with 148k miles – trusty, good to take downtown and leave overnight, has a rebuilt title so probably not worth selling at this point, we’ll keep it til it doesn’t run
Dog/Projects: 2010 VW Routan with 167k miles – Also use it on road trips with our 100lb Great Pyrenees. Getting a bit tired, will likely upgrade to something like a Pacifica in a couple years.
Holy hell, that T8 Recharge lease is great.
My daily is a 2018 Volvo V60 that’s about to turn over 110K. It’s doing fine, though I think I’ve got some loose trim clips in the hatch. I’ll definitely be keeping it until at least the timing belt change is due at 150K. I don’t see the point in starting to shop until ’25 when the EV charging situation has stabilized some. The car still gets over 30 MPG on average, and that’s not too bad, really. I don’t see the point of replacing it with anything that gets worse mileage.
Some things never change…
https://www.youtube.com/watch?v=MqkT4B-9MGk
My daily driver is a 2006 Saab 9-5 SportCombi, it has 202,100 miles and is… well… getting tired. Still runs and drives strong, but almost every railroad crossing comes with new squeaks and rattles, there is now some clunking from the front end, and a 18 gallon tank isn’t cheap to fill with premium these days. My last tank was 16mpg, which hurts quite a bit, though it can do better on the highway, my all-city driving commute isn’t ideal.
“there is now some clunking from the front end”
Something I always recommend now, before replacing bushings, struts, tie rod ends, etc check the torque on the center nut holding down the top plate to the strut shaft. Mine had a tendency to loosen up over time causing a clunk. It may seem fine at rest but unless its torqued properly it will get unloaded during compression and the gap that forms slams shut causing chunks and rattles. If this is the problem you can try a bit of locktite to keep it in place.
Checking it is free and should only take a few minutes of work so why not?
My daily is a 2017 Mazda3 with just under 73,000 miles. I plan to keep it for at least 6 more years, which will be right around the time my daughter starts driving. Then my wife and I can decide which car becomes hers between the Mazda and my wife’s 2018 Accord. She works from home now and only has 50,000 miles on her car.