May 23, 2018

Where Is This Going?

Bloomberg Press just published an article claiming "Americans Are Prioritizing Phone Payments Over Car Loans." The article says, “As cars grow relatively less important, borrowers struggling to pay back their loans on time are increasingly prioritizing payments on the latest iPhone instead of making sure they hold on to their pickup or coupe.”

“So what?” You might say . . . and rightfully so.

The reason Bloomberg was interested in this phenomenon is investments. In particular, good old derivatives. Remember them? Those unsecured, gambling vehicles that were used to bankrupt the entire world economy in 2007? Yeah, that’s the way we’re going to look at the future of motorcycling, cars, and cell phones. “The shift is increasing the attractiveness of bonds generated from mobile-phone loans, a small but growing portion of the asset-backed securities market. While just $7.7 billion of bonds backed by phone purchases have been issued since 2016 -- and all by Verizon Communications Inc. -- the number may increase over coming years.”

So, not only are Americans more interested in staring at their tiny screens, tapping away with their thumbs at the speed of mentally deficient secretaries, and double-checking their “likes” while walking into traffic without a clue or a care in the world. And they are walking because their car has been repossessed and they probably didn’t even notice.

If that’s the direction we’re going, you damn well better get whatever you can get out of your vintage bikes while you can. In another generation, you’ll be selling those wheels for scrap metal prices.

4 comments:

  1. I've been hearing some version of this for at least 10 years and vintage vehicle prices remain as crazy high as ever.

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    1. Not according the vintage collectors I've met around here. Those US muscle cars are losing value almost as fast as I gain weight during the winter. We had an electric car show in Red Wing a few weeks back and one Boomer collector said he'd started dumping his ICE collection a couple of years ago and got close to peak prices for most of it two years ago, but can't find buyers for half of what he's insured his cars for (and the original asking price) in the last year. A mechanic friend said his father's vintage (all pre-1930 vehicles) could go for close to scrap prices after his father dies. Check this out: http://www.businessinsider.com/vintage-car-market-sothebys-2017-8.

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  2. It's already happening. As the age of the target demographic moves up the price of the vehicle goes down. Model A Fords that traded for 30k 10-15 years ago are now half that, and you can find them for less than 10k. Everyone that wanted one has one, and there aren't many younger folks interested. As the boomers age out of the market the demand for a lot of bikes will disappear.

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    1. I would agree that as the target group ages out then their preferred vehicles drop in value (Model A's, then 50's, Muscle cars) but there has also been a sharp increase in '70's Corvettes, late 70s'80s Porsches and others. The market reports don't capture the next wave because they appear to be outside of the "classic" definition that I could find.

      None of this matters really, I'm just sour grapes that the cars I might actually buy just because are still too high : )

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