via Mike Shedlock
We are in the midst of a “total loss” epidemic says “Car Dealership Guy” on Twitter. Pictures explain why.
Used Car and Truck Prices vs Maintenance and Repairs
Total Loss Epidemic
Cars have more electronic components then ever before..
These components are pretty much unrepairable…So overall cost of repairs and skills needed for repairs have gone up.
Definitely covid did amplify it .
Overall your argument makes total sense.— Jarvis-Alerts (@Jarvis_Alerts) May 24, 2024
Car Dealership Guy Comments
We are in the midst of a “total loss” epidemic. More than *20%* of vehicles are now declared a write-off by insurers after examining claims. That’s around *five* times higher than in 1980. But why?
One big reason is that the cost of vehicle repairs has increased by almost 50% since the pandemic started—far exceeding inflation.
Another major driver: Declining used car prices. It may seem counterintuitive, but the rate at which used car prices have fallen over the past couple of years encourages salvaging instead of repair… And all that contributes to an increase in vehicle write-offs.
No wonder Copart’s stock price has gained 1,100% over the past decade…
Historical Context
If you get into a wreck and total your car, and all your insurance covers is the decreasing value of your car, what can you afford to buy?
Discretionary Spending Tumbles
Target CEO Brian Cornell said the results show “continued soft trends in discretionary categories.”
On May 22, I commented Discretionary Spending Tumbles at Target, Shares Drop 10 Percent
We had an advance hint at Target weakness.
Are Consumers About to Throw in the Towel?
On May 16, I commented Retail Sales Fall Flat, Are Consumers About to Throw in the Towel?
On a year-over-year basis, real retail sales have been negative 12 out of the last 15 months.
Real vs Nominal Advance Retail Sales Percent Change From Year Ago
The vaunted consumer is much less than portrayed.
Fed Consumer Survey
Let’s check out some charts from the latest fed survey on how well people are doing financially. This data and a new chart by me tie everything I have said about the rent and the election together.
Please consider Fed Consumer Survey: Are You Worse Off Than a Year Ago?
Are You Worse Off Financially Than a Year Ago?
Between 2022 and 2023 the numbers improved (lead chart). However, the numbers are a disaster compared to the peak in 2019.
Can You Handle a $400 Emergency?
Millennials and Zoomers are increasingly stressed since the end of 2021.
All of the savings from three rounds of pandemic stimulus, rent abatements, and student debt cancellations have been wiped out by rising inflation.
Click on previous link for more details.