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This video by Grant Rudow, titled “Dealerships Can’t Sell Cars Anymore,” explores the current breakdown of the American car market, focusing on how predatory lending, hidden costs, and high interest rates are creating a debt crisis for average consumers. The Current State of the Car Market • Rising Delinquencies & Repossessions: Car loan defaults are rising across all credit tiers, not just for high-risk borrowers [01:29]. Repossessions are projected to hit 10.5 million by the end of the year, with banks taking cars back after just one missed payment [02:28]. • Extreme Monthly Payments: The average new car payment has reached $749, with many people paying over $1,000 a month for standard family vehicles like Kias or Toyotas [02:56]. • Negative Equity: One in four new car owners owes more than the car is worth immediately after driving off the lot, averaging $10,000 in negative equity [03:10]. The “New Playbook” of Dealerships The video explains that dealerships are moving away from selling the car itself and instead selling “monthly payments” and recurring revenue: • Feature Subscriptions: Manufacturers are locking basic features behind paywalls. Things like heated seats, remote start, and even horsepower boosts are being turned into monthly subscription services [06:18]. • Data Monetization: Modern cars collect vast amounts of data on driving habits, which is sold to insurance companies and advertisers [06:45]. • Emotional Engineering: Salespeople pivot the conversation toward “affordability” per month (e.g., “It’s only $63 more per month”) to upsell customers from a $32,000 car to a $47,000 loan [08:52]. The Five Layers of the “Car Loan Trap” [09:32]

1. Ultra-Long Terms: Loans are being stretched to 84 or 96 months (7–8 years) to make payments look smaller [09:49].
2. Early Trade-ins: Most people trade in cars after 5 years, meaning they roll thousands in unpaid debt into their next loan [10:14].
3. High Interest: Rates of 8–12% mean buyers often spend more on interest than on food [10:41].
4. Backend Add-ons: Dealers make most of their profit on “extras” like fabric protection and extended warranties [10:55].
5. The Debt Cycle: Rolling negative equity into new loans keeps consumers in a perpetual cycle of debt [11:15]. How to Protect Yourself • Focus on Total Price: Always negotiate the “out-the-door” price rather than the monthly payment to strip the dealer of their hidden tricks [13:03]. • Avoid Subscriptions: Reject software upgrades and add-ons that don’t provide long-term value [13:21]. • Buy Mathematically, Not Emotionally: Redefine a “nice car” as one that provides financial breathing room rather than status [12:45]. • Wait for the Market to Soften: Buyers with cash or strong credit will gain significant leverage as dealerships struggle to move inventory [14:04].