Could somebody explain to me why making used cars more affordable would be a net loss? People being priced out of reasonably priced (and not falling apart) used vehicles is likely a contributing...
Could somebody explain to me why making used cars more affordable would be a net loss?
People being priced out of reasonably priced (and not falling apart) used vehicles is likely a contributing factor to the poverty cycle, especially outside of urban areas.
Yes, it's true that if car prices are lower then that's a win for people who need cars, in the long run. But, for businesses, a gradual change can be handled better than a sudden one. A lot of the...
Yes, it's true that if car prices are lower then that's a win for people who need cars, in the long run. But, for businesses, a gradual change can be handled better than a sudden one. A lot of the time, businesses are built assuming prices are fairly stable, and when they're not, they're not prepared and can lose lots of money.
Like with any asset whose price goes down, it's bad for sellers and good for buyers. So who owns lots of cars? This was a factor in the Hertz bankruptcy. Hertz went bankrupt because they were doing a lot of financial engineering, so they were the most fragile.
Also, car companies lose money because they lease cars and they have to sell the cars at the end of their lease.
Although I personally think cheap quality used cars are good, they have the downside of heavily discouraging the production of any car which isn't immediately successful, which reduces the variety...
Although I personally think cheap quality used cars are good, they have the downside of heavily discouraging the production of any car which isn't immediately successful, which reduces the variety and availability of cars available to consumers (see subcompacts as an example). Used cars also don't employ nearly as many people, which is helpful in a struggling economy like the one we're in now.
Does this really matter though? Do we really need 8,000 variants of mid-size, SUV, minivans, and pickup truck? It seems like needless market segmentation to me. WRT the employment, I think we...
reduces the variety and availability of cars available to consumers
Does this really matter though? Do we really need 8,000 variants of mid-size, SUV, minivans, and pickup truck?
It seems like needless market segmentation to me.
WRT the employment, I think we could use a healthy dose of restructuring employment. We need less people building cars, and more people building infrastructure so we don't need as many cars.
I'm not sure why this is such a concern. There aren't 8000 variants of cars - and market segmentation doesn't majorly increase the number of workers needed. Auto productive is very streamlined,...
I'm not sure why this is such a concern. There aren't 8000 variants of cars - and market segmentation doesn't majorly increase the number of workers needed. Auto productive is very streamlined, the CR-V is built on a civic platform, the HR-V is a fit platform. The odyssey, pilot and ridgeline are all on one platform.
I agree we need to shift away from cars (that's why I don't own one) but I disagree with the premise that market segmentation is a notable drain on resources.
I was specifically addressing the idea of reduced customer choice. I think we honestly have too many choices in that regard, and most of them boil down to minor differences that we attribute more...
I'm not sure why this is such a concern.
I was specifically addressing the idea of reduced customer choice.
I think we honestly have too many choices in that regard, and most of them boil down to minor differences that we attribute more value to mostly due to marketing.
That's fair. People, for whatever reason, really like the idea of choice. It's why we have 60 flavors of 20 different brands of deodorant (that come from 3 conglomerates)
That's fair. People, for whatever reason, really like the idea of choice. It's why we have 60 flavors of 20 different brands of deodorant (that come from 3 conglomerates)
But it's a net loss on demand that's dropping price to begin with. I personally think supply/demand is bunk, but in theory they should reach a stable equilibrium. Assembly line manufacture of cars...
But it's a net loss on demand that's dropping price to begin with. I personally think supply/demand is bunk, but in theory they should reach a stable equilibrium.
Assembly line manufacture of cars is a mostly an unskilled labor. I'm sure given appropriate funding, we could put that labor to better use.
There's no reason unemployment needs to be as high as it is currently. There are endless useful tasks to be done, just that they're not immediately profitable so no businesses want to do them, or pay taxes to fund them collectively.
An equilibrium will be reached, but it's an equilibrium in which the quantity demanded is lowered, and the quantity supplied (and therefore workers employed) will be reduced. But that's just the...
An equilibrium will be reached, but it's an equilibrium in which the quantity demanded is lowered, and the quantity supplied (and therefore workers employed) will be reduced.
Could somebody explain to me why making used cars more affordable would be a net loss?
People being priced out of reasonably priced (and not falling apart) used vehicles is likely a contributing factor to the poverty cycle, especially outside of urban areas.
Yes, it's true that if car prices are lower then that's a win for people who need cars, in the long run. But, for businesses, a gradual change can be handled better than a sudden one. A lot of the time, businesses are built assuming prices are fairly stable, and when they're not, they're not prepared and can lose lots of money.
Like with any asset whose price goes down, it's bad for sellers and good for buyers. So who owns lots of cars? This was a factor in the Hertz bankruptcy. Hertz went bankrupt because they were doing a lot of financial engineering, so they were the most fragile.
Also, car companies lose money because they lease cars and they have to sell the cars at the end of their lease.
Although I personally think cheap quality used cars are good, they have the downside of heavily discouraging the production of any car which isn't immediately successful, which reduces the variety and availability of cars available to consumers (see subcompacts as an example). Used cars also don't employ nearly as many people, which is helpful in a struggling economy like the one we're in now.
Does this really matter though? Do we really need 8,000 variants of mid-size, SUV, minivans, and pickup truck?
It seems like needless market segmentation to me.
WRT the employment, I think we could use a healthy dose of restructuring employment. We need less people building cars, and more people building infrastructure so we don't need as many cars.
I'm not sure why this is such a concern. There aren't 8000 variants of cars - and market segmentation doesn't majorly increase the number of workers needed. Auto productive is very streamlined, the CR-V is built on a civic platform, the HR-V is a fit platform. The odyssey, pilot and ridgeline are all on one platform.
I agree we need to shift away from cars (that's why I don't own one) but I disagree with the premise that market segmentation is a notable drain on resources.
I was specifically addressing the idea of reduced customer choice.
I think we honestly have too many choices in that regard, and most of them boil down to minor differences that we attribute more value to mostly due to marketing.
That's fair. People, for whatever reason, really like the idea of choice. It's why we have 60 flavors of 20 different brands of deodorant (that come from 3 conglomerates)
It's a net loss from the supply side - less new purchases, leading to unemployment. Whether you think that's a real problem is up to you.
But it's a net loss on demand that's dropping price to begin with. I personally think supply/demand is bunk, but in theory they should reach a stable equilibrium.
Assembly line manufacture of cars is a mostly an unskilled labor. I'm sure given appropriate funding, we could put that labor to better use.
There's no reason unemployment needs to be as high as it is currently. There are endless useful tasks to be done, just that they're not immediately profitable so no businesses want to do them, or pay taxes to fund them collectively.
An equilibrium will be reached, but it's an equilibrium in which the quantity demanded is lowered, and the quantity supplied (and therefore workers employed) will be reduced.
But that's just the classical economics take.