Readers Buy New/Nearly New Vehicles

Rarely am I surprised by by poll results, but it happened Sunday. Nearly three-fourths of readers that resounded to the non-scientific Sunday Poll indicated their new vehicle will be new or nearly new.

Q: Your next vehicle purchase will be how old:

• Brand new 16 [47.06%]
• Nearly new, possibly certified pre-owned 9 [26.47%]
• Used 4 [11.76%]
• Well used 1 [2.94%]
• N/A — won’t be buying a car 3 [8.82%]
• Unsure/No Answer 1 2.94% [2.94%]

I’ve had many cars in the last 34 years — most used or well used. I have had two new cars — both costly mistakes. The best financial times were when I was car-free, but that’s not an option with my husband’s job.

Our last payment on our 2007 Honda Civic will be in early October, we’ll be actively shopping for a replacement then.   The Civic was 7 years old and had 90k on the odometer — just under the 100k our credit union would finance.

Because we want a fairly loaded midsize sedan new is beyond our budget — plus I don’t like owing more on a car that its resale value. Depreciation on a new car is steep. Many people now finance them for 6 years!

Now, if you buy a new car and keep it 10 years depreciation isn’t really an issue. What you can’t control is the other driver that totals your car and their insurance paying you thousands less than what you still owe on it, Sure, their are insurance plans that will replace your car but you pay more for that coverage — increasing your cost of ownership.

Later this year we will be looking at late model cars:

1. Hyundai Sonata Limited w/Tech Package (2015)
2. Honda Accord EX-L or Touring — 4 cylinder (2013-2015)

Why these two? As I explained last year, these are the two most affordable cars with memory seat — the Sonata also has memory mirrors.

We’ll potentially spend twice as much as we spent on our current car, but will be much newer with significantly fewer miles. Because we’ll be financing it for longer we’ll keep it longer.

Still, the appeal of a new car is strong. We’re heading to Chicago today for two days of auto show media events — the Chicago Auto Show opens to the public on Saturday February 11th, closing on Monday February 20th. Will be posting to Twitter & Facebook starting tonight.

— Steve Patterson

Senior Apartments To Be Built Adjacent To Swansea MetroLink Station Parking Lot

Back in September 2016, on the 20th,  I received a press release from our transit agency Metro — aka Bi-State Development:

SWANSEA, IL, SEPT. 20, 2016…  Southwestern Illinois Development Authority (SWIDA), in partnership with Bywater Development Group and Bi-State Development (BSD), is pleased to announce a new, $10.5 million development that will bring senior apartment living adjacent to the Swansea MetroLink Station in Swansea, Ill. The transit-oriented development (TOD) project, which will be developed by SWIDA and Bywater, was approved by the Illinois Housing Development Authority (IHDA) in Chicago on September 16. 

This new development, called Metro Landing of Swansea, will feature a handsome three-story building with 62 affordable one- and two-bedroom apartments for older adults seeking an independent lifestyle. Located adjacent to the Swansea MetroLink Station, residents will have car-free transportation options via MetroLink and MetroBus to conveniently access restaurants, retail, entertainment venues, recreational locations, employment centers, and medical facilities around the bi-state region. The Swansea Station is located on the Metro East Park and Recreation District BikeLink trail system, so seniors will be able to utilize the trail for exercise and recreation.

This development would not have occurred without the collaboration of a number of groups including IHDA, the St. Clair County Transit District and the Village of Swansea.  The Village has been a vital asset in the predevelopment planning process.  “It is truly an example of how public and private partnerships can lead to an important community investment,” James Nations, SWIDA’s Chairman said. “This is an excellent opportunity for SWIDA and Bywater Development Group to contribute to active senior housing as this segment of the population continues to grow.” The SWIDA Board of Directors is seeking other markets in the region in need of comparable developments.

Mike Lundy, Executive Director of SWIDA said, “It has been great working with Bi-State Development. We are very pleased with the new senior housing development and worked extremely hard to move this development forward.”

“This new development to be positioned next to the Swansea MetroLink Station reflects other successful transit-oriented projects in our area, and is a testament to the positive benefits the Metro transit system brings to the region,” said John Nations, President and CEO of Bi- State Development (BSD). BSD operates the metro public transportation system for the St. Louis region. 

“Metro Landing of Swansea is reflective of a very strong and effective public/private partnership and stands to serve as a model for transit oriented senior housing. It will create both a positive impact on the community and an ideal living environment for its residents.  Our organization is highly honored to be a part of this collective effort,” said Aaron Burnett, President of Bywater Development Group.

Metro Landing of Swansea is scheduled for construction commencement in the summer of 2017 with full completion by late summer of 2018. 

 

About SWIDA

The Southwestern Illinois Development Authority is a special-purpose, municipal corporation and local governmental unit whose purpose is to promote and enhance economic development within the counties of Bond, Clinton, Madison and St. Clair Ill. To learn more, visit www.swida.org. 

About Bi-State Development

Bi-State Development (BSD) operates the St. Louis Regional Freightway, the region’s freight district, and the Bi-State Development Research Institute. BSD is the operator of the Metro public transportation system for the St. Louis region, which includes the 87 vehicle, 46-mile MetroLink light rail system; 391 MetroBus vehicle fleet that serves 77 MetroBus routes; and Metro Call-A-Ride, a paratransit fleet of 120 vans. BSD owns and operates St. Louis Downtown Airport and the Gateway Arch Riverboats, as well as operates the Gateway Arch Revenue Collections Center and Gateway Arch trams. 

Within 90 minutes of receiving the press release I emailed Mike Lundy of SWIDA and Aaron Burnett of Bywater Development volunteering to help with accessibility, pedestrian issues, etc. I wanted to make sure they avoided common problems I’ve found throughout the region.Unfortunately, I’ve yet to hear back from either.

The stories online that day from the Post-Dispatch & other media outlets was a rephrasing of the press release along with the image provided.  Rather than do the same as others, I visited the Swansea MetroLink station and surrounding area a few days later  — on the morning of September 23rd. I was in the area nearly 2 hours — taking 158 photos in that time.

Go back up and read the press release again, you’ll see buzz words/phrases like ‘car-free’, ‘transit-oriented senior housing’, and ‘ideal living environment.’ Yeah…not so much.

The main thing these independent seniors will be buying is groceries. The nearest grocery store is al Aldi about a half a mile walk to the South, a Schnucks just over a half mile to the North. Before we go to the grocery stores let’s take a look at the station.

Let’s go to the Aldi first since it is slightly closer and we’re almost out to the main road, IL-159/N. Illinois St.

Let’s return to the station entrance and go North to try to access the Schnucks. Though the Schnucks is also on the West side of IL-159, there’s no sidewalk so we must cross to the West to head North.

Seniors living here might not be able to carry a bag or two of groceries, so an inexpensive folding shopping cart is a good option. But traversing parking lots are dangerous and trying to get the cart up & over many curbs is a challenge at any age/ability. My experience confirms the WalkScore of 33 out of 100 for the MetroLink light rail station — car dependent.

Metro and its partners want everyone to believe seniors will be able to live here car-free. I realize pedestrian-friendly development doesn’t happen around transit immediacy — it takes time. This station has only been open since…May 5th…2001 — over 15 years!

— Steve Patterson

The High Cost of Buying a Car If You’re Poor

For months now I’ve been wanting to post about auto financing. Last month John Oliver did a segment on it (below) that got me motivated:

Is there another subprime loan crisis brewing?

John Oliver, host of HBO’s “Last Week Tonight,” found disturbing similarities between the easy loans dished out for used cars and the mortgage crisis that devastated the economy in 2008. 

Now, car dealers are making high-risk, high-interest loans that “trap people with few options into paying vastly more than a car is worth,” Oliver said. “It’s just one of the many ways in which when you are poor, everything can be more expensive.” 

The average interest rate on a “buy here, pay here” loan made by used-car dealers is 19 percent, but some buyers are paying up to 29 percent for loans that many default on within an average of just seven months.  (Huffington Post)

Oliver pointed out bad subprime auto loans are being bundled and sold as investments — the same way bad subprime mortgages were dome a decade ago.

Note: a few words aren’t suitable for all work environments.

Some have pointed out that the auto loan market is too small to cause another recession. Even assuming these won’t cause another recession, the reality is disturbing.

In most places, the working poor need a reliable car to get to work. Even in regions with high frequency public transit, commutes can take hours. We’ve designed our built environment to male car ownership mandatory. So you ask?

For those who live paycheck to paycheck, buying a car isn’t an easy task. When my husband and I bought our used Honda Civic in 2014 we got a loan at our credit union. We didn’t qualify for their best interest rate, but still got a reasonable 3.69%APR. They required the vehicle not be more older than 7 years and have under 100,000 miles. Being pre-approved allowed up to go car shopping with confidence.

Here’s the numbers for our auto loan:

• $9,003.75 financed
• $596.01 in interest
• $9599.76 total after 42 months

Our last payment will be in November 2017. We got a good price on the car in 2014 so we’ve never been upside down on our loan.

For millions of people, their experience is very different. Their car breaks down, or they get a new job where they suddenly need a car. They turn to a nearby used car dealer where they can pay there.

The problem with this route is:

• The sales price is well-above the value of the car.
• The interest rate is 19%-25%.
• The total paid, if paid in full, is double the value of the car at purchase. Double!

Wednesday 9/14/16 I went to the website of one such dealer, picking out a car with a high reliability rating, decent fuel mileage, and less than 100k.

To someone needing a car to get to/from work at 4-cylinder Camry is a good choice, with only 88,749 miles it should have a lot of life left. The asking price is the first problem. Sure, prices are negotiable — but not much.

I also went to Kelly Blue Book to see what someone should expect to pay at a dealer for a 2006 Toyota Camry LE with 88,749 miles.

But this Camry is too old to get financed through my credit union, right now the oldest year model on used car loans is 2009. So I went back to the website and filtered their 299 cars in inventory to narrow down to 2009 & newer models under 100K miles. I got 59 matches — so 20% of their inventory could be financed elsewhere. I then sorted the 59 by price, ranging from $9,995-$15,995.

But it’s new enough (2011) and low milage enough (97,257) that it could be financed at my credit union. But the credit union wouldn’t lend more than the value.

So I wanted to compare this 2011 Chevy Aveo purchased/financed two different ways. First up, buy here pay here:

• Financed: $9,995
• Term: 48 months
• Interest: 22% (middle range)
• Payment:$314.90
• Total:$15,115.36
• Interest: $5,120.36 (33.88% of payments made)

Wow, those are big car payments for a 7 year-old car with nearly 100K miles. At this price it would be hard to afford routine maintenance and repairs for the length of the loan. Now let’s look at the same car if bought elsewhere for the suggested price and financed at a local credit union:

• Financed: $7,105
• Term: 48 months
• Interest: 3.69% (lowest rate is 2.49%)
• Payment:$159.44
• Total:$7,653.14
• Interest: $548.14 (7.16% of payments made)

The monthly payment is half with a reasonable interest rate, so hopefully the buyer could afford to keep up the car, not miss any payments, etc. I used an auto loan calculator to do the math for both.

Some of you likely think this is just the free market at work. It is, which is why unregulated free-market capitalism means a few profit while others are bankrupted. We shouldn’t force people to buy a car so they enter into an unjust racket.

By contrast, those with higher incomes have many more options. When we’re in Chicago dealers there routinely advertise new car leases with one up front payment.

A one pay lease, also known as a single pay or pre-paid car lease, is similar to a standard lease in that you are purchasing the use of the vehicle only for a set period of time. Like a standard lease, you agree to return the vehicle to the dealer in good condition and under a pre-determined number of miles at the end of this time. The difference is that instead of making monthly payments throughout this period, the entire amount is paid at the beginning of the lease. (Carintelligent)

That one payment of $12,000 will save you interest, but also cost you on interest it would’ve earned. It’s expensive to be poor.

— Steve Patterson

A Small Local Boulevard Through Forest Park Grew To Become A Major Interstate

Last week I posted about Forest Park’s 140th anniversary.  Earlier this month my husband and I visited the Science Center, looking out from the walkway over Interstate 64 I was reminded that land was originally part of the park.

In 1958 Kingshighway hadn’t been straightened, but a small road cut through the Southern edge of Forest Park — see aerial. Highways were meant to connect cities to each other, but within cities they divided and consumed valuable land.

— Steve Patterson

A Look At Kansas City’s New Modern Streetcar

Last week leaders in the St. Louis region argued publicly over future pubic transit:

St. Louis Mayor Francis Slay has made clear his support for a north-south MetroLink expansion, saying it’s a top priority in his final year in office. But a recent push for money to plan such a route has met with strong resistance from St. Louis County Executive Steve Stenger.

Stenger, in a letter to the Federal Transit Administration, said he will not endorse the north-south route until other proposed routes are studied. (Post-Dispatch)

At the other end of the state, in Kansas City, there’s also a disagreement about the expansion of rail-based public transit. The local non-profit behind the new KC Streetcar wants to expand South on Main Street, while another is pushing a light rail plan.

[Clay] Chastain argues his plan gives Kansas City residents a real choice and a much more extensive rail transit system, from the airport to the Cerner Trails campus under construction in south Kansas City and from Union Station to the stadium complex. 

He estimates it would cost $2 billion to build, or about $45 million per mile, although some light-rail systems have cost considerably more than that per mile. He assumes the federal government would provide $1 billion of that amount.

The local match would come from a 3/8-cent sales tax increase for 25 years, plus 3/8 cents that currently go for the bus system, once that tax expires in 2024. (Kansas City Star)

Anyone who has flown in/out of KC’s airport knows it is a long distance from downtown KC. It’s a 20-25 minute drive, but takes over an hour by bus. Frankly, they need to do both — expand the new streetcar and build light rail to far off destinations like their airport and stadiums.

Kansas City was without rail-based public transit from 1957 until May 6, 2016 — the day the 2.2 mile starter streetcar opened.

THE FUNDING:

• Cost to build: $100 million — $37 million from the federal government, $63 million from bonds.
• Cost to operate: $4 million annually to be paid by a combination of sales & property taxes within the transportation district.
• Fare:  $0 — free
• Local comparison: Our Loop Trolley vintage streetcar project. also 2.2 miles long, is costing $51 million to build. The 8-mile cross-county MetroLink extension that opened in 2006 cost $430 million.

THE VEHICLES:

• “Each vehicle is 77 feet and 8 inches long; 78,000 pounds; and 12 feet tall.”
• “Each vehicle capacity is approximately 150 riders and is bi-directional (can run both directions). There is a combination of sitting and standing within the streetcar.”
• “There are three “cars” in each streetcar vehicle, with 4 sets of doors (one on each end and two in the middle car).”
• Each of the four vehicles cost $4.39 million each (source).
• Same as vehicles used in the Cincinnati Streetcar opening later this year.
• Model: CAF Urbos 3 100% low-floor
• Manufactured in Elmira NY by CAF USA, a subsidiary of a Spanish company.
• To meet US crash-standards the body is made of steel
• Comparison: our 4-car light rail vehicles are 90 feet long; capacity of 72 seated plus 106 standing

THE ROUTE:

Kansas City is lucky to have Main Street as a central arterial. We have Olive/Lindell, but they’re very different. The 2.2 mile route does a loop on the North end around their River Market area. It goes down Main and ends at Union Station.

The route is 2.2 miles long and travels along Main Street in downtown Kansas City from the River Market to Union Station/Crown Center. The route also includes a loop around the City Market and runs on 3rd St on the north, Delaware on the west, 5th St on the south, and Grand on the east. (KC Streetcar FAQ)

An extension to continue South on Main Street is already being planned.

See a route map here.

THE STOPS:

Stops are every few blocks, over the 3-day weekend I rode the streetcar a few times but also traveled the route on the sidewalk. For the most part. the stops are built out into the parking lane — leaving the sidewalk unblocked.

NEW CONSTRUCTION:

New construction is everywhere in Kansas City, especially near the streetcar route.

VIDEO:

I put together a brief video of various clips I took:

FINAL THOUGHTS:

Their streetcar isn’t meant to be a regional system, at least not initially. CAF makes very similar vehicles for use in higher-speed light rail applications, so if they ever do a light rail line the vehicles could look just like their streetcar.

The main problem we experienced was crowds — but it was a nice holiday weekend in the first month of service.  Would like to ride it on a regular weekday. We did speak to a retired couple that recently moved from the suburbs to new construction downtown — the streetcar was one reason,

Being right there it helped add life to the street. It’ll be interesting to see if they’ll be able to expand.

— Steve Patterson