So much car debt!!!!!

[Chapap]

These are astounding numbers to me. I didn’t check these numbers too throughly but they’re close in several places. Some automakers don’t even make $40k+ cars. I’ll probably be making some detrimental assumptions here, but that’s ok since I’m not a statistics person. 2 cars per household equates to one years salary for cars and $10,000 down payment per car.

This is insane to me. That’s way too much. It’s a car. It takes a couple people from A to B. I’m looking for a car and am trying to stay around 25k INCLUDING my illogical creature comfort/ fancy tech desires. I mean… how many folks actually need 3 rows, or a truck, semi-aniline leather, etc.? Do I need to shop for a Mercedes instead of a Hyundai?

Edit: see attached pic. That’s interesting and I’m sure someone can correlate some value to it.

• median household income is $90,000
• average new car price is $47,000.
• average monthly car payment is $563 for new, $397 for used, $450 for leased.
• Americans borrow an average $34,635 for new, $21,438 for used.
• average loan term is 70 months for new, 65 months for used
• The average auto loan APR was 9.46% in 2020, but that ranged from an average of 5.49% for borrowers with the strongest credit to 22.66% for borrowers who are credit invisible.
• The average price of a new, light-duty vehicle is $39,25
  

 

[fastpakr]

It's crazy how far people are willing to extend themselves to buy things. I have no problem whatsoever with expensive cars being on the market - buy whatever you want. But seriously consider the effect on your finances, especially if you're buying it off the lot and getting hit with the immediate associated depreciation.

 

[RonD]

Credit/loans are real money makers, for the lenders
Actually help the economy

 

[Chapap]

Credit/loans are real money makers, for the lenders
Actually help the economy

I also hate how interest works. I mean I’ve done all the calculations and such in some finance courses… but still. I’m looking at mortgage stuff and messing with calculators. It’s amazing how an innocuous 3% interest rate actually means tack on an extra 25%.

 

[racsan]

When I bought the 2011 escape (used) the plan was to pay it off after a year, then 4 months after buying it the corona hits, another few months and my manufacturing goes down, my job drops to one shift and I get laid off. By this time there was only 1 month left of that additional $600 extra a week along with regular unemployment. So I saved up and paid the loan off even earlier than I planned. Saved almost $3000 vs just paying it month by month until the scheduled payoff time.

 

[rusty ol ranger]

I have exactly 0 dollars in auto debt.

I still get down the same roads, to the same places, in the same amount of time as someone with 50k car note.

Driving junk has many advantages.

 

[Ranger850]

Yes. It is a pain to think about how much you really pay. Try going a credit union to get pre approved. Then work under that amount. Stay away from their finance lenders if possible. They may give you more money, but the internet rate will get you. You may have to get used, but even a good used car about 4 years old can be nicely equipped.

 

[Uncle Gump]

We finance my wife's vehicles now... and will finance her a Maverick. My rides are paid for... and I hope to keep it that way for a bit. Moving my ass back to Michigan is my next action item.

Driving junk has many advantages.

I've lived by that rule too... but you have to have two pieces of junk. If I find another good deal... I'm going for the RBV trifecta.

 

[mikkelstuff]

My uncle told me while a teenager, "if ya can't pay out right for the car, ya walk until ya can do so." I've always lived by that which is a good part of why I keep this fine 2002 Ranger XLT!

Ok, ok, so the wife says I'm so cheap and tight with a buck that I squeak. Ha! 'Course I keep her in a much newer Ford - which is also paid for.

 

[RonD]

If you want to roll back the clock a few hundred years..................

Say I have a piece of land I want to sell for $100
I have some one who wants to buy it and has saved up enough money to buy it
And another person who offers $110 because he only has $80 but can borrow $30

I would be a fool not to take the extra $10, because its cash in hand
OR
I could say I will take the $80 and you can pay me $10/year for next 4 years so I get $120

In either case that's how inflation starts
Borrowed money

Its not good or bad, it just is the way it works
The "invisible hand" means the price of a product will find its selling and buying point, by pure greed, on the part of the seller and buyer

If my $100 land got an offer of $90 and no other offers for a year, maybe I would take the $90, that extra $10 asking price was my greed for profit

But if someone wants the land and can borrow the money to get it then they may pay more than $100, greed of ownership


If a new car asking price is $40,000 and you offer $30,000, but there are others willing to pay the $40,000 then seller has no reason to take the $30,000 offer
But if the people paying the $40,000 are doing it with borrowed money then its an "inflated price", they are willing to get the greed of ownership over the obligation to pay an even higher price with interest


And higher prices to buy anything, creates a pressure for higher wages, so the upward spiral of inflation begins
In 2006/7 the borrowed money "bubble" broke
But it will return, greed of ownership is very strong in Western Countries

 

[snoranger]

• median household income is $90,000

I’m going to stop you right here and ask how a family can live on that?

 

[85_Ranger4x4]

vI'e lived by that rule too... but you have to have two pieces of junk. If I find another good deal... I'm going for the RBV trifecta.

Explorer to round out the herd?

I’m going to stop you right here and ask how a family can live on that?

Depends on where a feller lives.

 

[don4331]

Rich dad/poor dad:

You can take the truck loan for $35k on your $40k F-150 at 1.99% for 7 years; and put the $35k to work in the stock market and average >10% return on investment (year over year) and the end, I'll have paid off my F-150 and have ~$30k more in the bank than I would have if I had paid off the truck before driving it off the lot.

How much would the average individual be paying on maintenance on a older vehicle, versus the no maintenance on a new vehicle.

 

[Chapap]

If you want to roll back the clock a few hundred years..................

Say I have a piece of land I want to sell for $100
I have some one who wants to buy it and has saved up enough money to buy it
And another person who offers $110 because he only has $80 but can borrow $30

I would be a fool not to take the extra $10, because its cash in hand
OR
I could say I will take the $80 and you can pay me $10/year for next 4 years so I get $120

In either case that's how inflation starts
Borrowed money

Its not good or bad it is just is the way it works
The "invisible hand" means the price of a product will find its selling and buying point, by pure greed, on the part of the seller and buyer

If my $100 land got an offer of $90 and no other offers for a year, maybe I would take the $90, that extra $10 asking price was my greed for profit

But if someone wants the land and can borrow the money to get it then they may pay more than $100, greed of ownership


If a new car asking price is $40,000 and you offer $30,000, but there are others will to pay the $40,000 then seller has no reason to take the $30,000 offer
But if the people paying the $40,000 are doing it with borrowed money then its an "inflated price", they are willing to get the greed of ownership over the obligation to pay an even higher price with interest


And higher prices to buy anything, creates a pressure for higher wages, so the upward spiral of inflation begins
In 2006/7 the borrow money "bubble" broke
But it will return, greed of ownership is very strong in Western Countries

I think you have to go a step further and take into consideration that allot of people are paying zero down and buying purely on a promise.
But not sure that’s where inflation comes from. It doesn’t create more money, just transfers it from one part to another. Only Uncle Sam can cause inflation.

I’m going to stop you right here and ask how a family can live on that?

That’s plenty down here in FL. You’d still have to be smart with it, but it’s enough for two parents and two kids to not be doing “fine.”

 

[bobbywalter]

I am willing to throw 10k a year into a fire to make sure my ol lady is secure.


That is how I look at it