New car prices are out of control

[OILFIELDTRASH]

It boggles my mind how people are willing to take on a payment for 5 years with total prices of cars being close to half of their homes value sometimes. I just bought a cheap cash truck to replace a high dollar truck that I had sold. Just never felt right having so much money in transportation. I really feel like 30k vehicles should be driven by people that make 150k a year or more.
Looking for the off topic perspective please.

 

[Kaido]

This thread is now about bacon.

 

[OILFIELDTRASH]

This thread is now about bacon.

So you fell for the marketing scheme it seems. You trailering it up with a 40k truck parked out front?

 

[rh71]

were you living month to month that you had no savings? Why do people always equate annual salary with what they can afford with one-time or semi-rare purchases?

My wife and I both paid cash for our cars and we each don't make 150k.

 

[OILFIELDTRASH]

were you living month to month that you had no savings? Why do people always equate annual salary with what they can afford with one-time or semi-rare purchases?

Nope. That's the crazy thing. My previous truck was paid for and I have a savings account. I told people I got rid of it because I couldn't afford the truck which I felt I couldn't even though it was paid for. Felt good buying a cheap vehicle and not even flinching at the price. I am that guy that can afford whatever vehicle but decided to drive a beater. Feels good man.

 

[RagingBITCH]

Why does it bother you so much what people spend their money on? Go buy a clunker and be happy driving it. If someone wants to drive a $30K car, it's no sweat off your back.

 

[slayer202]

I agree, only people making more than 150k/year should buy houses worth more than 60k

 

[Mursilis]

It boggles my mind how people are willing to take on a payment for 5 years with total prices of cars being close to half of their homes value sometimes. I just bought a cheap cash truck to replace a high dollar truck that I had sold. Just never felt right having so much money in transportation. I really feel like 30k vehicles should be driven by people that make 150k a year or more.
Looking for the off topic perspective please.

None of this should surprise you. Most people are terrible with money, and typically put short term wants (new truck!) ahead of long-term needs (retirement fund, college fund for the kids, paying off credit cards, etc.). Every time I read how little the average person has put away for retirement, I'm horrified.

 

[amdhunter]

I think 8% of your take home pay should be the maximum payment for a vehicle. So that is about ~300 or so a month for someone making $52k annually (or roughly an $16-17k vehicle.)

My math is probably off a bit, but I think $20k vehicle per $50k salary is pretty damned high.

That said, I am looking to spend ~50-70k on my next vehicle, and I make nowhere near my calculations.

 

[SunnyD]

I agree car pricing is ridiculous. You look at asking prices for low end econobox cars these days and compare them to 5 years ago, and it's laughable at best.

But on the flip side, you look at pricing of ANYTHING and compare it to 5 years ago, and it's laughable. Including one's salary with respect to inflation.

 

[ponyo]

Whatever makes you happy. So when you bought your $30k+ new truck, prices were reasonable?

 

[OILFIELDTRASH]

I agree, only people making more than 150k/year should buy houses worth more than 60k

I would agree but 60k puts you square into the ghetto. So spending more is justified as no one likes getting shot or robbed just because someone needs a fix.
A 30k car vs something used and reliable does nothing but screams look at me I'm important.

 

[Kaido]

So you fell for the marketing scheme it seems. You trailering it up with a 40k truck parked out front?

No, I mean bacon:

http://i93.photobucket.com/albums/l61/LTwon/FOOD/meat-car.jpg

 

[mvbighead]

Eh, I am pretty much with you on this one op. As a family, my wife and I can afford much nicer cars than we do, but we simply don't need them. At this point, my wife and I have three cars:

1) 2007 Impala LT - Daily commuter
2) 2005 Equinox LT - #2 Commuter and primary winter transportation (AWD)
3) 2000 Silverado - Alternate winter vehicle (if roads are really bad) and the going to Menards/HomeDepot/Lowes truck for big item purchases

The Impala was the most expensive of the cars purchased, and we've had it for 4 years or so now, but it was still under 20k. The other two were well under 10k a piece. They all start, run, and don't have any major issues. And, they're all paid off. The only downside is any major malfunction away from home could result in needing to have it towed, but not having to make payments more than makes up for it. And generally speaking, many issues happen at home anyway, so I have a backup vehicle if something goes wrong there.

Compare that to a couple I know, who I'm fairly sure take in less income, and drive newish 2010+ cars that were bought new and on payments. They always "don't have enough money" to go out to eat, or whatever the case may be. Always talking about being broke, etc. etc. And they're not fancy cars either, just 20k+ each I'd imagine.

I guess some people just feel happier with themselves if they're driving around in that nice new car. Me, I could give two craps about the cars I drive. All of my cars are currently worth less than 10k, and I don't know that I've ever had a person make a negative remark about what I drive. If they do, oh well. Eventually we'll upgrade our daily commuter, and I one day hope to have a nicer ride than my Chevys. Thing is, they're pretty easy to work on, find parts for, etc. And if I can't fix it, there are a number of places I can take them that can do it and do it cheaply.

And lastly, people that buy 30-40k trucks simply baffle me. I've heard stories of the guy with a 40k truck that wouldn't load stuff in the back of it because it was new and pretty. I know guys who buy that as their primary vehicle. And when you look at it all, you're getting 10-15mpg, and seldom loading the back up with things that trucks are generally used for. Me, I'd rather have a 13 year old beater that works that I can use when I need it, and park when I don't. Granted, I have space to park all three vehicles easily, and not every one can do that, but I simply don't see owning a 40k truck as necessary unless you put it to use more than once a week. It seems that greater than 75% of the people that own them don't use the truck function more than 5 times a year, and for that, you could rent one from HomeDepot/Lowes/wherever.

 

[lxskllr]

Never had a new car, and I never will. I prefer to let someone else take the depreciation.

 

[OILFIELDTRASH]

Whatever makes you happy. So when you bought your $30k+ new truck, prices were reasonable?

Nope. I'm getting smarter with age. A different take on it now. It really dawned on me driving around in that expensive vehicle.

 

[Kaido]

were you living month to month that you had no savings? Why do people always equate annual salary with what they can afford with one-time or semi-rare purchases?

My wife and I both paid cash for our cars and we each don't make 150k.

There was a guy my dad knew who did a pretty cool thing - he saved up for a new car and paid cash for it, then kept paying the monthly fee (what it would have been) into his savings account. Whenever he wanted a new car, he traded in his current one (which was always fairly new because he bought new ones) and covered the difference with what he had put in his car savings account. So basically he got the freedom to pick up whatever ride he wanted, whenever he wanted, but only had to shell out a monthly payment for the rest of his life instead of coming up with down payments or the full amount over and over again. Really interesting approach. Not the most cost-effective method, but his monthly car payment was basically fixed for life, so he didn't have to worry about that, and if he wanted something new, he could pick something up basically whenever he wanted.

 

[Sho'Nuff]

New cars are notoriously bad purchases. Where else can you buy something for 50k that, in 3-4 years, will be worth 25k?

This is precisely why I drive a 2003 corolla everyday instead of a BMW, Mercedez, etc. Sure I could afford those cars, but I simply cannot justify purchasing them given how quickly they depreciate in value.

 

[slayer202]

I would agree but 60k puts you square into the ghetto. So spending more is justified as no one likes getting shot or robbed just because someone needs a fix.
A 30k car vs something used and reliable does nothing but screams look at me I'm important.

:|

 

[IronWing]

Never had a new car, and I never will. I prefer to let someone else take the depreciation.

Except it doesn't work that way much anymore. Used car prices are totally out of whack. When I bought my last car, a Fit, the prices on year old private sale used Fits were within a thousand bucks of new.

 

[Kaido]

Nope. I'm getting smarter with age. A different take on it now. It really dawned on me driving around in that expensive vehicle.

Well, it really depends on your financial situation. I have friends living with their parents who drive really nice cars because they don't have to pay rent, so paying $600+ a month on a car isn't a financial hit for them because they're not paying $900+ a month for an apartment.

And a lot of it depends on what your personal goals are. I know people who dump every paycheck into their cars and love it, but go cheap on everything else. I also know people who drive old cars and maintain them well and save a ton of money. If money savings is your goal, great. If you want a new car and can afford it, great. I think the only time it gets to be a bad idea is if it makes you financially irresponsible - if you can't pay bills because of your car payment, maybe it's not such a good idea :awe:

 

[OILFIELDTRASH]

Eh, I am pretty much with you on this one op. As a family, my wife and I can afford much nicer cars than we do, but we simply don't need them. At this point, my wife and I have three cars:

1) 2007 Impala LT - Daily commuter
2) 2005 Equinox LT - #2 Commuter and primary winter transportation (AWD)
3) 2000 Silverado - Alternate winter vehicle (if roads are really bad) and the going to Menards/HomeDepot/Lowes truck for big item purchases

The Impala was the most expensive of the cars purchased, and we've had it for 4 years or so now, but it was still under 20k. The other two were well under 10k a piece. They all start, run, and don't have any major issues. And, they're all paid off. The only downside is any major malfunction away from home could result in needing to have it towed, but not having to make payments more than makes up for it. And generally speaking, many issues happen at home anyway, so I have a backup vehicle if something goes wrong there.

Compare that to a couple I know, who I'm fairly sure take in less income, and drive newish 2010+ cars that were bought new and on payments. They always "don't have enough money" to go out to eat, or whatever the case may be. Always talking about being broke, etc. etc. And they're not fancy cars either, just 20k+ each I'd imagine.

I guess some people just feel happier with themselves if they're driving around in that nice new car. Me, I could give two craps about the cars I drive. All of my cars are currently worth less than 10k, and I don't know that I've ever had a person make a negative remark about what I drive. If they do, oh well. Eventually we'll upgrade our daily commuter, and I one day hope to have a nicer ride than my Chevys. Thing is, they're pretty easy to work on, find parts for, etc. And if I can't fix it, there are a number of places I can take them that can do it and do it cheaply.

And lastly, people that buy 30-40k trucks simply baffle me. I've heard stories of the guy with a 40k truck that wouldn't load stuff in the back of it because it was new and pretty. I know guys who buy that as their primary vehicle. And when you look at it all, you're getting 10-15mpg, and seldom loading the back up with things that trucks are generally used for. Me, I'd rather have a 13 year old beater that works that I can use when I need it, and park when I don't. Granted, I have space to park all three vehicles easily, and not every one can do that, but I simply don't see owning a 40k truck as necessary unless you put it to use more than once a week. It seems that greater than 75% of the people that own them don't use the truck function more than 5 times a year, and for that, you could rent one from HomeDepot/Lowes/wherever.

I have roadside assistance on all 3 of my vehicles (newest being my wifes 08). Any breakdowns and they'll tow it for me for free. I know it's not technically "free" but it is good piece of mind for a few extra dollars a month.

 

[SearchMaster]

While I agree with you personally, I have no problem with people spending their money however they want. I make enough to "afford" an M3 and I DO pay my mortgage (only a handful of years left on that though), but I drive a 15 year old car with almost 250K miles that I paid $2000 for. I've gotten 70K miles out of that car and spent only a few hundred dollars on repairs and maintenance, so I'd have to get over a million miles out of a new $30K car to break even . When it dies, I probably will buy a new (inexpensive) car if used car prices are as out of whack as they are now.

We got my wife a brand new minivan 6.5 years ago because used vans were too expensive relative to new.

 

[Kaido]

I've heard stories of the guy with a 40k truck that wouldn't load stuff in the back of it because it was new and pretty. I know guys who buy that as their primary vehicle. And when you look at it all, you're getting 10-15mpg, and seldom loading the back up with things that trucks are generally used for.

I know several people who have gone this route...$40k+ luxury trucks. Won't put anything in them or take them offroad. Kills me :biggrin:

 

[purbeast0]

It boggles my mind how people are willing to take on a payment for 5 years with total prices of cars being close to half of their homes value sometimes. I just bought a cheap cash truck to replace a high dollar truck that I had sold. Just never felt right having so much money in transportation. I really feel like 30k vehicles should be driven by people that make 150k a year or more.
Looking for the off topic perspective please.

guess it all depends where you live.

my car was over $30k when all said and done with taxes and warranties, but my house isn't $60k. not sure where you are living that people own $60k homes and are buying $30k cars. i do agree that sounds retarded.