New car prices are out of control

[Pray To Jesus]

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.

yep

 

[Vic Vega]

No problem with people buying new cars. It's their money and they can spend it how they see fit.

Personally I buy low mileage, extremely clean used cars and pay cash. I just bought a 2007 Mercury Montego Premier AWD with every option and only 60K on the clock for a song. I paid cash.

 

[Vic Vega]

The point of the OP, I think new car prices are ridiculous and the car makers know it, but since almost every finances cars now they don't even think about the total price (and how much they're getting ripped off), they just think about what they will pay per month.

People just assume they will have a car payment forever. I haven't had a car payment since January 2008 and I'll never have one again so the price of cars matters to me.

 

[Tommy2000GT]

I tried to buy used cars but I can't bring myself to do it. Used cars are usually just a little cheaper than a new one so you might as well get a new one. The only used cars that are cheap are 5+yr old buckets

 

[Vic Vega]

I tried to buy used cars but I can't bring myself to do it. Used cars are usually just a little cheaper than a new one so you might as well get a new one. The only used cars that are cheap are 5+yr old buckets

Wow, you're stupid - but I guess we already knew that.

 

[KeithP]

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

If you buy a car new and keep it long enough, depreciation isn't an issue.

-KeithP

 

[highland145]

Wow, you're stupid - but I guess we already knew that.

Where have you been. The last few years have been very expensive in the used car market.

Or are you just being a dick?

 

[Tommy2000GT]

Wow, you're stupid - but I guess we already knew that.

Paying $4000 less for your 2007 crap box with no warranty over a new one isn't much savings unless you are poor. But you seem like you're poor anyways

 

[highland145]

If you buy a car new and keep it long enough, depreciation isn't an issue.

-KeithP

Heh, 19 years, 203k miles...does that count?

 

[Naeeldar]

Average personal income in the United States for those over 25 years of age was $32K in 2005.

A solid rule of thumb is to not spend over 25% of your annual income on a new car purchase, which means the average person should be buying an $8,000 car.

First of all, they do not even sell new cars for $8,000 so you already looking at the used market. Don't be fooled though, $8,000 is plenty to buy yourself a great used vehicle that will last thousands of miles if you know how to buy a used car (only from the original or second owner, no used car lots/dealerships, all service records, and a good eye).

Second of all, the average new car sold in the United States is around $30,000, which means the average car buyer should be making $120,000/year.

Wait, what? So, pretty much the majority of the country are brainwashed by consumerism into thinking they need an expensive new car which they can just finance for 6 or 7 years.

It was very common(up until the housing bubble) to have families with two brand new financed cars which the payments exceeded their mortgage payment.

Raising gas prices has worked wonders for the auto industry too, tricking people with sort commutes and cars with decent but not horrendous fuel economy into spending $20,000+ for a more fuel efficient vehicle when it will probably take years and thousands of miles before they start to break even.

General advice is generally pretty useless. So somehow it's ok for somebody making 32k a year to buy an $8k car leaving them with $24k left over but somebody making $100k can't spend $50k leaving them with $50k extra?

It's horrible example/generalization. The fact of the matter is that once you reach a certain level of income you have exponentially more for savings/fun money. There's a basic cost of living and as you begin to exceed that you end up with a lot more money. It's not like the guy making $100k a year pays more for food then the $32k (unless he goes out of course).

I saw this first hand when I went from making $40k at 23, $75k at 24 and 25, and then $100k at 26. Short time frame but god did I see a world of difference in what I could afford/pay down as my income went up each year.

Anyway the example is poor. Does not account for the fact that somebody making $100k has far more money left over after paying for basic essentials.

 

[IronWing]

Heh, 19 years, 203k miles...does that count?

Youngster.

 

[ponyo]

Where have you been. The last few years have been very expensive in the used car market.

Or are you just being a dick?

Only for the econobox and budget cars. But I never saw the point of saving couple thousand dollars for used Civic, Corolla, etc when people who buy these cars treat it like an appliance and tend to keep it forever. Luxury market has bounced back but there are still plenty of good deals in this segment. And buying couple years old used always made the most sense in the luxury market where you can save tens of thousands of dollars. Go look at price of 4-5 years old used 7 series or S class. 50-60% depreciation after ~4 years = $50-60k savings. Not $5-6k pocket money like budget cars.

 

[highland145]

Youngster.

Show me yours.

 

[highland145]

Only for the econobox and budget cars. But I never saw the point of saving couple thousand dollars for used Civic, Corolla, etc when people who buy these cars treat it like an appliance and tend to keep it forever. Luxury market has bounced back but there are still plenty of good deals in this segment. And buying couple years old used always made the most sense in the luxury market where you can save tens of thousands of dollars. Go look at price of 4-5 years old used 7 series or S class. 50-60% depreciation after ~4 years = $50-60k savings. Not $5-6k pocket money like budget cars.

True but the average American isn't buying 7 series, s class or m3's.

And $5K is a lot of pocket $$ to the average American.

If I were inclined, I'd buy a 3 year old BMW suv.

 

[Vic Vega]

Where have you been. The last few years have been very expensive in the used car market.

Or are you just being a dick?

Another winner I see.

Sure, used cars are keeping their value better. The troll's statement was still wrong, and so are you. Welcome to the list.

 

[highland145]

Another winner I see.

Sure, used cars are keeping their value better. The troll's statement was still wrong, and so are you. Welcome to the list.

Hell, this works better that what I could post.

Wow, you're stupid - but I guess we already knew that.

 

[MixMasterTang]

The total OTD price of my car is/was 17.6% of my annual Salary. But I don't care if someone wants to spend 50% of their annual income on a car, I spend quite a bit on eating and drinking out at places, but that's what I like to do.

 

[phucheneh]

I agree with the 'people buy more than they can afford' sentiment. But I think most logical people do...

However, car prices are not 'out of control.' If you think that, IMO, you demands are out of control. I'm pretty sure car prices have been moving down, not up.

If you go back and adjust for inflation, I don't think you're going to see decent, reliable cars with power windows, locks, anti-theft, 6 airbags, A/C, 4+ speaker AM/FM/CD/aux-in stereos...things we all accept as 'standard'...for what they cost now. I paid 14k for a 2011 Versa (before someone crashed into it and totaled it...) that had all that stuff. There were also Hyundais and Kias available. Toyotas and Hondas were a tad more.

Go look at some 90's cars and be stunned by the shitheap you could waste 15-20k on.

 

[KlokWyze]

Used cars are expensive when you purchase them from stealerships.

Got a used GTI in 2004. About 2/3s of the sticker price for a new one. That shit done been paid off, falling apart, but I don't give a rat's ass if it gets me from point A to B.

 

[Jumpem]

I view a car payment as just another monthly expense such as an electric bill or groceries.

I always plan to have a car payment, and I'm fine with that. I get a warranty, so no worries about unexpected repairs; the latest safety features; and something that isn't going to start rusting from all of the road salt.

I agree cars are a big, but necessary, expense. To make up for it, my wife and I have a single car and commute together.

 

[BarkingGhostar]

Around 2010 I was thing of buying a used 2004 BMW 325i just like my wife's. I waited and then six months later the average price went from $9500 to $13K!

A couple of weeks ago I went and bought a brand new 335i for a heck of a lot more. But even what I spent was less 1/5 my home price. I don't know many folks living in homes <$90K. I know they exist, but I don't know any of them.

And if someone owns one of the $1-3 million homes within walking distance of my place then they can afford a $100-300K car and still be in the 1/10 fraction.

 

[lxskllr]

If you go back and adjust for inflation, I don't think you're going to see decent, reliable cars with power windows, locks, anti-theft, 6 airbags, A/C, 4+ speaker AM/FM/CD/aux-in stereos...things we all accept as 'standard'...

I'd love to be able to buy a stripped car, and add what I want. I don't want power anything, and they can keep their shitty overpriced stereo. "Standard" sucks. That just means mandatory markup.

 

[phucheneh]

Here we go, I found a site with some 'legacy' pricing.

Example:
http://www.newcartestdrive.com/review-intro.cfm?Vehicle=1994_Honda_Accord&ReviewID=4255

1994 Accord. 'State of the art' with its 16v 4cyl, front airbags, and power amenities. Only 20k.

Almost 20 years later, that car would now fit into the 'economy compact' segment and have competition for less than what it costed in 1994. If prices are out of control, does that mean you'd rather have (today) a brand new Accord, as it was in 1994, for 20k?

I'd love to be able to buy a stripped car, and add what I want. I don't want power anything, and they can keep their shitty overpriced stereo. "Standard" sucks. That just means mandatory markup.

I don't really think it adds that much, though. There are actually cost benefits to standardizing production and not having to make provisions for manual windows and locks and whatnot. Plus, cars with those things as optional would still be very likely to have most of the wiring and mounting provisions in place, leading you to only save the cost of, say, four electric motors and four lock solenoids...and that ain't much.

 

[OverVolt]

I agree with the 'people buy more than they can afford' sentiment. But I think most logical people do...

However, car prices are not 'out of control.' If you think that, IMO, you demands are out of control. I'm pretty sure car prices have been moving down, not up.

If you go back and adjust for inflation, I don't think you're going to see decent, reliable cars with power windows, locks, anti-theft, 6 airbags, A/C, 4+ speaker AM/FM/CD/aux-in stereos...things we all accept as 'standard'...for what they cost now. I paid 14k for a 2011 Versa (before someone crashed into it and totaled it...) that had all that stuff. There were also Hyundais and Kias available. Toyotas and Hondas were a tad more.

Go look at some 90's cars and be stunned by the shitheap you could waste 15-20k on.

You mean go back and adjust for wages :awe:

Oh wait they are stagnant! Hah!

Anyway this bump in prices is directly related to all the subprime auto loans for longer terms. MOST are overextending themselves to buy more car than they can afford. Those who are NOT overextending themselves are getting ripped off since everyone else is overspending on credit around them and making the price go up.

If you can wait 2-3 years for a new car when many of these people inevitably default then that would be wise. If not then don't splurge on a car with alot of extras now.

 

[Vic Vega]

Around 2010 I was thing of buying a used 2004 BMW 325i just like my wife's. I waited and then six months later the average price went from $9500 to $13K!

A couple of weeks ago I went and bought a brand new 335i for a heck of a lot more. But even what I spent was less 1/5 my home price. I don't know many folks living in homes <$90K. I know they exist, but I don't know any of them.

And if someone owns one of the $1-3 million homes within walking distance of my place then they can afford a $100-300K car and still be in the 1/10 fraction.

I think you just have to spend what you're comfortable with and I don't fault people for buying new. I do know some people with $50K cars living in $100K homes. I work with them. Some of them don't even have a home, they drive their $50K cars to an apartment complex. These are people making in the $100K/year range.

My home is worth $350K even in today's market. I have several homes in walking distance worth $750K-2M. The guy across the street could easily get $500K for his home. The $100K homes exist, I just bought one to rent out. It depends on the market.

Some people ask me how I can live in a 3,600 square foot house and drive a five year old pristine car I paid $6,000 cash for. It's easy, that's what I am comfortable with. I think you do what you are comfortable with and not worry about other so much.

Some people get an extra $500/month from a raise or something and think, "I'm gonna buy a new car!" For me instead of paying $500/month in a car payment I'd rather buy a house for $100K, pay $500/month for the mortgage and rent the house for $1,200/month.