New car prices are out of control

[Spike]

Meh, I'm torn. I like driving cheap, older cars and until last year we were driving a '98 Explorer and a '95 Civic. The Explorer was totaled so after some debating we went out and bought a 2013 Forester that, after taxes and warranties, was just about 30k. However, we put 8k down and will put another 8k into it this year leaving us ~13k to pay off at 2.99%, I can't really complain.

For us it was worth a new car since we plan to drive the thing for a min of 10 years, which is why we went for the 10 year bumper to bumper. I could have gotten away with buying used cars over the same time period but with the improved safety features and comforts we both felt it was worth it. Our household income is still a little shy of 150k but I figure the $360 a month we are paying is not much of a burden.

Besides, coming from cars 15 and 18 years old it was quite nice to drive something new

 

[Tweak155]

I'm actually debating going back to leasing. I like driving new cars and I can easily afford it, and I like changing it up every so often. If only there were 1yr leases.

 

[AstroManLuca]

say what?

I guess you can get used electronics that work properly. Depends on how old though. My point was their usefulness declines much more quickly than cars. A TV will need a converter box if it's past a certain age. An older computer might not be able to run a modern OS and might choke on some newer, fancy websites. And try to find a 5 year old laptop with a battery that lasts a decent length of time.

 

[Naeeldar]

i wouldn't call that wasting at all. those are memories that you will have for a lifetime. my wife and i also go to at least 1 carribean place a year, sometimes two. to be honest that is probably my favorite thing i do in life, going to warm clear water beaches and snorkeling. snorkeling is probably THE MOST FAVORITE thing to me that is out there.

I agree but that is sort of the point of my post. A car is a waste to many but when you love and enjoy them then the money is not a waste. I love cars so it's worth it to me.

 

[PingSpike]

The conventional wisdom of buying a 2 year old car and letting some one else take the depreciation hit seems to be outdated to me. I was in the market for an econobox in 2006. I test drove a honda civic that was 2 years old 20K miles, automatic and A/C power nothing and they wanted 15.5K for it. I thought a brand new Hyundai Elantra with power everything for 13.6K. Say what you will about the hyundai brand versus honda, that car was brand new and had a 5 year bumper to bumper that I would have had to pay extra for on the civic. After the government instituted the SUV bail out program the cost of used vehicles became even more ridiculous. Manufacturers scaled back production after the financial crisis sapped demand allowing them to offer less incentives. I haven't looked recently but I wouldn't be so quick to suggest buying a "reasonably priced semi used car" to save money these days. Often the value isn't there and a lot of times it paradoxically it actually costs more to buy a used vehicle some how. You'd think this wouldn't happen but apparently a lot of people don't even look at used car prices to compare and simply go straight to the used lot with the idea of saving money. I just say to look everywhere first because things are all over the place lately.

 

[AstroManLuca]

Yeah, if anything is out of control it's used prices. The only way to save decent money is to go much older. Price difference between new and ~2 years old is little enough that buying new makes sense. Still my opinion that the smart move is to go older than that, like 5-7 years old and actually save serious money (like, 50% off the cost of a new one). But it depends on a ton of little factors so you can't say the same for everyone.

 

[vi edit]

Dirt cheap interest rates are doing the same thing for cars that it was doing for housing markets. It's a lot less to finance. 10 years ago the only way you could get a decent interest rate was to buy new. And that wasn't even 0% for 60 months. It was like 5.9% for 60 months. Used was 8% or more for that same time.

Now that same sixty months is like 1.75%-2.2%. That's huge savings on a monthly basis. So dealers charge more because people pay more.

Same thing with housing. 3.5% interest rates have greatly disrupted what people are willing to pay for a house because it has huge impacts on overall monthly costs. Jack that percent up to 7% (or the 10%+ rates of the 80's) and see what it does to housing costs.

The used market is jacked up right now.

 

[purbeast0]

I guess you can get used electronics that work properly. Depends on how old though. My point was their usefulness declines much more quickly than cars. A TV will need a converter box if it's past a certain age. An older computer might not be able to run a modern OS and might choke on some newer, fancy websites. And try to find a 5 year old laptop with a battery that lasts a decent length of time.

there are many many more electronics than just computers. tvs don't need converter boxes, they will work just fine.

and car batteries go to and you replace them. you can do the same with laptop batteries.

 

[ponyo]

People have different priorities and values. And that can change over time. Some people like cars. Some like it a lot. I like cars but my priorities have changed. But I don't fault for people if they don't have the same priority as me. I have a younger cousin. He loves cars. Really loves cars. So much that he's willing to sacrifice his lifestyle and retirement. He could have easily retired by now if not for his car hobby. But his car hobby makes him happy and drives him. If there is a car he wants, he works hard for the next year to buy it. He lives in a half million dollar house instead of million dollar plus country club homes like his brother and friends because he rather have nice cars than a fancy house. Granted half million dollar buys you nice house in Georgia but he still drives nicer cars than others who live in multimillion dollar homes. But because of him I have driven/rode in Rolls Royce, Bentley, various Ferrari, various Porsche 911s, Viper, NSX, M3, M5, various AMG, Lexus, BMW, Mercedes, and other high end cars. He knows his car obsession is not the best financial decision but he wouldn't have it any other way. It makes him happy and isn't that the whole point of working/earning money?

 

[JulesMaximus]

Hmmm, that means when we buy a house this year we should be able to easily afford a G55 AMG for the wife and Range Rover for me...and still have some left over to keep our 3 current vehicles.

Point is, don't generalize My wife and I are certainly not rich but based on your above comment my example isn't terribly inaccurate. Its all a matter of where you live and the type of lifestyle you want.

No kidding. I could afford a Ferrari using that logic.

Time to trade in the Maxima! WOOT!

 

[OnePingOnly]

I miss the days of truly solidly built cars. I'm talking about the pre-1995 Mercedes-Benz and BMW, '90s Toyotas and Lexus, etc. They were built to last 20 years easy. The new cars are built with eco plastics which degrade faster and electronic components which fail by 10 years. I will never purchase a new car.

 

[Attic]

Leasing is still a mystery to a majority of buyers. I'm amazed how many folks in careers that require college degrees have no idea that they can't sell their leased car to buy into a future car they want more. Car payments once you factor in monthly lease/finance insurance/gas/maintance/ect, is a huge part of folks take home pay. Getting that done for 300 a month is difficult.


I still buy my cars by checking the saturday/sunday specials in newspaper ads. Got a chevy cruze (base/base/base/base/6sp manual model) for well below invoice this way (13.5k)... but it still only made sense by taking advantage of a 3k used vehicle trade incentive for my previous car that was worth ~1k at most.

Fuel efficiency now making a big impact on transp costs. If i could do it again i'd take a closer look at prius c.

 

[rh71]

I miss the days of truly solidly built cars. I'm talking about the pre-1995 Mercedes-Benz and BMW, '90s Toyotas and Lexus, etc. They were built to last 20 years easy. The new cars are built with eco plastics which degrade faster and electronic components which fail by 10 years. I will never purchase a new car.

More electronics/gizmos and safety features = more chance of things failing.

Also, weight reduction = fuel efficiency. Cheaper materials = cheaper price (but costs went up in other areas like gizmos otherwise you'd be paying even more)

Give and take situation.

Fuel efficiency now making a big impact on transp costs. If i could do it again i'd take a closer look at prius c.

You bring up another argument - fuel efficiency. I mentioned we have a 30mpg Sonata, but my wife drives 50% city/highway (3 blocks to the highway, 2 exits, then another 3 blocks) and the computer reads 20mpg actual. That's not much better than my 4980lb SUV. Fuel efficiency is only a big deal if you drive a lot of highway, like majority, and for a lot longer than 2 exits like a regular commute tends to be.

 

[Naeeldar]

I'm in a similar situation and I'd never buy a $55k car (at least that is my opinion right now). It is all about perceived value.

Even the things I really like, I go for the best deals. I hate the idea of paying more for something than I think it is worth. It has nothing to do with having enough money or not.

BUt that's the point though. To many the car is worth it. I love taking the car out for a drive for no other reaso nother than to hit some twisties. I do the same thing with my bike. At that point the value is in the passion/joy I have.

It's not as straight forward as saying it's not worth it because otherwise you wouldn't do anything ever then.

And that 15,000 car won't do what my 50,000 car can do. Even if it is a better "deal".

 

[fatpat268]

Eh? I'd like to see these houses.

OP lives in Texas (so do I). Here in Texas, 100K will get you a pretty nice basic house. 150K will get you an upscale two story house, and 200K will get you a mansion.

It's not inconceivable to see people with $100k homes and $50k cars here.

 

[bigrash]

I really feel like 30k vehicles should be driven by people that make 150k a year or more.

LOL what?

 

[GoPackGo]

I purchased a 2008 Toyota Prius in 2010 that had less than 33K miles on it for $15K...I think I did alright.

 

[CraigRT]

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.

That is precisely why I bought my Honda new.
Also because I don't plan on selling it until it's paid off, and it will still be worth something to sell after the 5 years (3 done)
Also its 0% interest. The only way to buy a new car. (aside from cash)

Generally though I love old used cars, if I can land a job where I am not commuting anymore... I sell my car and get an older one.

 

[Gunslinger08]

Late model used cars don't seem like especially great deals right now. You can get a new car for just about any price range you want, starting at around $10k for base models of smaller/cheaper cars.

I don't think you need to be making $150k to afford a $30k car. Let's say you get a 4% 60 month loan. That's $552.50 a month, with no money down. Not an outrageous amount of money for someone making $50k in a low/moderate standard of living area. You make $4166/month before taxes. Probably somewhere around $3k after taxes, so a little over 1/6th of your net income.

If you're the type of person that can't hold on to a car for a while after paying it off, leasing is probably for you. Lease payments can be considerably cheaper than actual loan payments, if you abide by the mileage rules.

 

[PricklyPete]

This is like the anti-Alky thread... And just as offensive. OP, is this your way of making yourself feel superior to others? Sad.

 

[CPA]

I recently got a used Nissan Titan. Friggen thing was loaded - Nav, Sunroof, tonneau cover, bed rails, factory installed sprayed bed pad, TV/DVD (yep, tv in a truck), seperate DVD player for Nav updates, 6 CD changer, etc. 42K miles. Awesome truck and I love driving it every day. Bought it for about $18K.

During the test drive, I found the original sticker in the glove box (with all of the other manuals). $47K!!!. The truck was less than 2 years old. If the previous owners financed it, they got killed on the trade-in.

 

[Gunslinger08]

I recently got a used Nissan Titan. Friggen thing was loaded - Nav, Sunroof, tonneau cover, bed rails, factory installed sprayed bed pad, TV/DVD (yep, tv in a truck), seperate DVD player for Nav updates, 6 CD changer, etc. 42K miles. Awesome truck and I love driving it every day. Bought it for about $18K.

During the test drive, I found the original sticker in the glove box (with all of the other manuals). $47K!!!. The truck was less than 2 years old. If the previous owners financed it, they got killed on the trade-in.

I have an 09 Titan. They paid considerably less than sticker. Probably closer to $30k.

 

[Anubis]

I miss the days of truly solidly built cars. I'm talking about the pre-1995 Mercedes-Benz and BMW, '90s Toyotas and Lexus, etc. They were built to last 20 years easy. The new cars are built with eco plastics which degrade faster and electronic components which fail by 10 years. I will never purchase a new car.

no shit
i sold my 88 volvo 240 wagon in 2008, 250k miles, still ran like a tank

actually i still see it on the road because i know who i sold it to

 

[CPA]

Eh? I'd like to see these houses.

Land is cheap down here in Texas, so it's not unreasonable to get a great house for $150K or less.

I have 3,450 duplex with 2 garages on an acre and a half and it ran me less than $350K. Price that house in Cali, Denver, Washington, NY and you could pay $1M or more for something comparable.

 

[CPA]

I have an 09 Titan. They paid considerably less than sticker. Probably closer to $30k.

I hope so, but you never know what some people agree to at an auto dealership.

Do you like yours? Probably best vehicle I've had in a long time.