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New car prices are out of control

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Capt Caveman said:
And a computer is a tool to many, but if I remember, it's a passion for you. Why not buy all of your computers/parts used?
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Newer computer parts tend to also be better. Yes the same can be said for cars, but it's not like the roads are requiring a faster and faster car all the time. With computers you pretty much have to upgrade every now and then just to keep up with software bloatness etc. Of course in some cases it does make sense to also buy used or lower end. Depends what you need it for. A computer is also a very small expense compared to a car. It's not something you would get a loan for. The issue with buying a new car is that you are shelling out a massive amount of money that puts you in debt for years when you could pay a fraction of that for a tool that gets the same job done.

A new car is still going to rust, still going to need repairs, etc so while you are fixing it you are STILL doing payments too! I would rather put that money towards the house or other things that I will spend more time enjoying. For the price of a typical car you can redo a kitchen, bathroom or basement etc... places you spend more time in.
 
CPA said:
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.
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Yep, love it. We now have 3 in my immediate family (brothers and spouses). Way more practical than the 05 Mustang GT I bought right out of college. I really enjoy driving a bigger vehicle - plenty of room for 4 or 5 people and I sit up high enough to see over the hilly roads around here. Saved me tons of time when buying supplies to finish my basement and build a fence. Great to have the bed for dirty things like trash, paint buckets, etc. I just paid it off and got the title in the mail yesterday.
 
Tweak155 said:
Lol.
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yah... I see that.. Point was that I have no revolving credit card debt. Compared to many people I'm way ahead. Mortgages are generally considered a fact of life, a debt that is far more justified than say... a car lease or thousands of dollars on a credit card for shit you didn't need.

Clearer now? 🙂
 
OILFIELDTRASH said:
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.
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I often think the same thing myself. Median household income in the US is about $50K/yr. Sure if you don't mind driving a stripped down Kia you can get a car for $15K. But it's pretty easy to spend $25K on a fairly basic car. The car companies can get away with it because Americans are always trying to keep up with the Jones, and they're bad at math.
 
joshsquall said:
Yep, love it. We now have 3 in my immediate family (brothers and spouses). Way more practical than the 05 Mustang GT I bought right out of college. I really enjoy driving a bigger vehicle - plenty of room for 4 or 5 people and I sit up high enough to see over the hilly roads around here. Saved me tons of time when buying supplies to finish my basement and build a fence. Great to have the bed for dirty things like trash, paint buckets, etc. I just paid it off and got the title in the mail yesterday.
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Same here, I live out in the quasi-country and it's difficult not to have a truck, especially when I prefer to DIY most things. Had a Charger (which I loved and miss, but it's not practical) and then a Honda Civic Hybrid (got it cheap) and just couldn't take it anymore. Found this on a BMW lot.

Nice to hear it's paid off.
 
AstroManLuca said:
How much did you trade it in for? How much was the market value of the car? I've never understood trading cars in except for the super-rich and old people who don't have the time. Last time I sold a car it took me a week and I got about $2k more than I would have trading it in.

Also you do know that it's possible to get a newer used car that isn't an old beater, and it's still much cheaper than buying new, right? Driving a 15-year-old used car that you got for pocket change isn't fully representative of used cars. I'm not saying you're wrong for liking new cars, you're entitled to your opinion and you can spend your money however you like. But I'd feel ripped off if I paid $22k for a new car when I could get one just a couple years old and still practically new for $16k.
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I tried to buy a used truck this time around. I really did. was looking at two and three year old trucks. Private sellers I found still had a bank note on the vehicle and they were asking full book or higher because for some reason they felt it was up to me to bail them out of an upside down deal.

Dealers wanted 30K for what I was looking for. Only $4k more netted me a brand new truck and full warranty. For a vehicle I plan to keep well over ten years, it financially made sense. I've read that the used car market is going to be getting it's prices back in line this year as the cash for clunkers program elevated prices and there is more used inventory out there now once again.
 
If anything I'm amazed at how much car you can buy for $30-50k now. Cars have gotten so luxurious, spacious, powerful now and $30k buys you lot of car for the money. I think about all the shit cars we went through in the 80s and 90s... Even minivans are faster than most 80s and 90s sports cars.
 
BoberFett said:
I often think the same thing myself. Median household income in the US is about $50K/yr. Sure if you don't mind driving a stripped down Kia you can get a car for $15K. But it's pretty easy to spend $25K on a fairly basic car. The car companies can get away with it because Americans are always trying to keep up with the Jones, and they're bad at math.
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I wouldn't blame the car companies. Their profit margins are actually pretty low. Nissan was about 5% last time I checked. Ford looks to be about the same. I think the 2 big issues are:
1. People wanting features that they can't afford. Most people don't NEED more than a basic econo-box. As you said, everybody just wants to keep up with society and have the new minivan with 12 seats, 6 DVD Players, GPS navigation, etc.
2. Auto manufacturer costs are pretty high. Union labor has gotten more reasonable lately due to the near collapse of the US auto industry, but it's still not cheap to employ tens of thousands of workers with fairly high pay, good benefits, and a retirement plan.
 
I was just talking about this the other day at work. Car prices have slowly outpaced people's incomes over the last decade, and instead of making more affordable cars, they just started offering 6, 7 and 8 year financing. $400-$500 is usually a comfortable car payment on the average US householder's income, and they can hold on to that with an 8 year loan...in the mean time they're actually being tricked into spending more than they can afford.

It's kind of sickening when you think about it. I've sworn off new cars for that reason and go with 2-4 year old models when I'm car shopping. You end up saving $10000's that way, and many times you still have a factory warranty, or you can buy an extended warranty for a couple thousand more.
 
Anyone that buys a truck is bad with money. This is the most useless type of car in America unless you have a business that needs one.
 
ponyo said:
If anything I'm amazed at how much car you can buy for $30-50k now. Cars have gotten so luxurious, spacious, powerful now and $30k buys you lot of car for the money. I think about all the shit cars we went through in the 80s and 90s... Even minivans are faster than most 80s and 90s sports cars.
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That's great. I'm glad you think new cars have amazing features. But you're still spending $30K. Add on tax, title, other up front costs, yearly license fees, insurance, fuel. And then double that because every family needs two vehicles. You can easily spend $15K/yr on just the family transportation. There's way too much focus in the US on the car as a status symbol, and the average American family would do well to avoid getting trapped in that mentality. But as I said, people want to maintain an image, and are bad at math.
 
Ally is the old GMAC.

Like all things, the economy is fueled by credit. And so autos are being overproduced IMO since subprime lending is BACK. I'm waiting to buy a new car.
 
Fritzo said:
I was just talking about this the other day at work. Car prices have slowly outpaced people's incomes over the last decade, and instead of making more affordable cars, they just started offering 6, 7 and 8 year financing. $400-$500 is usually a comfortable car payment on the average US householder's income, and they can hold on to that with an 8 year loan...in the mean time they're actually being tricked into spending more than they can afford.

It's kind of sickening when you think about it. I've sworn off new cars for that reason and go with 2-4 year old models when I'm car shopping. You end up saving $10000's that way, and many times you still have a factory warranty, or you can buy an extended warranty for a couple thousand more.
Click to expand...

And this.
 
Red Squirrel said:
Newer computer parts tend to also be better. Yes the same can be said for cars, but it's not like the roads are requiring a faster and faster car all the time. With computers you pretty much have to upgrade every now and then just to keep up with software bloatness etc. Of course in some cases it does make sense to also buy used or lower end. Depends what you need it for. A computer is also a very small expense compared to a car. It's not something you would get a loan for. The issue with buying a new car is that you are shelling out a massive amount of money that puts you in debt for years when you could pay a fraction of that for a tool that gets the same job done.

A new car is still going to rust, still going to need repairs, etc so while you are fixing it you are STILL doing payments too! I would rather put that money towards the house or other things that I will spend more time enjoying. For the price of a typical car you can redo a kitchen, bathroom or basement etc... places you spend more time in.
Click to expand...

New cars typically have 3 year full warranties and 5 year powertrain warranties. You aren't paying for repairs, if you need any, during those warranties.
 
OverVolt said:
Ally is the old GMAC.

Like all things, the economy is fueled by credit. And so autos are being overproduced IMO since subprime lending is BACK. I'm waiting to buy a new car.
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I got approved at just aboe 2.9 from Ally right out of college. Been very pleased so far.
 
Meh. My wife and I make $140K and we drive a $1K dodge neon and a $8K Jeep Liberty (blue book values).

Car loans are pretty much the single reason why people don't save money.
 
Fritzo said:
If you've ever owned a house, you need a truck at some point (or a van).
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This. That's why many people have them.

For me, my truck has several uses. It's my alternate 4wd vehicle, and where I live 4wd becomes necessary in the winter. And it definitely helps to have around the house.

That being said, I don't need a $15k+ truck for what I use it for. And as it's bad on gas, I don't drive it that much. But, $5k surely fits and it's always there when I need it.
 
AstroManLuca said:
How much did you trade it in for? How much was the market value of the car? I've never understood trading cars in except for the super-rich and old people who don't have the time. Last time I sold a car it took me a week and I got about $2k more than I would have trading it in.

Also you do know that it's possible to get a newer used car that isn't an old beater, and it's still much cheaper than buying new, right? Driving a 15-year-old used car that you got for pocket change isn't fully representative of used cars. I'm not saying you're wrong for liking new cars, you're entitled to your opinion and you can spend your money however you like. But I'd feel ripped off if I paid $22k for a new car when I could get one just a couple years old and still practically new for $16k.
Click to expand...

Have you priced cars recently? Aside from maybe a car that was a rental or has well above average number of miles on it already there are going to be few, if any, decent cars that go from 22k to 16k in just two years.

The old axiom of always buying a used car just doesn't hold the way it used to. Commuter sedans depreciate slowly compared to in the past. I know more than one person that has traded in their car for more than they paid for it, not sure how that works for the dealer but it happens now and I am guess it is a new thing.

You should still be buying a car you can easily afford but the used car market sucks for the 2-4 year old affordable cars so a new car can make a lot of sense.
 
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