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Message
re: Americans Struggle to Afford Car Payments
Posted on 10/22/23 at 8:11 pm to molsusports
Posted on 10/22/23 at 8:11 pm to molsusports
quote:
And the car companies have also largely lost sight of the goal of selling affordable cars to working class people.
Whose goal was that??
1
Posted on 10/22/23 at 8:22 pm to Bard
I prodded around on the site you post frequently but couldn’t find anything related to vehicle delinquency or repossessions. Is there such a graph on that site anywhere?
I gotta admit that I’m in the “want” a $60k truck but just can’t bring myself to pull the trigger on one. I can put well over half down but I don’t even want a $500 car note. Both mine and my wife’s vehicles are paid off with plenty of life in them. So I’ve talked myself out of it for now. But the perpetual 6 months till vehicle prices tank is still 6 months away. Even if vehicle prices come down, it’s hard to imagine they’ll break by more than 15-20%.
I gotta admit that I’m in the “want” a $60k truck but just can’t bring myself to pull the trigger on one. I can put well over half down but I don’t even want a $500 car note. Both mine and my wife’s vehicles are paid off with plenty of life in them. So I’ve talked myself out of it for now. But the perpetual 6 months till vehicle prices tank is still 6 months away. Even if vehicle prices come down, it’s hard to imagine they’ll break by more than 15-20%.
Posted on 10/22/23 at 8:23 pm to threeputt
quote:
Whose goal was that??
Traditionally? Every major (non luxury) brand. Because it makes sense for short term market share, business servicing cars at dealerships, and to build loyalty.
Even many luxury brands would sell an affordable model with the goal of up-selling progressively more expensive vehicles to repeat customers as they grew older and more affluent.
The Japanese manufacturers never would have been successful without that progression. American manufacturers losing sight of that need (for affordable and reliable cars) is what made Toyota, Honda, Mazda etc so successful.
This is also the market that the Chinese and Tesla hope to expand into. And if one or more really produces decent 20-25k cars they are going to put a bunch of big name manufacturers in real jeopardy.
Posted on 10/22/23 at 8:33 pm to molsusports
In the past you’re right. I think Covid blew the whole low cost model out the window. They realized they can make way more money by producing fewer high cost vehicles than low cost in quantity.
Also, the world in its entirety has moved far away from any sort of loyalty reward. Which is disappointing.
Also, the world in its entirety has moved far away from any sort of loyalty reward. Which is disappointing.
Posted on 10/22/23 at 8:35 pm to olemissfan26
Car prices are insanely high af. I hope every dealership goes belly up.
Posted on 10/22/23 at 8:36 pm to SulphursFinest
quote:
Everyone spends entirely too much on vehicles. It’s actually insane to me how expensive they are
It will be worse with EVs.
Posted on 10/22/23 at 8:45 pm to WhiskeyThrottle
quote:
In the past you’re right. I think Covid blew the whole low cost model out the window. They realized they can make way more money by producing fewer high cost vehicles than low cost in quantity.
Short term only
People's income didn't rise at the same rate as either housing or car prices. The forbearance programs delayed reality and enormous future demand for both was pulled forward.
But the math doesn't work unless the typical household income skyrockets. My bet is that doesn't happen because productivity isn't likely to similarly appreciate. If I'm wrong then the average American is going to have huge salary increases over the next five years
Posted on 10/22/23 at 9:01 pm to Paul Allen
quote:
quote:People shouldn’t be driving around in 60k cars when they make $145k. With a mortgage payment of less than 25% of take home pay and no other revolving credit card debt you could easily afford a 60k car. 145k is probably what let’s say $9500 take home pay per month after 401k, taxes, etc. Let’s say mortgage payment is less than 3k that leaves you with over $6000 a month again with no other debt. Why wouldn’t you be able to afford a 60k car?
Income Tax/SS
Savings
Health Insurance <- High AF
House/House Insurance/Property Taxes <- If you got in pre-2022 probably ok
Life Insurance
Car Insurance
Childcare <- High AF
Utilities <~ High AF
Phone/Internet <- High AF
Groceries <- High AF
Gas <- High AF
Kid Activities <- Expensive depending on # of kids and the activity
Kid Clothes and necessities <- kids are expensive
I personally don’t understand how lower earners pay just the normal stuff. I do well and constantly there is always something breaking or needing to be fixed kind of stressing me out. I carry no debt outside of a mortgage and it is not a huge portion of my take home.
I feel many of these items shot up in the last couple of years.
This post was edited on 10/22/23 at 9:05 pm
Posted on 10/22/23 at 9:22 pm to WhiskeyThrottle
quote:
I prodded around on the site you post frequently but couldn’t find anything related to vehicle delinquency or repossessions. Is there such a graph on that site anywhere?
I wish FRED kept vehicle repo/delinquency rates. From what I can tell, they haven't tracked that information in any form for a very long time now.
Posted on 10/23/23 at 7:11 am to Colonel Flagg
You forgot to add High AF to car insurance. Mine is now $1,050 every 6 months for 1 car. Same car was $773 last year, and < $700 year before that. No tickets, no claims! I have usaa, can’t get any lower around here.
Posted on 10/23/23 at 8:15 am to NaturalBeam
quote:
I mean it’s everyone who has bought a new car recently. I’m assuming you haven’t.
Stop buying new cars you can’t afford. There’s nothing wrong with buying used. I bought a nice used car that admittedly had a high number of miles on it. I pay (actually) 350 a month on my note finances through a credit Union, low interest.
I refuse to believe other Americans cannot workout a similar arrangement.
This post was edited on 10/23/23 at 8:18 am
Posted on 10/23/23 at 9:13 am to Double Oh
quote:
Car prices are insanely high af. I hope every dealership goes belly up.
A similarly equipped truck like mine is selling for 55-60% more than I paid in 2017. It's insane. I don't know how people are paying these prices.
Posted on 10/23/23 at 9:15 am to Colonel Flagg
quote:
personally don’t understand how lower earners pay just the normal stuff. I do well and constantly there is always something breaking or needing to be fixed kind of stressing me out. I carry no debt outside of a mortgage and it is not a huge portion of my take home.
I thought the same as well. I don't see how folks are living. Maybe answer is simply loads of credit card debt
Posted on 10/23/23 at 9:45 am to LSUSUPERSTAR
quote:
financed at 0% for 60 months.
I miss these.
Posted on 10/23/23 at 10:00 am to fallguy_1978
quote:
A similarly equipped truck like mine is selling for 55-60% more than I paid in 2017. It's insane. I don't know how people are paying these prices.
YOLO
I know a couple that just bought a Grand Wagoneer ain't they ain't rich.
Posted on 10/23/23 at 10:03 am to Paul Allen
Just want to say that $145k is not $9500 take home
Posted on 10/23/23 at 10:29 am to boogiewoogie1978
quote:
I know a couple that just bought a Grand Wagoneer ain't they ain't rich.
Are they close to figuring out why they aren't rich?
Posted on 10/23/23 at 10:38 am to olemissfan26
We should just send government money so they can afford to get and stay current.
Posted on 10/24/23 at 6:06 am to PhiTiger1764
quote:That's a silly assumption. I make $160k. I'm putting $6500 per month into savings. Tell me again why I shouldn't buy a nice car every 10 years?
People shouldn’t be driving around in 60k cars when they make $145k.
Posted on 10/24/23 at 7:00 am to Asharad
You make 160k?
Save $78k?
Pay taxes?
And live off of how much per month?
I presume you pay cash for the car (a car note for a $60k vehicle with $42k+ remaining living budget would probably fall under struggling to afford car payments).
Save $78k?
Pay taxes?
And live off of how much per month?
I presume you pay cash for the car (a car note for a $60k vehicle with $42k+ remaining living budget would probably fall under struggling to afford car payments).
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