Its official - 60% of households and 82% of singles can't afford a new car.

[SC Maintenance]

We have all lamented on the crazy prices of cars in the last few years. Seems Newsweek has made it official.

"60 percent of American households currently cannot afford to buy a new car, based on Census data. For individuals, the numbers are even worse, with 82 percent of people"

Also -

"Since 2020, new car prices have risen by 30 percent, ... Within the same timeframe, used car prices have jumped by 38 percent."

They also comment on how car makers are no longer making cheap, econo models.

Full article, for those interested. https://www.newsweek.com/americans-can-no-longer-afford-their-cars-1859929

 

[proveitwithdata]

We have all lamented on the crazy prices of cars in the last few years. Seems Newsweek has made it official.

"60 percent of American households currently cannot afford to buy a new car, based on Census data. For individuals, the numbers are even worse, with 82 percent of people"

Also -

"Since 2020, new car prices have risen by 30 percent, ... Within the same timeframe, used car prices have jumped by 38 percent."

They also comment on how car makers are no longer making cheap, econo models.

Full article, for those interested. https://www.newsweek.com/americans-can-no-longer-afford-their-cars-1859929

Or my favorite.

Similar vehicle throughout the years.

Model Year 2020 msrp was 58k, dealer typically moved them at 48k before taxes and title.
Model Year 2022 msrp was 64k dealer typically moved them at sticker or adm before taxes and title.
Model Year 2024 msrp is now 64k, dealers are now moving them at 58k before taxes and title.


Customers claiming the MY24s are the best deals in the world.

This is before borrowing costs come into play.

 

[c502cid]

But the collective experts will rag on a sub $30k 2024 Trax because it doesn't have all the features my (insert vehicle owned here) has.

 

[FowVay]

I read these reports and listen to the doom and gloom on the news and things just don't add up. I don't see any old vehicles on the road, the stock market is at record highs, the restaurants are packed on a Friday night, and the cruise lines are doing record business.

There is money somewhere and people in this country seem to live like there is no tomorrow. Of the working people that I know, the ones who struggle with finances do so not because of an income problem but rather because of a spending problem. I suspect that if vehicle ownership were a higher priority then people would find a way to make it happen.

 

[Lubener]

Doesn't surprise me when many struggle to put food on the table.

 

[billt460]

This has a lot to do with it. Articles like this are everywhere. If you aren't interested in either working or driving, cars don't have very much appeal.... Let alone offer any affordability.

Young People Are Leaving Their Jobs in Record Numbers—And Not Going Back

Nearly a quarter of Americans 20 to 34 are neither working nor looking for work, according to the Bureau of Labor Statistics.

time.com

Driving Into Extinction? Zoomers Disinterest In Cars And Licenses | Carscoops

The declining rates of driving point to a wider trend among Americans, suggesting to a loss of faith in car culture

www.carscoops.com

 

[billt460]

There is also this. I've posted it before because it explains why many people can't afford necessities.... Or much of anything else. If you are stretched so far with money, or else are so horrible at managing it, that you can't come up with $500.00 in a pinch, how the hell are you going to afford a home or a $60K vehicle?

63% of Employees Are Unable to Cover a $500 Emergency Expense

Most American workers would have difficulty paying for an unexpected expense. Read on to find out how to boost your savings.

www.fool.com

 

[SC Maintenance]

I read these reports and listen to the doom and gloom on the news and things just don't add up. I don't see any old vehicles on the road, the stock market is at record highs, the restaurants are packed on a Friday night, and the cruise lines are doing record business.

There is money somewhere and people in this country seem to live like there is no tomorrow. Of the working people that I know, the ones who struggle with finances do so not because of an income problem but rather because of a spending problem. I suspect that if vehicle ownership were a higher priority then people would find a way to make it happen.

Its a good observation I share. However if you go to the FRED database, you will find credit card debt at an all time high (over a trillion), auto loans at an all time high, etc. So, possibly living on credit?

 

[skyactiv]

Instead of the Dave Ramsey type BS some might blurt out, the reality is the middle class is shrinking. My wife and I just bought a new 202 VW GLI 40th with a stick a week ago

 

[andrew_j]

Raising MSRP was tolerable when interest rates were low however rates do not support that anymore for working poor (financially) who borrow to buy vehicles.

 

[Jackson_Slugger]

Its a good observation I share. However if you go to the FRED database, you will find credit card debt at an all time high (over a trillion), auto loans at an all time high, etc. So, possibly living on credit?

I'm pretty sure you can say the above for any year on end for the last 50 or so years. Credit card companies/banks have made credit lines vastly easier to get since at least the 80's and at one time, if one could get a car loan at all even with solid credit, one had to put a substantial down payment and it was maybe 48 mo's max with 24 and 36 mo loans being the most typical...

 

[Jackson_Slugger]

Raising MSRP was tolerable when interest rates were low however rates don not support that anymore for working poor (financially) who borrow to buy vehicles.

That would be in response to "inflation" meaning that a lot of people were buying a lot of things like cars and houses and this is nothing new and can only be throttled by rate hikes. Even then the housing market is on fire here and many other places.

LOL The "working poor"? Yeah, because they enjoyed excellent interest rates capped by how much any given state would let subprime victimize people (here 24.99% and even higher elsewhere). ... Sorry broh, but if you look into things the vast majority of the working poor never got the pre-2020 incentivized auto manufacturer 0.9/1.9/20.9 etc. interest rates meant to push out NEW product and meet quotas and used cars have always been always much higher, even with perfect credit and it really isn't all that different from even the best of economic times.....

 

[JoelB]

Forget cars. How has anyone on a tight budget survived inflation on day to day goods? I suspect credit is the stop gap which can really only lead to bad things long term.

 

[billt460]

Much of this can be traced back to the age old saying, It's not what you make. But rather what you do with it after you make it.

 

[Jackson_Slugger]

This has a lot to do with it. Articles like this are everywhere. If you aren't interested in either working or driving, cars don't have very much appeal.... Let alone offer any affordability.

Young People Are Leaving Their Jobs in Record Numbers—And Not Going Back

Nearly a quarter of Americans 20 to 34 are neither working nor looking for work, according to the Bureau of Labor Statistics.

time.com

Driving Into Extinction? Zoomers Disinterest In Cars And Licenses | Carscoops

The declining rates of driving point to a wider trend among Americans, suggesting to a loss of faith in car culture

www.carscoops.com

Um yeah. The big 3 have decided that the profit margin is much greater on monstrosities like the Chevy Tahoe and pickup trucks, therefore they stopped making or importing Cruze's Astras, Sonics, etc. (already widely available in other markets). Gee where did I hear this before? Maybe 2006-08 during the 'great recession'?

I'm guessing Ford might be thinking of bringing back the Focus to US markets rather than making a really crappy SUV rendering they've already cancelled...

 

[Jackson_Slugger]

We have all lamented on the crazy prices of cars in the last few years. Seems Newsweek has made it official.

"60 percent of American households currently cannot afford to buy a new car, based on Census data. For individuals, the numbers are even worse, with 82 percent of people"

Also -

"Since 2020, new car prices have risen by 30 percent, ... Within the same timeframe, used car prices have jumped by 38 percent."

They also comment on how car makers are no longer making cheap, econo models.

Full article, for those interested. https://www.newsweek.com/americans-can-no-longer-afford-their-cars-1859929

Why not just post the whole article rather than just cherrypicking it?

They go Indepth as to WHY cars are more and it is pretty complicated starting with pandemic supply chain and microchip issues.. I think the gist is that this more or less a temporary phenomena rather than any fixed long term trend....

It's also just kind of funny that the leading overall sales leaders are the "foreign" manufacturers like Kia or Toyota that still offer small cars around the $20K+ range...

 

[billt460]

Um yeah. The big 3 have decided that the profit margin is much greater on monstrosities like the Chevy Tahoe and pickup trucks, therefore they stopped making or importing Cruze's Astras, Sonics, etc. (already widely available in other markets). Gee where did I hear this before? Maybe 2006-08 during the 'great recession'?

I'm guessing Ford might be thinking of bringing back the Focus to US markets rather than making a really crappy SUV rendering they've already cancelled...

Pickup trucks and SUVs are what the bulk of the buying public want.... Not little econobox go karts. Naturally the car makers are going to make what sells the most, and at the most profit.

They're in business to make money, not cater to broke people with lower profit products, who can only spend money they don't have. This isn't complicated.

Affordability is based on how people manage their income. When they strangle themselves by buying virtually everything they see on credit, and save little to nothing, they can afford less. Debt, which is at record highs today, keeps many families in the poor house. Not window stickers on pickups.

 

[joekingcorvette]

It's not something you can really sum up in a paragraph or two however it appears to me the way things are going you are going to have the rich, the poor, and nobody in between.

 

[Pablo]

Can I finance it for 10 years?

 

[billt460]

It's not something you can really sum up in a paragraph or two however it appears to me the way things are going you are going to have the rich, the poor, and nobody in between.

While that is mostly true, it's based on the fact governments in general want as much of the population dependant on them as possible.

And today the people seem to becoming more aligned with that fact. Self reliance has always been the key to achieving wealth and financial independence..... Not crumbs from the government.