More than 80% of Amercans can't afford a new car

[MSCH]

That is a seemingly odd way to define debt. Valid to question true ownership, sure, if you have to property taxes is that not a form of renting? but to call it a "debt", I'm not so sure.

I guess you could say you are running up a tab, with an amount due at the end of the month, when it comes to utilities. Or property tax. Thing is, not many would call that a debt until it goes past due. Then it's a debt. But before then?

some people confuse debt with bills... I have been debt free for awhile, but recently I accrued some debt, mostly in the form of going in on a student load for my daughter as well as an purchasing an RV... I have the money to pay either debt off... and if I die they can repo the RV... so I rent the RV.. that is the way I look at that one.. I could pay off what is best described as a depreciating asset or keep the money, right now paying monthly seems to make more sense...

OTOH everybody has bills... electricity, groceries, gasoline, insurance, property tax etc... people shouldn't confuse the two.

 

[MSCH]

I hadn't bought in a couple of years but it felt really weird to be asked if I wanted more than 5 on my last purchase. Like it just felt wrong.

Now had it be 0% APR I'd be fine with that! I had 0% on one loan, and that was probably the only loan I've ever had that went full term. I had zero interest in paying off early...

exactly, if they want to give you free money, might as well take it.. I think I paid my house off in 3 years... I even paid off the last 2 vehicles I purchased early,, even thought the interest rate was 1.5%... I dont generally like making payments. Same with credit cards, I use one for all my purchases and just pay it off , literally make a payment twice a month. works for me..

 

[grampi]

I dont know where you have been but most auto loans are at least 5 years..

Where I've been is not in a position to need to go longer than 5 years...

 

[grampi]

I hadn't bought in a couple of years but it felt really weird to be asked if I wanted more than 5 on my last purchase. Like it just felt wrong.

Now had it be 0% APR I'd be fine with that! I had 0% on one loan, and that was probably the only loan I've ever had that went full term. I had zero interest in paying off early...

Yep, can't beat free money!

 

[MSCH]

Where I've been is not in a position to need to go longer than 5 years...

me neither, but I aren't most people.
I bet you are like myself, and you strive towards autarky.
most people don't.

 

[zzyzzx]

Very true however that is probably the most cost effective car you can buy. Civic's run forever with good maintenance.

Newer Civics has CVT's.

 

[grampi]

me neither, but I aren't most people.
I bet you are like myself, and you strive towards autarky.
most people don't.

The only debt I have is a motorcycle loan, which I'm about to pay off. No mortgage, no other vehicle loans, no CC debt, and no other debt. The best way to maximize a retirement pension is to eliminate all debt...

 

[MSCH]

The only debt I have is a motorcycle loan, which I'm about to pay off. No mortgage, no other vehicle loans, no CC debt, and no other debt. The best way to maximize a retirement pension is to eliminate all debt...

exactly... although I have a public employee pension, I really hit hard on the 457bplan as well as the use of an IRA to get myself to the point where I retired before age 60... my focus on that began in my mid 40's. no to low debt as well as maximization of pre tax deferal as well as doing almost everything myself went a long way towards achieving that retirement goal.

I worked with a bunch of guys who were my age, made more money than me, but I was out of there before them, simply because I kept my nose aimed at the financial retirement grindstone so you should be able to also.

 

[grampi]

exactly... although I have a public employee pension, I really hit hard on the 457bplan as well as the use of an IRA to get myself to the point where I retired before age 60... my focus on that began in my mid 40's. no to low debt as well as maximization of pre tax deferal as well as doing almost everything myself went a long way towards achieving that retirement goal.

I worked with a bunch of guys who were my age, made more money than me, but I was out of there before them, simply because I kept my nose aimed at the financial retirement grindstone so you should be able to also.

Good for you! Sounds like you are very good with money!

 

[grampi]

Newer Civics has CVT's.

So do newer Corollas, and I think they are the bang-for-the-buck king in terms of value...and the new ones are MUCH better looking than the new Civics...the Civics are ugly!

 

[zzyzzx]

So do newer Corollas, and I think they are the bang-for-the-buck king in terms of value...and the new ones are MUCH better looking than the new Civics...the Civics are ugly!

The Corolla has a regular launch 1st gear, and there are other vehicles that don't have a CVT, like the Trax.

 

[MSCH]

The Corolla has a regular launch 1st gear, and there are other vehicles that don't have a CVT, like the Trax.

yeah... got used to drivng a CVT in my daughers Nissan, then it was in the body shop for accident repairs, and they gave us a Trax to drive... it was weird getting used to something that shifts gears after being in something that always seems like it is slipping.

 

[KrisZ]

Nobody is forcing people to buy overpriced cars, they do it all on their own.

 

[grampi]

Nobody is forcing people to buy overpriced cars, they do it all on their own.

I guess everyone who needs a vehicles could just do without, right?

 

[KrisZ]

I guess everyone who needs a vehicles could just do without, right?

During what period did the car prices skyrocket? During a period where people were asked to stay at home and work from home. Roads were empty with only speeders trying their luck and often failing. It was also a time of free or nearly free money, both in terms of interest rates and bailouts for individuals/corporations.

Not sure how in your mind the demand was fueled by the need.

 

[JeffKeryk]

During what period did the car prices skyrocket? During a period where people were asked to stay at home and work from home. Roads were empty with only speeders trying their luck and often failing. It was also a time of free or nearly free money, both in terms of interest rates and bailouts for individuals/corporations.

Not sure how in your mind the demand was fueled by the need.

A long time ago...
Prices went up during the pandemic because they were making very few. Dealer mark ups...

 

[grampi]

During what period did the car prices skyrocket? During a period where people were asked to stay at home and work from home. Roads were empty with only speeders trying their luck and often failing. It was also a time of free or nearly free money, both in terms of interest rates and bailouts for individuals/corporations.

Not sure how in your mind the demand was fueled by the need.

So in your mind, people just buy cars to get rid of their money, not because they need them?

 

[KrisZ]

So in your mind, people just buy cars to get rid of their money, not because they need them?

No, most are caught up in the rat race. I did mention cheap loans, didn’t I? So what money were these people getting rid of exactly?

But this forum is full of old and grumpy men that like to blame something, someone for the rapid increases in vehicle prices.

Simple fact remains that nobody forced people to pay overinflated prices, market adjustments etc. They did it all by themselves.

 

[grampi]

Simple fact remains that nobody forced people to pay overinflated prices, market adjustments etc. They did it all by themselves.

Yep, everybody should keep the vehicles they have forever, and keep getting them fixed no matter how nonsensical it may be to keep sticking money into a dead vehicle...

 

[ATex7239]

Yep, everybody should keep the vehicles they have forever, and keep getting them fixed no matter how nonsensical it may be to keep sticking money into a dead vehicle...

I think the point that is trying to be made is that there is a staunch difference between purchasing a new vehicle, at over inflated prices due to the market, when you need it and over purchasing all together.

For instance, I have two less than three-year-old vehicles… Both needed to be purchased, but we chose the sensible option vs over purchasing. The minivan and four-door sedan were a necessity but a decked out Tahoe or F150 would have been a personal choice… And unfortunately most people would choose decadence or bravado over sensibility.