Most Americans Can’t Afford a New Car: Report

[driftdiver]

That's why you buy the car you can afford. Because risk is only good with appreciating assets. Not only can the bank take your car, they could make you continue paying for the car you don't have anymore.

You can't take assets that have appreciated with you.   You can't take a car either but you sure can have fun while you're here.

Its about moderation and taking reasonable risks.  At least for me.   Others can do what they want.

Of course I've taken so much risk with my business that the risk of a car isn't even a rounding error on the ledger.

[Weird Tolkienish Figure]

In her case, she had the cash on hand. But I wasn't talking about her. I meant in general.

How do you know you will be able to make the payments? You can't predict the future. You only think you can make the next payment. Hence the problem with payments.

Example: My sister is paying $525 a month for a used truck. If she goes out of work for more than a few weeks, she can't make the payment because she spent her savings on a 5th wheel trailer.

Good point but do you pay cash for your house? The real problem with cars is that they are a depreciating asset. That being said, I see it as a trade off: a car payment vs $1000 in repairs every few months. Pick your poison.

[Wingnut]

Cash for Clunkers did more to price the poor out of affordable transportation than any other program in the history of man.  They saved the fat cat Auto industry and it's bloated dealer network of rich mega dealerships on the backs of the american public.   A pox on their house.

[Wingnut]

I paid $500 for this 03 Corolla S with 95,000 miles on it. It came with a complete record of all maintenance, fluid and oil changes. The guy even put a new set of tires and a brake job on it plus took me to the garage to pick it up.

Basically he gave me the car and I reimbursed him for the tires and brakes.

AutoZone sells 14 inch wheel covers for 39.99.

Just say'n

 

[Restored]

Good point but do you pay cash for your house?

No but it is an appreciating asset. It has gone from $189k to $400k in 20 years.

[EC]

Good point but do you pay cash for your house?

Oddly enough - yes.

[Frank Cannon]

AutoZone sells 14 inch wheel covers for 39.99.

Just say'n

 

Walmart sells lighter fluid and matches. Just sayin'.

[Wingnut]

Walmart sells lighter fluid and matches. Just sayin'.

What is NADA on that thang....purely for point of reference should a comp claim be needed.

[driftdiver]

Oddly enough - yes.

There is nothing wrong with debt as long as it is not misused.  From a financial perspective paying cash for a house is not necessarily a good idea.   The loan is costing you 2.4-4% depending on your loan rate.    With conservative investing you can get 8% on that money.

A 4% net profit for investing the money elsewhere over paying cash for a home.

[EC]

Interest rate on a mortgage over here was around 18% when we bought our first place. We also got a £15,000 discount for cash.

[Restored]

T From a financial perspective paying cash for a house is not necessarily a good idea.   The loan is costing you 2.4-4% depending on your loan rate.    With conservative investing you can get 8% on that money.

If that were true, you would borrow as much as possible against your house to invest. You would never want to pay off your house.

[driftdiver]

If that were true, you would borrow as much as possible against your house to invest. You would never want to pay off your house.

Some people don't ever pay off their house anyway.  The point is that if you are only looking at dollars and cents (or euro's) then it might not make sense.

Personally I lived on credit for a long time and was deep in debt.    One day I added up what I was paying interest each month and about puked. 

I'm almost out of debt except for my home and love the feeling.   I'm only saying that if other people decide that having a new car with a payment is acceptable then thats their choice.    Its between them and their bank.    Most banks are evil and have no soul.  So when you get a loan you are making a deal with the devil.  IMHO

I just wish they'd stop cutting me off in traffic.

[RoosGirl]

The prices on cars have gone up like crazy though.  We bought a used Ford Expedition XLT EL.  We got it because we were hauling 4 dogs to different events on a regular basis.  The starting MSRP on a new, 2017 Ford Expedition XLT (base model) EL is $49,835!  I find this a ridiculous amount for a closed in pick-up truck.

[Restored]

Banks are businesses, incapable of evil. If someone borrows money, they accept the risk. What they cannot do is predict the future. When we bought our house, we had the money to make payments for a while if we had no income.

Our 2nd mortgage(LOC) is 1/4 point over prime. We lost a dependent and a tuition credit. So using the 2nd to buy a car isn't such a bad deal since it helps with taxes. It beats selling our AT&T stock which is paying a 5% dividend. But when I buy a car, the whole thing(price - trade + fees) has to come in under $10k. My father owned a car dealership(Lincoln) and his father owned a car dealership(Ford). There is no point paying $30k for a new car when you can buy one for $10k. You can pay for a lot of repairs for $20k.

[ABX]

My income is far above median point and we don't buy new cars.

Dito, we always buy used, usually 1-2 years old with almost full warranty. You save a lot and get one with the bugs already identified. My current car listed for over 60k new, got it about a year old under 10k miles for under 40k, paid off in two years.

[thackney]

We bought a used Ford Expedition XLT EL.  We got it because we were hauling 4 dogs to different events on a regular basis.

What year?  We bought a 2015 last year and love it.  We haul horses with it, but we use a trailer....

[RoosGirl]

What year?  We bought a 2015 last year and love it.  We haul horses with it, but we use a trailer....

Haha, glad you have a trailer for them.  That could start getting cramped inside.

We bought a 2008 in 2009.  It was a dealer rental and we've been super happy with it.

[Night Hides Not]

My income is far above median point and we don't buy new cars.

We've bought one new car in the last ten years. My wife had her heart set on a Murano, and we've enjoyed driving.

I upgraded a couple months ago, bought a 2014 Altima with about 20K miles on it. Perfect for me, and what I want to drive it for: specifically, short-long road trips mostly to wineries, or an occasional trip to Reno to see my sister.

I had my "dream car" in my 20s, before marriage and kids, so I've never felt shortchanged in that area. It was a Volvo 242GT, drove over 30K miles on the autobahn in Germany. Best cruising speed was 90, didn't feel much until I got past 110.

I was a legend at my work place: made it from Kleber Kaserne (K-Town) to Spangdahlem AB in 55 minutes, a 90 mile trip that was only half autobahn at the time.  lol

[thackney]

Haha, glad you have a trailer for them.  That could start getting cramped inside.

We bought a 2008 in 2009.  It was a dealer rental and we've been super happy with it.

In 2015, they changed the engine to a twin turbo 3.5L, V6.  I am very impressed with it.  I would not hesitate to buy another.  It has better acceleration, pulling a trailer with a couple of horses, than my 6.2L V8 F250.

[driftdiver]

Banks are businesses, incapable of evil. If someone borrows money, they accept the risk. What they cannot do is predict the future. When we bought our house, we had the money to make payments for a while if we had no income.

Our 2nd mortgage(LOC) is 1/4 point over prime. We lost a dependent and a tuition credit. So using the 2nd to buy a car isn't such a bad deal since it helps with taxes. It beats selling our AT&T stock which is paying a 5% dividend. But when I buy a car, the whole thing(price - trade + fees) has to come in under $10k. My father owned a car dealership(Lincoln) and his father owned a car dealership(Ford). There is no point paying $30k for a new car when you can buy one for $10k. You can pay for a lot of repairs for $20k.

@Restored
Banks are run & operated by people, in many cases evil people.  In most cases by people who focus solely on the money and not the human side of the equation. 

When a lender makes a loan they also accept risk, the risk of not being paid back.   In return for that risk and the use of their money the law allows them to charge interest.   Many lenders have fought to change laws to eliminate their risk.

[driftdiver]

The prices on cars have gone up like crazy though.  We bought a used Ford Expedition XLT EL.  We got it because we were hauling 4 dogs to different events on a regular basis.  The starting MSRP on a new, 2017 Ford Expedition XLT (base model) EL is $49,835!  I find this a ridiculous amount for a closed in pick-up truck.

Has the price of the cars gone up or has the value of our dollar gone down?   Perhaps not directly reflected in the dollar value as reflected by wall street but the materials used to make the cars have become more expensive.

[Restored]

Banks can be run by evil people but the runners don't make decisions that affect people who don't choose the bank. Granted, I chose Wachovia but it became Wells Fargo. But I can move my money whenever I want. A bank cannot lend you money without your permission.

I recently test drove a Lincoln MKS Ecoboost. 350 HP and 350 lbs of torque. It was really fast and loaded but didn't pass the mechanic inspection. But that was a great car.

[Smokin Joe]

I've never even sat in a new car, never mind owned one. 

We don't take out loans.

I have sat in one, but I checked my boots for undesirable material first. I didn't like the smell of evolving solvents so much.

We don't take out loans either, and I never have bought a new car. With the on again, off again nature of the oil patch, If we can't pay cash, we do without until we can or we don't do it at all.

[Restored]

Has the price of the cars gone up or has the value of our dollar gone down?   Perhaps not directly reflected in the dollar value as reflected by wall street but the materials used to make the cars have become more expensive.

The price has become irrelevant because people base their decision on the payment amount. That Ford Escape SE I want is $328 a month. You can buy it for cash for $25k or pay $28.6k to finance it. If you only care about the $328 a month, the price is not a concern. But you can get a nice Escape Titanium for $361 a month. Don't you think you are worth that $33 a month? You can skip going to one movie and pay for that.

[Frank Cannon]

What is NADA on that thang....purely for point of reference should a comp claim be needed.

$38. There isn't much metal to scrap out so that is why the appraisal.