After many long hours, weeks, months and years, what was created in 2005 was a company that designs and sells aftermarket parts and accessories for modern cars (we specialize in American muscle cars – sorry not much for your Honda Fit). People who can afford new cars buy used unless they own their own business and can lease or write off depreciation. Work in a nursing and see people becoming ill or dying all the time. Does it have all the bells n whistles? Oh and uh, thats still below the 10% of 170k avg salary you mentioned… crazy (yet the consensus is that leasing is for suckers). Prices vary depending on the vehicle's condition, mileage, features, and location. I owe less than $4k on it with a payment of $170/mo and the car only has 26K mi on it. I love it. With Personal Capital, you can track your cash flow, x-ray your investments for excessive fees, and make sure your retirement plans are on track. They still may make the same, dumb decision but at least they could no longer claim ignorance. Are you kidding me? I wish they would pass a law, where people had to read a few of your car buying posts before buying a car. We’ve discussed the rising costs of new cars for a few years over at The Cheat Sheet. Maybe if I absolutely hated what I do for a living. Return of 8% is far from guaranteed. Then i’d have a car with 120k miles on it that I could maybe trade/sell for $7-8k (vs having nothing if i leased). First starting with whether or not you live in Metro Detroit (haha). I find it crazy how much things have changed in recent years in terms or car ownership (or leasing) over here in the UK. They’re giving them away these days and distributors don’t make anything on a car due to the interest. The Second Series 1955 was as new a truck as GM had ever put out: GM had a number of firsts on the '55 truck line beyond the new body and chassis. Yup, I’ll just hop on the bus, throw on my headphones, and let the driving (anything from costs, risks, and the actual act of it) be somebody else’s problem. I’ll never buy American again because my Chevy Equinox wasn’t even made in the USA! The top 0.1% are converting more of their funny money into real assets before it all goes poof like the last downturn. You’ll have to upgrade to the touring package and tack on another 5K. GMC 1/2 ton with zero options. So to showcase our products, every several years I buy a new car and design new products for it. It’s more commonly seen in the larger metropolitan areas like New York, San Francisco, and Los Angeles. He issues a rebuilt title for DMV purposes. Same thing with a car – purely looking at it as an asset or a functional tool doesn’t paint a full picture. If my I retest is 4% and I take the rest of my money and invest it, I’ll get a return of 8% which will be used to pay off my car and interest with an extra 4% to spare. Many of my friends did something a LOT of people here will disagree with, but I’m thinking about doing it too. This does make the upfront price of the car or truck worth it if you intend to own it for 10-20 years (which almost nobody does anyway). At least some of it has to do with the economy, however, I don’t believe car buyers are rational. Notify me of followup comments via e-mail. So, only now the Tesla. As the average age of Corvette customers continued to spiral upward with each generation of the car, Chevy made no secret that its goal with the C7 and C8 was to lure fresh blood to the mix. I try not to judge, but when it comes to cars, I can’t help myself. Make sure you have the best auto insurance possible to protect yourself and your family. They will often become very attached to their cars, and own them a long time. I had the price of the base model mistaken — An expensive one at the time, though as luck would have it a better deal then buying a house at the time. Always great information. On the high-amount of loan-balances — its evident – as average vehicle prices increase, the loan-balances increase too !! Again, can’t believe $34k is the average…. Crazy! I tried to talk her out of it, but it didn’t work. I never book anything around rush hour anymore. Simply too cool to pass up if it really ends up being anywhere near 35K like they promise. But I do see some merit in weighing features and safety/track record against the fiscally responsible approach of finding a reliable, older car. The enthusiasm for your car goes down over time, but the payments stay the same. To my grandfather a car is something that he uses to collect rent. He also earned his BA from William & Mary and his MBA from UC Berkeley. Have you ever checked out Metromile? I happened to grow up liking sports and muscle cars. I am usually able to pick up the vehicles for half price and with low mileage. There probably a few things at play here. That gives me the best of both worlds. Get this, an estimated 32% of all trade-ins toward the purchase of a new car through the first three-quarters of 2016 were underwater. My flashy car costs less than their tricked out pickup. It’s just the way it is once you add everything up. 105K on the clock. And I have 50k in cash, I’d still lease it for 3-5 years. A single person estimated average monthly costs are 935.69$ without rent. After seeing the chart she immediately was convinced. Those $500,000 supercars of the 0.1% really drive up the average sale price, but don’t tell us anything about what most people are paying for a car. The super rich don’t care about rising interest rates because they pay in cash or lease vehicles as a business expense. Would it have been worth it? It’s amazing. he wanted a brand new Prius, and I kept showing him prices for 2016 models for $14,500 with 35k miles from Enterprise, but he would just keep making silly excuses like “but I want a sun roof and navigation included, I don’t want to use GPS on my iphone.” The best excuse was “I’ve worked hard to get to where I am today, and I’m usually cheap and save my money (he doesn’t) and I’m tired of having to settle for used! A $10k discount just for someone else who broke a lease (or sold at a big loss)??? The car has now become an asset, a marketing tool. He also does not have a pension as it was eliminated before he was hired. The weighted average price reduces all the prices down to one single price. Some customers may not qualify. I agree with the comments on SUVs and Trucks, here in Texas they make up a pretty big slice of the car population, and they tend to sell for a higher premium than standard cars. I refuse to own a vehicle with a screen in the dashboard. Guess – truck/SUV mileage barely budged up from 18 to 22 mpg in the last 5 years? It was too easy to go out every night and get bottle service to impress hot Asian and Russian chicks. Put another way – if you negotiate a lease right, it costs you nothing extra to buy the car if you like the car at any point during the lease but if the car has mechanical issues, your family size grows or shrinks, or otherwise just hate the car, you can hand the car back to the dealer for free. Buy high end if you want, but buy used. Appreciate this site. Buying a 34k car every three years is not the equivelent of doing so every 13. My family and two kids ride around in a tiny Mazda 3. But you’re right, they are everywhere here. Many of them (my parents included), but not all, just ignored their parent’s teachings and advice as a thing of the past while they took their good fortune for granted. I love all the small cars there. It’s outrageous but I’m married to the perfect example of why it happens. It can also be ameliorated by BUYING the vehicle farther into the depreciation curve, but you’re taking a risk on whether the vehicle was properly maintained / not abused at the beginning. You are the sum of five people around you. The last salvation of hope for Americans is that maybe the $30,032 loan is paid back over a very short period of time, like 1-2 years. My dad bought a new Accord fully loaded a few years ago for $32k!!! 1955 chevy project car for Sale ( Price from $2500.00 to $33199.00) 6-24 of 24 cars. No one is using it. Change one’s financial habits instead of changing the rule to fit one’s behavior. Keep in mind that these prices are for unmodified cars. – Those who see cars as status symbols. You do make a lot of good points Rob. We’ve got easy access to credit in the U.S. One third of car trade ins are under water. The borrowed money becomes like Monopoly money in their minds – they just forget they have to pay it back. Cash brings a sense of pride when you realize many people driving around status symbols are actually just driving the banks car. No microprocessors, no exploding dashboards, no touch screens, no garbage, no stupidity. You’re interest on a car loan is after-tax money being paid to the creditor. Buy the selected items together. This is why I drive a 17yr old truck that I paid cash for, used it for work and got paid to use it, therefore “paying for itself”… Is it pretty? compared to cars! The car sales people told me they can’t keep them in stock because demand is off the charts. In some ways the only people that will own them are the rich will then treat them as their own money making fleet. Funny thing is, I am 24 and as I get older, I care less and less about what I drive and even what I wear. Actually, half of America lives on the coastal cities. Don’t get me started on car leases…. Some of those monstrosities cost more than my first house. The worlds gone mad. I splurged a little and bought my 2014 VW Jetta for $19K+tax brand new. Cars are so much more reliable nowadays. The most noticeable thing is the difference in the type of cars young people are driving these days compared to when I was in my early 20’s (about 10 years ago) – it’s now the rule rather than exception to see young people driving around in new or almost new premium cars. They do it because they derive pleasure from it. No. I also have the luxury of knowing the service history and if it was involved in any accidents. I’m afraid I don’t ‘get’ cars. I’m blown away by how many I see on the road. Newer cars have more accident prevention technology. Financed the car for 3 years at a 1.4% rate because at that rate why wouldn’t you. I am a physician and had been coming into town to help cover some shifts and also meet all of the docs at the main campus (we send a lot of patients from up here in Santa Rosa to San Fran)….I have 2 more shifts in January and then am done. Average selling prices of cars, small-cars have barely budged or in-fact decreased year over year – where as pickup-truck prices have increased to over 5% in a single-year !! My monthly payment is $506 with 7% interest. When you can borrow at 1-2% you are not paying much for the money, and if you can instead put your cash in the market and earn 5-7%, you almost end up getting a car for free (almost), 2) The previous ‘Great Recession’ stopped a lot of cars from being replaced when their owners would have liked to. That’s true. I respect performance, but am really passionate about design. Early last year I had to convince my wife that it made more sense to buy a less expensive car ($49 a month less) by doing a graph chart showing the time spent in the car and the time spent parked. Putting on my economist hat, I’d be a fool to not max out payment window when interest rates are at all time lows. There are a lot of decisions people make when buying a vehicle and used vehicles have by far exceeded the 1/10th rule for people. Just wondering what your thoughts would be for this type of a situation? Because of this unbreakable japanese beauty, I am paying off my student loans and investing like no one else. With the average new car price at $37,577 (Dec. 2018, Kelley Blue Book), That is another factor that needs to be considered. Are you buying a new luxury car? Not getting a large car and stuffing my family into a four door sedan is totally worth not spending twice as much for a Justice Van. So I guess I’ll throw in a caveat to your number. He does not have any savings and he does not contribute to a 401K. There monetary value is much higher than their true worth. better sound and navigation, more battery range, AWD, fancier Sam spent 13 years working at two major finance companies. Pretty pointless article imo, because obviously more expensive cars are being made over the years, making the average price go up. :-/, the auto industry is the reason the poor and middle class cannot level up. The end price was about 3K lower than Edmuds listing. state rebate, $800 PG&E rebate) that reduces to $37,450. I’d do differently if buying today. Otherwise my commute is 3 miles each way and I figure I can make my current 6 year old car last another 15….or at least until I retire…so 24? If nothing else you could invest the money in bonds and pocket the difference. Life changer. bike to work or to pick your kid up from pre-school occasionally), do your own maintenance, and keep your vehicle a long time, you can buy something quite expensive (perhaps something in the $40k-$70k range), and enjoy a reasonable cost of ownership. I am not against used cars at all. you can get great lease returns of fully loaded cars, especially with sedans. The best part is I sold my car for more than the lease period cost me. The financial institutions are providing strange instruments, and smart people can leverage them. Ain’t gonna build wealth that way! Your other points remain and are spot-on, but even a fairly “average” car like this can easily be in the high $30s. Can’t wait till you get your mid-life car! It has been easier for me to budget a new car that doesn’t hit me with surprise fix-it costs than the rough luck I’ve had with used cars. Modern manufacturing techniques and newer and better motor oils have made this very possible. We tend to be frugal with our expenditures and will splurge on our yearly vacation. Unfortunately, it turns out that most new car buyers are probably not making anywhere close to $190,000 a year. There was a used Plymouth Voyager where the A/C went out after the first week. Would you incur penalties – or instead dump/sell high-mpg achievable cars at low profit-margin (or even at minimal loss but lesser loss than EPA imposed penalty – which is better trade-off!) Why not stick with the old ones? But I see people all the time making probaby half of what I do, all driving new BMWs. Think LCD and iPhone stampede a decade ago. Better a bigger car for a kid than a smaller car. It had 90,000 miles on it at the time. I mean come on. Forget the great recession and the pandemic. 35k miles for $13k. But for people with more than 150k in a 401k, instantly paying the auto loan with other funds is an option but it’s still probably better to use timed payments, especially if the banks will give you 0%.).
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