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Post by jassy on Feb 13, 2019 19:40:07 GMT
There's a lot that stuns me in this article. I can't believe the average new car loan is over $36,000 dollars. That is absolutely nuts to me. I know the cost of new cars has risen far faster than wages have, but even with that, I know there are more reasonable options for purchasing a car than spending nearly $40,000 on one! I think this is good evidence that we are far too in love with vehicles more than just reliable transportation and rather see them as luxury or status symbols in this country. Americans Behind On Car Payments |
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Post by needmysanity on Feb 13, 2019 19:55:08 GMT
What else is shocking is how many people have these luxury vehicles but can't pay the $500 deductible when they get in an accident. I worked for a collision center for 6 years and at least once a month we would have a high end car sit in our lot for weeks because the person couldn't pay the deductible.
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Post by jassy on Feb 13, 2019 20:05:29 GMT
What else is shocking is how many people have these luxury vehicles but can't pay the $500 deductible when they get in an accident. I worked for a collision center for 6 years and at least once a month we would have a high end car sit in our lot for weeks because the person couldn't pay the deductible. Wow! |
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Post by myboysnme on Feb 13, 2019 20:16:08 GMT
The other thing people are doing is taking out loans of up to 7 years. A close friend of mine owns 3 new cars, all on 7 year loans. They got the heated leather seats, sunroof, navigational system, the works. They make plenty of money but can't afford a monthly car payment on these vehicles if it is a more traditional 3-4 year loan term.
So people start out paying their loans and then they can't. 7 years is a long time for a car loan.
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Post by bbkeef on Feb 13, 2019 20:21:49 GMT
Crazy! I've heard of 7 year loans for boats (they tend to hold their value), but cars? Wow! We normally buy 2-8 year old cars that are fully loaded, but since they aren't new, we can afford them. I feel EXTREMELY lucky we were able to pay cash for my DH's 2011 truck that we bought just last year.
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Post by bbkeef on Feb 13, 2019 20:24:38 GMT
I've also had the conversation with a couple friends of buying over leasing. I always say buy something you can afford the payment on, and the response is "but if I lease, I can get the newer model with more bells and whistles". That's fine if you are a person who can afford to do that and like leasing. The friends I am referring to would be the ones that couldn't afford the $500 deductible and are already behind on lease payments.
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tuesdaysgone
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Post by tuesdaysgone on Feb 13, 2019 20:40:37 GMT
Cars lose their value so quickly! I'm driving a 12 year old Altima and hubby drives a 17 year old Tundra truck. I hate car payments! Then again, we aren't "car people" and having the newest and best in a vehicle isn't important to us. Clearly, it is important to others.
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carhoch
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Post by carhoch on Feb 13, 2019 20:48:53 GMT
I used to live in Mobile Alabama where I knew some ladies making 30,000 a year having brand new SUVs in the driveway , it’s ridiculous and sad but it’s all about status and what they show to the world .
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Post by papersilly on Feb 13, 2019 21:00:05 GMT
guy in the front building tells me he saw an ad in the paper for a KIA Optima. $99/month lease, no down payment. i told him it was a just a hook to get him in there. it's never that low and IF it was, it's for a base model and they only have one of that car at that price. he was convinced it was not.
the next day, he come to work in a new car with a monthly payment of $599.00/month. "WTH? how did that happen?", i ask him. he says they talked him into the highest model with all the bells and whistles. with all the related fees it came out to $599/month. nuts.
here's another story scenario i always hear about. person has a family member, friend, whatever who has bad credit or no money for down payment. person decides to buy the car on their behalf. family member, friend, whatever will make the monthly payments. a few months in, family member, friend, whatever starts to flake on the payments. what do they care? the car is not in their name. actual loan holder starts getting repo notices. one such person drove the car back to the dealer, left the keys on the dash and walked away thinking that was enough to absolve him of his payment obligations. again, nuts.
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Post by cannmom on Feb 13, 2019 21:11:59 GMT
I think that America has a serious credit crisis. People are buying everything on credit. Young people or anyone that is not very good with finances can easily be swayed into thinking they can afford far more than they really are able to afford.
It it also seems as if lifestyles are changing so much in regards to how people entertain themselves. People eat out much more frequently it seems now. I know we do. My ds is college aged and I worry that he will find it difficult once he has to support himself on his own income. Dh and I have taken several vacations lately where we have gone to nice restaurants and bars. Seeing all the younger people spending lots of money drinking and eating at these places made me wonder how they afford it. Of course it could be a special occasion thing for them like it was for us, but it seemed to be a regular thing for some. It just wasn’t something we did as a young couple or really anyone we knew did that either. I sound like an old fogey, lol! I do worry though, that many people are really over-extending themselves on credit.
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Post by cannmom on Feb 13, 2019 21:19:12 GMT
guy in the front building tells me he saw an ad in the paper for a KIA Optima. $99/month lease, no down payment. i told him it was a just a hook to get him in there. it's never that low and IF it was, it's for a base model and they only have one of that car at that price. he was convinced it was not. the next day, he come to work in a new car with a monthly payment of $599.00/month. "WTH? how did that happen?", i ask him. he says they talked him into the highest model with all the bells and whistles. with all the related fees it came out to $599/month. nuts. here's another story scenario i always hear about. person has a family member, friend, whatever who has bad credit or no money for down payment. person decides to buy the car on their behalf. family member, friend, whatever will make the monthly payments. a few months in, family member, friend, whatever starts to flake on the payments. what do they care? the car is not in their name. actual loan holder starts getting repo notices. one such person drove the car back to the dealer, left the keys on the dash and walked away thinking that was enough to absolve him of his payment obligations. again, nuts. That’s the kind of scenarios I’m talking about. Some people have not been taught much about finances. Also, if someone can’t get a loan, they can’t afford the payments. Seriously, there are not terribly tight restrictions on loans now and dealerships make money on financing. If they won’t extend credit, you can not afford to buy a car! |
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Post by Merge on Feb 13, 2019 21:24:02 GMT
I've never understood the need to have a car that costs that much - particularly if you can't easily afford it.
I will say this - the wealthiest people I know don't put a lot of money into cars. They're a losing investment every time.
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Post by jeremysgirl on Feb 13, 2019 21:25:05 GMT
The problem is that most of us need a car. A car is so necessary to job security. And I will say, I am lucky because my husband is very handy. I say my brakes are squealing and he's right out there doing new brakes. He replaced my thermostat last week, no problem. But the newer the car, the more computerized they are which makes it more difficult for them to be repaired by the average guy. If I didn't have a handy husband, I would lease so I would not be responsible for the repairs. Not so I could get a nicer car, but so that I had security that my car would be taken care of. An older car is more likely to have problems, so you are paying one way or another, IMO.
Do I think that people are a bit caught up in keeping up with the Joneses? Yes, I do. So I'm sure some of the problem is also that. I also think that there is a serious lack of cars with a decent price point, as well. I have been debating replacing my van. I did some test driving. As much as I would prefer a smaller vehicle, I decided that I would like to be in a better place financially before I get rid of my van. And I learned something test driving and that is, even lower level cars have a lot of technology in them. My salesman thought it very funny that I was bummed that cars no longer have CD players in them. Well, I want a newer, more reliable car, but I don't need all the technology. I seem to be in the minority. Car companies are no different than any other producer. They make what people want. And if people are willing to pay the price, well then they will continue to charge more. It is the same exact thing with phones. If people think nothing of paying $700 for a phone, well then, that's what they will charge. People need to say, nope, we're not paying it. I am moving more towards this way myself. I am terming it as Marie Kondoing my spending. I am getting to the point where I'm starting to ask myself, will this really bring me joy, before I purchase it. And really 90% of the time, it just won't.
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Post by mygigiscraps on Feb 13, 2019 21:32:39 GMT
We are used car people. I tend to keep my cars until they are at least 10-12 years old, longer if I really love the car and it's been dependable.
DH worked with a guy a couple of years ago that financed a Lexus SUV for 10 years. Ten freaking years for a car. They'll trade again before then and never own a damned thing.
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snyder
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Post by snyder on Feb 13, 2019 21:35:50 GMT
People want and need instant gratification these days. Niece and husband had an income of $180k a year, yet when they divorced, had $65K in credit card debt and car payments. I just can not imagine living like that!
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julie5
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Post by julie5 on Feb 13, 2019 21:40:07 GMT
Before we bought our van in 2017, we drove (and still have them) vehicles that are 27 and 23 years old. Our van will be driven for 20 if we can help it. We wanted a new suv but the $40k price tag turned us off. We paid $26 for a van with very few extras. I think a large chunk of Americans under 40 are living beyond their means. Everything is bought on credit so what could be a good income family is paying throug the nose for their stuff and don’t have cash for incidentals. Could we afford the higher priced car? Sure. But that’s another $100-200 a month we can save for incidentals or investment.
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julie5
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Post by julie5 on Feb 13, 2019 21:43:12 GMT
The problem is that most of us need a car. A car is so necessary to job security. And I will say, I am lucky because my husband is very handy. I say my brakes are squealing and he's right out there doing new brakes. He replaced my thermostat last week, no problem. But the newer the car, the more computerized they are which makes it more difficult for them to be repaired by the average guy. If I didn't have a handy husband, I would lease so I would not be responsible for the repairs. Not so I could get a nicer car, but so that I had security that my car would be taken care of. An older car is more likely to have problems, so you are paying one way or another, IMO. Do I think that people are a bit caught up in keeping up with the Joneses? Yes, I do. So I'm sure some of the problem is also that. I also think that there is a serious lack of cars with a decent price point, as well. I have been debating replacing my van. I did some test driving. As much as I would prefer a smaller vehicle, I decided that I would like to be in a better place financially before I get rid of my van. And I learned something test driving and that is, even lower level cars have a lot of technology in them. My salesman thought it very funny that I was bummed that cars no longer have CD players in them. Well, I want a newer, more reliable car, but I don't need all the technology. I seem to be in the minority. Car companies are no different than any other producer. They make what people want. And if people are willing to pay the price, well then they will continue to charge more. It is the same exact thing with phones. If people think nothing of paying $700 for a phone, well then, that's what they will charge. People need to say, nope, we're not paying it. I am moving more towards this way myself. I am terming it as Marie Kondoing my spending. I am getting to the point where I'm starting to ask myself, will this really bring me joy, before I purchase it. And really 90% of the time, it just won't. Bingo. Auto repair shops can bill out at $100 an hour all day long because they have the proper tools to fix your car. The sad part is, these guys with the education fixing our cars are barely able to make a living after having to invest in their own tools to fix things. Trust me I know their tool bill and they spend more on a toolbox than I would pay for a CAR. |
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ddly
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Post by ddly on Feb 13, 2019 21:46:34 GMT
That’s nuts! I’m also a buy a used car person. My last car was 3 years old with 31,000 miles and cost me $12,500. I could never buy above my means. I just don’t roll that way. I need clean, low mileage and reliable.
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Post by Rainy_Day_Woman on Feb 13, 2019 21:52:15 GMT
As I live in an urban area- we don't have a lot of cars. None of my friends have cars. We have a sweet ride- a 2004 Chevy Venture  Granted, I think Canadian cars are more expensive than American cars but I have no idea how people afford so many cars or buy cars for their kids. I don't know anyone whose parents bought them a car. I guess a lot of people are just in debt for them, it would seem. We are going to need a new car soon, and pricing them out is terrifying me! We have money saved but it is still a lot. |
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Post by ladytrisha on Feb 13, 2019 21:52:48 GMT
Bingo. Auto repair shops can bill out at $100 an hour all day long because they have the proper tools to fix your car. The sad part is, these guys with the education fixing our cars are barely able to make a living after having to invest in their own tools to fix things. Trust me I know their tool bill and they spend more on a toolbox than I would pay for a CAR. That was my hubby too before his career blew up with his knee. He was one of the lucky ones making an actual living - most of the guys there were struggling. There was a major lawsuit in California a few years ago that said techs were to be paid min. wage when they didn't have work. So no more working 8 hours and only getting 2 hours actual flagged work for a day. Some days, some guys didn't make any money before that lawsuit came in. Also, Ca Law said if you provided your own tools, then you got 2X min wage/hr. as base. Well, the dealer owners didn't like that so they made all the guys take their toolboxes home (one guy had just bought his for over $15k - and yes, that's empty) - the dealer delivered it to their homes so that they could provide the tools and toolboxes at the dealership. Well guess what, that meant they didn't have to pay 2X min wage. BTW, sharing shop tools never worked in the past because they had a habit of disappearing. The older more experienced techs all left or were forced out so that when I finally had to get my car fixed there (luckily they still gave hubby an employee discount) - it took 3 attempts to get it right and the car still didn't run right so I now have a car loan payment. New Subaru Outback, not the top of the line, but I pay extra on that loan every month and I make a payment every paycheck online. I have a 90 mile commute every day so dependability was top of the list. My husband refuses to go back into the automotive industry - he worked for that dealer for over 30 years and they tried to say that they were only 14% liable for his blown knee. Thank goodness we had doctors documentation in hand proving otherwise. |
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Post by annabella on Feb 13, 2019 21:53:33 GMT
I don't drive so I just listen to friends talk about their cars and yes I find it so shocking, some only lease, some get 7 year loans, range rovers are popular with men, one person upgrades every 2 years and had some rational for it when I questioned.
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Post by myboysnme on Feb 13, 2019 21:58:41 GMT
, I would lease so I would not be responsible for the repairs. I leased twice and was definately responsible for repairs. I also had to keep up with the scheduled maintenance. The window stopped going up and down and I had to pay for the repair. The only things they would cover were things like engine and transmission, and then only if it wasn't wear and tear. |
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Post by cadoodlebug on Feb 13, 2019 22:12:55 GMT
My salesman thought it very funny that I was bummed that cars no longer have CD players in them. Well, I want a newer, more reliable car, but I don't need all the technology. /quote] My new Highlander has a CD player! I love it because on long trips I love listening to my son's high school band playing in concert. |
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Post by jeremysgirl on Feb 13, 2019 22:14:38 GMT
, I would lease so I would not be responsible for the repairs. I leased twice and was definately responsible for repairs. I also had to keep up with the scheduled maintenance. The window stopped going up and down and I had to pay for the repair. The only things they would cover were things like engine and transmission, and then only if it wasn't wear and tear. I'm sorry I should have clarified that I meant that I would not be responsible for the kind of repairs that come with an older car. Brand new car is far less likely to have repairs. |
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Post by FuzzyMutt on Feb 13, 2019 22:19:44 GMT
, I would lease so I would not be responsible for the repairs. I leased twice and was definately responsible for repairs. I also had to keep up with the scheduled maintenance. The window stopped going up and down and I had to pay for the repair. The only things they would cover were things like engine and transmission, and then only if it wasn't wear and tear. Not just repairs.. but maintenance too! My guy leases and just spent over $1500 on tires! |
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paget
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Post by paget on Feb 13, 2019 22:25:21 GMT
I leased twice and was definately responsible for repairs. I also had to keep up with the scheduled maintenance. The window stopped going up and down and I had to pay for the repair. The only things they would cover were things like engine and transmission, and then only if it wasn't wear and tear. I'm sorry I should have clarified that I meant that I would not be responsible for the kind of repairs that come with an older car. Brand new car is far less likely to have repairs. I’m with you. I drive quite a distance each day and I like security of feeling like I won’t break down. I have driven cars for a pretty long time (10 years and 8 years) but I recently got a new one to feel More comfortable - but we can afford it. |
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scorpeao
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Jun 25, 2014 21:04:54 GMT
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Post by scorpeao on Feb 13, 2019 22:38:26 GMT
this is why I drive a honda civic. yes, it is an entry level car, but I paid $17K for it brand new, and I put $10K down. It's been paid off for years, and I don't plan on another car until this one is breaking down regularly.
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PrettyInPeank
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Post by PrettyInPeank on Feb 13, 2019 22:39:28 GMT
This worries me. Like we're on the brink of another economic collapse.
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keithurbanlovinpea
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Post by keithurbanlovinpea on Feb 13, 2019 22:45:10 GMT
DH manages two auto repair shops and has been in a industry for over 30 years. It baffles him the number of people who will walk away from a $3000 repair and buy a new car and sell the old one. People figure out a way to fork out a few hundred bucks every month for the payment but aren't prepared for the repair bills
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Post by busy on Feb 13, 2019 22:55:56 GMT
DH manages two auto repair shops and has been in a industry for over 30 years. It baffles him the number of people who will walk away from a $3000 repair and buy a new car and sell the old one. People figure out a way to fork out a few hundred bucks every month for the payment but aren't prepared for the repair bills $3000 is likely a pretty decent percentage of the overall value of the car and spending that much may be throwing good money after bad. Often, once cars start needing huge repairs like that, they're usually older, and they continue needing other significant repairs. To have an unreliable car that you're constantly sinking money into may not only be financially questionable (OF COURSE there are a lot of variables there), but most people need their car to get to work and if it's routinely in the shop, it can be trouble. Anyway, I can see why people may sometimes decide not to pursue a big repair like that and go with a newer, more reliable car. But... a lot of people probably don't really run the numbers to be sure which makes the best financial sense. |
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