But as things stand, cars are still really expensive for many Americans. Just 10 percent of new car listings are currently priced below $30,000, according to CoPilot. Things are not much better in the used car market, where only 28 percent of listings are currently priced below $20,000.
According to an October report by Market Watch, Americans needed an annual income of at least $100,000 to afford a car, at least if they’re following standard budgeting advice, which says you shouldn’t spend more than 10 percent of your monthly income on car-related expenses.
That means that more than 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 below the $100,000 line.
$100k to afford a car! Wtf.
Okay this does bring up a question I’ve had for a long time: Who the fuck buys new cars? I’ve only known like 1 person in my life who bought her car new and it’s because she was a moron who wanted a fancy new mustang. Even relatively wealthy adults I know buy like 3-5 year old cars.
I’ve always questioned this. It genuinely doesn’t seem like there have ever been enough people buying new cars to keep the supply of used cars going. I don’t understand how this works.
Not to brag, but as an old software developer, I’ve bought new (compact/subcompact) cars for cash, meaning no loan. Now I live car free, but in a city almost no one can afford. There is still a PMC/middle class/labor aristocratic class, though it’s ever-shrinking.
Welcome to the world of car finance, where the tiny guardrails introduced to stop the housing market going Kerplunk again don’t even exist, and is therefore awash with subprime loans.
people who can’t afford them
Companies I’d imagine
As well as private leases there is a massive corporate market for company cars (at least in my country). Cars are offered as a benefit to employees and used as pool cars etc. The company leases them for 6 / 12 / 18 months then they are returned back to the lease company (often the oem themselves) and either re-leased to other individuals or sold on. It’s a huge amount of cars that have that ‘sales’ model. I think almost 80% of BMWs are leased to begin with.
I was reading about a small EV startup company (read: multi billion dollar Saudi oil diversification project) that is planning on never selling cars but instead perpetually leasing cars, and reconditioning the returned car for ‘like new’ leases of the same vehicle again and again and again.
Cars companies aren’t really a manufacturing businesses any more, they’re banks; all of their real products are financial products, loans and leases etc with a car just as the vehicle (pun slightly intended) to sell those financial services.
Wanted a fancy new Mustang 🤢
That’s what I fucking said. I had the misfortune of riding in the thing one time. I sat in the back seat. I’m 6’2”. Mustang back seats aren’t made for people taller than maybe 5’6”.
I’m not sure if it’s like this everywhere, but where I live Mustang owners are thought of to be shitheads who are dangerous to drive next to.
i imagine this is because mustangs are powerful, rear-wheel drive cars that are relatively affordable, allowing inexperienced drivers to purchase and drive them (and not be able to control them)
and because aggressive dorks like fancy cars
Yes correct
The only person I ever knew who bought a brand new car also “invested” a significant chunk of their life savings into youtube hustle and grindset crypto scammers
So they’re a millionaire now, right?
Remember: It’s never a loss till you sell at a loss
I think if you have a big chunk of change to put down it is the smart move long-term, but basically you have to have enough money to not worry about how expensive cars are anyways. I think most new cars get leased for a year or two before they get properly sold; I have a friend who leases a new car every two years, pays just a bit more than an actual car note, and has something nicer to drive. But he doesn’t have any path to ownership.
It used to be the case you could get a new car and take out a loan with the car company for 0-1%, or buy a used car and get a loan with the bank for 5-6%. I don’t think the car companies are offering those deals now but when they did, for the same monthly payment you could get like a $20k new car or a $13k used car. Given the risk of inheriting someone else’s mechanical problems + you don’t know how well they took care of it, in that specific case new could be the better use of money in the long run.
I’ve helped a couple friends buy a car. I usually say either go with the very low end of new cars, or buy some 15 year old Honda or Toyota that will run reliably for a while longer for like $5k
The Market Adjusts. I assume financing as well as dealerships that accept trade-ins help a lot.