Are Today's Vehicles REALLY That Expensive?
Advanced
Joined: Dec 2016
Posts: 699
Likes: 280
From: California
Inflation is a valid argument to a point. Another reason why cars are so expensive is that people that cannot afford them keep buying them. If they focused on need rather than want they would not end up leasing $40k+ cars. Really sad to see the expensive leases and 72+ month loans with people that are essentially broke. Just look at average household income, average new car prices, and average savings rates. It just doesn't make sense, but no surprise as personal finance is not taught in schools.
But please keep buying and leasing to excess though, it helps my stock portfolio.
But please keep buying and leasing to excess though, it helps my stock portfolio.
Thread Starter
Lexus Fanatic
Joined: Oct 2003
Posts: 94,223
Likes: 221
From: Virginia/D.C. suburbs
Overall most ppl can afford a much better and safer car now compared to 50yrs ago.
The quality of life even for the poorest Americans has never been higher. People now also have many ways to generate passive income that did not even exist before because of new tech, globalization, Internet etc.
Cars in America also remain much cheaper and more affordable compared to rest of the world. Finance tools like leasing allow ppl to acquire expensive cars for a relatively low monthly payment. This is possible primarily due to our great financial system which most other countries lack.
The quality of life even for the poorest Americans has never been higher. People now also have many ways to generate passive income that did not even exist before because of new tech, globalization, Internet etc.
Cars in America also remain much cheaper and more affordable compared to rest of the world. Finance tools like leasing allow ppl to acquire expensive cars for a relatively low monthly payment. This is possible primarily due to our great financial system which most other countries lack.
Your post is pretty close to the mark.....
......and takes into account some things that others are not considering.
Last edited by mmarshall; Oct 7, 2020 at 11:42 AM.
Driver School Candidate
Joined: Jun 2014
Posts: 10
Likes: 1
From: Indiana
People have always thought cars were too expensive
I leave it to everyone else to debate average annual income.
When I was a kid in high school in the early 70s before I even got a drivers license, I got a job at the local Ford dealer washing cars after school. It was just a few blocks from my high school. There was a poster in the showroom at the time demonstrating that the price of a new LTD was about six months annual income. And the price of a Ford Galaxie in the 60s was about six months annual income. If you look at the Ford Fusion on the Ford website, (the biggest car they offer now) it starts at a little over $23,000, probably about six months income. So, I guess price hasn't really changed that much. But today, no matter what make you buy you get so much more quality and safety. Who can forget the rust? Six to twelve months after you drove it home the rust started to show up, and it wasn't covered by warranty.
When I was a kid in high school in the early 70s before I even got a drivers license, I got a job at the local Ford dealer washing cars after school. It was just a few blocks from my high school. There was a poster in the showroom at the time demonstrating that the price of a new LTD was about six months annual income. And the price of a Ford Galaxie in the 60s was about six months annual income. If you look at the Ford Fusion on the Ford website, (the biggest car they offer now) it starts at a little over $23,000, probably about six months income. So, I guess price hasn't really changed that much. But today, no matter what make you buy you get so much more quality and safety. Who can forget the rust? Six to twelve months after you drove it home the rust started to show up, and it wasn't covered by warranty.
Driver
Joined: Feb 2020
Posts: 96
Likes: 27
From: CT
Another important point to bring up, net vs gross. 50 years ago, most jobs had a pension, which means the employer took care of your retirement savings. You take home was significantly different. Beyond that, college was significantly cheaper and NOT a requirement to make it like it is now. Cars from 50 years ago could be taken apart and put back together with simple hand tools, by the owner, in their own garage or driveway and put back together again in a weekend.
This article is BS and comparing apples to oranges.
Are cars safer? Yes
Are they significantly more costly to maintain and operate? Yes
Is insurance considerably more expensive (and you know, required) compared to 50 years ago? Yes
Do the price of cars roughly keep up with the median income from 50 years ago? Yes
Do people take home the a smaller portion of pay compared to 50 years ago? Yes
This article is BS and comparing apples to oranges.
Are cars safer? Yes
Are they significantly more costly to maintain and operate? Yes
Is insurance considerably more expensive (and you know, required) compared to 50 years ago? Yes
Do the price of cars roughly keep up with the median income from 50 years ago? Yes
Do people take home the a smaller portion of pay compared to 50 years ago? Yes
Intermediate
Joined: Nov 2001
Posts: 275
Likes: 7
From: Texas
Instructor
Joined: Apr 2016
Posts: 794
Likes: 3
From: CA
Lexus Champion
Joined: Nov 2013
Posts: 13,195
Likes: 1,844
From: WA
SEATTLE - The median household income in Seattle topped $100,000 in 2019, jumping about $9,000 over the previous year, according to data released this month.
The data, from the U.S. Census Bureau's 2019 American Community Survey's 1-year estimates, showed the median household income in 2019 went up to $102,486, up from $93,481 in 2018. It reflected a continued trend in Seattle over the last several years.
The data, from the U.S. Census Bureau's 2019 American Community Survey's 1-year estimates, showed the median household income in 2019 went up to $102,486, up from $93,481 in 2018. It reflected a continued trend in Seattle over the last several years.
Across the country, the median household income was $68,703, a jump of 6.8% over 2018, according to the data.
Other cities frequently ranked as the most expensive across the country, including San Francisco, had median incomes even higher than that of Seattle. In San Francisco, the median income in the city according to the 2019 survey was $123,859.
Other cities frequently ranked as the most expensive across the country, including San Francisco, had median incomes even higher than that of Seattle. In San Francisco, the median income in the city according to the 2019 survey was $123,859.
Another important point to bring up, net vs gross. 50 years ago, most jobs had a pension, which means the employer took care of your retirement savings. You take home was significantly different. Beyond that, college was significantly cheaper and NOT a requirement to make it like it is now. Cars from 50 years ago could be taken apart and put back together with simple hand tools, by the owner, in their own garage or driveway and put back together again in a weekend.
i put some comment like this in your other assertions
This article is BS and comparing apples to oranges.
Are cars safer? Yes
Are they significantly more costly to maintain and operate? Yes Not true because they're thousands of times more reliable
Is insurance considerably more expensive (and you know, required) compared to 50 years ago? Yes accounting for inflation? doubtful
Do the price of cars roughly keep up with the median income from 50 years ago? Yes
Do people take home the a smaller portion of pay compared to 50 years ago? Yes again, doubtful, back then while more would have had company pensions, today they have 401k's with company match which is tax deferred, lowering their take home but saving for the future... and company pensions weren't always the greatest things because companies could go bankrupt.
Are cars safer? Yes
Are they significantly more costly to maintain and operate? Yes Not true because they're thousands of times more reliable
Is insurance considerably more expensive (and you know, required) compared to 50 years ago? Yes accounting for inflation? doubtful
Do the price of cars roughly keep up with the median income from 50 years ago? Yes
Do people take home the a smaller portion of pay compared to 50 years ago? Yes again, doubtful, back then while more would have had company pensions, today they have 401k's with company match which is tax deferred, lowering their take home but saving for the future... and company pensions weren't always the greatest things because companies could go bankrupt.
although i didn't know they still offer the fusion. 
thanks Amazon.
Lexus Fanatic
Joined: Nov 2011
Posts: 35,285
Likes: 310
From: ON/NY
The rate cars depreciate is so fast that cars are going to be the worst investment you will ever make. It boils down to how much disposable income you're willing to throw away for a vehicle to get you around for basic needs and transportation.
In the PANDEMIC era, the need for vehicles have increased (avoiding public transit, safer travel options) and decreased due to increased work from home options.
That said, a $1000/month car sitting on your driveway or in garage for less than 500 miles per month means your car cost has doubled or tripled for what you're getting out of it. They say the average pre-pandemic monthly miles was about 1k or 1.5k miles per month, or 12-15k yearly. What's the point in throwing away all this $$ plus insurance and gas when you're not using it.
Anything over $30k is wasting your $$ in a few short years. That $65k BMW, Audi or Range Rover now becomes valued at $30k in 3-4 short years just because of time, and you've just saved $30k! You will not recoup much gains on the car values with fewer miles on the car due to driving it less.
There are the buyers who can throw $$ around as disposable income. Good for them. It's not a sound practice for buyers who have their income sucked up by other distractions such as college tuition bills, mortgage, phone, cable/internet, and dining/eating out.
Cars have maintenance costs and most people do not have the resources to suck up a $1k premium or luxury car service bill every 10k miles. Maybe the better question is how much of a maintenance surprise can they afford? The latest I've heard is people are downsizing to the least number of cars they need during this pandemic. 3 or more cars are collectively a waste of $$ and depreciation. It puts today's cars very overpriced unless you're going to put some serious miles on it where it costs you less than $1 per mile to use the vehicle. Stupid buyers are there for the taking to buy new when they think of their purchase/lease in monthly expense terms... Got $10k income or more per month and want to throw away10% (or 20% or 25%) to cars that wont get much miles on it? Go ahead. Chances are you will not have it 2-3 years longer than the lease or loan is up and you're $40-50k+ poorer for it.
Those who really can afford the expensive cars are the ones who have close to no debt, built up a decent retirement, ready for something to enjoy in 'style' after working 30+ years (and hard $$ earned), and have capability to pay full cash on the vehicle. As an added perk, if you have a business permitting you to deduct car expenses per mile -- go for it. There is an 'expensive' car market to make you happy.
In the PANDEMIC era, the need for vehicles have increased (avoiding public transit, safer travel options) and decreased due to increased work from home options.
That said, a $1000/month car sitting on your driveway or in garage for less than 500 miles per month means your car cost has doubled or tripled for what you're getting out of it. They say the average pre-pandemic monthly miles was about 1k or 1.5k miles per month, or 12-15k yearly. What's the point in throwing away all this $$ plus insurance and gas when you're not using it.
Anything over $30k is wasting your $$ in a few short years. That $65k BMW, Audi or Range Rover now becomes valued at $30k in 3-4 short years just because of time, and you've just saved $30k! You will not recoup much gains on the car values with fewer miles on the car due to driving it less.
There are the buyers who can throw $$ around as disposable income. Good for them. It's not a sound practice for buyers who have their income sucked up by other distractions such as college tuition bills, mortgage, phone, cable/internet, and dining/eating out.
Cars have maintenance costs and most people do not have the resources to suck up a $1k premium or luxury car service bill every 10k miles. Maybe the better question is how much of a maintenance surprise can they afford? The latest I've heard is people are downsizing to the least number of cars they need during this pandemic. 3 or more cars are collectively a waste of $$ and depreciation. It puts today's cars very overpriced unless you're going to put some serious miles on it where it costs you less than $1 per mile to use the vehicle. Stupid buyers are there for the taking to buy new when they think of their purchase/lease in monthly expense terms... Got $10k income or more per month and want to throw away10% (or 20% or 25%) to cars that wont get much miles on it? Go ahead. Chances are you will not have it 2-3 years longer than the lease or loan is up and you're $40-50k+ poorer for it.
Those who really can afford the expensive cars are the ones who have close to no debt, built up a decent retirement, ready for something to enjoy in 'style' after working 30+ years (and hard $$ earned), and have capability to pay full cash on the vehicle. As an added perk, if you have a business permitting you to deduct car expenses per mile -- go for it. There is an 'expensive' car market to make you happy.
We don't look at how short we keep something as we pay cash for something and get it over with and we just hang on to them for the long haul.... But if people are spending too much on their wheels or think of their cars as an investment....wrong way for them to look at itI personally don't like used cars...as we like new, but I get the depreciation part however I am willing to accept it.
Instructor
Joined: Apr 2016
Posts: 794
Likes: 3
From: CA
Seattle median income is over $100k. According to this article, SF is $124k, but I can see if being lower if you include the entire Bay Area.
Source
Source
Lexus Champion
Joined: Nov 2013
Posts: 13,195
Likes: 1,844
From: WA
We have family in San Jose and my wife used to live in Menlo Park. Beautiful but expensive areas down there.
Instructor
Joined: Apr 2016
Posts: 794
Likes: 3
From: CA
Yeah it's definitely NOT cheap and NOT affordable unless you're pretty well off or bought in when things were relatively affordable. I wouldn't want to live anywhere else though, we were lucky to purchase a 4 bedroom home here for 250K years ago. We had it appraised recently at over 1.1 million. The market here is crazy and isn't slowing down.
Rookie
Joined: Sep 2013
Posts: 76
Likes: 15
From: GA
So, today, unlike back in the 1960s, if we aren't spending a large part of our income on a vehicle, we're spending it on rent or mortgage instead....or putting our kids through outrageously-priced colleges....or paying for the enormous costs of health-insurance.
You do not have to put your children, as you say 'through outrageously-priced colleges." You have plenty of choices where you can send them for higher education than the Ivy League schools and other tony small colleges. I teach at one of the lowest-priced colleges in the U.S. Almost 80 percent of the faculty at my college hold doctorate degrees. I do too, but I am not even paid the prevailing average American salary. I also have the right to a decent income and a good life. Wanting something for nothing is not going to work. Students are so sad, they want free books as well. Does not someone have to take her or his time and knowledge to write a book? Who pays for their labor? Just do not think you have the sole right to a six-figure income. I also do!
You do not have to put your children, as you say 'through outrageously-priced colleges." You have plenty of choices where you can send them for higher education than the Ivy League schools and other tony small colleges. I teach at one of the lowest-priced colleges in the U.S. Almost 80 percent of the faculty at my college hold doctorate degrees. I do too, but I am not even paid the prevailing average American salary. I also have the right to a decent income and a good life. Wanting something for nothing is not going to work. Students are so sad, they want free books as well. Does not someone have to take her or his time and knowledge to write a book? Who pays for their labor? Just do not think you have the sole right to a six-figure income. I also do!