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That's some extreme depreciation. I'm coming up on 3 years for mine and it's depreciation from purchase price according to KBB trade in at very good is about 23%, 17% if you go private sale. So even if that's off by a factor of 10% that still is only 1/2 the depreciation you are factoring.
Every time I see these extreme depreciations I notice that most people tend to look at sticker price of new to trade in value. What percentage of people that buy cars actually pay sticker price? I've never paid anywhere near sticker for a car.
But I do agree that many people buy cars based on the payments they can afford instead of the overall price that they can afford.
Sorry...it was just an extreme example...lets say 30K into 18K in 4 years. Also it depends on the condition of the vehicle and possible fender benders recorded to insurance.
Most people don't have a large chunk of cash either (i) sitting around to spend on a car, or (ii) that they want to sink into a depreciating asset.
In other words, you are trying to use depreciation as a reason not to pay cash. I am simply pointing out that that makes no sense because you have the same depreciation whether you pay cash or not.
In other words, you are trying to use depreciation as a reason not to pay cash. I am simply pointing out that that makes no sense because you have the same depreciation whether you pay cash or not.
That's still not saying anything to the contrary, and that's really not the point I was trying to make. Depreciation is irrelevant to the point that using credit to purchase a vehicle isn't by default a bad decision.
I've never understood why people are so eager to blow so much of their hard-earned money on a car, of all things. A vehicle! A depreciating liability that eats even more money in the form of gas, maintenance, insurance, etc .It gets you from point to to point b. It serves no real purpose beyond that and yet throngs of people are pushing themselves to the brink for the damn things.
I've never understood why people are so eager to blow so much of their hard-earned money on a car, of all things. A vehicle! A depreciating liability that eats even more money in the form of gas, maintenance, insurance, etc .It gets you from point to to point b. It serves no real purpose beyond that and yet throngs of people are pushing themselves to the brink for the damn things.
I know, I don't understand why people are so eager to blow so much of their hard-earned money on fancy restaurants. It completely depreciates over night and food's only real purpose is to provide calories and nutrients to the human body, why pay more for it when you can just get it from the grocery store.
That's still not saying anything to the contrary, and that's really not the point I was trying to make. Depreciation is irrelevant to the point that using credit to purchase a vehicle isn't by default a bad decision.
I know, I don't understand why people are so eager to blow so much of their hard-earned money on fancy restaurants. It completely depreciates over night and food's only real purpose is to provide calories and nutrients to the human body, why pay more for it when you can just get it from the grocery store.
I've never understood why people are so eager to blow so much of their hard-earned money on a car, of all things. A vehicle! A depreciating liability that eats even more money in the form of gas, maintenance, insurance, etc .It gets you from point to to point b. It serves no real purpose beyond that and yet throngs of people are pushing themselves to the brink for the damn things.
Until the USA suddenly has a public transportation revolution, because they are necessary expenses. By my reckoning there are, at best, 10 cities in the USA where not having a car is possible - New York City, Chicago, Boston, Philadelphia, Washington D.C., Seattle, San Francisco. Maybe a couple smaller ones like Portland, Charlotte or Salt Lake... but you'd have to live close the lines.
Generally speaking you can't get around without a car unless you live in a "walkable" place, which is usually prohibitively expensive.
So you need a car that's reliable... and cars are complex machines with gas-powered engines that require maintenance and break down. If you go older and cheaper, it WILL be in the shop from time to time. I own a 1988 Chevy and a 1999 Pontiac. I should know. We also spend so much time commuting that a car is a lifestyle investment & "likability" of your car should be taken into account.
Yep, no public transport of consequence. Which kinda kills the argument of cheap cost of continental living, if a car chunks up that much of your household budget.
Of course we know that's hyperbole. There are options other than 40K SUVs and sedans. If we all drove 15K econoboxes, the aggregate cost of transportation in a Country without public mass transport wouldn't be an issue. BUT!....Americans are 50K/yr millionaires. They have to be. Why? Because they know they're paycheck-to-paycheck slaves, they know they have no cash, they know they have no income or job security. Why be a miser when you know you're already screwed? I'm not being flippant, this is exactly how my exwife behaved and why she divorced me as a non-compliant spousal unit within that expectation of consumption behavior.
Financing allows them to feel as though they are secure and affluent, even when they know they're going to a social security de facto indigent "retirement". That's really the jist of it. And it all stems from our economic policies and our hatred for labor as a social class; the masses simply accept it as a sunk cost of not having political power or literacy.
So you make a car, a house and a cellphone plan affordable enough to finance for the length of your natural life, and the frog will happily boil. I call it "have a good day slavery". None of these interest-related financial opportunity cost discussions is ever part of the perma-payment car loaner masses. You guys are outliers and your perspective as a demographic is irrelevant, by virtue of being here and posting with any modicum of displayed "financial choice/freedom" or literacy in the first place.
My only dog in the fight is the same as that for the cost of healthcare. If the unadjusted bill didn't come to half a million dollars for a 2 week stay at the clinic, I wouldn't need insurance to negotiate down in the first place. Ergo, if the meh cheapo 4-banger mass produced clone of every other car didn't cost 25K after fees taxes and title, such as the ho hum no-towing capacity Mazda 4-banger CX-5 I begrudgingly purchased last year, which I can't tell apart in a parking lot from a Kia or Acura or Ford, when I couldn't find a direct replacement for my 2000 Jeep cherokee at the same inflation adjusted price, then you wouldn't need car payments in the first place. Why do you think there's an uptick in sales of loading up cheap cars with options versus paying the same for a lesser loaded higher performing vehicle? Because cars are escapism in a society that cannot afford discretion after the house payment is done with. The vacuum cleaner that takes you to and from work is then forced to provide you with non-economic contentment in addition to transportation utility. Especially as your second highest household line item month to month for life. Sad, considering most people are NOT car hobbyists.
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