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Since personal finance classes are not taught in our high schools, a staggering percentage of Americans are illiterate about all things financial; from buying a house to buying a car to building a credit rating and all the rest.
As Automotive News has reported, the average transaction price of all of the new cars which were sold last year came to a shade over $33K, which tells me that a ton of folks out there paid a lot of $$$ to buy a new car, and in all likelihood many of them were taken to the cleaners because they inexcusably didn't do their homework, which is unforgiveable given the bottomless pit on car pricing information available online at too many websites to count.
Lots of folks just don't know how to buy a car in the first place; when you walk into a new car showroom and the salesperson asks you 'how much do you want to spend for a new car?', lots of folks will give him the dumbest answer possible which will also bring music to his ears--'I can only afford XXXX per month!'
Toss in the fact that the average car on our roadways is a staggering 11+ years old, and it's easy to see that many folks need to replace their current vehicle.
Since personal finance classes are not taught in our high schools, a staggering percentage of Americans are illiterate about all things financial; from buying a house to buying a car to building a credit rating and all the rest.
As Automotive News has reported, the average transaction price of all of the new cars which were sold last year came to a shade over $33K, which tells me that a ton of folks out there paid a lot of $$$ to buy a new car, and in all likelihood many of them were taken to the cleaners because they inexcusably didn't do their homework, which is unforgiveable given the bottomless pit on car pricing information available online at too many websites to count.
Lots of folks just don't know how to buy a car in the first place; when you walk into a new car showroom and the salesperson asks you 'how much do you want to spend for a new car?', lots of folks will give him the dumbest answer possible which will also bring music to his ears--'I can only afford XXXX per month!'
Toss in the fact that the average car on our roadways is a staggering 11+ years old, and it's easy to see that many folks need to replace their current vehicle.
The price is what it is.. How didn't people 'do their homework'? dealers don't negotiate much off of sticker MSRP in this market (especially when you don't use their F&I department)..
Just to add, there is a small niche of people who just build a car to better than new condition. Especially the case with the older imports. It does add up if you do everything right, and its like 15k on average but it's new everything. Often times, I see these cars going for 8-9k on craigslist and they get bought. I don't know if they actually get that price or what, but you figure if you get at least half of what you paid overall, that's not too bad. Again, really small niche.
I have a friend who leases, and I see the benefit. He beats the crap out of it and is just gonna turn it in a couple years and get something newer for the same monthly payment. Also, in terms of not doing their homework, normally they just don't care and want to get it over with. Numbers scare the average consumer. Look at the tax companies around this time of year. LOADED.
I own an old beater car and I fix it. Always runs, just has little issues like light bulbs going out or something like that. In total I've only spent maybe 1200 in total including the car. Looks like crap but it gets me from point a to point b. I also prefer the feel and kind of a thrill of driving an old car. No extra protection like air bags or anything but much more road feedback. Just my preference.
People can buy what they want, but its preferable for the benefit of the whole to not do it beyond what you can afford, and especially not for the sake of "keeping up". I'm not certain on the argument that buying a new car is cheaper than fixing the one you have though. Maybe because no matter what I own, I'll end up modifying it somehow.
The price is what it is.. How didn't people 'do their homework'? dealers don't negotiate much off of sticker MSRP in this market (especially when you don't use their F&I department)..
Sure they do. I've never paid sticker for a car. First Jeep I bought, I got 3 grand off just for agreeing to take it for a test drive. Second one I got 3 grand off because I got up to walk out. The one I just bought I got almost 5 grand off, and that was on a 2014. There are plenty of people who have gotten more than that. It all depends on how bad the dealer needs that sale and how good you can negotiate.
The price is what it is.. How didn't people 'do their homework'? dealers don't negotiate much off of sticker MSRP in this market (especially when you don't use their F&I department)..
You couldn't be more wrong. It sounds like you got screwed. I purchased a brand new 2008 Ford with a MSRP of roughly $27,000 for $22,000. My starting negotiation price was $20,000. I walked out of the dealership twice and came back a week later and got the exact car I wanted for $5,000 under MSRP. I probably could have gotten it down even more had I walked out again, but I didn't want the aggravation. In the future, I will never buy a new car unless I can negotiate the price down at least $5-6000 below MSRP.
There is also a myth about first year depreciation and that buying a 1-2 year old used car with "low mileage" is a better deal than buying a new car. I have not found that to be the case. It may have been true prior to the '07 recession, but not since then. Used cars are rarely more than a few thousand less than a brand new version of the same car. You also are getting someone else's problem. You are better off paying an extra $3000 and getting a brand new car with no problems and a fresh factory warranty.
The terms to buy a new car are closing in on home mortgages. We now have as the norm, 72 month loans.
What happened was everyone had to have an SUV. How did people ever survive with a sedan? Now, you need 7 seats because little susi might need to go to soccor practice and imagine the parent's embarrassment if they couldn't also haul along 5 of her friends. Why the local social would talk about you for a week.
In the me me me I gotta have it now world, the car makers are only giving people what they want, not what they need.
When I was growing up modern day "SUV's" were the ubiquitous full size station wagons. Personally I always preferred the SUV's of the time. Full size broncos, blazers, J series based cherokees and suburbans. All the 2 door "sport" utes seemed to die off to more practical 4 door versions with a new smaller class joining in as well with the exception of the suburban. Those full size wagons disapeared as well, about the same time the full size 2 door SUV's were replaced by 4 door versions. (bronco to expedition, blazer to tahoe) Basically it seems that is what people want, a full size enclosed vehicle for families and haulin things. Those full size wagons really didn't disapear at all, they just became more truck based. Perhaps all the modern day quad cab pickup trucks is taken over the older full size family sedan as well. just seems a lot of people prefer a larger vehicle. Whats wrong with that?
Besides who is to tell me, or anybody, what I/we need? Nobody but me has that right. So again, what is wrong with a car manufacturer selling what people want?
As far as new vehicles, affordable ones are out there. It just seems that the "in thing" to do right now is to bash anyone who has a top line car or especially SUV. Of course you don't have to purchase it with all options. Some might automatically assume a used car is cheaper as well and not even price a new one. When I was shopping for a "new" vehicle in the past I was assuming the same thing and kept pricing out used dakotas because I wanted something economical. Turns out the MPG's on the full size Ram with small V8 was not much worse then the MPG's on a six cyl dakota so I started looking at Rams. I prefer larger vehicles anyway. Came to find out that with lower new car interest rates and rebates a new 1500 SLT was no different then a used one with 30,000 miles. So that was a no brainier for me. The Ram was only 1000 more then a dakota so once again, I chose the 1500.
Last edited by marlinfshr; 03-04-2013 at 12:55 PM..
to some cars are more than just transportation appliances.....
I also don't think that the article written ihere is grounded in reality. maybe it is just where I live and my demographic..... but it seems that every kid who has a full time job, has a new car. they could be living in their parents basement working at a barely minimum wage job, but have a brand new mustang GT. The people I work with, who are young professionals, almost always are leasing a new car every 3 years, and not cheap nissan versas, loaded up nissans, infinitis, acuras, BMWs etc. I find that everyone here seems to have a burning desire to drive an impressive or nice car.
I'm a car guy and find imyself a little jealous, I'm also somewhat cheap,have a nice house and have a wife and kid. I don't think its responsable for me at the moment, to lease a car spending 500 a month on a nice BMW 3 series or G37 or mustang GT. Meanwhile people who appreciate these things less, get them as status symbols...
You made the decision to get married and to be a parent. That has financial consequences. I on the other also knew about financial consequences of that so I will never do that. Hence, I will be able to afford nice cars at will. I hold my personal happiness above living a cookie cutter lifestyle. I'm sure many who drive these really nice things feel the same way.
When you see sales for $8k off MSRP for a new Explorer Limited, that ought to tell you how over-priced MSRP is.
Those ads are come on's.. If you read the fine print you have to 'qualify' as a Tier One customer and finance thru their dealership or F&I department financing no less than 90%.. If you don't qualify as a tier one customer (not everyone has a 720+ credit score) then you don't get the $8,000 off MSRP. And especially in this market (which favors the seller) you would be lucky to get $2,000 off MSRP many times that is an illusion if you trade in because you are just low balled with the trade in value
BTW, where are these ads anyway? shopping around in the Boston area, the most it seems that the dealer will take off any window sticker price (at least for used 2 or 3 years old) is the doc fee.
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