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I'd hope not. Most Americans don't have a college education (70%) and made a lot of poor decisions in their younger lives. Hell, 30% don't even graduate from High School.
I worked my ass off and can afford a new car every couple of years (don't have any vices such as smoking, drinking, hookers or blow).
no hookers??? how do you live?
i see people make these financial decisions with buying/leasing cars that they cant afford (according to my standards). i wonder, will they ever pay for their poor decisions? i guess ultimately the consequences are lack of retirement savings or large debt. i guess when you dont have kids to raise anymore, you can cut back and while you wouldnt be as comfortable as you could have been, you just survive on less. i see it with my wife's family, they live above their means but i kind of feel like after their kids are gone; they can still be fine even with all their bad decisions.
Plus insurance which in many places like NYC is not cheap. Also, car ownership rates are going up, not down.. I always wonder about this as well how people earning average salaries of say $50,000 - $80,000 a year (per person not household) can afford housing costs which are pushing $2,000 in many areas plus car payment (plus insurance).
Most people don't stash away a lot of savings. A lot of people have a roommate to help with housing costs.
We have always bought new cars and driven them until they started falling apart, mostly 12-14 years. My father always wanted new cars as he "didn't want to buy someone else's problems". Of course, that may have been true in the 50's and 60's and even later. Reliability has been a major concern for us. We have not have had a car payment since '99 as we have saved and payed cash for the cars. We have also bought Accords. I am now in the position to go to a BMW or MB dealer and write a check for a car but I see it as a bad way to spend money. I am currently driving my mother's '05 Cad which has 45K miles on it. I don't see any need to get rid of it.
They said on the radio the average car on the road right now is 11 years old. Many people probably do nto have a choice, their car is simply worn out and they have to buy something. Slightly used cars are barely cheaper than new, and many are more expensive, especially if you factor in financing. So if your 11 year old car dies, you can either buy another 11 year old car and hope it survives. Buy a 3 year old car for 19,000 or buy a new car for $22,000. A lot of people will just bu the new car.
You just described my situation exactly. We have two 11 year old cars (my now-wife and I both bought new cars in 2002 before we met). Between us, we haven't had a car payment in 8 years. Unfortunately one of the cars is getting to the point where it's becoming unreliable. We now have 2 small kids, and reliability has become a concern. I have no desire to spend money on another car, but ours are getting so worn out that replacing it is going to become a necessity soon.
I've been looking around for a few months now, and the cost of both new AND used cars is absurd. The price between new and lightly used cars isn't significant enough for me to buy a used one. If I am going to spend that much money, I'd rather just pay $3000 more on a new vehicle rather than buy a 3 year old car with 40k miles on it. I will be able to drive it longer, and more importantly, I'll know how it was driven and maintained.
Low interest rate and long loan term can contribute to more new car purchase.
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.
Next, everyone became a mobile audiophile and so nothing short of a 17 speaker sound system replete with iPhone connection is remotely considered standard. You deserve that don't you?
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. People make choices and when it comes to cars, so many define themselves by their car. You don't have 17" wheels, leather interior and actually need to look at a mirror instead of a camera display? What are you, poor?
You just described my situation exactly. We have two 11 year old cars (my now-wife and I both bought new cars in 2002 before we met). Between us, we haven't had a car payment in 8 years. Unfortunately one of the cars is getting to the point where it's becoming unreliable. We now have 2 small kids, and reliability has become a concern. I have no desire to spend money on another car, but ours are getting so worn out that replacing it is going to become a necessity soon.
I've been looking around for a few months now, and the cost of both new AND used cars is absurd. The price between new and lightly used cars isn't significant enough for me to buy a used one. If I am going to spend that much money, I'd rather just pay $3000 more on a new vehicle rather than buy a 3 year old car with 40k miles on it. I will be able to drive it longer, and more importantly, I'll know how it was driven and maintained.
Pretty much in the same boat, my wife drives an '02 model we bought new, now has 207k miles. I drive an '02 model I bought 5 years old, it now has 130k miles. Both are paid for.
Here's the thing though, my wife is not complaining about driving her vehicle and it's her choice to keep it as long as it will last. We both can't believe it's still running and agree that she might as well drive it until it dies.
For my car, I've learned so much about it and done a lot of preventative maintenance to where I feel very comfortable doing any repair work myself. I have a 2-post lift in my home garage and a decent set of tools, so can tackle most any job needed. Mechanically, it's in great shape and I still enjoy driving it every time I get behind the wheel.
We live very comfortably and could easily afford 2 new car payments, but we'd rather have the extra cash to put towards raising our 2 kids and doing things we want to. Some of us just prioritize things differently. Hopefully I won't be reporting back next week that my wife's car died!
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.
Next, everyone became a mobile audiophile and so nothing short of a 17 speaker sound system replete with iPhone connection is remotely considered standard. You deserve that don't you?
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. People make choices and when it comes to cars, so many define themselves by their car. You don't have 17" wheels, leather interior and actually need to look at a mirror instead of a camera display? What are you, poor?
I know, I only have a Honda Civic EX from 2008 with almost 50,000 miles on it (without the navigation package). It is almost paid off (only owe $1600 on it bought in 2010 took a 60 month loan at 11.75% APR due to poor credit at the time).. If I feel the need to drive something nicer, I can always rent a car for around $35 a day.. Of course it is downscale at a place like Trader Joes when everyone comes in Volvos & Priuses with the Thule bike rack on top...
...you don't have 17" wheels, leather interior and actually need to look at a mirror instead of a camera display? What are you, poor?
Funny story - A friend purchased a used mid 90's Saturn last year to save $$ on gas compared to his full bed F-150. The little Saturn cost about $2500, somewhat shaggy interior, falling headliner, consumes a bit of oil. But in the year he's owned the car it's paid for itself in fuel savings over his truck, and works as a solid daily commuter. When going out to lunch this friend offered to drive, upon hopping in the car another friend looked around, took it all in, and said "Wow, this car feels like poverty." It was a very truthful joke, but our buddy who owns the car couldn't have cared less...for what he needed, this car works great...this same friend has since picked up a Ford Mustang GT as his weekend car, and uses the "beater" as his daily driving four door ride.
Yes that is the average in the NYC metro area (not Manhattan, average neighborhoods in the 'other 4 boros' and a small two bedroom apartment in Nassau or Suffolk County on Long Island and maybe in parts of North Jersey) or in Eastern Massachusetts (in any decent town east of I 495) where not only will you have the car + insurance payment but another $110 - $250 a month in commuting costs by subway or Subway + LIRR/Metro North/ New Jersey Transit.
I read that the average mortgage payment (PITI with Prop taxes & insurance) is over $3,000 in most of these areas as well. I think most 'families (2 adults with 2 kids) in this area spend around $10,000 a month on just essential expenses..
Yes that is the average in the NYC metro area (not Manhattan, average neighborhoods in the 'other 4 boros' and a small two bedroom apartment in Nassau or Suffolk County on Long Island and maybe in parts of North Jersey) or in Eastern Massachusetts (in any decent town east of I 495) where not only will you have the car + insurance payment but another $110 - $250 a month in commuting costs by subway or Subway + LIRR/Metro North/ New Jersey Transit.
I read that the average mortgage payment (PITI with Prop taxes & insurance) is over $3,000 in most of these areas as well. I think most 'families (2 adults with 2 kids) in this area spend around $10,000 a month on just essential expenses..
That's correct that's what it cost to live in these locations. Housing is older and has always been way overpriced for what it is. I'm from Eastern Mass. Between car payments, insurance and the cost of commuter rail/ subway passes plus parking. Life is expensive. Just the cost of the Commuter Rail passes and the daily parking rate, can approach the cost of a car payment every month. I'm thankful I no longer have to deal with any of that commuter world, and high cost any more in life. .
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