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Another thing to remember is new vehicles are often financed by cash poor buyers who can't even come up with a decent down payment, while most used vehicles are bought with cash.
I highly doubt that that assertion is true. The 2017 figure for used vehicle sales was at 39.2 million.
I bought my schwin in 1970 so the 6o’s is close to what i had, but my point is everything cost more today than yesterday just like when i was growing up stuff cost more in the 70’s than the 60’s everyone one is complaining about vechicle prices saying they are to expensive, welcome to the real world everything cost more money. I don’t get people they ***** about car prices but have no problem going out and spending a $1,000 on a new iPhone every time a new version comes out. And we can’t blame the UAW on high vehicle prices can we now. Because all new vehicles are way to expensive and the Toyota and Nissan and Honda vehicle’s are made by non UAW members so it can’t be because of higher labor cost can it.
Of course, things cost more in absolute dollars. The point, again, is that when you adjust for inflation, purchasing power remains much the same. Here's a really good article about it with a couple of pertinent links:
"We also compared the difference in price each year to see how much it went up or down. Turns out, though we enjoy a lot more bells and whistles today, the price of your average new car has remained fairly consistent. Car prices in the U.S. reached a peak in 1999, the same year the average family income peaked at $57,000, according to the Federal Reserve. National GDP growth also hit a 25-year apex in 1999, reaching a whopping 4.79 percent. As GDP growth declined in following years, average car prices followed suit.
These summary visualizations illustrate two visible trends between the absolute and inflation-adjusted costs of a car since 1967. Though the absolute price of a car has steadily risen due to inflation, the inflation-adjusted price has remained relatively stable. This means car buying over time has likely had a similar impact on American budgets, regardless of the year of purchase. In other good news for the American car buyer, the cost of the average new car in 2016 is the lowest it has been since 1983."
Are new cars too expensive? They drop in value as soon as you drive it off the lot. What do you think?
As they've always done. This isn't something new.
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Used cars are also listed at inflated prices on the lot. Car dealerships truly are one of the worst businesses in society for the consumer.
Sigh... been burned a few times? It's not cheap to run a car dealership.
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The only solution is to get a lightly used car you want, in good shape, that is reliable, with a warranty, and one you can pay off in no more than 3-4 years. Then keep it until the wheels fall off. This new car nonsense is out of control.
Luxury new cars are probably way too expensive since a $50k German always go for around $10k after 10 years. Heavy depreciation for well built cars if you can service it yourself.
There are Toyotas that are new for $30k and after 10 years it is still worth 1/2 MSRP. Amazing while VWs alike are only worth 1/4 of MSRP.
So Mercedes trying out the $1k/month leasing deal that you can borrow and return certain models is probably better than buying their heavy depreciation cars.
I highly doubt that that assertion is true. The 2017 figure for used vehicle sales was at 39.2 million.
I'm not going to subscribe the the wsj so I haven't read the article. What does $39.2m represent? since i'm sure it doesn't include private party sales I'm not sure it means anything...
It's true that some people finance used cars, my point is that it's very rare for new vehicle buyers to pay cash but very common for used car buyers to pay cash. The assumption that new car buyers can afford more than used car buyers made by an earlier poster is a very weak one. Most new car buyers just look at monthly payments. In most cases buying a new vehicle is a terrible financial mistake due to the depreciation losses. The only thing it says to me about their financial wealth is they can afford that $400/mo payment, nothing else.
I don't think it's fair to compare the prices of todays cars with cars from yesteryear because they are better in every way by miles. Cars decades ago were incredibly simple and didn't last very long compared to modern cars, you get a ton more for your money than you used to. After you adjust for inflation, value needs to be added for a ton of research and engineering that went into it. That said, I would still never be willing to suffer the first few years of a vehicle's depreciation loss simply because I could afford the monthly payment. I'm glad there are those who are willing though, so people like me can take them off their hands when they are ready to bend over for their next new car purchase.
When I see many new cars at dealerships, just about every mid size family car starts at $27k for basic and typically priced around $33k and can be topped at $42k loaded.
Then Minivans now starts around $28k and usually $35k for mid-range then $44k for the loaded models.
What's even scary these days is that trucks start at $33k and a midrange one is around $39k and many different ways to get one up to the $50ks and even some in the $60k range.
A $20k car these days is a hatch back economy car.
Yes, new car prices have went through the roof, and salaries have not increased at the same rate. And I disagree with an earlier post saying that if one's salary hasn't increased at the same or better rate, then you're in the wrong career. We can't all be executives and senior sales people. There are just some areas that don't pay six figures a year, and even yet, people don't always get into certain careers solely based on the pay.
Having said all that, I believe anything over $30k is expensive. Even if I was making six figures a year, I would still think it was expensive.
But most people do not have cash. They will continue to buy using the monthly payment as a yard stick for what can be afforded. And the easiest way to fall into that trap is to buy a new car and use your old one as a down payment.
People are not clever when it comes to personal finances. I think the automotive industry is safe.
But most people do not have cash. They will continue to buy using the monthly payment as a yard stick for what can be afforded. And the easiest way to fall into that trap is to buy a new car and use your old one as a down payment.
People are not clever when it comes to personal finances. I think the automotive industry is safe.
Well said.
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Miata starts at 25,300. Top of the line with the extra $200 for that sexy red paint: $32,760. 
