Middle class income & new car prices

[BmacIL]

Everybody always thinks they have all the answers. If people want to have debt and spend thousands wether they can afford it or not that’s there business and If you wanna live like a hermit and nickel and dime everything go for it.

People are too busy worrying about other people’s shit that doesn’t pertain to them. Live your life and buy the shit that makes you happy cause you never know what tomorrow might bring.

We're in an economy together. It matters.

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[RaceHorseV8]

8 years is a mini mortgage! Then again some cars and trucks/SUVs cost as much as small houses. The college tuition 'scandal' is the real threat right now. Universities have been draining taxpayer money, sponsored by the government, out of the economy for years and throwing the debt on the backs of students who have no way to repay it. If the government doesn't stop giving these loans out it will be the next housing crash. Limit the amount available in loans and the universities will be forced to lower tuition or go the hell out of business. University professor, administrator and department head salaries are out of site and not sustainable. It has become a real racket IMO

 

[Balr14]

You know giving loans without the proper credit is how the last big recession started! I know this about buying a new cars, new cars have terrible depreciation, you can get a 3 or 4 year old car with CPO plan some what low mileage sometimes 40% off new car purchase price. so is it worth buying a new for the new car smell and keeping up with the Joneses?
.

That is an interesting parallel. Big banks were grouping questionable home loans with other better secured mortgages and selling them to investors as a package. So, many unqualified buyers were able to buy homes, driving up home prices to unsustainable levels; well beyond actual value. When the bubble burst, lots of banks and investors holding these mortgage packages, lost their shirts. The lesson is that there will always be investment bankers coming up with new ways for them to make more money and to hell with the fallout.

You can certainly see the similarities in the car market. But the reality is car prices are 10 times what they were in the 60s, and so is the cost of most everything else. So, car prices are not actually out of line. But, middle class income has not kept up. A car would have cost you $2500 - $4500 and a middle class income would have been $10,000 - $12,000 in the 60s.

 

[BmacIL]

Sounds like commie talk.

K. Keep dreaming that people's economic choices only affect themselves.

 

[Bikeman315]

K. Keep dreaming that people's economic choices only affect themselves.

I believe/hope that Mik was kidding. When people get in over their heads regardless of what the product is the trickle down effects everyone. Anybody here remember 2008 and your 201K's. Then it was the banks and the real estate industry. Now it could be the banks and the auto industry. I certainly hope not since we know how that ends.

 

[Stage_3]

There are dealerships/banks that do 8 year loans now?!?!?

 

[1MEAN18]

There are dealerships/banks that do 8 year loans now?!?!?

You are me last week when I first heard of it too. It's just one of those idiot things, that once you hear about it, you can't unlearn it.

 

[Stage_3]

You are me last week when I first heard of it too. It's just one of those idiot things, that once you hear about it, you can't unlearn it.

Yeah,....that's crazy.
It's like another recession waiting to happen, almost.
Scary stuff my friend. Scary stuff.

 

[1MEAN18]

Yes, which is why I put Liberty Prime in the mix. We're heading for a dystopic disaster, both environmental and economic. Eat, drink, and be merry, for tomorrow we die.

 

[Stage_3]

Live your life and buy the shit that makes you happy cause you never know what tomorrow might bring.

I will agree with that.

BUT!!!!,.....only "IF" you can afford it. I don't care how much interest you pay or anyone else pays on a loan that is long term. That's your/their business.
Only as long as they can afford it.

 

[Idaho2018GTPremium]

Some of you are not monetarily intelligent. For example, those that think/say: "If I can't write a check for a house, I can't afford it.". Flat out wrong. By saying that, you're implying that someone should rent and throw away money until they save up hundreds of thousands of dollars to write a check for a house. That's foolish. The best bet is to buy a house with a reasonable price that can be easily afforded within your monthly budget. Houses generally appreciate, and after time, you can sell later and move up into a better/nicer/bigger house. Over time, you will be able to get into a nicer house much sooner than if you were to wait to write a check for a house. My last house I bought for $325,000 and sold it 37 months later for $420,000. I couldn't have written a check for that $325,000 house, but obviously, it was a good decision to put down 20% and take a mortgage out. The appreciation more than paid for all of my payments, interest, and then some. I essentially was paid to live there for 3 years. If I had rented that entire time trying to save up money for a house, I'd be out tens of thousands of dollars of rent. Some of y'all have no idea what you're talking about.

Edited to say: I don't disagree with that sentiment regarding a car, however, sometimes it's not financially the best choice to write a check for a car.

 

[zackmd1]

Actually I think that would be true just about anywhere in the US. Cars are one thing, housing is another. There are a lot of people today that still cannot come up with the 20% down payment much less pay for the entire purchase.

The wife and I just purchased a house over the summer.... Both of us are about 2 years out of college and making a combined income of over $150k (Mechanical Engineer and Government Contractor). We were barely able to do 5% and cover closing costs on a $250k house (the low end of the market where we live for a decent house).... That is even with limiting a wedding/honeymoon to under 10k and each saving about 10-15% of our monthly income (not including retirement). Student loans (even with a full ride scholarship for 2 years and a shortened 3.5 year degree for her) was a significant factor in us not having enough saved. Our options were to either keep renting at over $1200 a month or take the hit on PMI at over $200 a month in addition to the regular mortgage. Prices for things like cars and hosing are simply to high while wages are not high enough and debt from college (my generation was told from K5 up that going to college was the ONLY way to be successful) is to high. Housing and student loan debt doesn't leave much room at all for a new car, especially vehicles over $30k when having to include gas (which is also rising in cost).

 

[Bikeman315]

Some of you are not monetarily intelligent.

Priceless!!!!!!! Best freckin' line of the day

 

[shogun32]

you can get a 3 or 4 year old car with CPO plan some what low mileage sometimes 40% off new car purchase price.

or you can buy a new, zero mile one for 20% off (now 35-40% off on F150s) too. If you're not cramming the 1st year depreciation down the dealer's gullet you need to keep shopping or wait till this time of year when they start to get desperate.

In by-gone days you are correct - a 3yr old car was available at a good price.

 

[shogun32]

Yeah man, college is racket that got sold to us by people nostalgic for a time that never was.

No, college became a racket once the loans for unqualified (low score) and any curricula became passe. Highschools also killed the mechanical arts in favor of pushing the college mill. Businesses got on the hamster wheel too, using a degree as a lazy eligibility criteria. To some extent because the people making the policies had a degree and you'd never hire someone of lesser stature to put ahead of yourself, and because HS education had degraded to badly that diploma meant little any more.

Non-discharge laws should have helped tamp down the demand side but I don't think it moved the needle. That's why there is all this call for 'forgiveness' of late. With unlimited funds colleges spent equally lavishly on nonsense degrees, admin staff out the ying-yang with eye-popping salaries, and dorms that would do 4 start hotels proud.

To get it back on track we need to summarily halt all state/fed college loans and make them dischargable. And we need to turn off the out of control invasion of foreign workers (H1B, L1B) who are exploited at the expense of native educated who can't find a job or can't afford to take the job. Not the least by all these supposedly progressive and caring 'tech' firms. Do you know what that degree cost the Czech or Indian or Chinese graduate? Next to nothing relative to US tuition costs.

The gov't massively distorted the housing market, the education market, the medical market, and also the auto market. More interference is not the answer.

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