New Cars Are Too Expensive For The Typical Family, Says Study (gulfnews.com)

An anonymous reader quotes a report from GulfNews: A new analysis from Bankrate.com found that a median-income household in the U.S. could not afford the average price of a new vehicle in any of the 50 largest cities in the country, though cars are more affordable in some cities than others. The average price of a new car or light truck in 2016 is about $34,000, according to Kelley Blue Book. That's in part because new cars are loaded with helpful but expensive safety features like collision-avoidance systems. Bankrate calculated an "affordable" purchase price for major cities, using median incomes from U.S. census data, and factoring in costs for sales taxes and insurance. In San Jose, California -- the heart of Silicon Valley -- the median income is about $84,000, and an "affordable" new car purchase price is about $33,000 -- close to, but still below, the average new car price. In lower-income cities, however, affordable purchase prices for a typical family are far below the average cost of a new car. In Hartford, Connecticut, where the median income is about $29,000, an affordable purchase price is about $8,000 -- about a quarter of the average new-car price. Experian Automotive said the number of new cars bought with financing rose to more than 86 percent (Source: may be paywalled) in the first quarter of this year. The average loan amount topped $30,000, with the average term for a new-car loan in the 68-month range -- some stretch as long as seven years.

Comments

median vs average

[phantomfive]

They are using median and average really loosely there, and comparing them in ways that don't make sense. It's a good advertisement for the website owner, though.

Re:median vs average

[Anonymous Coward]

You should never spend more than 20% of you annual income on a car. Median income in the US is ~$50,000 per year. So half the US population can only afford a are of $10,000. Good luck finding a new car at that price.

Re:median vs average

[sunking2]

That's why there are these magical things called loans which spread the cost over 3-6 years.

Re:median vs average

[Anonymous Coward]

That's why there are these magical things called loans which spread the cost over 3-6 years.

That's including the loan dumbass. The MSRP of your car should never exceed 20% of your yearly income.

Re:median vs average

[fermion]

I noticed they were talking about median income but a more vague average price of car, which makes no sense, We know that half the families makes more than this money, which means that half the families have this much to spend. On the other hand, it makes not sense to say the average price of a car as such a thing is not going to the limit the ability of a person to buy a car.

This is not the case of median home prices, which does represent the homes sold in an area, and a high median home price will result in families not being able to afford a home in that area if the median price. There is seldom an incentive to build cheaper housing outside of government programs. On the other hand, a person with a low budget can get a Nissan Versa.

Tl;dr there are a lot of cars under $20,000, so the fact that the average person can't afford the average car is irrelevant. The average person can afford a car.

Re:median vs average

[phantomfive]

You should never spend more than 20% of you annual income on a car.

Where did that rule come from?

Re:median vs average

[rockout]

Why does everyone have to find a new car? I could easily afford a new car, but my last 3 purchases have all been for cars that are 2-4 years old. You save thousands of dollars that way, and you still have a very good car that will last you for years (provided you've done your research).

As soon as I saw the headline I thought "since when does the typical family buy a new car?" Upper middle class families can do that, but smarter upper middle class people aren't obsessed with being the first owner of a car, since you have to pay a huge premium for that privilege.

Re:median vs average

[bloodhawk]

what utter Bullshit. I earned just on 200k a year, that would only let me afford a slightly above average car while most people could not afford anything until they are earning in excess of 100k a year. Your numbers are complete garbage, The cost of a car is averaged over the expected lifetime.

Re:median vs average

[Anonymous Coward]

That's why there are these magical things called loans

And there are magical things called second-hand cars too, which can reduce the cost.

Re:median vs average

[phantomfive]

Tl;dr there are a lot of cars under $20,000, so the fact that the average person can't afford the average car is irrelevant. The average person can afford a car.

And that's not even taking into account used cars, which I consider to be an excellent option, even though I can afford something more.

Re:median vs average

[BitterOak]

You should never spend more than 20% of you annual income on a car. Median income in the US is ~$50,000 per year. So half the US population can only afford a are of $10,000. Good luck finding a new car at that price.

Where did you get the 20% figure? I typically spend about half my annual income on a new car. I start saving for my next car shortly after I buy one.

Re: median vs average

[ArmoredDragon]

Yeah, and a lot more people should probably go that route of they can't afford a car. My income is ~80k/yr and I've never owned a new car in my life. The newest car I've ever had is a 2013 Camry that I bought in 2015 for less than half of its msrp, and I just paid cash for it. In fact I've never had to borrow money to buy a car, even in the days when my income was shit.

Re:median vs average

[fizzup]

84% of statistics are made up; however, GP is not 100% wrong, just wrong about what cost should not exceed 20% of your income.

According to AAA, an organization more reputable than Bankrate.com, the cost to own and drive a vehicle in the USA today is $8,558 per year. That's a number with a lot of precision but without a lot of accuracy. They have an article up on the web that talks through their assumptions and calculations, though. Fun fact: they note that the cost of owning and driving a car has fallen to a six-year low, so TFA's author can go peddle their papers someplace else.

Back to GP! 5 x $8,558 is $42,790, which is not so far off what actual people actually working actually make. If you're making less you should consider a small sedan, which AAA estimates costs only $6,579 annually. You can do a little better if you buy a good used car. You can't do much better, though, and there is an element of luck around whether you buy a car from a careful owner or a doofus.

Re:median vs average

[Deadstick]

Why does everyone have to find a new car?

Because if you're not an automotive engineer, a new car gives you a fighting chance not to be fucked.

Re:median vs average

[phantomfive]

Fun fact: they note that the cost of owning and driving a car has fallen to a six-year low, so TFA's author can go peddle their papers someplace else.

That's worth mentioning again. It's hard to find good statistics about inequality.

Re:median vs average

[mysidia]

It's bullshit. You should decide what is important to you and budget your annual income.

Travel expenses should be one of the slices.

You can buy a $50k car and still keep your annual Travel expenses a smaller % of your annual income by loaning out the purchase money. Then per year you include the Loan servicing costs Plus Amount of Principle that you will pay during that year.

You just need to make sure your car will last at least as long as the loan term. And those amounts stay below your desired percentage, even after adding Gas, Insurance, and Service/Repair costs.

Re:median vs average

[psmoot]

I had a very different experience. I went shopping for used cars for my daughter and to replace my old car. I found used cars hold their value much, much better than they used to. 2-4 years in, they were only selling for a 20% discount under prices for new cars. It seems the days of a car losing half its value when it rolls over the dealer curb are over.

Re:median vs average

[GameboyRMH]

Came here to say this. The mean price is driven up by pickup trucks (the prices are skyrocketing on those due to the financing available for them, something like what happened to student loans) and possibly even 6/7-digit supercars. A regular midsize sedan costs somewhere in the ballpark of $18k~$25k, maybe a little more for a hybrid or EV. Surely well under $30k.

Re: median vs average

[ATMAvatar]

I have done similar, but with a twist: I have bought used cars with cash from my parents when they wanted to get something newer. I know the condition/history of the car, I get a good deal, and my state waives sales tax when transferring the property to another family member if you fill out the right forms.

Added bonus: since I primarily bike commute to work, I get another 5-10 years out of the car.

Re:median vs average

[Anonymous Coward]

It seems the days of a car losing half its value when it rolls over the dealer curb are over.

I had also noticed this in my own research the last time I was in the market for a car. I have a couple of theories that dovetail well with the premise of TFA:

First, as mentioned in TFA, the average quality level of most cars has been increasing. Even mid-market and entry level cars come with all sorts of safety options, better engineering and higher quality assemblies. The days of dirt cheap new cars, ala the "Barbecue that Seats Four" (aka the Ford Pinto) are definitely behind us now.

Second, cars last longer these days and Americans who do choose to own cars tend to drive them for longer periods of time before replacing them, partly because they can and partly because cars are much more costly to replace. When a new car could be had for well less than 10k back in the 1960s, 1970s and even into the 1980s in some cases it made more sense to trade up every 5 years or so. Now, as cars have become more complex, sophisticated and expensive that's not as true as it used to be.

Third, most of the quality well-maintained used cars tend to end up in the dealer certified "pre-owned" programs where people can purchase them from the dealer with warranty coverage similar to what they would be offered on a comparable new car purchase. This has reduced the number of good used cars for sale by individual private owners and made the transaction less attractive in any case because private owners don't offer warranties. This has also allowed dealers to capture a greater share of the best part of the used market.

Fourth, because of points 1-3 and the relatively recent "Cash 4 Clunkers", where many old but serviceable used vehicles that might have been attractive to the lower middle class and working poor were taken off the road by the government and crushed, the used car market outside of the dealer certified "pre-owned", which offers much more modest discounts over new prices, has been increasingly filled with shadiness and problem vehicles that have been abused rather than maintained. Unless you like to spend your weekends at AutoZone and do your own work, buying a car like that is going to be a bad move for most people.

These are just my own opinions, but I think that I cannot be the only one to see these trends. In the long run, especially with ride sharing services like Uber and the declining interest in car ownership among generation Y, as many of them choose urban living situations where cars are either less necessary or even problematic, we may see the new car and car ownership in general become more of a luxury item and less of an everyman purchase.

Re:median vs average

[CanadianMacFan]

The rule of thumb I heard was that your vehicle expenses (loan/lease, insurance, fuel, maintenance, etc.) shouldn't be more than 20% of your total expenses. It doesn't have to do with the value of the car. Similarly housing costs (rent/mortgage) aren't supposed to more than 30% or 35%. That doesn't mean you can only buy a house of $15,000.

Re:median vs average

[lgw]

The single biggest factor affecting savings at retirement is how often you've replaced your car in your lifetime. Unfortunately, holding on to a new car for more than 6 years stops helping much (annual costs become dominated by other factors). Going cheaper helps a lot.

20% sounds very low to me, though. I've tried to keep it to 25-30%, and that's worked well for me. Spending 40%+ of a year's pay on a car is just a bad life strategy.

Re:median vs average

[lgw]

That's nuts. Borrowing money to buy a car? You're already doing it wrong (unless it's a work vehicle, or your first reliable car after getting your first real job).

Spending $50k on a car when you need to borrow money to buy it is insane. And travel expenses as a significant part of your budget before retirement? That's a plan for a retirement involving cat food.

Re:median vs average

[HiThere]

Unfortunately, holding on to a new car for more than 6 years stops helping much (annual costs become dominated by other factors).
???

I generally hold onto a car over 10 years, and it's never cost me that much extra. You *do* need to maintain it as you go along, and it depends on how much you drive, but my current car is from the 1990's and isn't yet in condition where it needs to be replaces, though it's getting there.

Re:median vs average

[HiThere]

As a statistician (well, once upon a time) let me say that the median is one of three averages. The averages are the median, the mean, and the mode. Each is an average with certain characteristics and areas of utility. If you've got a normal bell curve they are the same number.

For most purposes involving income the useful averages are the median or the mode. Not the mean, which is unduly influenced by extreme values. (I didn't read the article, so I'm only commenting on your response.)

Re:median vs average

[number11]

I typically spend about half my annual income on a new car

Half on your car, 30% on housing, that doesn't leave much. Unless you're sleeping in your car or living in your parents' basement.

Re:median vs average

[lgw]

If you look at lifetime depreciation + lifetime maintenance, you do better the longer you keep a car, but with diminishing returns. After about 6 years, the benefit per extra year is pretty small. For the same cost, getting a slightly nicer car that you keep for 10 years, vs a slightly less nice car that you keep for 6? Works out to about the same "average level of niceness".

Of course, if you put very little wear on your car, keeping it longer can make sense (but then, a car with very little wear has significant resale value after 6 years).

Re: median vs average

[JoeMerchant]

I bought a new car in 1991 for $14K when my (solo) household income was $30K.

We bought a new truck in 1999 for $21K when our combined household income was ~$100K

In 2007 we picked up a used Sebring Convertible for $3K - drove it until 2010 when we traded it in for virtually nothing.

In 2010 we picked up a year old Dodge Caliber for $12,500 - drove it until 2016.

In 2016 we sold the Caliber for $1K and bought a 2002 Mercedes S430 with 44,000 miles for $12K.

Still have the 1991 and 1999 new vehicles, with 130Kish miles one each, still in good condition - but we drive the 430 most of the time, great car, sold for $80K new, who would pay that? For that matter, who would pay 3x as much for a new piece of junk that will wear out just as fast?

Re:median vs average

[beelsebob]

It's also just a flawed place to use the average of any kind. If you want to assert that people can't afford a new car, you need to compare the cost of low end new cars to the median income. Including $80,000 Mercedes' and $60,000 trucks in the calculation makes no sense at all. No one on the median income cares about $80,000 Mercedes', they care about $10,000 Kias.

Re:median vs average

[JoeMerchant]

Some used cars devalue, some don't. 1 year and 20K miles after I bought my Mazda Miata, it was worth more than when I bought it new. Similarly, we were looking at Hyundai Sonatas/Elantras recently and used with 20K miles, they are holding 95% of their new price. Other models drop like a stone - it depends.

Re:median vs average

[beelsebob]

Right, if you need to borrow to buy a $50k car, you should instead just be spending $15k on a perfectly serviceable car, and not taking any loans at all.

Re:median vs average

[bloodhawk]

I buy new and depreciate my car, generally I keep a car on average for 6-7 years after which time maintenance costs start to cut in to the point where you should have repurchased, I wish I had sold my current car at 6 years (hit that last year), would have been far better off as have spent $3000 alone in repairs this year. I aim for around 5% income per annum on my car (before tax deductions).

Re:median vs average

[sunking2]

Give me a break, most modern cars will go 10 years with little more than oil changes.

Re:median vs average

[beelsebob]

Buying a new car is actually usually pretty good value if you buy low end. Buying a $15k car brand new saves you huge amounts in...
1) 3 years of the thing "just working" with no issues (and warranty if it doesn't)
2) 3 years longer before the car starts developing serious issues that cost thousands to fix.

Sure, you spend an extra $6k ish for those first 3 years, but that can be well worth it. 3 years of paying for high maintenance costs at the end of a cars life can easily cost you that much.

Re:median vs average

[lgw]

That's far too much. I suspect you've been suckered into buying status instead of transport. You're at least trying to be sane, if you're not borrowing money for that, but 50% is too much.

Re:median vs average

[beelsebob]

While I agree that spending half your annual income on a new car is pretty insane, you're misinterpreting the parent. He's saying that he spends 50% of his annual income every $TIME_UNTIL_CAR_REPLACEMENT, not 50% of his annual income per year. He presumably does not replace his car every year.

Re:median vs average

[lgw]

Further, if you can make the payments on that $50k car, then save that money instead, and soon enough you won't need a loan.

Re:median vs average

[RightwingNutjob]

Um, no. Unless your car is a complete shitbox to start with, or you drive ~100 miles per day every day, keeping it for 10-15 years will not cost you more than replacing it every six years. Depreciation is an accounting trick that only really works in aggregate. If your car is still running in six years time, keep it. You will save the cost of a new car. The fact that yours is worth zero on paper means absolutely nothing if it still works the way it's supposed to.

I have an 07 Chevy. The biggest expense I've had on my car was when it got hit by a forklift while parked. That was 3k in body work covered by insurance. The next biggest expense was about 700 to replace the brake disks because I let the brake pads wear down to the metal. Oops; everyone has to learn somehow to replace their brake pads regularly

Other than that, new brake pads and fuel injector cleaning every two years (200 a pop). New spark plugs every four years. New tires every ~3-4 years depending on mileage (again, 300-400 depending on tires). New battery and timing belt at six or seven years.(500-600, I don't recall). Oil changes every three months ($30). All of those are recurring costs no matter whether your car just came off the line or is ten years old.

And lastly it goes without saying that even if you do make mid six figures, a 25k car gets you to work on time just as well as a 50k car. There's not even that much difference in the bells and whistles these days.

Re:median vs average

[RightwingNutjob]

What kind of car and what do you use it for? And what's breaking, essential stuff or bells and whistles?

Re:median vs average

[digitig]

Here in the UK, all respectable dealerships check vehicles over thoroughly and offer a warranty (if they do end up with a clunker on their hands, they send it off to auction rather than risk getting a bad name). Buying new is largely a status (or company fleet) thing; nearly-new second hand is the smart move.

Re:median vs average

[RightwingNutjob]

Domestic cars are fine. Except for Chryslers, that is. My 07 Chevy (built in Kansas City) has 130k+ miles on it and runs fine. Maintenance costs (other than oil changes and tires) average out more than a few hundred per year. Only one thing broken so far (turn signal lever, at the 120k mark, $60 parts, $100 labor because I'm lazy).

Re:median vs average

[lgw]

Which is why most modern cars keep losing resale value between 6 and 10 years. If you keep a car for just a few years, the "off the lot" depreciation is the dominant cost, but as time goes on, insurance, maintenance (which does go up over time), gas, parking, tolls, etc, are the majority of your expenses, and gains in "average depreciation per year" are no longer the primary concern.

Re:median vs average

[lgw]

Do the math.

Resale value varies a lot by car and by condition, but to have some numbers, lets look at a car that is worth 1/3rd it's upfront cost after 6 years, vs 10% after 10 years. The difference in depreciation is then 11% vs 9%, per year. If that were the only cost of car ownership, that would be significant - you could get a 20% better car by keeping it for 10 years instead of 6.

But other costs matter too. Maintenance (which does get worse over time), insurance, gas, parking, tolls, etc. So you're maybe looking at being able to get a 10% more expensive car at replacement time by keeping the car for 10 years rather than 6. That's not even a step up to the next model for most manufacturers.

So, for the same money, do you get better value by getting a $30k car every 6 years, or a $33k car every 10 years? Seems very subjective to me: if you value "newness", the former is a better deal, if you don't the latter, but it's a small enough difference either way.

Re:median vs average

[Grishnakh]

$700 to replace brake discs (not "disks" - those are things you use in a computer)? I could have done that for $50 with parts from Autozone.

Fuel injector cleaning is a total scam and not needed. Brake pads for an '07 Chevy (say, an Impala) cost about $20 online. Spark plugs $10-15. Tires are the big expense.

If you're actually interested in keeping your car expenses low, you'll figure out how to do these things on your own. Otherwise, you might as well just lease a car and get a new one every 2 years.

Re:median vs average

[Grishnakh]

Here in the US, good luck getting a used car dealer to honor their "warranty".

You can get a "certified pre-owned" car from a high-end dealership, for one of the luxury brands, where you will get a good car with a strong warranty, but now you're looking at a whole lot of money for a used car; you might as well just buy a new one from one of the mainstream Japanese brands.

Re:median vs average

[Grishnakh]

That's exactly what I found too when we got another car for my wife. To get a price around $5k on a decent car (a good Japanese brand, not a shitty American brand), I had to look at cars with over 100k miles, plus I had to pay a bunch of money for Carfax. Also, we ended up spending a ton of time searching and running into a bunch of dead ends and one really really horrible Hyundai dealership.

When I needed another car and didn't have 3 months to hunt around for a used car, I went ahead and got a new one. Buying a new car (not a Hyundai!) was a totally experience. Also, you can get far better loan terms on new cars, frequently at or close to 0%.

Personally, my formula is to buy a good Japanese car new, maintain it really well, and keep it a long time. There's just too much of a chance of problems with new cars, it takes too long to find a good one, and there's not enough of a discount to make it worth it. The cars that usually have a big discount are ones that suck, like Chevys.

Re: median vs average

[hackwrench]

Remind me never to DuckDuckGo... How does that Star Wars quote about wretched hive of villainy and scum go again? None of the top results gave that answer to the question, the first result was Australian but had a link to an American site page behind a paywall and the other results read like ad copy.

Re:median vs average

[russotto]

It might be a good thing that cars are so expensive, as it gets "drive until you qualify" when choosing houses, and moves people into the cities for more efficient management.

That's some awful revealing wording there, Benito.

Re:median vs average

[careysub]

Do the math.

Resale value varies a lot by car and by condition, but to have some numbers, lets look at a car that is worth 1/3rd it's upfront cost after 6 years, vs 10% after 10 years. The difference in depreciation is then 11% vs 9%, per year. If that were the only cost of car ownership, that would be significant - you could get a 20% better car by keeping it for 10 years instead of 6.

But other costs matter too. Maintenance (which does get worse over time), insurance, gas, parking, tolls, etc. So you're maybe looking at being able to get a 10% more expensive car at replacement time by keeping the car for 10 years rather than 6. That's not even a step up to the next model for most manufacturers.

So, for the same money, do you get better value by getting a $30k car every 6 years, or a $33k car every 10 years? Seems very subjective to me: if you value "newness", the former is a better deal, if you don't the latter, but it's a small enough difference either way.

What is a "20% better car"? Is there an objective absolute "car goodness" measurement scale I never heard of?

You seem so deeply embedded in the "car resale and buy new" paradigm that you cannot see that there is an entirely different way to manage you car needs. Buy a car and keep it on the road until such time that the repair costs are no longer economical when prorated over the additional mileage gained, or ti simply becomes too unreliable. I keep my car costs low by buying used (mostly, sometimes new) and then never selling the vehicle while it still runs, subject to the repair cost and reliability criteria just mentioned. "Resale value" is a piece of paper to me, I never resell until end of life.

But you are the source of the good deals on the used car market. Keep it up. I may buy your depreciated but perfectly serviceable car.

If you value "newness" you are absolutely going to spend big additional bucks over the years to satisfy this predilection. If you don't the difference is "not small either way" it is huge.

As you say, do the (real) math.

Re:median vs average

[amiga3D]

His pads hit metal so the rotors were probably impossible to refurbish. Those can cost quite a bit for 4 of them assuming that all of them were damaged. More likely he got ripped off and only 1 or at most 2 of them were bad. Depending on the car those are about 30 to 100 dollars per wheel. Brake pads might be 50 bucks per brake pair for OEM style pads. That's a lot more than 50 bucks in parts. Still 700 sounds really excessive, he probably took it to his dealer and you know those guys are going to fuck you. I've installed plugs on my Grand Marquis and it's a bitch on it. I can't conceive of doing it on my daughters Nissan. Sure, they're a couple of dollars a piece for the plugs but 130 dollars per hour of labor and that gets expensive too. If you can't work on your own car then the simplest maintenance will cost hundreds of dollars. My dad taught me because we couldn't afford to pay anyone else to do it and we had cars that were almost always 20 to 30 years old and required a lot of work. I remember my dad rebuilding a 57 buick dyanflow transmission on a table in our basement. That was a shitty transmission, he called it a dynaslush. Still he got the car for 100 dollars, towed it home and 3 days later he was driving it to work for the next 7 years before it threw a rod and went to the crusher.

Re:median vs average

[amiga3D]

Probably stuff like the starter, alternator, power steering pump, those kinds of bullshit items designed to break after 5 to 7 years of standard use.

Re: median vs average

[amiga3D]

I've bought two new cars in my life and both times I paid out the ass compared to the used cars I've bought. I bought a 2001 Grand Marquis in 2005 with only 28,000 miles on it for 11,000 dollars and I'm still driving it now with 186,000 miles on it. I've had to fix a few things but it's a joy to drive, super comfortable and built like a tank. Cars off lease are almost always great buys. Well maintained with low miles and good prices. I will never buy another new car.

Re:median vs average

[amiga3D]

If you don't have any mechanical ability you should buy a new car. It's terribly expensive compared to used but if you have to pay a mechanic unless you personally know a good one you're going to pay out the ass for repairs. To change the heater core in my Grand Marquis it cost me just over 50 bucks for the part and a couple gallons of anti-freeze and most of a Saturday in my garage. If I had to pay for it I'd have had to pay 500 dollars and that's to a guy I know and trust. At the local Ford dealer I'd have gotten shafted to the tune of almost 800 dollars. Labor is expensive and tearing the dash out of a car down to the firewall isn't fun but I'm not paying out that kind of money.

Re:median vs average

[narcc]

This. Basic maintenance like that isn't difficult. It's well-worth the time and effort to learn to do those things yourself.

If that dude really paid $700 to replace a set of rotors, he needs to learn how to do basic maintenance himself. Even if he's not interested in doing the work, it'll help him spot dishonest scumbags posing as mechanics.

To the parent: Your mechanic sounds like a dishonest scumbag. Find someone else. You're getting hosed.

Re:median vs average

[RightwingNutjob]

I don't feel like doing my own maintenance (lazy) and more importantly rent and don't have a place to do it if I wanted to. Whatever. I like my mechanic. He can make a few hundred off of me every couple of years.

Fuel injector cleaning isn't a scam. Reason I do it every two years I had an MIL alarm from clogged fuel injectors at the 2.5 year mark when the car was new. I've been putting the same gas into it since, so I get it cleaned every two years.

Re:median vs average

[careysub]

As a statistician (well, once upon a time) let me say that the median is one of three averages. The averages are the median, the mean, and the mode. Each is an average with certain characteristics and areas of utility. If you've got a normal bell curve they are the same number.

For most purposes involving income the useful averages are the median or the mode. Not the mean, which is unduly influenced by extreme values. (I didn't read the article, so I'm only commenting on your response.)

Thanks, I have been peeved about this for a long time. The mean is the easiest to calculate (you only need to retain the total and the number of items), and for many purposes is the most useful (for budgeting for example). And so it is not surprising that in common, non-technical discourse "average" and "mean" are treated as identical.

But then we get the would-be pedants who introduce more technical and precise terms ("median" most often, "mode" is fairly uncommon) but continue to use the average=mean imprecise common terminology.

Again, not addressing the article.

Re:median vs average

[amiga3D]

Man a lot of people don't even know how to change an oil filter. If anything goes wrong once it's out of warranty they're at the mercy of a mechanic. It's like people having to take their computer to best buy because it wont boot, most end up just buying a new one when all they needed was a new hard drive.

Re:median vs average

[RightwingNutjob]

It wasn't a dealer, but it was all four. I let it go for a whole lot longer than I should have. I may be off on the 700 figure, or I may have had him do something else on top of it while he had the car, it was a while ago and I don't remember. And yeah, labor was a little more than half the bill. Price of renting instead of having a house like a normal person. Oh well.

Re:median vs average

[Grishnakh]

His pads hit metal so the rotors were probably impossible to refurbish. Those can cost quite a bit for 4 of them assuming that all of them were damaged.

Yeah, I got the bit about the rotors needing replacement. $50 at Autozone. Rotors are cheap. These are GM parts, not Mercedes parts; GM cars still aren't that great, but one good thing about them is the parts are really, really cheap, even cheaper than parts for Japanese cars. There's a huge number of those GM cars on the road, plus they tend to reuse parts for a long time and on different models (particularly for things like brake parts, not for interior parts obviously), so there's lots of aftermarket parts available at very low prices. I changed the rear pads on a friend's '10 Impala recently and the parts were about $15 on Ebay with shipping. I could have gotten a full set of pads + rotors for about $50 IIRC.

$700 sounds exactly like a dealer price, like you said. There's a reason those places are called "stealerships"; they're the absolute worst place to take your car for service out-of-warranty. The prices are insanely high, and the service technicians frequently aren't that great (the good ones go to work at independent shops where they can make more, or start their own shop).

As for changing plugs, all I can say there is that in this day and age, you should never buy a car that doesn't have an inline 4-cylinder engine. There's simply no need for it; with all the turbo-ing carmakers are doing, and with the high horsepower numbers they're getting even from naturally-aspirated I4s, it's just silly to get a V6 or more. Sure, you can get some extremely powerful V6s like in the Camaro, but this thread seems to be about people wanting sensible, economical transportation, and for that a 4-cylinder is all you need now. They're all getting well over 150HP now (and over 200 for the ones with turbos), which is plenty for your typical 4-door family car. And with an inline-4, changing plugs is ridiculously easy because they're all right on top. What kind of engine does your daughter's Nissan have?

With a modern Japanese 4-cylinder economy-to-midsize car, the only maintenance that should be a PITA these days is changing the timing belt. And even there, many cars have finally dumped that stupid belt and switched to a chain. Everything else is extremely simple: brakes, spark plugs, coolant, air filter, etc. Everything is easy to get to and usually made to be easy to do. And Japanese cars (Honda, Toyota, Mazda) seem to take extra trouble to make service simple, unlike some other cars where they either treat it as an afterthought or even seem to make it intentionally hard or require special tools (Euro brands seem to be the worst here).

Re:median vs average

[aphelion_rock]

You should never spend more than 20% of you annual income on a car.

Where did that rule come from?

Comes from common sense!
Of course the banks/credit cards / car dealers want us to borrow everything we possibly can borrow so that we spend our whole life paying mostly the interest on the loan. The reality is called living within our means. Too many people are bought up to believe we can have anything we want.

Re: median vs average

[Gussington]

Yeah, and a lot more people should probably go that route of they can't afford a car. My income is ~80k/yr and I've never owned a new car in my life.

I earn a lot more than that and I don't buy new cars either, it's such a poor use of money.
Buy second hand, keep it for a long time, and spend your money on more useful things (investments and travel).

Re:median vs average

[dfenstrate]

Um, no. Unless your car is a complete shitbox to start with, or you drive ~100 miles per day every day, keeping it for 10-15 years will not cost you more than replacing it every six years. Depreciation is an accounting trick that only really works in aggregate. If your car is still running in six years time, keep it. You will save the cost of a new car. The fact that yours is worth zero on paper means absolutely nothing if it still works the way it's supposed to.

Bought a '98 Camry about 10 years ago for 8 grand. It's got 253,000 miles on it now. Off the top of my head, I've done the following non-routine maintenance to it:
Exhaust replacement, front to back: $575
Idle air control valve: $800 (Dealer because I didn't have a good cheap mechanic at the time.)
New suspension and steering parts & alignment: $800
Oil leak from oil pump: $500 (estimated mechanic cost, I did it for much less)
New air intake hose: $40

Let's round that up to $3000 in case I've forgotten a few things.

I have a car that is quiet, drives well, doesn't leak, and is reasonably comfortable. It gets 27 mpg and still has sufficient power. The money I've put in it to keep it in good working order for 10 years doesn't add up to 10 months of car payments.

Would I like a newer ride? Sure, and I may get one eventually. The fact is that I can keep this car comfortable and running for cheap money. The occasional $800 hit saves me a few thousand a year.

Re:median vs average

[Gussington]

You should never spend more than 20% of you annual income on a car.

Where did that rule come from?

He just made it up just now. That's how the Internet works.

Re: median vs average

[narcc]

I don't understand it either. Buying new seems like a waste. I got my wife's car at an auction for about $2200 six years ago. (A seemingly spotless 1992 model with 80k miles on it.) Outside basic maintenance (brakes, oil, etc.), I have invested well-under $500 in repairs for it. She puts a lot of miles on her car (over 10k miles/year) yet with regular maintenance, I expect she'll easily get another 6 years out of it.

If it explodes tomorrow, it wouldn't matter. It's costs us less, maintenance included, over the past 6 years than a down-payment on a new car. The Slashdot crowd seems to get no more than 5-7 years out of their cars new, so I'd say I've got my money's worth out of it. It's like I had low down-payment, partially spread-out over the entire period of ownership, and a $0 monthly payment.

My current car, and the last two I've owned, have similar stories. I can't imagine getting only 5-7 years out of a car, let alone a new car. What are these guys doing to their vehicles?

Re:median vs average

[OhPlz]

"Respectable dealership" is an oxymoron here in the states.

Re:median vs average

[sexconker]

If you sell your working car for 5000 and buy a new car for 35000 the resale value of your car was NEGATIVE 30000.
You have the same utility - a functioning car - and you paid 30000 for it.

The new car may be nicer and that may be worth some money, and it may have slightly lower operating costs, but it's certainly not 30000 worth of a difference.

Your next "argument" is going to be that I'm forgetting the resale value of the new car. The resale value of an item means nothing until you plan on selling it and not replacing it.

Re:median vs average

[speedlaw]

You were looking for the unicorn of used cars, a good condition Accord/Camry for $5k. Sorry.

Re:median vs average

[TechyImmigrant]

What is a "20% better car"? Is there an objective absolute "car goodness" measurement scale I never heard of?

I don't know, but I got my 350z used and it's an excellent car. Certainly 20% better than the one it replaced. As with my wife's Mazda 5 (120k and likely to go another 100k) we expect to drive it until its resale value is effectively $0, or until I've saved the money to buy a new one when the fancy takes me.

What I won't do is borrow money to buy a car. How efficient my total cost of car ownership is is not something I particularly care about, but I like having a decent car and I hate being in debt.

Re:median vs average

[rockout]

That's ridiculous. If you do your research, you can get a used car that's much more reliable than many new cars. Consumer Reports puts out tons of information to help used car buyers, and I've been extremely satisfied with the track record of my last three cars. I put over 100k miles on each of them, except for my current one which is still at 84k miles and going strong.

And while I know how to, I don't even change my own oil. You're just looking at the wrong cars.

Re:median vs average

[rockout]

Yeah but then you have to be seen driving a Miata.

Re: median vs average

[thesupraman]

Sorry but you don't have a clue..

Fuel injectors get blocked because of a foreign object blocking them. No about of cleaning will stop this unlikely event happening in the future.. It is not a cumulative problem.
Combined with the fact that usually they don't even bother reverse flushing the injectors (which is the only kind of clean that would matter) means you are just passing stupid tax unless an injector has actually become blocked.

Re: median vs average

[AuMatar]

I buy only new. I know nothing about cars, don't have a deep interest in them to want to learn to maintain them, and have no place to do so anyway (home ownership is actually a huge money loser and cost me at least 300k over renting- and I broke even on the damn thing on paper). However I keep it until it's unreliability becomes a problem or it breaks beyond worth of repairing. My current car is 16 years and going strong. My major consideration is whether to replace some of the ripping leather on the driver's seat. Given it's mileage is 60k, I expect it will hit 20 years before I replace it. At which time I'll get another new car, in cash, and expect it to lay till I'm 60+. Buying used is took risky if you don't know about cars.

Re:median vs average

[eth1]

Why does everyone have to find a new car? I could easily afford a new car, but my last 3 purchases have all been for cars that are 2-4 years old. You save thousands of dollars that way, and you still have a very good car that will last you for years (provided you've done your research).

As soon as I saw the headline I thought "since when does the typical family buy a new car?" Upper middle class families can do that, but smarter upper middle class people aren't obsessed with being the first owner of a car, since you have to pay a huge premium for that privilege.

I think a lot of people that *can* afford a new car can *because* they don't buy/lease new cars every few years... :P

I work with a group of people all making six figures. Guess what we drive? 2x used BMWs, 2x used Mercedes, 1x used Porsche, used Audi, and my Toyota that will be old enough to drive itself this year (the only one that was bought new by one of us). The people making less are the ones with the new cars, for some reason.

Re:median vs average

[TechyImmigrant]

This. Basic maintenance like that isn't difficult. It's well-worth the time and effort to learn to do those things yourself.

If that dude really paid $700 to replace a set of rotors, he needs to learn how to do basic maintenance himself. Even if he's not interested in doing the work, it'll help him spot dishonest scumbags posing as mechanics.

To the parent: Your mechanic sounds like a dishonest scumbag. Find someone else. You're getting hosed.

I used to fix my cars when I was younger and poorer. But I would charge a heck of a lot more than $700 providing equivalent time and facilities to do tasks for people. I'd prefer to spend the $700 and not have to deal with it. I have a mechanic I trust and have used for 15 years. If I did not I might suspect I was being overcharged. But opportunity cost is real.

Re: median vs average

[thesupraman]

Putting diesel through a petrol engine does absolutely no damage at all other than stopping it running until it is drained out.
Petrol in a diesel will most likely blow the head gasket at a minimum.. And often much worse.
Just in case you thought you had a point.

Other than that.. You are an entitled moron. Second hand cars are a perfectly valid and sensible option for many consumers.

Re:median vs average

[gfxguy]

I'm sorry, but I'm not seeing the sense of including things that you need with either a new or old car - like parking and tolls. I get you're trying to show a percentage of TCO, but it's a moot point, IMO. Insurance goes DOWN when the car is older (it makes no sense to have comprehensive coverage at some point). Also, in my area, we pay a yearly ad-valorem tax when we register the cars - based on the "value." My cars started at over $250, but now cost me less than $100/year for that. Over the last six years, I've save probably about $800/each just for that tax alone. Monetarily, holding on to a well maintained, good running vehicle will save you a LOT of money over trading it in. Depreciation SLOWS over time, so suggesting trade in values are higher for a less-old car also doesn't make sense, because you haven't been making payments for the extra four years.

And you're math still doesn't work, because, assuming a 5 year loan, you're neglecting the fact that you don't have a car payment for one year if you buy every six.... but you don't have car payments for 5 years if you buy every 10. In fact, if you take the car payment you're no longer making and save it, you end up being able to get a much nicer car over over time - even if you save only a fraction of it.

But really - I don't understand why people spend so much on cars. There's going to be a bust at some point, like housing. People used to get 10 year loans, then 15, 20, now they get 30 and even sometimes 40 year loans just so they can buy more house than they can afford. Then when the market turned upside down, they whined and complained about it. The only justification for getting more than a 36 month loan is if they offer 0% (or close to it) financing (in which case it doesn't make much sense to NOT get the longest term you can). Honestly, if you can't afford the payments for a 36 month loan, then you can't afford the car - it's just that simple.

I make a decent amount over six figures, and I'd never even entertain the idea of wasting my money on a $35k car. My shortlist, to replace my car when it does start costing more to maintain, includes cars from $18k to $26k - and I'd be happy with any of them. It's good not to care about being judged based on your vehicle - I'd rather make the smart choice.

Back to the article - the nonsense is that cars are getting more expensive because people are buying more expensive cars. If they stuck to the reliable and safe low end of the range, you'd see more choices there. Averages don't mean anything as long as there are good choices out there. We just paid about $16.5k for a new car for my son - one that was recommended by Consumer Reports and that I was very happy with when I test drove it. Reliable, safe, and inexpensive... and actually kind of cool (a Scion IA). Granted, we waited for the right time to get that price (actually $750 under invoice) , but that's another aspect of car buying - don't wait until you absolutely need a car to buy one, buy one when you can get deals and incentives, and more easily walk away from dirty salesperson (which is about 99% of car salespeople).

For the record, both my primary vehicles (my wife's car and mine) are north of 10 years old - mine is 12 years and well over 200k miles, and looks good and runs great because I reasonably maintained it - and made a wise choice in brands and models when I bought it. Why on earth would I willingly want to make car payments when I don't have to? All that extra monthly cash flow is helping a LOT more than new cars would.

Re: median vs average

[ArmoredDragon]

I haven't had any reliability problems with newer cars. As has always been the case, it really depends on the car. My previous car was a 2005 Buick Regal which I sold to my brother, and it still runs fine.

I'm seeing most of these cars you're buying are Dodge, and Dodge are somewhat known for making junky cars. The Neon in particular is a complete turd that's made about as cheaply as a car can possibly be made, and so is its 4 door cousin, the Intrepid. As for that Sebring of yours, I had to drive a brand new 2011 Sebring once after some derp did an improper lane change and crunched my right fender, and while it was getting repaired, the insurance company gave me the Sebring as a rental, which was basically brand new. My Regal, 6 years older, was such a nicer car than that, and the reason why is because Sebring is a cheapo car whose only selling point is that it's roomy. I don't know much about Caliber, but it IS a Dodge so... From what I understand, the only decent cars Dodge makes these days are trucks.

But, if you want a sedan that isn't going to be a perpetual fixer upper, your choices are pretty much anything GM or anything Toyota, with some exceptions for other manufacturers.

Re:median vs average

[eth1]

According to AAA, an organization more reputable than Bankrate.com, the cost to own and drive a vehicle in the USA today is $8,558 per year.

Holy crap! $8,500? That seems really high. Here are my numbers:

2001 Toyota Solara (yearly, bought new):
Depreciation: $1700
Maint (avg): $500
Insurance: $1150
Gas: ~$1000-1200
Total: $4,550/yr

2008 Porsche Boxster S (yearly, bought used):
Depreciation: $1400
Maint: $800
Insurance: $1000
Gas: $1000-1200
Total: $4,400/yr

Am I missing something (other than the urge to go switch cars every three years)?

Re: median vs average

[gfxguy]

I feel this way, too. Got my car in '05; over 200k miles; had a couple of repairs that cost me some, but not nearly as much as new car payments would have cost me over the same time. Now it's been running great - and because I actually take care of it, it looks better than most cars half it's age. KBB says it's only worth like $1500 - but if a new car payment is $300 to $400 or more, it's worth a heck of a lot more to me to not get rid of it.

Re: median vs average

[TechyImmigrant]

Yeah, and a lot more people should probably go that route of they can't afford a car. My income is ~80k/yr and I've never owned a new car in my life.

I earn a lot more than that and I don't buy new cars either, it's such a poor use of money.

Buy second hand, keep it for a long time, and spend your money on more useful things (investments and travel).

Ding Ding Ding! We have a winner!
Skipping the leading edge of the bathtub curve is pretty neat too.

Re: median vs average

[TechyImmigrant]

I can't imagine getting only 5-7 years out of a car, let alone a new car. What are these guys doing to their vehicles?

They're buying new ones because they want the new shiny models with the iShiny features.

It's worth considering that there are older cars that are awesome and remain awesome regardless of their age. You can do the sums on total cost of ownership and convince yourself you're better off with a new car, but the fact remains that most people can't drop $35k on a car and many who could (myself included) simply will not.

Re:median vs average

[gfxguy]

On American brands, maybe. The post makes no sense. I bought a '93 Honda Civic in '98, and kept it until it was 13 years old and never had that kind of trouble with it - the worst that happened was the A/C went out, it was an older unit that couldn't just be recharged without paying a lot of environmental impact fees for the coolant, or even more to have a new one put in. In retrospect, I should have paid for a new A/C. Regardless, replaced it with another Honda that I've now had for over 12 years. Yes, I've paid maybe $3500 in the past five years on non-regular maintenance.... but that's less than a year's worth of payments on a new car, and it looks and runs great - why on earth would I willingly take on a new car payment obligation? I'm sure it'll get to the point where it's not worth a major repair - but anyone that can't make a car last 10+ years is doing something wrong - either stupidly picking the wrong brands, or not doing even lackadaisical maintenance. Do people not get the math? $3k is still less than a typical year's worth of car payments. If you're doing that every year, then fine, but then you've probably done a really crappy job of buying and maintaining the car.

Re:median vs average

[TechyImmigrant]

>If you don't have any mechanical ability you should buy a new car. It's terribly expensive compared to used but if you have to pay a mechanic unless you personally know a good one you're going to pay out the ass for repairs.

Only if the car is borked. I've yet to purchase a truly borked used car and I've had a few in my life. The odds are with the used car buyer, regardless of their mechanical skills or proximity to a trustworthy mechanic. Labor is expensive but my labor is a lot more expensive than theirs.

Re:median vs average

[gfxguy]

Sure... taking on new car payments becomes the primary concern. I'd rather pay $1000/year on maintenance (averaging in non-routine maintenance) than $4k year or more for some new bells and whistles that get me nothing except debt. You keep ignoring the fact that the difference is that when you sell your car after six years, for the next five (the average) YOU will have a car payment that I will NOT.

Re:median vs average

[TechyImmigrant]

Man a lot of people don't even know how to change an oil filter. If anything goes wrong once it's out of warranty they're at the mercy of a mechanic. It's like people having to take their computer to best buy because it wont boot, most end up just buying a new one when all they needed was a new hard drive.

I know how to do that. I take the car to the mechanic near where I work, walk to work, walk back at the end of the day and pick it up complete with fresh oil and oil filter.

I have hobbies. Fixing cars isn't one of them.

Re: median vs average

[gfxguy]

I always bought used until I got married. Then it was "happy wife, happy life, " right? Wife demanded new cars. More like "happy wife, in debt for life."

Re:median vs average

[gfxguy]

Sadly, that's +1 insightful, not +1 funny.

Re:median vs average

[gfxguy]

My Honda was built in East Liberty, Ohio. If you bought a Ford or Chevy, there's a damn good chance it was assembled in Mexico. It's not so simple comparing foreign and American cars anymore. Besides, there's an enormous market for automobile parts out there, I really doubt it's a worthwhile concern. Even accessories - I refuse to pay for dealer installed accessories. There's a huge aftermarket, even OEM parts.

Re:median vs average

[NotAPK]

"I can't conceive of doing it on my daughters Nissan."

I've found Japanese makes some of the easiest to work on. Armed with a metric set of tools you'll probably find it as simple as removing some of the air inlet components and then going straight for the plugs with a suitable tool.

Sure, modern compact engine bays can appear to be formidable, but we're talking about changing the plugs, not the timing belt! Now that would be a PITA!

Re:median vs average

[lgw]

What's a car payment?

Seriously, if you're borrowing money for a car, you're doing it wrong (unless it's a work vehicle, or your first reliable car after getting your first real job).

If you can only think of the cost of a car in terms of a "car payment", you need to learn how money works. Best thing I ever did.

Re:median vs average

[lgw]

The cost of a car is the price you pay for it, less the price you sell it for. TFA is about new cars, thus the topic of this here thread. Of course it's better to start with a used car, but that's another topic.

You have a strategy. I've tried it, and I don't find it optimal. It's not materially cheaper than replacing a car after a reasonable number of years, and you get a less reliable car.

Re: median vs average

[ruir]

I would never apply for a job where they request me to own my own car.

Re:median vs average

[ruir]

Who cares? It is a good idea anyway.

Re:median vs average

[lgw]

because you haven't been making payments for the extra four years. ... loan this ... loan that

Stop with the car payments already. Terrible way to go through life. Consumer debt is never the answer. There's plenty of years to save up for your next car

buy one when you can get deals and incentives, and more easily walk away from dirty salesperson (which is about 99% of car salespeople).

Or just use a buying service. They're great, if you can find one where you are. Last time I bought a new, low-end car, I used Enterprise Fleet Services - they don't charge anything (or didn't then), and I didn't have to mix with the weasels. There's a variety of such places, and you don't have to hunt for that 1 guy in 100.

Re:median vs average

[nbritton]

You got screwed on the brake job. Even if you wear down the rotors it only costs about $50 in parts to replace each rotor and it takes no additional time to replace a rotor then it does to replace the brake pads. Break pads are also usually less then $50 in parts cost. This is a do it yourself kind of maintenance, all you need is a jack stand and basic tools like a ratchet and sockets, spanners, breaker bar, baling wire or string, and if you want to get fancy a torque wrench. It should only take about an hour to replace all four sets.

Re:median vs average

[narcc]

I would charge a heck of a lot more than $700

For a task that takes less than an hour?

I'd prefer to spend the $700 and not have to deal with it.

I'd rather find a guy who charges a rate that isn't an order of magnitude above the average.

Re: median vs average

[nbritton]

I just paid cash for it. In fact I've never had to borrow money to buy a car, even in the days when my income was shit.

Assuming the stock market is doing well, you are actually loosing money by not financing it. That money could have been invested in the stock market earring 10% compound interest. Assuming you could get an auto loan for 4%, you could have been netting a 6% return on your money. This of course all depends on if the market is bullish and where it is in the credit cycle. The last thing you want to do is invest all that money in the market when it's going down. Right now the market is about to crash, cash out all your investments and squire the money away under your mattress or in a credit union. The banks will fail.

Re:median vs average

[bloodhawk]

Current Car is a VW R36. Steering column computer, air conditioner compressor are the big ones, few other minor bits as well.

Re:median vs average

[jellomizer]

Location is a huge factor. You could make 200k in a metro area and just live the upper middle class lifestyle. Or you can make 100k and live the same life style in a rural area only a hundred miles away. Housing is considered your largest expense taking between supposably 1/3 for renting and 1/2 for a mortgage of your income. Then the cost of goods in the area are inflated to pay everyone else larger wages to live in that area.
That $15 minimum wage debate is because in some areas of the US $15 an hour (30k) is more than some professional work at in some areas.

Re:median vs average

[Aereus]

You're forgetting you have to pay sales tax every time you buy another car. Depending on the state, that can add another 5-11% plus registration fees. Most car sales also involve several thousand up-front. Meanwhile you've lost 2/3 of the value of the car selling it at 6 years, but less than 1/4 for the next 4. At the average 12k miles/year that puts you at 120k miles after 10 years. Most cars require minimal maintenance to that point in their life these days. The real maintenance costs don't happen until 150k+ when you start having things like rear drum brakes needing replacement, radiator, water pump, shocks, exhaust work, etc. Even then, much of the maintenance can be done for a fraction of the cost by yourself, and without much mechanical prowess. Check Youtube videos and determine what you're capable of.

IE: Had Autozone run the code from the check-engine light and it was the EGR Valve. Taking it to a shop would have cost me $350. The part itself turned out to cost $85 and was merely 2 bolts and a power connector. Took all of 5 minutes to do myself. Were it not for the videos, I would have assumed it was something I couldn't handle and dished out way more money.

Re:median vs average

[Aereus]

I don't recommend refurbing rotors at all. You have a high likelihood of the new pads not seating properly and the thinner rotors will warp a lot easier. In both cases it leaves you with noisy brakes that are annoying to listen to. And if you're gonna pay the price to turn down the rotors, you may as well use that money for new ones anyways. Something like higher-quality napa rotors and pads should still be $200 or less for all four wheels, and I still think he got fleeced on doing the rears at the same time—75% of your braking is done in the front, so the rears were probably fine. (Assuming 4-wheel disc. Rear drums last even longer... 150k+ miles.

Re:median vs average

[thegarbz]

Because if you're not an automotive engineer, a new car gives you a fighting chance not to be fucked.

Is that like saying it's her fault for the way she dressed?

Seriously find a garage with technicians who can do the work and fix problems without screwing you. There's no real value in new cars from a reliability point of view. The vast majority of wearout items happen at a regular pace. Your new car will need a timing belt every 6-8 years just like your old one. Your new car will need an oil change every year just like your old one. Your new car will need wheels, breaks, suspension done just like the old one.

What the new car has is a significant capital expense for things not broken and things which don't need to be replaced. ... Unlike your old one.

Re:median vs average

[pghmike4]

Exactly right. The last car we replaced was 13 years old, and the previous one was a 9 year old Civic hybrid whose (big) battery died. The annual maintenance costs beyond what a new car would require was probably less than $300 per year at the worst. Of course, these were Hondas; no idea what a GM car's maintenance would be after 10 years :-)

Re:median vs average

[Gussington]

Who cares? It is a good idea anyway.

Not really, or should Bill Gates have a car worth a billion dollars, and should my teenage kids have a car worth $100?
In the GP's example, A family earning $50k can spend $10k/year on a car. Well my last car cost $30k, I kept it for 8 years and sold it for $10k. So it cost me $2.5k/year. Closer to 2% than 20%.
Even with insurance, maintenance and running costs, you're probably still under $5k/year. So 20% is a ridiculous figure.

Re:median vs average

[dk20]

I'm with you on this one. I make OK money, have no mortgage or car loans. Both of my cars are like 10 years old and they work fine for what they are suppose to do (go from Point A to Point B).

My previous car (cheap Voyager) lasted 10 years and it still had the original battery in it when i got rid of it.

People get hung up on cars as "status symbols". If someone wants to judge me because i have a 10 year old car that is fine, i am not "hung up" on cars... they are just machines to serve a purpose and the old ones i own now do that.

Once they start to cost me money in repairs they will be gone. I just replaced the windshield in one car for $200 due to a 12 inch crack, if i get another few years out of it then my $200 "investment" in the windshield was OK.

Re:median vs average

[movdqa]

I traded in my previous car at 250K miles and it was running just fine (Toyota Avalon). My car before that was an Audi which I got rid of at 187K and the car before that another Audi which I sold at 225K. The Audis cost a lot of money to maintain. The Toyota Avalon cost far less to maintain. I currently drive a Toyota Camry which is far less than the Avalon to maintain. It feels like high maintenance costs have been engineered out of this car. It has about 80K miles and feels like it's a new car. The takeaway for me is to buy brands known for reliability and low maintenance costs and buy cars with very large production runs. One of my Audis had a production run of 800 for my model. Parts were outrageously expensive compared to similar parts for common cars.

Re:median vs average

[hattig]

This is the reality everywhere.

It's how the car market works - the top 10-20% earn enough to buy or finance a new car, maybe on a rolling replacement schedule every so often.

Everyone else buys second/third/fourth hand according to what they can afford. The cars simply make their way down a list of owners as they get older, maybe changing hands every 3 to 5 years depending on the owner's whims.

Some people stretch themselves further to get a better car than they can really afford, and others scrimp on the car (often because they're in a city with decent public transport, often because housing in their city is very expensive). Many households don't own cars, although I guess that's more common outside of the US.

In your example, 20% of $50K is $10K, so on a 5 year finance cycle you could probably stretch to a new car. But in my opinion that's a large percentage to pay for a car, then again I don't need to drive every day, I get the train to work (UK).

Re:median vs average

[movdqa]

The property taxes on my car when new were about $900. After four years, it goes down to about $80. States have various ways to tax your vehicle but it's usually a function of age. Insurance on a newer car with higher replacement value is usually higher than insurance on an older car. There are factors with newer cars that can lower costs like safety and anti-theft technology but the general case is that older cars cost less to insure.

Re:median vs average

[Anonymous Coward]

Why does everyone have to find a new car? I could easily afford a new car, but my last 3 purchases have all been for cars that are 2-4 years old. You save thousands of dollars that way, and you still have a very good car that will last you for years (provided you've done your research).

As soon as I saw the headline I thought "since when does the typical family buy a new car?" Upper middle class families can do that, but smarter upper middle class people aren't obsessed with being the first owner of a car, since you have to pay a huge premium for that privilege.

New cars can make sense for some, but I'm like you, I save a lot of money buying used even though I make a decent living. But buying used wisely is a challenge for many. I've had great used cars that I've driven for many years after purchase with few issues, but even if I had a sudden multi-thousand dollar repair need, I'd still be way ahead financially. I thank new car buyers for making the investment which enables my used car purchase!

Re:median vs average

[chooks]

Don't forget a sexy assistant to help you bleed the brakes at the end...

And ideally it should only take an hour, but if it is your first time doing it, then plan on doubling or tripling the estimate as a Newbie factor. Also in cars these days there is probably some OBD bullcrap light that won't reset unless you have the equipment to do that kind of stuff or take it to a mech...

Re:median vs average

[hattig]

Exactly.

The only reason to buy a new car, in my opinion, is if you drive in it every day for over a couple of hours, whereupon having mod cons actually improves your quality of life. Although IMO you might be better off buying an older, but better car second hand still, for less :-)

Of course most people will do it to keep up appearances with the neighbours. I.e., vanity.

My car is the 15 year old dented Honda Civic, and I earn in the top 10 percentile (or better, I just checked the government stats). But that's London, I drive it maybe 15 minutes a day on average, I have to park on the street (hence the dents, other drivers suck), it cost me about £2300 five years ago (cash) and I guess I pay £1200 a year to run it (insurance, tax, MOT, petrol). Even if I give it away, that's under £1700 a year for freedom and time saving ability (if I didn't have a child to drop off at nursery, etc, I could drop the car and just hire a vehicle for when I really need it).

Re:median vs average

[hattig]

I'm guessing that's 20% every year, i.e., most people get a car on credit and have to repay it monthly.

You're saving for the next car for presumably several years, and then you buy it without any form of credit. In effect you've done the same - put money aside each month - but you've earned interest on it instead of paying interest on it.

Re: median vs average

[JoeMerchant]

As you say, depends on the model almost as much as the manufacturer. The truck is a Dodge RAM 1500, 17 years and 140,000 miles later - it's doing pretty well for itself. The Caliber was indeed a piece of junk, tolerable until around 100K miles, but never delivered on promised fuel mileage, underpowered & small for 4 people + stuff. It replaced a Sebring Convertible, which had 2 redeeming factors: 6 cylinders and convertible with 4 seats. The main problem with the Sebring, for us, was that it was a boat - hard to maneuver in our grocery store parking lot. It was also getting up in years and the transverse mount FWD V6 layout (whether Dodge Sebring, Ford Taurus, or any number of others who have done it), means that changing the rear 3 spark plugs is an ordeal, changing the front struts (shock absorbers) requires more labor expense than the vehicle is worth, and at the engine-age that car had reached it was starting to burn oil. Still, no complaints, $1000/yr depreciation isn't bad on any car - that was our rate, the original owner depreciated $4K/year before he sold it to us.

We've rented a number of GMs, lots of Impalas, a few Malibus, etc. they all are fine to rent, but I get a strong feeling I wouldn't want to own one. Besides being poor in the handling department, the gadget fest seems doomed to early failure, and other than one $45K leather Malibu, the interior trim seems like it will look and feel old within 2 years.

Personally, I'd like to have the time to restore something late '60s vintage, update with EFI and otherwise keep it simple. I do want headrests, collapsible steering column, seat belts, those things that came in in the late '60s safety department, but air bags don't really increase my feeling of safety - regardless of what the statistics say - especially in my owned-since-new '91 that is fully functional, except for the airbag circuitry.

Re:median vs average

[luis_a_espinal]

You should never spend more than 20% of you annual income on a car.

Where did that rule come from?

Since forever. It's an old personal finance rule regarding how much of your income should go to credit, or home mortgages or car loans. It has to do with your liquidity in cases of emergencies and such.

Re:median vs average

[Bob the Super Hamste]

Well for some reason resale value never really applies to the vehicles I own. I pile the miles on them so fast that if they run they end up being worth $1500-$2000 yet run great so it doesn't make sense to dump them until they don't run anymore. At that point the salvage yard will pay me to haul them off and I get between $300-$500 for it. Then again I go and buy nice used vehicles for about $10,000 and the fewest miles I have put on one was 99,000. Keeping up on maintenance really keeps the unexpected repair costs down. Granted things that I consider standard maintenance also include suspension parts, radiators, and engine gaskets as once a vehicle starts getting up around 200,000 miles those things do just wear out, more so when you start approaching 300,000 even when not abused. If you can do those things your self, as well as all the other regular maintenance, cars are really cheap to maintain.

Re:median vs average

[Bob the Super Hamste]

It should only take about an hour to replace all four sets.

It should unless the the previous owner rounded off a couple of bolts which is what I found when I did brakes on my car last summer so I had to add in a stop midway through to go get a couple of new bolts and a bolt out.

Re: median vs average

[dywolf]

*cookie*

Re:median vs average

[Bob the Super Hamste]

until such time that the repair costs are no longer economical when prorated over the additional mileage gained

My rule of thumb is generally for each $1000 put into repairs I expect either another 10,000 miles of trouble free usage or 1 year which ever comes first. A good exception is if the vehicle is so old that the cost of the repair exceeds the vehicles value if it were functioning properly.

Re:median vs average

[Bob the Super Hamste]

Sounds like you need to find a better gas station that doesn't have shitty gas.

Re:median vs average

[fnj]

Unfortunately, holding on to a new car for more than 6 years stops helping much (annual costs become dominated by other factors).

Utter bullshit. I financed my cat for 5 years and I am currently in my 16th year of ownership. I have had no car payments for the last 11 years. That saved me almost $500 a month. No way in hell have my repairs and maintenance come anywhere near $500 a month, and anyway there were repairs and maintenance on the first 5 years too.

Re:median vs average

[oh_my_080980980]

You've never maintained a car so it's obvious you don't know what you are talking about. How much are you paying annually in repair costs from years 6-10? Those costs do not amount to the yearly payments of a new car. In fact if you buy a "good" car, then you should have a minimum repairs necessary for a car for the first 10 years. Maintenance costs are even less. There are only certain maintenance you need to perform at certain mileage and those DO NOT amount to the cost of yearly payments on a car.

If you are perpetually making car payments you are not saving money.

Re:median vs average

[oh_my_080980980]

LMOL they lose their resale value because cars can go 10 years with little more than oil changes....wow. Stop Potsy just stop. You know nothing about cars.

Re:median vs average

[Chrisq]

Um, no. Unless your car is a complete shitbox to start with, or you drive ~100 miles per day every day, keeping it for 10-15 years will not cost you more than replacing it every six years. .

You get into the stage where necessary repairs become a risk though. Your 12 year old car worth £1,200 needs a gear-box repair costing £700. Is it worth it? You start to think "well that's only £60ish a month, much less than a new car payment, but what if the engine goes next month". In my student days I had a car that was probably worth less than the replacement cost of a couple of tyres!

Re:median vs average

[fnj]

I keep a car on average for 6-7 years after which time maintenance costs start to cut in to the point where you should have repurchased, I wish I had sold my current car at 6 years (hit that last year), would have been far better off as have spent $3000 alone in repairs this year.

You're making no sense at all. $3000 a year is only $250 a month. How can that possibly be higher than car payments? Unless it's a complete shitbox. Anyway, $3000 in repairs indicates to me that you deferred maintenance, which is a dumb policy.

Re:median vs average

[Bob the Super Hamste]

Apart from my wife's Mexican made 2000 VW (that thing has been a basket case since day 1) and the, '85 Bronco II I had as a beater, I haven't done any of those things on a vehicle I've owned in ages. Power steering pumps get neglected by most people as they never change the fluid which is what does them in, not to mention turning until until they hit the stop and keep the wheel there for a while which is hard on the pump. My current car has 172,XXX miles on it now and runs and looks great and doesn't even have any strange noises like the whine of a starting to fail power steering pump or audible click from the lifters that so many higher mileage vehicles get.

Re:median vs average

[fnj]

Give me a break, most modern cars will go 10 years with little more than oil changes.

For sure the bad old 1950s days of valve and ring jobs every 50,000 or so miles are a thing of the past. I've got 16 years and 190,000 miles on my car now, and the engine runs as perfectly as the day it rolled off the lot on Day 1, without any mechanical work whatsoever to the engine, beyond timing belts. Some minor accessories like starter.

Re:median vs average

[mysidia]

Right, if you need to borrow to buy a $50k car, you should instead just be spending $15k on a perfectly serviceable car

Well, you COULD reduce cost to $15k to buy just a serviceable car, But many people will have less personal satisfaction with what the serviceable car has to offer. If you will derive more than $6000K worth of additional enjoyment in the vehicle per year, or more than $16 worth in additional enjoyment per day, then it is a good deal, even if you have to borrow money for the purchase.

In fact, borrowing money for the purchase is a separate issue. Even if it cost $15K; you may very well still want to borrow money for the purchase.

Re:median vs average

[Wdomburg]

Chrysler isn't domestic anymore. They're owned by Fiat. They have an American subsidiary, of course, but so do Toyota, Nissan, Honda, etc.

Re:median vs average

[fnj]

there are magical things called second-hand cars

There are only two ways a car gets on the second-hand market. Either the owner died without heirs, or the owner wanted to get rid of a headache - almost always the latter. You have no idea how that clunker was abused. With a new car, you control whether it ever gets abused.

Re:median vs average

[fnj]

Yep. Trucks, SUVs, and rolling status symbols.

Re:median vs average

[nickersonm]

Unless the loan rates are so low that you can more profitably use that money for something else. With good credit you should be getting 2% loan offers - even if you can afford to pay it all at once, you might prefer to invest in something with 3-5% return instead. Or use it for other profit-making endeavors.

Re:median vs average

[Deadstick]

More to the point: With a used car, you're at the mercy of the person who decided he didn't want it any more. A good used car is worth keeping.

Re:median vs average

[fnj]

Pretty sure the MSRP of the cheapest Kia is over $14k. I think the cheapest cars are the Nissan Versa and the Chevy Spark, both in the $12k range. And that was in 2014. It'll be more now.

Re:median vs average

[Whorhay]

I saw a video recently that was trying to make the point that smarter people don't make anymore money than everyone else. One of their quips was about college professors driving obviously old cars, their assumption being that if they made more money they'd all be driving new cars. I've even got family with more than a couple million in relatively liquid assets who won't buy new cars. It seems to be one of the hallmarks of being first generation financially well off to either not buy new cars and or to buy new but very reliable cars with the intention of driving them for a decade or more.

Re:median vs average

[dcw3]

Not just age, but climate and care matter. Are you driving on the salty roads up north, or near salty ocean air?...it matters. Is your vehicle garaged, or baking in the sun all day? How often to you clean it? Etc., etc.

Re: median vs average

[dcw3]

The ones in Seattle are usually empty. I often have the bus to myself, but generally I'm one of 3-4 people. What a waste!!!

Maybe if you showered more people would get on.

Re:median vs average

[bill_mcgonigle]

Don't be so certain about generics like 'Japanese' - I had a terrible experience with a Pontiac, but a new Subaru blew through its head gaskets at 65k, just peddling kids around town and driving normally on the Interstate. The previous Subaru blew through its head gaskets at 100k. The Subaru before that went 160k with no engine problems at all.

The quality is falling as they try to get these things to be fancier and more automatic.

Re: median vs average

[Bob the Super Hamste]

10k miles per year isn't a lot as the average is about 12k. For comparison I typically put between 25k-30k per year on my car and have done so for close to the past 20 years. You are correct in that buying good used vehicles is a great way to save money and they do last, mine never seem to never last year wise as long as I would like but almost every one gets sent off to the scrap yard with well over a quarter million miles on them with one almost reaching 400,000 miles.

Re: median vs average

[Whorhay]

I drove a 20 year old Porsche for five years and even that honestly was pretty economical. I finally sold it to a family member who wanted it when I decided I didn't want to go another summer in the south without AC.

Re: median vs average

[Bob the Super Hamste]

Buying used is took risky if you don't know about cars.

My advice is find a friend or relative who knows about cars and bring them along. My dad and I are that person in my family and have been car shopping a number of times with others. Also listen to them if they tell you to stay clear of a vehicle as they do have your best interests at heart. My cousin's wife realy wanted one neon and brought me with to check it out and I told her to stay clear of that car as even for a neon it was a rolling pile but she really wanted it and got it anyway and the thing has been a money pit.

Re: median vs average

[AuMatar]

Don't have any of those (friends who are gearheads, not friends in general). Nor would I impose on them like that if I did. If you do have a close friend willing to help, more power to you. I'll just buy new and not worry about it, once every 20 years or so.

Re: median vs average

[__aaclcg7560]

I know the condition/history of the car, I get a good deal, and my state waives sales tax when transferring the property to another family member if you fill out the right forms.

I took ownership of my father's old car. It took me three years to find and correct all the DIY repairs he made. When the mechanic informed me that the ignition switch needed replacement, my father called BS. I got the repaired done, brought home the old part, he took it apart to determine that mechanic was correct as the contacts were worn out, and paid the repair bill. When the alternator died a few years later, I sold the car to Pick-N-Pull.

Re:median vs average

[Wycliffe]

When I did the math a while back, I believe I calculated that the average car lost about 20% (of that year's current value) every year. It didn't really matter whether it was new or used. A $30k new car and a $30k used car both lost about the same $6k in a year and it continued that way. The advantage of owning a 3k car vs a 30k car isn't that it doesn't lose value but that because the car is worth considerably less, the actual dollar amount of lost value is also less. 20% of 3k is only 600 dollars vs 6k for 20% of a 30k car or 12k for 20% of a car currently worth 60k.

Re:median vs average

[Mass Overkiller]

I do my own brakes. Done them in all my cars and family cars. Takes me about 1.5 hours to do the front and rear if I mess around. I spend about $100 in parts (rotors/pads) sometimes more for my GTO (higher performance parts). I have a fancy torque wrench that I bought for many reasons, one being the ability to torque the lug nuts and brake caliper bolts correctly. A friend of mine got soaked for $550 for a brake job on his 8 year old Camry. I told him I would do it for parts + a sub sandwich and soda. He declined. Brakes are a very easy to replace part for the DIY mechanic with basic tools, as outlined above. Please remember the jack is not for holding your car up, that is the purpose of JACK STANDS.

Re:median vs average

[jedidiah]

Used cars are a total crap shoot. You have no idea how well that vehicle has been maintained. They could have done zero maintenance leaving you with a ticking time bomb.

You could also be too young or too poor to appreciate properly maintaining a car of any price.

If I am going to drive a "used car", I prefer to drive one where I can trust that it's been properly maintained. There's only one way to do that really.

Buying quality is difficult but it eventually pays off. Crap breaks and needs to get replaced.

Re:median vs average

[gfxguy]

OK, stop with the car payments - if you buy outright a $30k vehicle every six years compared to every 12 (if you've picked a decent vehicle and maintained it), you're NOT saving money. Yes, at some point it does not become worth it to pay for major repairs on an old car, but for some reason I've never had, with 10+ year old cars, things like transmission problems (the single biggest, most common, major repair). The only car I've ever had that didn't make it to ten years was a Ford, and I'll never buy one again (despite the fact that was 30 years ago and cars are completely different now - certain Japanese brands are still more reliable, despite gains made by American brands - and yet my Hondas were assembled in the U.S. while a lot of American cars are assembled elsewhere).

In fact, if you're speaking strictly financially, unless your repairs over the second six years are going to total more than the price of a new car, you're still ahead keeping your older car longer. I know the rule of thumb is to not pay more than the car is worth for repairs, but ignores the important fact that the alternative is to buy another car, which is likely a lot more than the cost of the repair... that makes it worth it to ME. Again - we're speaking strictly financially. While my 12 year old Hondas have needed non-routine repairs, they've never stranded me or made me miss work. Why would I want to spend $25k to $30k for a new car in that case? My insurance is low (required only, no comprehensive because it doesn't make sense), my ad valorem taxes are about 1/4 of what they would be for a new car... how on earth could it possibly make sense to trade in a perfectly working vehicle?

Re:median vs average

[jimbolauski]

I'm guessing their metric has to do with value of the vehicle and cost of maintenance. If you assume the car lost 60% of it's value after 6 years then annual costs should only be 60% of the loan. This of course makes no sense on many accounts which is more evidence that it is the metric they used.

Re:median vs average

[bill_mcgonigle]

Camry. The Official Old Person's car.

eh, I had an '85 in college. I still got laid in it. Chicks dig guys who can get to work.

If you want to be a badass, get a Ducati.

Re: median vs average

[Mass Overkiller]

Good point. An old 1972 Camaro that you think is awesome is still awesome whether it's 10 years old or 50.

Re:median vs average

[JohnFen]

But many people will have less personal satisfaction with what the serviceable car has to offer.

Well, yes, that's why it's called a "serviceable" car. The point is that the serviceable car is temporary. It's what you drive while you're accumulating enough money to buy a better car.

Outside is some rare circumstances, going into real debt to buy a new car seems crazy to me. It's unnecessarily sacrificing your standard of living in the medium to long term for the sake of immediate gratification.

I have borrowed money to buy temporary serviceable cars, but only if I can pay it off in two or three payments. If I can't do that, then I can't afford the car I'm looking at.

Re:median vs average

[gfxguy]

No, not even with 0%... you're still buying a vehicle that you don't need if you have a well running older car. Even at 0%, I'd rather keep my $25k (or more, but that's about what I'm looking at on my next car). What people (not you) are suggesting is it's somehow cheaper to buy a car twice as often.... no, not even with 0%.

Re: median vs average

[jedidiah]

There's more to basic maintenance than "brakes and oil".

Thinking like this is why you can't trust a used car. The previous owner was probably some cheapskate that never properly maintained the thing.

This is OK if you have some clunker that you're using as a "burner car" but some of us want cars that are more modern for basic structural and safety reasons without even getting into gadgets.

If you ignore the "shiny shiny" you can get a safe, reliable car for less than 34K.

Re:median vs average

[gfxguy]

Even buying outright it doesn't make financial sense to buy a cars twice as often; I really don't understand how you can suggest otherwise.

Re: median vs average

[jedidiah]

Except you've diverged from the domain of clunkers into classics where the car itself has some intrinsic or extrinsic value to it regardless of how much of a bother it is to keep running.

That constitutes a tiny percentage of drivers.

Re:median vs average

[amRadioHed]

$16 dollars worth of enjoyment a day? That's a huge amount of enjoyment to be getting from what is basically staring at the asphalt in front of you on a sightly nicer seat.

Re: median vs average

[narcc]

There's more to basic maintenance than "brakes and oil".

Hence the "etc." at the end of my short list of examples. It was there to provide context to the reader, not to be a definitive guide to basic auto maintenance.

Thinking like this is why you can't trust a used car. The previous owner was probably some cheapskate that never properly maintained the thing.

Apparently not. In this particular case, the car appears to have been meticulously maintained by the previous owner.

If you ignore the "shiny shiny" you can get a safe, reliable car for less than 34K.

I got a safe and reliable care for less than 3k. I've managed this more than once, in fact. Buying used is only a gamble if you don't check out the car before you buy it.

Re:median vs average

[mishehu]

I'm pretty sure he had to either machine the rotors down or replace the rotors for that $700 price. That is not that unreasonable of a price for new rotors if the shop was doing the work, depending on the car.

There are certain cases where a fuel injector will need cleaning - but that usually implies that the driver barely uses the car and thus does get build-up that never gets flushed away.

It isn't usually cheaper to lease a car every 2 years. I didn't do any work myself besides replacing headlamps and turn signal lights, and I've had the car for over 11 years now, and after the cost of maintenance, i'd had spent a lot more for a lease of the same car. But sorry for ruining your smugness. :-)

Re:median vs average

[Shirley Marquez]

Unless you work on your own car, those maintenance numbers look rather low, especially for such old vehicles. Depreciation will be a larger expense for newer cars. Insurance is much more costly in many areas. And you haven't included taxes; some states and localities have taxes on car ownership.

And that 15 year old Toyota? Less of an option if you live in a snow belt state where salt gets applied to the roads. Cars don't last as long up north.

Re:median vs average

[Shirley Marquez]

I know how to change my own oil. I just don't bother. I could save about $10, which is less than the hour or so I would spend to do it is worth to me. A shop can do it in much less time because they have capital equipment like lifts that let them do it quickly; I'd have to run the car up on ramps and crawl under it.

Re:median vs average

[bluefoxlucid]

Historically, the purchase price of the average new car has been a surprisingly-stable 56% of the median income. Stretching that over 5 years with a loan gets you under 20% per year. As well, there are new cars for under $20,000.

Budgeting discussions are useless without debt management discussions.

Re:median vs average

[Shirley Marquez]

Certain types of cars fail to hold value. Electric cars are one example because you're comparing the wrong numbers; the apparent price of the new electric (before tax credits) and the actual price of the used car. (That was true in the early days of hybrids, but I don't think there are any remaining hybrids that qualify for tax credits in most US states.) Volkswagen diesels are another. Prices of cars from companies that fold or withdraw from your country tend to plummet because of doubt about availability of parts and service.

But yes; cars hold their value better nowadays because they last longer. Back in the 60s it was considered unusual for a car to last long enough to turn over its odometer. (Odometers in those days only had five digits plus tenths, so they would turn over when you reached 100,000 miles.) Now you can safely assume that new cars will be capable of reaching that milestone without difficulty.

Re: median vs average

[lgw]

Or you can take the secured loan, invest the $50k, and come out ahead. Moron.

Perhaps that thought also occurred to the finance company that offers the loan. Somehow they see the loan to you offering better risk-adjusted returns than the market. But I'm sure they're wrong, and you're smarter.

Re:median vs average

[lgw]

If you sell your working car for 5000 and buy a new car for 35000 the resale value of your car was NEGATIVE 30000

Sure, that's a different outlook but the math is identical.

If I replace a $30k car after 6 years and get, say, $9k for the trade in (reliable cars have reasonable resale value these days), that's a cost of $3500/year. If I replace the same car after 10 years and get, say, $3k for it, that's a cost of $2700/year. If that were my only cost of ownership, that would be a big deal. But of course it's not.

Most cars will need at least 1 major repair in that 6-10 year window, and normal ongoing maintenance gets more demanding as everything made of rubber ages out. Still probably less than $3000/year with all of that, unless you need 2 major repairs (must be a Chevy or Dodge), but still that's about a 20% difference.

If you look at the TCO, with insurance, gas, parking, tolls, normal maintenance that all cars need, etc, that savings is more like 10% of the TCO. Still coming out ahead, but it's marginal. (I spend $7000/year on all that non-depreciation stuff, BTW, freaking Seattle).

Re:median vs average

[Reziac]

Here in farm-and-ranch country, trucks aren't status symbols. I drive an F350 because I need the hauling capacity almost every time I drive it. Next time you complain about the price of food, remember that some rancher needed a truck to haul the hay to feed the cows, and he can't do that if he's losing money because the truck was so damned expensive.

Re:median vs average

[lgw]

K, stop with the car payments - if you buy outright a $30k vehicle every six years compared to every 12 (if you've picked a decent vehicle and maintained it), you're NOT saving money.

I agree. My point was that the savings is very minor. In my case, where my non-depreciation costs are about the same as my depreciation costs, getting a new car every 6 years adds about 10% to my total cost of owning my car. If it were a "second car" that's hardly ever used, it might be 20% cheaper (or maybe more, as maintenance would be so low), and that's a different story. But for a daily driver you put real miles on, you're just not saving very much.

Re: median vs average

[Kreplock]

Tripled my income since marriage. Still always broke. Don't do it.

Re:median vs average

[yusing]

You can do a little better if you buy a good used car. You can't do much better, though, and there is an element of luck

In my experience, you can do A LOT better if you buy a good used car ... which you know how to vet ... and learn how to repair and maintain it.
Lots of us have made it through a working lifetime without ever buying a shiney new car, saved A LOT on depreciation, and saved A LOT doing our own repairs whenever possible.
An easy downgrade from Great Expectations and dedicated following-of-fashion is to get a car with several years left on the drivetrain warranty. By the time that warranty expires, you've saved enough to rinse and repeat. The rest of the money you save can be wisely invested in making your own microbrew ... to help you chuckle when you drive by the dealership.

Re:median vs average

[Nethemas the Great]

I've never heard 20% before, seems unreasonably low given reality. The calculation I've heard cast about more commonly is based upon monthly cost and can be used as a comparable to alternatives, e.g. public transportation. The numbers I've typically seen range between 25% to 30% of your take home pay.

Regardless, new cars don't cost $34,000 unless you want them to. This is nothing but ad bait capitalizing on poor understanding of median vs. average. Nice sedans, e.g. Honda Civic, or Toyota Corolla, start around $17-18K and there are econo-box offerings e.g., Nissan Versa, Ford Fiesta, etc., that start around $13-14K. You'd have to be in a pretty bad way to not be able to budget one of these either on payments or lease. Even then you can get some pretty nice used cars for half that if that's where you're at.

Re:median vs average

[Cederic]

Yeah, repairs and maintenance are nearer $20/month for my cat, although another $200 for the annual checkup.

I'm not sure why car payments are relevant though, or why you needed finance for your cat. Is it a rare breed?

Re:median vs average

[HiThere]

Well, if it become less reliable, then either it hasn't been properly maintained, or it's time to replace it (or, of course, both).

Re:median vs average

[Cederic]

New discs + pads for my front brakes cost me $520 yesterday.

The car's worth rather more than that, and I'd wear out the brakes on any car, so it's not a terribly relevant factor in whether to replace the car or not - but if the car was worth $300 (as some I've owned have been) then yeah, it's cheaper to replace the car.

Re:median vs average

[Cederic]

Or the owner had changed circumstances - divorce, children, employment, location.

Or the owner only ever wants to drive cars less than 2-3 years old. I know people like that.

Or the really big one: Lease companies. In the UK certain makes and models of car have horrendous 1-2 year depreciation and it's entirely because they're bought as fleet cars, driven for 1-2 years then sold off at auction.

So no, second hand cars aren't an issue and usually aren't abused.

Re:median vs average

[HiThere]

Well, the mean *is* the most generally useful average, but when you are dealing with a strongly skewed distribution, like incomes, it becomes nearly worthless.

Additionally, the mean is what I was taught was the average in the third grade. If I hadn't gone on in math, I'd probably think that was the only proper average too...but it isn't. It's just, as you pointed out, the easiest to calculate and the most generally useful. (Well, moving averages...which are always, as far as I know, based around variations of the mean, are probably even more widely useful, but they're generally enough more difficult to properly calculate...or even define, much less explain... that they aren't used.)

Re:median vs average

[slinches]

There is a vehicle in the works that will sell new for well under $10k: The Elio

It's anticipated base price is $6800, gets 84mpg hwy and has power door lock & AC/heat standard. They are currently building 23 engineering units for validation testing (safety, handling, ABS & PCM calibration, etc.) and plan to start full scale production in the second half of 2017.

Re:median vs average

[lgw]

Yearly payments? You're borrowing money to buy a car? Don't do that.

The annual depreciation cost of a car is (amount_paid - sale_price)/years_owned. For that cost alone, you're saving 20-25% a year by keeping a new car 10 years instead of 6.

Maintenance gets worse over time (most cars still need one expensive repair during years 6-10, plus low cost repairs accumulate). That won't make up the difference, but it's non-trivial, so you're looking at a savings of ~20%/year by keeping the car longer. But there are a lot of other costs to owning a car (insurance, parking, tolls, normal maintenance, gas), and those costs tend to be similar to the depreciation cost for a daily driver that you put real miles on, so you're really only shaving off ~10% of your "car TCO" by keeping a new car for 10 years.

Buying a new car every 3 years is really costly. Buying one every 6 years is slightly more expensive than keeping it for 10. You're at the point of diminishing returns by 6.

Re:median vs average

[LunaticTippy]

You're quite a bit luckier/smarter than the average car owner. Your depreciation is well under half the average, which is inflated by people who buy new cars or cars that don't hold their value. You don't list several major expenses that most owners have - finance charges, tires, registration/license/taxes contribute $1500 on average to ownership costs.

That accounts for the difference between your numbers and the average. It's all spelled out in the (very good) article.

Re:median vs average

[lgw]

It's important to understand the phrase "risk-adjusted return on investment". Investment-grade short term corporate bonds are paying under 2%. Or think about it this way: the finance company is going to float a bond in order to loan you money. Clearly they think there's profit in this arrangement.

Borrowing to invest in something volatile like the stock market is ... well, let's just say very few people have had long-term success with that strategy.

Now if you have a mortgage at 4%, and you can get principle-reduction credit by borrowing on your car at 2%, that would make sense, but you've increased the monthly payments you're required to make, which would suck if you lost your job.

Re:median vs average

[LunaticTippy]

Balderdash. I've bought numerous used vehicles for myself and friends and not once got a lemon. Of course it is smart to have it inspected by a reliable mechanic prior to purchase, but I don't always even do that much.

Lots of people buy new cars just because they want a new car. Old one is perfectly fine. There are so many used cars entering the market in top condition it is never hard for me to find what is called for within a month or two at a good price.

Re:median vs average

[amiga3D]

Probably okay if the shop is reputable. I had a friend that worked at one of those quick change places. He said most of the time they never actually changed the filter. Lot's quicker that way.

Re:median vs average

[XXongo]

I was going to post that trucks are not cars, so the price of pickup trucks shouldn't be included in the average price of new cars, but then I checked the link to the text, and the link was in fact to the "estimated average transaction price (ATP) for light vehicles", so, yep, you're right.

Re:median vs average

[LunaticTippy]

2016 Base Versa is $11,990 MSRP.

Re:median vs average

[amiga3D]

Hah, I remember having to change the thermostat on my sons Maxima at a gas station parking lot one time. What on any normal american V8 is a 10 minute job became a fucking nightmare. There was about an inch and a half clearance between the housing and the strut tower. I looked at the plugs on hers because the shop wanted so much to change them. I'm not a professional mechanic but I've got 3 thousand dollars worth of tools I have acquired over my 56 years and I know how to use them after working on cars, trucks and aircraft for decades. I told her to pay them, they would earn it.

Re:median vs average

[amiga3D]

Right, most of the time the back brakes will last at least as long as two front sets.

Re:median vs average

[amiga3D]

That's pretty pricey but then I've never paid anyone to do a brake job. It's actually one of the less challenging mechanical jobs on a car. The hardest part is bleeding the brakes afterwards. Still, if you aren't mechanically inclined it's better to pay a professional.

Re:median vs average

[mysidia]

It's what you drive while you're accumulating enough money to buy a better car.

Over the next 10 years, I expect to spend a good 10% 20% of my time driving, so it is kind of important how much my car appeals to me, how comfortable it is to drive, etc. AND getting just a serviceable car is a sacrifice to standard of living assuming you can do better without risking going bust.... what did you think it was?

Just like i'm not going to cheap out on my mattress, or other heavily-used possessions. First of all, I need them to be robust and not break on me, or leave me in a bad situation. They should also be ergonomic and uplifting; they should not be things I would complain about every day.

I am still going to take out a loan if I want to buy a $40k car, of a model which I have an expectation to last 15 years, even if I have $250,000 in investments at the time, and my income is only $50k a year (The cost will only go down over time, especially after considering inflation); Of course, I will make sure it is properly protected by some insurance and warranty policies. But it is kind of, my choice, you know..... no craziness......

Re:median vs average

[Grishnakh]

http://www.autozone.com/brakes...

That's $100 for two front brake rotors for a '07 Impala. Brand new, no machining needed. Brake rotors are an utterly simple thing to replace. Machining is not, of course, but at these prices you don't need to (and machining removes material anyway, if the rotor is already worn you might as well just replace it).

Re:median vs average

[Grishnakh]

Subarus are infamous for their head gasket problems in the 00s. Not all Japanese cars are the same. The reliable ones are Honda and Toyota, and these days Mazda. Subaru is probably pretty good these days too, but don't get anything older than 2010.

Re:median vs average

[Teckla]

That's nuts. Borrowing money to buy a car? You're already doing it wrong ...

Can you elaborate on this? I borrowed money for a car (1.9% interest rate) and use the money freed up to put extra money toward the principle on my mortgage (5% interest rate).

That's not doing it wrong, is it? (This is an honest question as I may not have figured all the angles correctly.)

Re:median vs average

[ShooterNeo]

Also, 5. The recent economic recession and slow recovery has meant that many people want to buy used cars to save money. More demand, less supply (cash for clunkers, less new cars bought) means higher prices for used.

Re: median vs average

[cthulhu11]

At some point that Prius will need a new battery too. Reasons I stopped subscribing to CR include their ludicrous review criteria ( hard-on for rotary climate controls ffs), fixation on the New Yuck market, and advice that makes me want to just slap them. Eg, negotiate trade-in value first. Nice fantasy but unrealistic. And the advice to keep driving a car for another four years saving $ instead of buying new. Because everyone comes out of the womb with a starter car, or can magically work and live for the first four years without one.

Re: median vs average

[cthulhu11]

People get 30 year mortgages because they *don't* have a choice. Companies with profligate compensation cause housing to skyrocket - look at San Fransisco and Seattle. It's not like one can buy an adequate $200k house.

Re:median vs average

[Cederic]

The parts aren't cheap but yeah I could save money fitting them myself. Not mechanically inclined, can't be arsed, lack the time.

Re:median vs average

[RightwingNutjob]

And a hundred for the back, and a hundredish for a set of pads, and a couple hundred for labor, and rotate the tires and change the oil while he's got my car for the day. So yeah. Maybe it wasn't 700 but it was a sizeable chunk of a thousand.

Re: median vs average

[lsatenstein]

Are you using the car for business and therefore you are able to write off much of the expense?

Most people I know have to lease their vehicle, and are never ever able to afford to purchase that same vehicle.

Re:median vs average

[Grishnakh]

WTF? A "hundredish" for pads? You can get pads for $20 on Ebay. Rear rotors are even cheaper than front ones. You can even get a full rotor+pads package for ~$75.

  A couple hundred for labor? That's what you get for being too lazy to take off a few bolts. Brakes are easy. Oil + filter is worth about $25 at the most.

Re:median vs average

[MercTech]

If you really want to confuse the average person with correct terminology; "Disc Brakes" have rotors, pads, and hydraulic compression cylinders with some having pad return springs as well. And, if you try to order "brake discs" from the parts counter you have volunteered for an attempted up-sell to something you only need if you are building a car for dirt track racing.

Re:median vs average

[JohnFen]

But it is kind of, my choice, you know.....

Of course it is -- I hope I didn't imply that I thought otherwise. It's your financial life, you can do as you wish with it. I still think it's pretty nutty, though.

Re: median vs average

[TechyImmigrant]

Careful feeling superior in your rule of thumb. The used market for a similar vehicle of my current driving vehicle said that saving anything more than $1000 meant looking at a vehicle with 60k-75k miles on it. Nothing like saving $3000 to be a few oil changes from stranded somewhere looking at a $3000 repair.

That's odd. I got a nice car with 50K on the clock for 50% of the new price, which sounds about right.

Re:median vs average

[TechyImmigrant]

I would charge a heck of a lot more than $700

For a task that takes less than an hour?

You're ignoring the 'equivalent time and facilities' bit. In my case that would be a lab and knowing how to use it. I can't think of useful things that people would pay for that would take less than an hour, but for the things people do want, it's going to cost more than $1000/hour.

I'd prefer to spend the $700 and not have to deal with it.

I'd rather find a guy who charges a rate that isn't an order of magnitude above the average.

I have no clue what the average of an exponential distribution is, because there isn't one. Basic statistics. For my car, changing out the rotors might easily cost $700.

Re:median vs average

[gfxguy]

Of course you are, unless you're doing something very wrong. I put nearly 20k miles on my car every year - it's 12 years old and north of 200k miles. I've put about $3500 into non-routine maintenance in the second six years. My insurance is lower because I don't need comprehensive coverage anymore, I've saved at least $800 in ad-valorem taxes in the second six years (probably a lot more, it depends on how the state values your car). The amount I've lost due to depreciation over the second six years is a fraction of what it was over the first six years. You're really reaching, here, to claim it's only 10%... and that you include things like tolls and parking and other things that you have either way, at the same cost, is disingenuous - about the only thing you could fairly include is if the newer car got better gas mileage.

Re:median vs average

[narcc]

You're ignoring the 'equivalent time and facilities' bit.

No, I'm not. For the mechanic, that's already factored in to the average hourly rate for auto-mechanics in the US. On your side, your mistake is in thinking that by doing the job yourself, or finding a mechanic who charges a rate consistent with the rest of the country, that you'll spend (or not earn) more than what you'd paying the grossly overpriced mechanic. Not only are you are not continuously productive, but you'd lose a comparable amount of time completing the repair yourself as you would in arranging for it to be done, transporting the vehicle to the garage, and waiting for the work to be completed.

You're also forgetting that the $700 charge the above user paid is dramatically above what the average mechanic would charge for the same job -- even if that price includes parts.

For my car, changing out the rotors might easily cost $700.

Certainly not for the car in question. I have nothing but skepticism about this mysterious and highly unusual car that would require a mechanic with such specialized knowledge and skill that he could charge a rate 7 to 10 times higher than average.

I have no clue what the average of an exponential distribution is

First, it is trivial to compute the mean of an exponential distribution. Second, that statement is completely meaningless in the context of the average hourly rate changed by US auto-mechanics!

Basic statistics.

You might want to retake that course. It didn't stick.

Re:median vs average

[CrimsonAvenger]

Not really, or should Bill Gates have a car worth a billion dollars, and should my teenage kids have a car worth $100?

Note the words "more than" in the original comment. It's important.

Note also that if your teenage kids are buying their own cars with an income of ~$500 per year, then they definitely shouldn't be spending more than $100 per year on their car(s).

Of course, if YOU are buying your kids cars, then the income that matters is YOUR income. And if you only make $500 per year, you shouldn't be buying your kids cars.

Re:median vs average

[lgw]

the amount I've lost due to depreciation over the second six years is a fraction of what it was over the first six years

Compare the total depreciation costs over the lifetime of the car, annualized.

Total cost of ownership is a thing.

You're really reaching, here, to claim it's only 10%... and that you include things like

If it costs to $3000/year to commute no matter what car you drive, then getting your annual costs below $3000 is the land of diminishing returns. Sure, if you're pinching every penny, savings is savings, and percentages don't matter. If, OTOH, you're trying to get the nicest car (by whatever standard) for a given budget, those tradeoffs mater.

It costs me over $6000/year no matter what car I drive (Seattle) so the percentage is lower still, depends on circumstance.

BTW, you're still "paying" for comprehensive, you're just self-insured. The risk is still there. Does it get cheaper as your car ages? Depends if you'd buy a new car one if the old one was stolen. Oh, and you're deducting that ad-valorem tax on your federal income tax, right?

Re:median vs average

[TechyImmigrant]

>I have hobbies. Fixing cars isn't one of them.

Changing the oil and filter on a car isn't a hobby nor is it fixing. It's routine maintenance.

It's routine maintenance that I pay a mechanic to do. I don't plan to own a funky wrench. I don't plan to own a car lift (since access to the filter on my last two cars was from below). I don't plan to collect dirty oil and then transport it to some dirty oil disposal center.

Re:median vs average

[Coren22]

When I was looking for a house, it was recommended by family that I spend between 3x and 5x my annual salary on a house. I spent a little more than 3x, and it seemed to all work out pretty well with payments.

However, when looking at houses, the real estate agent suggested that 6x annual salary was the better figure, so the motivation of the person should be looked at pretty carefully when taking advice.

Re:median vs average

[Coren22]

Toyota has a certified pre-owned program, it isn't a requirement for it to be a luxury brand.

http://www.toyotacertified.com...

Re:median vs average

[RespekMyAthorati]

I bought an '03 Honda Pilot in '08 with 180K on it. It now has more than 300K.

I have put maybe $400-$600 a year into servicing (apart from constants like oil changes, new tires every 4 years, etc).
If you are paying a lot more than that, then:
1. improve your yearly maintenance
2. buy a Honda

Re:median vs average

[RespekMyAthorati]

Yeah, repairs and maintenance are nearer $20/month for my cat, although another $200 for the annual checkup.

Why? After its spayed/neutered, what else do you have to pay for?

Re:median vs average

[RespekMyAthorati]

You're at the point of diminishing returns by 6.

If you buy crap cars. The point of diminishing returns is more like 16 years for a Honda.
My son's 18 year old Honda CRV (290K on the odometer) runs fine and he pays about $400 a year for non-routine maintenance.

Re:median vs average

[RespekMyAthorati]

And that 15 year old Toyota? Less of an option if you live in a snow belt state where salt gets applied to the roads. Cars don't last as long up north.

I live in Canada and bought a new Toyota in 1983. I drove it until 2002.
I sold it because it had transmission problems - no rust at all.

Re:median vs average

[Cederic]

Food, flea/worm treatment, occasional medical attention, entertainment devices and disposal mechanisms for the toys they've caught themselves.

Re:median vs average

[Shirley Marquez]

Canada shows more restraint in salt use than the northern US states do. I'm sure that helped.

Re:median vs average

[TechyImmigrant]

The context of the exponential thing was the cost of brake rotors, which pretty do much follow an exponential distribution. I saw one end of that when I worked on an F1 team.

You seem very intent on trying to convince me to maintain my own car. It's not going to happen.

Re:median vs average

[narcc]

You seem very intent on trying to convince me to maintain my own car. It's not going to happen.

You see what you want to see, and ignore what doesn't conform to your preconceptions. I can't do anything about that.

The point here, obviously, was that the parent was being grossly overcharged by his mechanic. Had he a bit more knowledge about the cost of parts and the time it takes to complete the labor, he wouldn't have been taken by his criminal mechanic's lies.

I couldn't care less if you maintain your own car, overpay for parts and labor, or slash your tires just for the opportunity to pay your local repair shop more.

Re:median vs average

[toddestan]

The trucks of today are sold as status symbols. They've grown massively in size, aggressively styled to look like oversized toys, and come loaded with luxury car features with a price tag to match. Kind of sucks for the guys who actually, you know, need a truck to actually do truck things. The basic work/farm truck as a utility vehicle with manual transmission and vinyl interior is dead, to be replaced with today's weekend toy-hauler. It's no wonder I see lots of trucks from the 60's, 70's, 80's, and early 90's still earning a living out in farm country.

Re:median vs average

[toddestan]

They seem to assume you're driving a fairly new car, and you've financed it. Therefore, you have a pretty big depreciation hit every year, insurance is higher, registration fees are higher, and they factor in the financing fees/interest.

A lot people will be well below that. I own my car, so no financing fees. It's 17 years old, so depreciation is minimal, insurance is less, registration is a lot less. I also drive less miles than they seem to assume. Maintenance is probably about the same.

Re:median vs average

[toddestan]

That's pretty remarkable. Japanese cars from the 70's - 80's are not known for their rust resistance. Here in salt country Japanese vehicles of that vintage are basically extinct from the roads. I bought an '88 Nissan in 1998 that already had significant rust, and it was disintegrating at an alarming rate by 2005. 90's and 2000's cars are much better. A 15 year old Toyota (that's not a Tacoma) will probably just starting to show rust, though a lot depends on how well the owner(s) took care of it. Most rust starts off as cosmetic so it's also up to the owner how much rust they are will to tolerate. Most cars scrapped nowadays may have rust, but were taken off of the road for some other reason.

By the way, the 1992-1996 Camry is legendary around here - dead reliable with many examples still on the road with no rust showing after 20+ winters. Unfortunately the Camry's built after that generation don't seem to be built to the same standard.

Re:median vs average

[toddestan]

Keep in mind that the car is usually several thousand more if you finance versus pay cash. Those ads that say something like "0% financing or $2500 cash back!". That's an instant $2500 discount if you don't finance.

Of course, the best solution is to not use the dealer's financing. That way you can have your cake and eat it too (though likely won't get the 0%, so YMMV).

Re:median vs average

[trigggl]

I completely overhauled the brakes on my '97 rodeo, front and back, for roughly $300. Of course, that was doing the work myself and I have to admit I didn't change out the discs (didn't want to take the hubs off again). I did change out the drums, calipers, brackets, pads, shoes, cylinders, fluid (pretty much everything else besides the hoses). I agree with a previous poster. My Rodeo is worth less than $1000, but spending more than it's worth for maintenance is still preferable to me than buying a new car and being stuck with a 6 year car payment of more than $300/month. My Rodeo is in better condition than most cars on used car lots that you'll find costing $4k or more. Do your own maintenance; drive a reliable car for less money and fewer surprises. I prefer true ownership.

Re:median vs average

[toddestan]

I don't know about Mazda, as their cars from the 00's have some major rust issues. Maybe that's behind them now, but we really won't know about today's cars until 7-10 years from now.

I do have to agree about quality falling. The Japanese, Toyota especially, seem to be just coasting on their reputation. That's not to say they won't sell you a reliable vehicle, but the cost cutting is obvious. The Koreans are really trying. Jury is still out on them, but it's undeniable that they've made impressive amounts of progress in a few years. Things were looking up for the domestics, but it seems they're slipping back into the pre-2008 mode of focusing on trucks/SUVs with a few cars on the side.

Re: median vs average

[toddestan]

I can't imagine how much it costs a 14 year old, German, large luxury sedan on the road. That's the kind of car you want to buy new, and then dump as soon as the warranty is expired (assuming of course you can afford to) because the maintenance and repairs on a car like that are insane. There's a reason those things depreciate so quickly, you know.

Re:median vs average

[Grishnakh]

I've heard that before about Toyota, and it is worrying, but not completely surprising. There's lots of companies that have done the same. Heck, the entire American auto industry did just that in a really bad way back in the 60s-70s.

Supposedly the rust issues with Mazda are mostly behind them, but only time will tell of course. They did have a problem with some rust on the sedan version of my car, on some welds on the trunk latches I think, which was corrected by a TSB. The current generation of the 3 has been out for almost 3 years now and aside from that there's nothing too major yet.

The Koreans have definitely made a huge amount of progress. However I had an experience so awful at a Hyundai dealer (involving the police even) that I don't think I can ever go back to one of those; what's really bad is that I've heard similar stuff from other people about other Hyundai dealers. The parent company seems to have a real problem getting affiliated with truly slimy local dealerships.

Re:median vs average

[Reziac]

Yeah, there is some complaint from the older crowd about how they no longer look like work trucks and are styled to resemble 18-wheelers, but so long as they still do the job and last through the work... as a Ford bigot, I think they stopped looking like real work trucks after 1997, and when I got mine I specifically looked for '97 or older, both for various features and so it wouldn't make my eyes bleed. (My F350 is a 1991. Previous truck was a 1978.)

For trucks-as-status-symbols, tho, we can't hold a burnt match to the Japanese in the 1980s. Back then a friend made a good living scrounging up used pickups for export to Japan... but they had to be fullsized, king-cab, and dually, and preferably loaded with all the options. Had to be pretty, but didn't have to run well... because the buyers didn't (and couldn't) drive them anyway. Those trucks literally sat out front of the house as status symbols and nothing else.

So I kinda laughed when the best used truck I found was a king-cab dually. Wasn't quite what I was looking for, but damn, it's an *awesome* work truck.

Re: median vs average

[JoeMerchant]

I'm glad people think like you, that's why the early 2000s BMW7s and big Mercedes are so affordable now. We've driven it 14,000 miles so far (32% of what the previous owners had driven), and our maintenance costs to-date are $4.50 to replace a cracked washer fluid cap. Previous owners depreciated more than $1.54 per mile, if it blows up tomorrow and we break even on the towing fee and recycling value we've depreciated $0.86 per mile.

In the meantime, it's a great car to drive. $0.14 per mile for gas, if we make it another 16,000 miles without a serious repair, our cost per mile will be down to 0.55, which the IRS tells us is "average" - even if we have a $5K repair every 12,000 miles after that, we're still at $0.55/mile operating costs - though if I wanted such a vehicle as that, I'd buy an old Jaguar.

Re: median vs average

[PingPongBoy]

bought in 2015 for less than half of its msrp

ghost of christmas future - an exercise in extrapolation: buy new for less than msrp, compute price by extrapolating from the used prices

Why do people think self driving cars will catch o

[Anonymous Coward]

Why do people think self driving cars will catch on? If anything, they will be more complex with even more sensors and systems needed to operate safely. If typical families already can't afford new cars, why would they be able to afford even more complex and expensive cars? The genius of Henry Ford wasn't building the best and most sophisticated car, but finding a way to lower production costs and make them affordable.

Re:Why do people think self driving cars will catc

[CRCulver]

Some have suggested that self-driving cars will lead to a decline in personal vehicle ownership. Instead, people will rent a car from a membership pool when they need it, paying a simple fee per use or per month instead of bearing all the costs of insurance, inspection and registration on themselves.

Poor graduated millennials

[thundercattt]

Majority of young people are graduating with 20-100k of school debt. Then working at BestBuy. Their credit is shot, I work for a local car dealership. The only people who come in to buy new are the Elderly. 50+. They use it for a year, trade it in against the next year's new one. The Millennials drive old run down not fit for the road Honda Accords or moms minivan because they still live at home until they're 30.

Re:Poor graduated millennials

[rockout]

I work for a local car dealership.

Yes, let's take the word of a car salesman on all this.

Re: Poor graduated millennials

[thundercattt]

I'm in the garage fixing them. Salesmen are the devil.

Re:Poor graduated millennials

[HiThere]

Yeah, it's not like we have independent evidence supporting his statements...

Re:Poor graduated millennials

[rockout]

Yes, his broad generalizations about those pesky millenials are all absolutely true and backed up by evidence, as is his contention that only the 50+ age group is buying new cars.

Sounds like you need to look up the definition of "independent evidence".

Re:Poor graduated millennials

[tommeke100]

Porsche?

Re:Poor graduated millennials

[j2.718ff]

The Millennials drive old run down not fit for the road Honda Accords or moms minivan because they still live at home until they're 30.

I drive an old Honda. I could afford much nicer, but why should I bother? The Honda runs great, and gets good gas mileage.

New vs. Used

[Anonymous Coward]

Since when did "typical" families buy brand new cars?

Since forever the middle class and better bought new cars, which gradually trickled down to the majority as used cars.

Naturally, that means you budget

[grasshoppa]

HAHAHAHAA, sorry.

In a sane world with rational people, this would mean you'd budget for a new car and buy only what you can afford. Of course, you may very well plan on using leprechaun gold at that point, while we're playing make believe.

Meanwhile, in the real world, people will borrow way too much for way too long, then complain about how it's not their fault. If it happens often enough, the government will get involved, ala "government backed loans"...then it'll really get exciting.

Re:Naturally, that means you budget

[Anonymous Coward]

leprechaun

That's considered insensitive now. Please say height-challenged Irish instead.

Re:Naturally, that means you budget

[Howitzer86]

It's the new sub-prime gold rush. High interest loans for 6 or more years is the norm rather than the exception. Depending on circumstances, the car itself might not last that long, encouraging "owners" to trade in and prolong the debt burden.

Re:Naturally, that means you budget

[ThosLives]

People either are never taught or choose to ignore the idea that you should never borrow to pay for a depreciating asset unless that asset helps you be more productive than you would be without it by a margin greater than the financing cost.

So financing a car that doesn't make you more productive than a car that doesn't require financing is a silly financial move.

I don't count "autonomous cars as a subscription" as a meaningful improvement either; it means individuals are no longer owners of capital and are therefore giving up something important. Unless we make it so that somehow nobody owns those things, the ownership situation is worse. And saying everyone owns something (e.g., through a co-op or something) has other economic and logistic issues, the least of which is the base-load / peak-load issue.

Consider - if your system has no unused ("wasted") capacity, it is extraordinarily susceptible to shocks. Unused capacity is sometimes worth the extra material costs.

Re:Naturally, that means you budget

[mysidia]

I don't count "autonomous cars as a subscription" as a meaningful improvement either;

Why not?

it means individuals are no longer owners of capital and are therefore giving up something important.

Presumably the subscription has to be beneficial for people to buy it.... E.G. The subscription costs less than owning a car. This means that instead of tying up your "capital" by purchasing a depreciating asset, that you get to keep that excess capital (cash) in your pocket, from which you can draw to make investments in other assets which are likely to either appreciate or maintain value and pay out benefits in dividends or interest......

Re:Naturally, that means you budget

[JaredOfEuropa]

What kind of rubbish car won't last 6 years?

Re:Naturally, that means you budget

[ThosLives]

I guess I left out a few words there - "individuals are no longer owners of their transportation capital." So maybe yeah their financial costs are lower and they have invested in financial instruments or whatever, but they are now at the mercy of the vehicle pool - that is the "something important" which was exchanged for the lower cost.

Re:Naturally, that means you budget

[HiThere]

One that gets into an accident. And traffic accidents are reported to be up this year.

Re:Naturally, that means you budget

[HiThere]

Even the advice you offered is too aggressive about promoting loans. You also need to consider the probability that adverse circumstances will render your investment of reduced value while not reducing the cost of the loan. Insurance can help, but it, itself, is another cost burden, and MUST, inevitably, be on the average more costly than the amount of money it will save you.

Re:Naturally, that means you budget

[speedlaw]

No problem, sir, that negative equity can be rolled into the new car loan, and over 86 months, the low payment comes to........

Re:Naturally, that means you budget

[suutar]

I think you blew past anything taught in my high school when you hit "depreciating". That's college economics, that is. Which supports your statement, of course...

Re:Naturally, that means you budget

[mysidia]

but they are now at the mercy of the vehicle pool - that is the "something important" which was exchanged for the lower cost.

Do you think, realistically, what was lost is going to be more valuable than what was gained? Assuming the subscription price is 'fair', and you are not being gouged.

Also, considering it's likely monthly subscription, then you can at any point turn around and change your mind, to decide you want out of the pool, and go buy one.

Meanwhile you have an investment that is growing every month instead of depreciating every month, and by the time you decide you want out of the pool, your compounded-investment might be worth several times as much as the cost of a car.

That is... if you buy $15,000 of stock at Year 1, and yields 10% a year, then buy the end of Year 7 it's worth $30,000.
If you had bought a car instead, then at the end of Year 7 it's worth less than $2000. I'll take a 100% gain over an 80% loss, any day.

If you want out after Year7, you can even possibly use dividend payments that came out of your financial investment to fund the purchase, AND you might have a huge chunk left over, which will continue to compound, and is extra $$$ you got to keep by delaying the vehicle purchase.

Re:Naturally, that means you budget

[Howitzer86]

Chevy.

Having electrical problems? Recall delays got you down? Come on in to the dealer, we've got nice new trade in options for you!

Re:Cars are also lasting longer though

[DaHat]

since most modern cars I feel are less see to drive because visibility is impaired (giant thick pillars in all directions these days).

Not to mention the lighter materials used and the trend towards smaller, both of which decrease survivability

As a rather tall individual, car shopping for me is rather big chore as it's not just a Q of "what do I fit in?" but "which vehicle that I fit in will not see the dashboard shatter my knees should I hit something at 20 mph?" (in far too many vehicles, parts of my body which should not be touching anything do).

Cars Are Not More Expensive

[Anonymous Coward]

Here's the depressing thing: cars aren't really more expensive than they used to be. This is not a shift in car prices. This is a shift in the financial solvency of the American people.

Re:Cars Are Not More Expensive

[CohibaVancouver]

The Anonymous Coward is right.

In 1973 a new Datsun (Nissan) 510 cost around $2300, which is around $13,000 today. By contrast, a 2016 Nissan Versa sells for about $12,000 MSRP - And the Versa is a much better made car than the 510 was.

Re:Cars Are Not More Expensive

[ruir]

It really depends. If you live in a country with repressed socialist tendencies in politics, and communist tendencies in morals, the gov will try to rob money from people with external signs of money. Apparently, as the main targets are the middle class, and not their cronies, the easiest way to do that is tax through the nose all car owners, in gas prices, regular "inspections", insurance, and "eco" costs.

Re:Cars Are Not More Expensive

[AmiMoJo]

That doesn't account for the differences in income and the relative need for a reliable car, maintenance costs, fuel costs etc. These days you need two incomes to raise a family. Public transport has been run down, and two people working means two cars. Housing near where you work is much more expensive than housing way out in the suburbs. Maintenance should be lower but tends to cost more. Fuel is more expensive, making older inefficient cars less cheap compared to newer ones.

I'm not saying the AC is wrong, only that it's a bit more complex than just comparing sticker prices.

Re:Cars Are Not More Expensive

[TechNeilogy]

The father of one of my lifelong friends was an executive with a major auto manufacturer. He was fond of pointing out that, relative to many commodities, automobile prices increase at a very reasonable rate. The unstated problem, of course, is that if the cost of a loaf of bread doubles, it can be hardship, but most families can cut back somewhere to make up the few dollars. If the cost of a car doubles, it's suddenly completely out of reach of a lot of families. He was a smart guy, and I know he could understand this. However, having lived most of his life at considerably above the median income, he had no intuitive grasp of the problem. He could only see one side of the economic equation: the marketing side.

Re:Cars Are Not More Expensive

[CohibaVancouver]

Maintenance should be lower but tends to cost more.

I'm not so sure about that - My 1973 Datsun 510 needed regular "tune ups."

I had to re-gap or replace the points and the spark plugs. The rotor and distributor cap needed regular replacement. An oil change was a *lube* oil and filter where you had to crawl under the car lubricating all the joints. The overhead cam needed regular inspection and adjustment.

On my 2012 Nissan you don't do any of those things, and it had a four-year end-to-end warranty. That Datsun 510 probably had a one-year warranty.

I'd say the difference is that likely in the 70s many more people did that tuneup work themselves.

Re:Cars Are Not More Expensive

[AmiMoJo]

Cars sold in the US seem to be designed to break though, judging by the amount of maintenance you guys do. In Europe most cars get a yearly service, alternating between major and minor. The minor one is basically a fluid change and some checks. The major one might involve re-aligning wheels or changing brake pads if they need doing.

Re:Cars Are Not More Expensive

[CohibaVancouver]

Cars sold in the US seem to be designed to break though, judging by the amount of maintenance you guys do.

That was definitely the case 15 or so years ago, but the US automakers have really improved things. For example, Ford vehicles are pretty well made these days.

Re:Cars Are Not More Expensive

[Holi]

I change my oil every 5000 miles, and I add some wiper fluid. I might need to get my brake pads and tires changed. Then I get my 30k, 60k and 90k service. I certainly don't get a "yearly" service. But I also take care of my car so it never needs "emergency" service.

Re:Cars Are Not More Expensive

[Reziac]

In my observation, maintenance now costs 3 to 10 times (in raw dollars) what it did 40 years ago, depending on what you're fixing.

And the newer the vehicle, the more expensive the maintenance. You may not need it as often but it'll cost way more than the inflation difference.

Re:Cars are also lasting longer though

[war4peace]

Are you sure?
I'm seeing plenty mostly-mechanical cars doing just fine, at least they are much less of a hassle from a maintenance perspective.

Re:Why do people think self driving cars will catc

[CohibaVancouver]

Why do people think self driving cars will catch on?

...because in their eventual form, people won't need to buy cars any more. You call one up on your smartphone and it pulls up at your door. You get in and it takes you where you want to go, then you get out and you're charged for the trip. Much cheaper than owning a car that sits in your driveway 20 hours per day.

Re: Why do people think self driving cars will cat

[Anonymous Coward]

People don't want a dirty car that strangers have been in. They don't mind a dirty car that is one they only use.

Re: Cars are also lasting longer though

[SuperKendall]

Thicker corners are exactly what I am complaining about. :-)

Re:Why do people think self driving cars will catc

[wonkey_monkey]

If anything, they will be more complex with even more sensors and systems needed to operate safely.

What do you mean, "if anything"? Of course they are more complex, with more sensors.

Re: Why do people think self driving cars will cat

[hawguy]

People don't want a dirty car that strangers have been in. They don't mind a dirty car that is one they only use.

Plenty of people in cities get by on taxis and car-share, self driving cars will expand that to suburban areas.

None of the car-share cars I've used have been "dirty", they are regularly cleaned and maintained.

Buy very used...

[Anonymous Coward]

I bought a 1998 Grand Caravan at 130,000 miles for $800, it needed $1400 in repairs right away (power steering pump, new rack and pinion & alignment). Paid for a new battery/alternator, new tires/brakes. A water pump went at 160,000, I watched a youtube video and had my car running for about $100. A new fuel pump replacement is due. So for around $3000 I have a nice, reliable car that seats 7, removable seats make it a cargo van, and it doesn't attract police attention (looks like a dadmobile). It's repairable by the mechanically inclined, and there's no touchscreen! Why would the average person pay $30,000 plus for a car?

Re:Buy very used...

[phantomfive]

So for around $3000 I have a nice, reliable car

It's not a reliable car, it could break any moment.

Re:Buy very used...

[rockout]

A new car could break any moment. Got any other stupid arguments against buying a used car? Because that one was terrible.

Re: Buy very used...

[Type44Q]

Got any other stupid arguments against buying a used car?

I don't, however I've certainly got some intelligent and informed arguments against buying a used piece of shit FWD Dodge. ;)

Re:Buy very used...

[HornWumpus]

Both, but much more the car.

The trick is to project 'I can afford a lawyer'.

Skip the 'feral stig' bumper stickers.

Re: Buy very used...

[thundercattt]

I did. If you shop around you can. Bought a VW Golf Diesel for around 3k. Lots of life in it.

Re:Buy very used...

[phantomfive]

That wasn't an argument against buying a used car. It's an argument against calling it reliable.
I drive a really old used car (1990), but I also carry my cell phone because I know it could break down unexpectedly, and I'll have to deal with it.

Re:Buy very used...

[JaredOfEuropa]

Not every worn out part will cause an unexpected and/or immediate issue. If you take care of the car and regularly inspect it (or have it inspected by someone who knows what he's doing), you will catch most trouble before it happens. And if the car is a popular model, there will be a ton of other owners with advise on what to watch for. Yes, older cars require more maintenance, you can't get away with the usual once a year or 10.000 km service, so I am not surprised the guy spent more on repairs than on the car itself. But if you do that maintenance well, the car will be as reliable as a new one.

If you decide to get an old car and you need it to run reliably, it's essential that you learn how to take care of it or find a mechanic whom you can rely on. And learning how to work on your car is another good way to save money. I'm pretty handy with tools but didn't know much about cars until I decided to learn; I've probably saved €4000 or so in repairs on our ancient Mercedes 500 (which we keep for sentimental reasons), and another €2000 or so repairing the old Jaguar (which we keep because it's such an unbelievably good ride).

Re:Buy very used...

[Sevalecan]

Anything can break down unexpectedly. For an older car, it's an issue of how well you maintain it(Aside from the regular stuff, pay attention to things like unusual noises or feelings while you're driving it and track them down. Then they won't strand you if you catch it before the point of failure). For instance, my dad's old 84 dodge only ever let me down once, and because of a modification we made to the vehicle to try something. One of the fusable links blew, not the vehicle's fault. Aside from that, it was never less reliable than a brand spanking new 2015 truck. Also consider the simpler a system is, the fewer things there are that can go wrong. Cars become more complex with each passing year with new technology and failure points to consider. For instance, I used to work at an automotive parts manufacturer for electronic power steering gears. The gears have a 3-phase electric motor, a belt, ball screw, and a complicated electronic control unit which also depends on communication with other vehicular modules in order to work. Think of all the resistors, inductors, capacitors, DSPs, EEPROMs, MOSFETS and crap that's built into that thing. That's a lot of points of failure vs a hydraulic system, or if you really want to go back in time, a full manual steering gear.

Re: Buy very used...

[rockout]

Do you? Where are they? Because saying "used piece of shit FWD Dodge" doesn't qualify as intelligent or informed to me. Maybe you have a different definition of that phrase.

Re:Buy very used...

[TechyImmigrant]

EEPROMs? What one of those grandpa?

Maybe you can get a UV erase box on ebay.

Re:Buy very used...

[fnj]

Think. I know it's hard, but try it. Yes, a new car could break down, but it has a FULL WARRANTY, and you have a pretty good chance of getting a loner if they need to take it for more than hours to work on it.

Rule of thumb

[Anonymous Coward]

... median income is about $84,000, and an "affordable" new car purchase price is about $33,000.

The diamond ring and the family car are both 20th century inventions. I thought the rule was spending 52 weeks income on a car and 4 weeks income on a diamond ring. Now it's 21 weeks for a suburban necessity and 13 weeks for a shiny decoration. What strange priorities for a not so brave, new world.

Re:Rule of thumb

[careysub]

The diamond ring and the family car are both 20th century inventions. I thought the rule was spending 52 weeks income on a car and 4 weeks income on a diamond ring. Now it's 21 weeks for a suburban necessity and 13 weeks for a shiny decoration. What strange priorities for a not so brave, new world.

Having a car as a 20th Century invention is rooted in the undeniable utility of having a vehicle that can transport people and goods long distances quickly.

The "requirement" that every marriage requires a large investment up-front in a diamond is purely the product of a marketing campaign by a diamond cartel (i.e. a price-fixing monopoly). Here is a brief, but honest as far as it goes, account by an organization dedicated to selling you diamonds. Note that the founding of the American Gem Society, in 1934, precisely coincides with the start of the De Beers cartel hard sell. It is striking that a trade organization, founded as part of a marketing scheme, does not try to hide its own origin.

Lengthier accounts of this bizarre pure luxury business are easy to find.

Regarding those "guidelines" (treated as "rules" by the industry) for how much to spend in a diamond ring - if you let marketing literature tell you what you should spend money on, you are perhaps typical, but still you are just being a patsy.

When I got married, no diamond was involved. It was a ridiculous waste of money, absolutely not an investment (they are virtually impossible to resell, the industry makes sure of that), and at that time a prop for the Apartheid regime. That last reason had ended, and recent "conflict diamond" rules have greatly reduced the tendency of diamond purchases to support mass murderers, but not ended that last problem entirely.

Re:Cars are also lasting longer though

[Austerity Empowers]

There is definitely a trade off between paying more for a car and getting more years out of it, and I suspect enough of us absolutely loathe car shopping and have been utterly disappointed with some of the faster moving features (mostly electronics) that might beget a faster update cycle that we are making that trade. Why buy new? There isn't a substantial increase in fuel economy, the feature-set is mostly decades old stuff, and the electronics are usually best done aftermarket...the price gouging on replacement parts or updates is beyond all reason.

Re:Why do people think self driving cars will catc

[CohibaVancouver]

You and everyone else that thinks that is a massive moron.

Thanks for the insight, Anonymous Coward.

Here in Vancouver we already have a variation on this called Car2Go, and a competitor called Evo. The cars aren't driverless, but you just a take a car that's parked nearby, drive it to your destination, park it and walk away. You pay by the minute. Lots of people have given up on car ownership as a result of these services appearing.

Who's the moron now?

Living room options

[QuietLagoon]

... That's in part because new cars are loaded with helpful but expensive safety features like collision-avoidance systems...

It is not really the safety features, but the "make the car more like a living room" features, that make cars a lot more expensive.

.
But don't worry, the car manufacturers are slowly turning the vehicles into remote monitoring and surveillance environments so that every aspect of our lives can be sold to the marketeers. That should drive down the price. /sarcasm

Re:Cars are also lasting longer though

[ColdWetDog]

Indeed. I'm trying to replace a 16 year pickup truck. The new ones get the same mileage. They festooned with all manner of gizmos that I don't really want. They're harder to see out of (because of the smaller windows from the side airbags -yes, they're useful but so is seeing things). They cost close to $50,000.

That is a hell of a lot of maintenance on my old truck. Unfortunately, GM built themselves into a corner. It's fundamentally sound. Even the interior looks OK.

So it's off to the local shop to replace what ever rusts out.

And off to buy a new radar for the boat.

Re:Cars Are Not More Expensive--BS!!!

[I75BJC]

In 1969, the cheapest Mercedes-Benz was $13K. (It was a diesel). Today the cheapest MB is $30K. The cheapest diesel saloon is much higher (if you can buy in the USA). Prices are higher. The Federal Government requires front airbags and the added $2K to the cost of a car. The Feds have added lots of $$$ to the actual cost of any automobile by creating and enforcing their safety regulations. Making cars higher, demanding higher mpg, making engines more complex (high control, fuel control, etc.), and other Federal Government requirements DO increase the price of each car. The MB Smart Car costs about $10K more in the USA than in Europe because of USA Federal Government regulations. And the USA version is also feature-crippled when compared to the European version. (Though the USA Smart Car will top out at 90 mph.)

Is collision avoidance *that* expensive?

[hawguy]

Does collision avoidance add significantly to the price of the car? At least one company sells an add-on collision avoidance system that costs around $1100. If this company can retail a compete add-on system for only $1100, it must cost manufacturers less than than to build it in to the car (they may sell the option as an add-on for thousands of dollars, but that has no relation to what it actually costs them to build it)

But even $1100 is less than 3% of a $34,000 car, so it doesn't seem fair to blame it for new car price inflation. Bundling options together likely one factor that adds to the price inflation - buyers can't pick and chose the options they want -- want the Bluetooth calling? Well you need to get the $1200 "premium audio package". Want a sunroof? Then you'll have to upgrade to the LX model for $4000 more. Want collision avoidance? Then you'll need the $3300 "tech" package that includes adaptive cruise control, GPS navigation, and backup camera.

Of course, even if the average new car costs $34K, there are still lots of cars available for less, a 2017 base model Honda Accord costs $22K (add $1000 for collision avoidance). A VW Jetta or Chevy Cruz is around $17K.

Re:Is collision avoidance *that* expensive?

[Overzeetop]

Packages get bundles because it's inefficient to offer them as *factory* options a la carte. That $3300 tech package includes an integrated version of the $1700 item you linked, cruise control, GPS nav and a backup camera system. You could probably put together an equivalent bolt-on system for all of that for $2500, so asking for 25-30% markup at the retail level really doesn't seem overbearing. Upselling is one of the most common profit centers in any business. So, in a way, it is that expensive. Though once it becomes standard, the price gets rolled into the base and it's no longer a premium item. Example: if you price the components that go into a car based on the dealership parts department, you'll find that the sum of all the parts to build a car are 300-400% of the price of a new car on the lot.

As for history, I grew up in a pretty middle-income family in rural MD, and our typical new cars were a Datsun pickup and a VW Fox and Rabbit. Definitely sub-average on the price tags. That was back when air conditioning was an option (and a $1000 option at that). New cars are expensive; always have been, always will be. You buy used until you can (or are willing to) afford a new car. It's a luxury, and if you're not on the happy side of the income curve you only get a certain number of those.

Bipolar market

[movdqa]

There are two car markets: luxury and the market for those that don't want to or can't pay the luxury price. I bought a cheap Camry from my local dealer four years ago for about $22K. Nice mid-size car (though the rental agencies classify it as a large car). There are lower-cost models out there too in the same class. I think that the Sonata, Altima, Focus or Fusion, Malibu are all pretty good value vehicles out there. Yes, you can spend $40K+ for cars but you really don't have to. And then there are used cars which I hear are a bargain these days.

Re: Cars Are Not More Expensive--BS!!!

[Type44Q]

Now how about you adjust for inflation? :)

Welcome to third world standard of life

[zedaroca]

Here in Brazil we usually buy a car in 60 - 72 not so cheap monthly payments.

That's in part because new cars are loaded with helpful but expensive safety features like collision-avoidance systems.

It's never because of abusive profit margins in a not truly competitive market. Down here they always blame the taxes (they are included in the price and not discriminated).

Re:Cars Are Not More Expensive--BS!!!

[HornWumpus]

Diesel saloon?

No thanks, tequila!

Re:Cars Are Not More Expensive--BS!!!

[DoofusOfDeath]

If I've used the Inflation Calculator correctly, then the cumulative inflation of the U.S. dollar from 1969 to 2016 is 554.6%. And so that $13k Mercedes-Benz in 1969 would cost ~ $85k in 2016. Much more than the $30k you cited.

Re:Cars are also lasting longer though

[Anonymous Coward]

Not to mention the lighter materials used and the trend towards smaller, both of which decrease survivability

They decrease the survivability of the car, but increase it for the person. Personally, I'd rather my car died than me. Those older, better looking, better visibility, stronger cars impact you during a crash. The majority of the hit is sent through your body. The newer, ugly, weaker cars crumple during a crash absorbing most of the energy so your seat belt doesn't need to crush all your ribs to keep you in place.

Buy used?

[jjn1056]

I've never owed a new car, I don't think its a very good value. Cars lose like half their value in the first few years, and the insurance kills you (and road taxes, some places charge road fees based on how old the car is.).

Re:Buy used?

[Bing Tsher E]

I have only bought one new car. It was a stripped 2006 Ford Ranger, and it was $15,000 with a zero percent interest loan from the manufacturer.

Re:Buy used?

[Tablizer]

Amen! New cars are a bad deal unless it's for ego or to get laid.

Buying cars about 3 to 6 years old are a much better deal, finance-wise.

Re:Buy used?

[Tablizer]

Generally you should buy insurance only if you will not be able to cover the costs of repairs yourself. Insurance co's need to make a profit and cover overhead and marketing, so there is a markup on the service you buy on average compared to paying for repairs yourself.

True, sometimes big problems happen out of bad luck, but buying used will generally leave you with plenty of margin to cover rare but expensive repairs.

For example, a new car may be 30 grand while a used one 5 years old may be 18 grand. You have 12 grand extra if you buy the used car as personal insurance against an (unlikely) large repair bill. (Insurance is also higher for new cars.)

True, dealing with the repair shop more often is a bit of a hassle, but a 5 year old car typically shouldn't have that many problems (unless you buy a screwy brand).

Re:Buy used?

[Tablizer]

Here are some examples of the steep deprecation for the first few years of a car.

http://www.freeby50.com/2013/0...

The actual utility of the car does not drop that steeply (cost per mile), it's that people pay a premium for ego/sex-appeal. If you look at a car as a utility instead of a sex machine or decoration, then new cars are illogical.

You can even pay a bit extra to have used cars shined and cleaned. Thus, it may be somewhat out of style, but can still look nice.

Re:Buy used?

[djinn6]

You should also take into account the amount of time you spend on maintenance and wasted time when the car breaks down. It's probably not much if you're unemployed and enjoy working on the car, but if you rely on the car for work, you'll pay more for a newer car. If the car breaks down on the way to the airport or an important meeting with your client, you risk losing a lot.

Re:Buy used?

[AmiMoJo]

The main value in buying a brand new car is reassurance. You know no-one else has mullered it, and you can expect the manufacturer to put any issues, even minor ones, right. Some people are willing to pay more for that peace of mind.

Personally I think slightly used cars are almost as good. Often deals have ex-demo models or low mileage 1-2 year old cars with part of the guarantee still on them. You get much of the benefit of a new car at half the price or less.

Re:Buy used?

[Tablizer]

If you get a Honda/Acura or Toyota, I bet the problems between say year 0 and 3 will be only slightly less than say year 4 to 8. Most of the early problems encountered are from manufacturing defects that affect the car anyhow, not wear and tear.

But if reliability is key to your line of work, then that small difference may matter enough. However, for most folks, it's not worth it. I'm looking at regular/typical usage, not special industries.

It's rare that Honda's and Toyota's outright stop working while driving; usually there's some warning via funny sound or engine light a day or more before failure (assuming you have a good battery). They've engineered out most of the "blunt failure" causes. We've had Honda's and Toyota's for a while, and the only outright stall was a broken water pump in a 10yr-old Civic.

Re:Buy used?

[Tablizer]

Sure, financing makes a new car "easy", but it really just spreads out the pain so that you don't feel it up front: sales psychology.

The difference between buying a new car and buying a used car, insurance included, comes to less than $200/month

I'm a bit skeptical of that number, but even at $200/month, that's 24k saved in 10 years.

Re:Buy used?

[djinn6]

It's worth mentioning that a 2011 Toyota Corolla is $14000 5 years ago and $11000 now. Sure, you might save a little more by going with used, but not that much. It just doesn't depreciate like the more expensive models.

Re:Buy used?

[painandgreed]

I've never owed a new car, I don't think its a very good value. Cars lose like half their value in the first few years, and the insurance kills you (and road taxes, some places charge road fees based on how old the car is.).

I always heard that from my father too. However, he also usually got his used cars from my grandparents. Meanwhile, during college, I went through two of his used cars, and one of my own, in a few years, all of which constantly broke down and bled money. For my second car, I did my research, checked consumer reports lemon list, and went searching. I checked every car lot I could find in the city and seriously, ever small, economic car on every lot was on that consumer report lemon list. Instead I bought a '94 Toyota Tercel brand new and I still have it 22 years later and it's only been in the shop once, for a pre-emptive clutch, water pump change along with a dent in the gas tank that was seriously limiting my range. Insurance didn't go up as I never had full coverage anyway (why get full coverage on a used car? my father would say) and I didn't notice any great rise in any other expenses either. Next time I a car, I'll be buying new again and driving it till I die. All those cars in used car lots are there for a reason.

Re:Buy used?

[LunaticTippy]

I used to feel that way until someone rear-ended my sensible liability only $5k sedan. It was totaled. Their insurance didn't want to pay what my car was worth, and my only option was to pay a lawyer to take them to court. I upgraded to comp coverage, only cost about $150/year more, and the next time someone rear ended me I got a check for the full value from my insurer same week no hassle. Their lawyers dug into the at fault insurer I have no doubt.

Well worth the saved time, money, and peace of mind.

Re:Buy used?

[fropenn]

All cars lose their value once you drive them off the lot - new, or used. It's how the used car dealers stay in business (that is to say, by selling the car to you for more than it is worth). What's more important is whether or not you get what you paid for. A $50,000 new car that gives you 200,000 safe miles is a better deal than a $6,000 used car that gives you 10,000 crappy, unreliable, will my car start at 2 AM in the bad part of town miles.

Re:Why do people think self driving cars will catc

[Gravis Zero]

Why do people think self driving cars will catch on? If anything, they will be more complex with even more sensors and systems needed to operate safely.

never having to worry about being in a car accident and thusly never having to pay for collision insurance will save you a lot of money. this is what is known as an long term investment. i know the short-sighted capitalists of the world who can't see beyond the next financial quarter don't understand but it's worth it over a long period of time.

Why everyone should buy new?

[140Mandak262Jamuna]

It is dumb to buy a new car. It loses 25% of the value the moment you take possession. Then rusts and loses value continuously. You can get fantastic almost as good as new car, one or two years old, some 30% cheaper.

Re:Why everyone should buy new?

[hawguy]

It is dumb to buy a new car. It loses 25% of the value the moment you take possession. Then rusts and loses value continuously. You can get fantastic almost as good as new car, one or two years old, some 30% cheaper.

If you keep your car for a long time, then it can be worth buying new since you know it was well taken care of. I bought my car new and 11 years later, am still driving it. While I've enjoyed the past 8 years of no car payments, I'm finally thinking of replacing it to get a car with better gas mileage and modern safety features.

Re:Why everyone should buy new?

[Alomex]

This is no longer the case. A quality, well built Camry, Civic, BMW or Accord loses about 10% when you drive it off the lot. Some American cars as well as some high end cars on the other hand do lose a lot more of their value on possession sometimes even more than 25%.

Re:Why everyone should buy new?

[sl149q]

Yeah, I'm sixteen years into my Toyota 4-runner and every time I drive it I pray for it to die so I can buy something newer. It simply refuses to stop running!

Re:Why everyone should buy new?

[Ol Olsoc]

It is dumb to buy a new car. It loses 25% of the value the moment you take possession. Then rusts and loses value continuously. You can get fantastic almost as good as new car, one or two years old, some 30% cheaper.

As well as more maintenance on the used. This is just like the old chestnut about always keep the used car because your maintenance will be lower than the payments on a new car. Yeah, that's true enough.

But it eventually gets to be a major pain in the ass. Different folks have differernt levels of what they will accept. Mine's about the 10 year mark.

Honey, the car needs a new engine

Honey the car needs a new transmission!

The garage called, we need new struts, brake rotors and a catalytic converter for inspection!

So I buy 1 -2 year old used. And if I spend a little more than the smart folks, I'll just write that off to the price of reliability.

Re:Why everyone should buy new?

[Ol Olsoc]

This is no longer the case. A quality, well built Camry, Civic, BMW or Accord loses about 10% when you drive it off the lot. Some American cars as well as some high end cars on the other hand do lose a lot more of their value on possession sometimes even more than 25%.

Then again, if a person buys a car for it's resale value, maybe a bicycle makes more financial sense.

Re:Why everyone should buy new?

[fnj]

It is dumb to buy a new car. It loses 25% of the value the moment you take possession. Then rusts and loses value continuously. You can get fantastic pre-rusted and already-badly-devalued car, one or two years old, some 30% cheaper.

FTFY.

Re:Why everyone should buy new?

[fnj]

Funny, mine is 16 years old too, and every time I drive it I pray that NOTHING WILL GO WRONG because there is no way in hell I could ever pay to fix a major problem, let alone buy a replacement.

Re:Why everyone should buy new?

[WindBourne]

You need to be a bit careful on that. Many dealers are unscrupulous esp. with used cars. OTOH, Tesla backs not only their new cars, but their used cars.

Re:Cars Are Not More Expensive--BS!!!

[Bing Tsher E]

*off topic*

What can really blow the mind regarding inflation is that back in the 1970's a 19" Color Television was typically over $500.

Re: Why do people think self driving cars will cat

[houghi]

I do not own a car and exclusively use car sharing when I need a car. The reason is money. I now pay less per month than what I used to pay for insurance.
Been doing it now for about 2 years. And I must say that the cars are not dirty at all. The reason is acountability. They know who used the car when.

So if I would get into a car and there is a lot of trash in the car, I just notify the company and they will make a note of it. If I see it before I get in the car, I do not open the car and could inform them right away. If the same person does it again, another user will notify the company. When you abuse the cars, you will get banned, so no more car for you.

It is not that you just walk up to the car with a pre-paid card and drive around. You need to subscribe.
I must say, it just works and the cars are cleaner and newer that what I used to drive myself and better maintained for sure. I use http://www.cambio.be/cms/carsh...

Re:Why do people think self driving cars will catc

[JaredOfEuropa]

Depends. I think people will buy fewer cars or perhaps different cars. You may still want to buy the car for your daily commute, but it'll be just that: a daily driver. Not a truck for when you need to haul stuff every so often, or a large sedan for the family holidays; for those rare eventualities you'll just rent something. And that second car that the wife uses twice a week for shopping? Better just rent that too.

There will still be reasons for people to want ownership of their car. For one, you can leave your stuff in it. Or perhaps you just prefer a particular model, like a convertible (those will be gone from the rental lot as soon as the weather turns nice).

THANKS OBAMA!!!

[SpankiMonki]

I there nothing we can't blame him for?

Re:THANKS OBAMA!!!

[Ol Olsoc]

I there nothing we can't blame him for?

It makes life easier for the dull among us.

Re:Cars are also lasting longer though

[PopeRatzo]

Those older, better looking, better visibility, stronger cars impact you during a crash. The majority of the hit is sent through your body. The newer, ugly, weaker cars crumple during a crash absorbing most of the energy so your seat belt doesn't need to crush all your ribs to keep you in place.

In college, I drove a '72 Chrysler Imperial. Other cars used to bounce off me like the Von Erichs off of Andre the Giant. And, it had a bench seat in the front that was big enough to land a small plane on. I met my wife in that car, and by met, I mean "met" if you get my drift. Met in the biblical sense of boning.

Let's see you do that in a 2015 Chevy Cruze that's made of plastic and papier-mâché. (damn, I still can't get over the fact that Slashdot allows me to use those fruity European letters with the little hats on them. Thank you, new Slashdot owners.)

Re:Why do people think self driving cars will catc

[Nemyst]

A current day non-smart no-nonsense car would've been exorbitantly expensive 20 years ago. Like everything else, costs will go down as more and more autonomous vehicles are created.

Re:The solution, buy a less than median priced car

[hawguy]

Another possibility, if the average family with an average of 3.5 members got rid of their average cell phone plan that costs an average of $60/mo per phone they would save an average of $210/mo which would let them afford the median priced automobile.

I think the average family worried about affording a car has a much cheaper cell phone plan than that.

Re: Why do people think self driving cars will cat

[hawguy]

Plenty of people also get by walking several miles in the sun/rain/snow/dark.

Sometimes people simply don't have a choice.

But they do have a choice - many carless city dwellers can afford a car payment and even a garage space (they may even have a deeded space that they aren't using), but chose not to own a car because there's no point - why buy an expensive depreciating asset that sits around unused 90% of the time if they don't have use it to get to work or run errands because they can get to work by train and walk to the grocery store?

Re:Why do people think self driving cars will catc

[Kjella]

Why do people think self driving cars will catch on? If anything, they will be more complex with even more sensors and systems needed to operate safely. If typical families already can't afford new cars, why would they be able to afford even more complex and expensive cars? The genius of Henry Ford wasn't building the best and most sophisticated car, but finding a way to lower production costs and make them affordable.

Goods transport, people transport, older kids, elderly and others with medical conditions that prevent them from holding a license, I think. We know there's a lot of elderly that either have voluntarily or involuntarily given up driving, should give up driving and they know it or they're in denial but that I think would be quite happy to not drive. Many have been forced to leave their homes and get an apartment because without a car public transport is too rare and too hard to use and taxis too expensive in the long run. And if they do get someone in the family to pick them up and drop them off that's time spent for them. Maybe if all the members of the household are driving age and license holders it's not such a big deal and small kids you can't just have running around by themselves but it's still many.

Personally I'm not sure how high the cost is going to be long-term anyway, sure there's sensors but ours aren't that fantastic. The rest is figuring out what the heck any of it means, but that's mainly a software challenge. If they can make a car that drives "correct" - or at least correct-ish enough and the only fault is a lack of sensor and processing capability that's a huge step. And that software you'll write once and can put in a billion cars, that's a lot of volume to spread it across. LIDAR is expensive today but we got may companies claiming it can be done much cheaper, there's optical + radar and really many possible variations and combinations for different needs, ranges and conditions. Pretty sure some of those will work out at reasonable cost.

Re:Cars Are Not More Expensive--BS!!!

[nnull]

So basically, cars are now cheaper than what they used to be and most people can't afford them anymore. Great times we're living in.

Re:Why do people think self driving cars will catc

[lakeland]

I think they'll catch on because I want one, and I assume most other people have similar wants to me.

The most expensive thing I own ...

[Qbertino]

... is the MacBook Air I'm typing this on. And it's from 2011 and I only bought it because my layoff in that year had an OK severance coming with it.

Granted, I hardly have any debt (a few hundred Euros) but if I had the money to buy a new car I'd certainly not use it for that. I'd use it for the downpayment on a small appartment or a microhouse.

As for the car, I have been toying with the thought of buy a used Smart to be more flexible. ... Couldn't say if that's happening anytime soon. Maybe I'll just wait till the robot-controlled electric version is out.

Bottom line:
I honestly don't know how people can afford the cars they're driving and standing in traffic jams with here in Germany. It's somehow beyond me. ... Maybe I'm not asking enough salary?

Re:The most expensive thing I own ...

[laughing_badger]

I can highly recommend the SMART. I was very happy with mine. Do check how much it will cost to get it serviced though. In the UK, it was more expensive than other cars would have been.

Average car?

[hibiki_r]

Many decent family cars out there are NOT, in any way, 34K new. A new Mazda 3 is a sensible car and starts under 20K. A Camry is 25K. You could buy a 350Z for less than 34K!

So plenty of families can afford new cars: They just can't afford large, over featured, expensive to repair urban assault vehicles. US streets would be better if nobody could.

Re:Average car?

[speedlaw]

In a world where streets can resemble off road courses, SUV or CUV are a rational choice...just another byproduct of our falling apart infrastructure. A truck will eat potholes all day that will bend your autobahn ready low profiles. ProTip-If you buy a new BMW in NYC, get the tire warranty.

Re:Average car?

[TechyImmigrant]

Many decent family cars out there are NOT, in any way, 34K new. A new Mazda 3 is a sensible car and starts under 20K. A Camry is 25K. You could buy a 350Z for less than 34K!

Get the Z. Mazda 3? 350Z? It's not a hard choice.

Re:Average car?

[DigiShaman]

It's the dealers. They add in all sorts of fucking bullshit like lifetime nitrogen for the tires (Honda civic), or bolt-on running boards (Toyota RAV4, wtf?) that have insane profit margins. Wherever the sales guy falls short, the finance dept will make up for via some numerical wizardry and voodoo. After TTL, yeah, I can totally see that going up to 34k for a decent family car!

You will never pay MSRP, because MSRP doesn't include bullshit! Bullshit costs an extra 10% above and beyond what you expected!!!

Re:Average car?

[Algan]

I will never set foot in a dealership until I know exactly what car I am going to buy (down to VIN), and how much I am going to pay for it, including taxes and fees and how am I going to pay for it, i.e. cash or pre-arranged finance with a third party. Everything is negotiated and agreed upon in advance. If they try any bait and switch I leave. They might try to lure me with their low APR financing, and I might take it if it is significantly better than what I have - say 0%. They might try to sell me extended warranty, which I will refuse. That's it. Any snag in the process and I give them a warning. Things don't go smoothly after the warning, I leave.

So yes, I never pay MSRP. I pay less.

Re:Average car?

[Dcnjoe60]

Many decent family cars out there are NOT, in any way, 34K new. A new Mazda 3 is a sensible car and starts under 20K. A Camry is 25K. You could buy a 350Z for less than 34K!

So plenty of families can afford new cars: They just can't afford large, over featured, expensive to repair urban assault vehicles. US streets would be better if nobody could.

A Mazda 3 probably is not a family car, at least a family with kids. Yes, you can buy a new Camry for as low as 25K, but that is the base model. I am actually in the market for a Camry and the local dealer has one at $27K which is pretty plain. The brunt of them are all close to 30K. Then one also has to figure in taxes and other fees. While I agree that there are family cars available for less than 34K, that number probably is not as far off as one might think when it comes to the total cost to purchase.

Re:Cars Are Not More Expensive--BS!!!

[CronoCloud]

Not usually that high, but it would depend on the brand and model. You could get a 21“ rca XL 100 from the lowest feature trim-line for about $450 - $500 in 72 -73. You'd get AFT and ACC for that price but no remote control. Aloso it would be a stand style tv not one of those wood cabinet models.

Re:Maybe they could

[lgw]

If the 1% weren't hogging all the wealth for themselves

So how would that help? Distributed evenly, all the stock in all the public corps in America comes out to about the same as the average income, so you'd get about 2% more money to spend from the dividends. All the corporate bonds are about the same story.

Now what? If people can sell that off, then the wealth just becomes concentrated again. And what do you do for retirement? Retirement is mostly about the accumulation of wealth over your working life, to sell off again in retirement. Should people save for retirement by giving money to banks? Now that's a silly idea.

Re: Cars Are Not More Expensive--BS!!!

[sl149q]

The best comparison is by comparing wages. Circa 1970 entry level job wages where in the sub $1 range. Certainly much less than 20% or current minimum wages.

To summarize.... average buying power is probably at least doubled, that gets you a car that has far lower operating costs, is much safer, has many more amenities, and lasts anywhere from 2-5 times as long.

Re: Cars Are Not More Expensive--BS!!!

[HiThere]

If you're going that route, you need to consider the unavoidable expenses, and subtract that from the minimum wage. (Apartment rental around here has gone up a LOT more than car prices. So have some food prices, though I tend to buy unusual items, so I don't know about in general.) Additionally you need to consider the number of hours a typical worker at the modal salary is allowed to work/week by his employer. And the fraction of the population unemployed at all. Etc.

I think you'll find that the modal disposable income in the quartile of the population containing the modal wage has not gone up by even approximately 20%, and may well have decreased. This will vary by region calculated for, of course. But fewer people used to be stuck in minimum wage jobs, and the ones that were used to be able to work 40 hours/week.

Re:Why do people think self driving cars will catc

[CohibaVancouver]

Everyone that says people won't own cars in the future is a massive moron.

Anonymous Coward Moron:

Will *some* people still own cars in the future? Yes, of course.

Will *many fewer* people own cars? Yes. Particularly in urban areas. Why would you bother owning one if it's cheaper, easier and faster to get from A to B using a car share?

You're already seeing growth in this year over year in cities with Car2Go.

PS Moron.

Re:Why do people think self driving cars will catc

[JanneM]

never having to worry about being in a car accident and thusly never having to pay for collision insurance will save you a lot of money.

If you don't have or can get the money to actually buy the thing in the first place, it doesn't matter if it saves you money in the long run. This is part reason why it tends to cost more to be poor than to be rich.

You're not saving nearly as much

[rsilvergun]

as you used to. Yes, it is technically "thousands" but 3 or 4 thousand on a 6 year note is $60/month. Plus there's been a _lot_ of problems with modern cars as they struggle to meet the fuel & emissions standards. Looks at VW. Or Nissan's problems with CVT transmissions. Or Toyota's break issues (which turned out to be real). Having an active warranty is nice. Yeah, there are recalls, but it can be a pain to deal with if you're not the original owner. 2 or 3 extra years of not dealing with any of that is worth $60. Especially if you get stuck with a $3000 repair. You're gambling that you won't (something Americans seem to do a lot :(... )

Also if you run your own business or you're in sales you need a new car to show off. Appearances matter for a lot of people. There are practical consequences for weak appearances even if the /. community prefers not to acknowledge them...

Re:You're not saving nearly as much

[rockout]

I do run my own business. The day I need to drive a new BMW or Mercedes in order to get clients is the day I know I suck at my job.

As for your faulty math - $60/month over 6 years is $4320 - but that's if you got a loan for ZERO PERCENT. Even with excellent credit you're looking at 4.5%.

For my finale, here's my numbers - the car I bought in 2012 retailed for about $21K in 2010. I got it for $14,500 - when it had 18K miles on it. There's no way you're going to convince me I would've been better off buying the new version. It's a ridiculous concept.

Re:You're not saving nearly as much

[NJRoadfan]

4.5% is high for someone with excellent credit. The captive financing arm of any major automaker will finance for much less these days, usually 0-1.9% depending on promotions. Heck even a bank will give you an auto loan for around 3% or less depending on the length.

Re:You're not saving nearly as much

[Wdomburg]

Zero percent financing is far from uncommon for auto loans.

Re:You're not saving nearly as much

[rockout]

Yeah from the dealership - of course, then you're paying full price. But if you pay cash, or bring the money from your own bank (where you're paying interest) you can get a huge discount off the sticker price. If you finance at 0% from the dealer, you're not going to get as good a price. What do you think, they're in the habit of giving money away?

It amazes me how many so-called "nerds" have only the most basic understanding of how car pricing and financing works.

Re:You're not saving nearly as much

[PhoenixFlare]

As for your faulty math - $60/month over 6 years is $4320 - but that's if you got a loan for ZERO PERCENT. Even with excellent credit you're looking at 4.5%.

Heh, the last time I had to pay that sort of rate on a car was 9 years ago, when I was not too long out of college with almost no credit history.

Traded that car in a couple of a days ago, got 1.9% with no hassle whatsoever.

Re:You're not saving nearly as much

[Wdomburg]

Of course they're not in the habit of giving money away, but manufacturers need a steady supply of new buyers in order to maintain demand. The advertised 0% rate also pulls in a lot of buyers who don't actually qualify but will buy anyway, or who ostensibly qualify but forego the rate for other considerations (longer terms, no down payment, etc).

Sure, you can avoid financing at all, but the opportunity cost of dropping tens of thousands of dollars is considerable. Even setting aside possible returns on your capital, a zero nominal rate is a negative real rate (even while inflation remains mild).

Re:You're not saving nearly as much

[Coren22]

Or Toyota's break issues (which turned out to be real).

Oh? What story did you read? Toyota made two fixes for the "brake issue". Neither of them was to solve a problem, but to prevent a possible problem that didn't actually occur.

1. Remove the all weather floor mats, these never pinned a gas pedal, but were pointed out as possibly being able to
2. Reprogram the car's computer to interpret gas and brake being depressed as no gas and all brake.

Everything I have read about this issue was that the people were actually pressing on the wrong pedal. Do you have some kind of evidence more than when NASA reviewed the logs and the systems and determined it was user error?

Re:You're not saving nearly as much

[toddestan]

Did you miss the part where Toyota finally had to cough up the source code for their ECM's and it turned out to be a massive mess of spaghetti?

How is it my fault?

[rsilvergun]

I'm under 60. I had less than no say in America's transportation system and infrastructure.

Re: Why do people think self driving cars will cat

[RightwingNutjob]

Plenty of people in cities also have bed bugs and other infestations. Call me a hypochondriac but I am proud adherent of the bus pants methodology of utilizing public transportation when I don't drive.

Re:Ugly for the price...

[Ol Olsoc]

A lot of the new cars look the same to me. All pill shaped ovals on wheels. The price doesn't help either when I've been looking around at cars recently. I've found myself going to classic car sites looking for 60's, 70's, and 80's cars all fixed up like new. I miss the simplicity of hand crank windows.

Un huh. My cars I owned in the 70s are noe just as expensive as new ones.

Is this a big surprise?

[AbRASiON]

Your money has less buying power than it used to, we can get $6 toasters now but if your son needs an operation it's $100,000. A house is ridiculously expensive but you can get a meal at a fast food place for $2.

Certain goods haven't gotten more expensive, it's that other goods have slowly gotten cheaper. Cheap chinese goods, or goods which were over priced to begin with.

Globalism is causing issues, inflation is causing issues. You need only look at the 60s and 70s families with 1 breadwinner for the household yet a reasonable house and vehicle was purchased with that income, maybe a TV and what have you.

Re:Is this a big surprise?

[Overzeetop]

Globalism is not the cause. Manufacturing efficiency is the cause. Many "third world" countries where you used to get dirt cheap labor are starting to pay more for workers. Not American or EU rates, but the ratio has closed by an order of magnitude in the last 20 years.

What you're seeing is that goods - things - have stayed the same cost or risen only slightly, but labor costs have increase dramatically. The per-unit cost for a widget has become trivial because we can make a million widgets with basic, easy to create tooling and unskilled labor. But a doctor or a nurse, who has to be with you, personally for care; or a framer, plumber, or electrician who has to travel to your land to erect a building piece by piece; or a teacher who has to spend 6-7 hours a day teaching the same class size at 30 or 40 years ago - that's labor that hasn't been automated. There are inefficiencies, but they're nowhere near the gains seen in manufacturing. It's raised our "standard of living," as measured by all of the stuff we own compared to 50 years ago - but has brought into sharp relief all those things we haven't automated.

Re:Is this a big surprise?

[Moof123]

Very true. It is easy to see a lower income family with an iphone and judge, but it is not fair. A fridge used to be a luxury item, now they are cheap and last forever. Smart phones are quickly turning into the same, hard to live life without one it seems.

Healthcare and just about anything that has not gone through the automation revolution has not gotten cheaper compared to median wages, rather the opposite.

Re:Is this a big surprise?

[moeinvt]

"Certain goods haven't gotten more expensive, it's that other goods have slowly gotten cheaper."

The goods and services that have gotten ridiculously more expensive are medical services, higher education and housing. What's the common factor in all of these markets? Massive government programs, loans, subsidies, etc. Government intervention has caused prices to skyrocket while quality stagnates.

Are there any non-government markets where the consumer has faced such a rapidly declining value proposition?

Re:The solution, buy a less than median priced car

[Ol Olsoc]

Another possibility, if the average family with an average of 3.5 members got rid of their average cell phone plan that costs an average of $60/mo per phone they would save an average of $210/mo which would let them afford the median priced automobile.

I think the average family worried about affording a car has a much cheaper cell phone plan than that.

Nope. I know a fellow who works as a waiter in an iHop gets every tax break imaginable, and he's spending over 500 a month on phones.

A lot of folks do not understand how addicted to the things that people are.

Re:Why do people think self driving cars will catc

[kamapuaa]

Because I have to drive too much every day. Having a self-driving car that lets me sleep or do something interesting instead of driving myself up and down 680 for the 3000th time would effectively give me hundreds of extra hours in a year.

Re: Why do people think self driving cars will cat

[Gussington]

Plenty of people in cities get by on taxis and car-share, self driving cars will expand that to suburban areas.

Plenty of people in cities get by on public transport, and it's generally quicker in a lot of major cities.

Re:Why not finance when COM is effectively zero?

[Ol Olsoc]

Experian Automotive said the number of new cars bought with financing rose to more than 86 percent (Source: may be paywalled) in the first quarter of this year. The average loan amount topped $30,000, with the average term for a new-car loan in the 68-month range -- some stretch as long as seven years.

When I bought my last new car three years ago, I financed the whole thing at 1% for five years.

Same here - for my last two cars. I needed some credit activity, and at around 1 percent, it's almost like free money. Probably sounds weird to many, borrowing money when you don't need to, but my other investments make much more, and there's that need to show I borrowed money in case I do need to.

Here in the US

[aussersterne]

you will find that many dealerships do the same.

Only there are precious few protections for the consumer.

So when your used car breaks down catastrophically in a couple of months, it's "Oh, we must have missed that!" and when you try to use your warranty to cover it, it's excluded on one of 57 different technicalities, with maximum coverage for that particular type of repair that only covers a fraction of the typical cost, all spelled out in tiny print in a massive rulebook of which you do not actually get a copy when you purchase your vehicle and your "warranty."

And even if you manage to find something that is covered, and want to get your fractional pittance, you still have to pay out of pocket yourself for the repairs, then submit the receipt to the third-party corporation that provides the "warranty," who will scour your receipt for more technicalities on which to exclude your claim, and if they can't, will ultimately send you your fractional pittance in 8-12 months and after several letters from your attorney.

In short, U.S. "dealer checks" and "warranties" are worth less than lavatory tissue, which is why every reputable U.S. publication strongly advises used car buyers to pay to have their own favorite mechanic go over the vehicle (at a cost of $50-$200) before buying. So you can easily burn up $2k or more having cars vetted by a mechanic before you find one that he or she will actually tell you is a reasonable bet. Yet all of them are happily checked, warranted, etc.

Re:No shit!

[Ol Olsoc]

Though, with all the money that's been printed over the past few years, minimum wage should be $50/hour now.

That was paying for the emergency appropriations in the early part of the century. You know - war on the reverse layaway plan.

Re:Why not finance when COM is effectively zero?

[Overzeetop]

Yup - I was going to pay cash for a new Subaru 4 years ago. Dealer offered me 0% for 5 years, and couldn't knock anything off if I paid with a cashier's check. I put that $25k in the bank. 4 years out, I've paid $20k off, and I've still got $20k of the initial $25k in the bank. I can't even tell you how glad I am that he talked me into financing.

irony

[Anonymous Coward]

The irony is that in actual costs, not book-cooking it costs between $2k and $8k to make most cars. The rest is sucked up in monopolistic dealerships, and book padding back at the major manufacturer. About a third of the sticker price goes to the dealer: some to the sales person and the remaining to the dealership. The remainder goes to the manufacturer, who claims it is the cost of production, but it is not.

Re:irony

[joerdie]

What about all of the R&D costs? Does the manufacturer not get to pay it's designers and engineers? I agree that dealers are a problem but the cost of any product has more to it than the simple component parts.

What is a Warranty Worth ?

[speedlaw]

For most folks, the reason they pay the big bucks, discounting ego (eg Mercedes CLA, BMW 320i) is for a warranty. This is a promise that if it breaks, someone else will fix it, on an open ended contract. This is the warranty premium, and what sells most new cars. (I"m sick of my POS whatever, I was late again, I NEED A NEW CAR). Interestingly, repair costs are set up specifically to be just a bit more than car payments when the car begins to age...at dealer prices.... Now, in reality, it isn't that simple, but you need 99% uptime to get to work, and it plays into that. If you can afford two cheaper cars, you don't need that 100 % uptime from one, and it can be cheaper. You need space, so city dwellers can't do this. If you can do some work on the car yourself, or have basic knowledge such that you can discuss reasonably with a service tech, you can buy used pretty safely. If you know where the gas goes and the key goes, and the "check engine" (yup, still there) light scares you and results in random $500 bills, then you can't buy used. I'm driving a $50k car (new) that I bought used for $16k. I did $2500 in catch up work and this includes an alternator which puked 15k miles after I got the car. Most folks think I'm driving a $50k car, but as I have another car, and I DIY most work that does not need a lift, I can afford to drive a used car. Mileage is a factor. Warranty is because they know how much folks drive, so 3 yrs/36k means I'm out of warranty early year #2. It is brief warm feeling, like a towel out of the dryer....so new, for me, isn't equal to warranty. You can do a LOT of repair work for the "warranty premium, even a whole engine in most cases". Again, this only works if you have some space, and understand the mechanics. Otherwise, they are awfully good at separation of you and money, aren't they ?

Re:You don't need a car

[speedlaw]

So says someone who is living in a City, HAS public transportation, works and lives on a reasonable system, is healthy enough to bike, and their city is pretty flat. What does grandma do, living in the Hudson Valley, or out in the midwest ?

Re:Cars are also lasting longer though

[speedlaw]

Electronics are easy. "Aux In" and a Bluetooth Button. $40 and your smartphone does all the work.

Re: Why do people think self driving cars will cat

[hawguy]

Plenty of people in cities get by on taxis and car-share, self driving cars will expand that to suburban areas.

Plenty of people in cities get by on public transport, and it's generally quicker in a lot of major cities.

Sure public transit is good for everyday trips, but still it's nice to have access to a car (even within the city) to take you point-to-point instead of waiting on transit and possibly adding blocks of walking to your journey. Things like getting taking your date cross-town from a restaurant to her friend's party on a rainy night, taking the dog to the vet when he injured his food and can't walk, going on a weekend camping trip out of town, etc.

These are the times when it's nice to have access to a car, but you don't neccessarily need your own car - take Uber or a taxi when you're in town, use carshare or a car rental company when you want to get out of town - take the car-share 4WD SUV when you're going camping, take the convertible when you're driving down the coast to a B&B with your partner, rent a minivan when you're taking the family for a week long road trip. When you don't have to own a car, you have a lot more flexibility in what kind of car you get when you *do* need one.

Bad advice to forgo the V6.

[sethstorm]

Except when you end up with another problem part - the turbo. When it does work, you have the issue of increased fuel costs vs your turboless V6. When it doesn't work, you have dead weight that impedes the engine.

Displacement and cylinders will always beat air-based imitations.

Re:Bad advice to forgo the V6.

[Grishnakh]

That's not what the EPA fuel economy figures show for modern turbo engines. There's a reason so many automakers are all moving to them: they get better fuel economy overall.

Re:Bad advice to forgo the V6.

[jaymemaurice]

I thought there was a recent study that showed turbos motors get better fuel economy /during test conditions/ but often not real in world conditions

Re:Bad advice to forgo the V6.

[amiga3D]

The tend to be more efficient, especially on overhead cam engines. They used to have a reputation for being troublesome but modern ones seem to be much better. Modern electronics have solved a lot of problems with them.

Re:Bad advice to forgo the V6.

[amiga3D]

On the open road they're hard to beat but I think in town driving they're not any better than a normally aspirated engine.

Re:Bad advice to forgo the V6.

[amiga3D]

My dad's 74 suburban had a 454 big block engine and a heavy duty towing package. It got 11 miles per gallon. 11 city, 11 highway and 11 when towing a 16 foot travel trailer. With all that torque you only knew you were towing the trailer by looking in the mirror. I do remember one time he towed a trailer load of chipped marble and it got 8 then. I could tell that load was back there!

Re:Bad advice to forgo the V6.

[Grishnakh]

And EPA fuel economy figures for turbo engines are bogus as hell. The EPA dyno testing rarely gets into operating modes where the turbo contributes, so the fuel economy of the relatively small base engine dominates. In the real world, people step on the gas and keep it there for a while, and when the turbo's pumping the gas is flowing; figure you'll get at least 20% less than what EPA says.

No, that's bogus. Maybe if you drive like a street racer all the time you'll get shitty fuel economy, but these cars (and the EPA tests) are built for normal drivers who don't drag race from stoplights. V6 and V8 cars (NA) aren't going to get EPA fuel economy figures either if you drive them like that.

If you're getting crappier fuel economy with a turbo than you would a V6 of the same power, you need to look in the mirror for the person to blame.

Re:Bad advice to forgo the V6.

[Grishnakh]

Sure, if in the "real world" people are driving like jackasses and flooring it every time the light turns green. I don't see the problem.

The whole point of a turbo engine is that it gets the fuel economy of a small engine when operated at light load, but for those times when you need more power it's able to deliver it using forced induction. It also gives you a better power-to-weight ratio. If you're constantly driving like a street racer, then yeah, it might not give you better fuel economy than a larger naturally-aspirated engine.

Re:Bad advice to forgo the V6.

[sethstorm]

Fuel and maintenance costs are not static.

Besides, if I want a glowing red turbocharger, it's going to cook my burgers. Not in my car.

Re: Bad advice to forgo the V6.

[sethstorm]

At the end of the day, I still have my engine while the Subaru owner blew theirs trying to race a Tesla.

Re:Bad advice to forgo the V6.

[jaymemaurice]

My BMW 2001 330ci (3.0l inline 6 RWD) got much better fuel economy than my 2004 VW 1.8t (inline 4 FWD) and I drove the BMW much harder than the VW and both were well maintained. The BMW seemed to give at least 2.0L/100KM better economy despite not having the turbo or wideband o2s of the VW.
The study was performed after numerous anecdotes of turbo vehicles not getting their claimed fuel economy.

While I understand there could be less weight in smaller turbocharged engine blocks, there is extra weight for the intercooler piping, turbo, possibly the pistons and crank (no need for forged internals on a NA engine) plus you have to cool the turbo and hotter burning combustion chamber which isn't free. Nor is the back-pressure helpful.
The 2001 passat 2.8l v6 was 1428 kg and the 1.8t 1451kg - the 2.8l was an aluminum block vs iron on the turbo. I get better highway economy with the V6 and got better shot trip/city fuel mileage with the 1.8t.
I thought the big benefit to a turbo engine is that you could add more fuel if needed and make more horse power with a smaller engine - I'm skeptical about magical efficiency claims

Re:Bad advice to forgo the V6.

[jaymemaurice]

except when it is idle

Re: Cars are also lasting longer though

[TechyImmigrant]

In the summer, my convertible has great visibility. No thick corners at all.
Not so much in winter though.

Silly study and sensational finding

[guacamole]

Honestly, if you spend more than 30 grand on a new car, you're already rolling in a lot of superfluous or unused features. My family members always end up buying well-equipped (not best equipped) midsize sedans like Toyota Camry and Honda Accord in the low 20Ks, and usually under the sticker price. And in fact, Camry and Accord have gotten too fat to even be called mid-sized. So if you want to save more money, go for a 20K compact car, like a Corolla, Focus, or Civic, etc. This still have four doors and five seats. Plenty for an average family, specially with younger children.

Re:Silly study and sensational finding

[guacamole]

And who said that hybrids are a good value? I don't believe that even a much cheaper Prius is a good value, considering that it's a compact car with a comfort, ride quality, and equipment levels of a Toyota Corolla but sold for at least 5-6K USD more. You need to drive that tin can for like 300,000 miles to finally make up for the price difference in saved fuel costs. The same reasoning applies to mid-size hybrids. At the time when a well equipped Honda Accord EX (without Navi or Leather seats) is sold for 25K, the Hybrid version sold for +35K is superfluous and not a very good value. Even a well equipped Accord EX-L with Navi is sold under 30K.

Re:Screw cars

[TechyImmigrant]

>I'm my area (Greater Vancouver)... In the last two weeks basically one in every third house in about 5 block radius around me has gone up for sale.

This is because people finally internalized that they won't get a new bridge until the current one falls down and kills people, due to the people they voted into power. The only way to avoid crossing a draw bridge on an Interstate that seems to lift every rush hour is to live on the other side of it.

Re: Why do people think self driving cars will cat

[spiritplumber]

My roommate is in the same situation as you. She continues to mistake me for a chaffeur, So I keep mistaking her for a gas card. Learn to drive, at least. It's a skill. Having a skill is always better than not having it. I agree with you about walking (or biking).

There is a lot of discussions about buying used

[Trachman]

While the reality is that average car on the road is 11+ years old. If you take out commercial and industrial cars probably average consumer age is approximately 10 years.

While many advocate buying used, this used car needs to become a new purchase first, and, just as the statistics shows, on average every tenth car on the road is probably a new car. If everyone would be buying a used car, then there would be no supply of new cars.

Reality is that existing prices for both new and resale values represents a finely tuned, yet fluid, supply and demand model, that takes into account both purchasing power, vanity, depreciation, reliability, cost of auto-mechanics labor, crash accidents statistics, auto-industry profit margins and many other factors.

Yes, brand new car is often overpriced. That is part of the model, where salespeople commissions and average buyer's vanity comes into a play. It is also true, that sometimes the old is just not the right choice for some people.

Re:There is a lot of discussions about buying used

[Dcnjoe60]

It didn't help that cash for clunkers took out of service a large number of good cars that would have entered the used market. Without these cars in the supply chain, used car prices rose dramatically and with the rise in used car prices came the rise in new car prices. That was the real bailout for the auto industry, not the thousand of vehicles that were initially purchased during the "deal," but the ongoing higher prices that could now be and have been charged.

Re:Why do people think self driving cars will catc

[zmooc]

The main reasons people want to own a car is in order to have it available when they want to use it and because its cheaper than a taxi. With self-driving taxis, these advantages are pretty much gone. Real self-driving cars will make car ownership mostly a thing of the past.

Re:It's true

[OneSmartFellow]

Hmm. let's see. median age.

Let's assume that nobody buys a car before they are old enough to drive - 16 in most US states but let's round it down to 15.

Let's assume that most people beyond the age of 85 don't buy a new car because of failing health, eyesight, finances, etc.

85-15=70
70/2=35
15+35=50
It is completely logical that the median age for a Toyota purchaser is 50 - in fact, I suspect the median age for the purchaser of almost any item other than a lolipop, or adult diapers is about 50.

Time to learn a little about math.

Keeping up with the Jones

[jellomizer]

A big problem is the American problem is trying to keep in style and compare themselves with their neighbors. Bigger home, nicer car... It is like we went to America to escape Europian class structure only to not let go of the feeling you are not worthy so you need to compensate, because everyone want to be a noble.
This had been a problem for a long time Americans are rich outdoor and poor inside. This makes us feel that we are somehow achieving less than most others.
What needs to be done which is hard is change the culture towards people driving more affordable card and using public transportation without feeling like they had lost in life.

total nonsense

[pghmike4]

A classic example of how to lie with statistics, by using medians for income stats, and averages for car price stats. A new Honda Accord is something along the lines of $23,000. The car is spacious, reliable, and about $11,000 below the "average" price discussed in this article. If buying a new Accord is slumming it, well, tant pis.

Also, just because someone finances a car, especially in these low interest rate times, doesn't mean they couldn't afford it. It usually makes sense to keep a certain amount of your assets liquid, and if someone offers you free liquid money, you take it.

Re:total nonsense

[Dcnjoe60]

Are you using MSRP for you numbers or street prices? While I agree the $34K figure in the article seems high, the price on the dealer lot in my locale is a lot closer to $26K after destination charges and the charges for all the other stuff that used to be included. Then, lets not forget the sales tax on the vehicle, here, that adds another $2,000. So that Accord requires $28,000 before it can be driven off the lot.

As for financing, the rule of thumb used to be no more than 10% of your income to car payments and no more than three years on financing. At 0% financing, to afford that $28,000 car would mean your income would need to be $93,000 (28,000/3 = $9,333/yr which if that is 10%, then annual income would be $93,333). Even using the lower $23,000 would bring annual income of over $70,000. Now, the national household median income for the US is just over $53,000. So, even at 0% financing, the car shouldn't cost more than $16,000 without putting one in financial risk.

Now, half the households in the country don't have the income to purchase today's vehicles, so instead of lowering the price as supply and demand would dictate, they extend the loan period to keep the payments down. However, if 10% and three years was financially sound in the past would it still not be, today? What happens with the longer loans, is that people end up being upside down, owing more for the vehicle than it is worth and if there is an accident, they are in real dire straights as the money they receive not only won't be enough to pay off the loan, let alone get a replacement vehicle.

Simply put, regardless if one uses the value from the article or your numbers, given the average household income for the US, cars are two expensive for half of the population to purchase.

Re:Cars Are Not More Expensive--BS!!!

[DoofusOfDeath]

That was my initial thought as well.

But I wonder if there are a few alternative explanations as well:

(a) Mercedes had added cheaper cars to its lineup in 2016, compared to what they offered in 1969. (After all, in the U.S. they do have a long-earned reputation as a luxury brand.)

(b) The ratio of food-costs to car-costs in general has changed significantly over those decades. (I don't think this is likely.)

Re:You don't need a car

[Merk42]

So says someone who is living in a City...

Well the article did say "of the 50 largest cities in the country"

People buy used cars.

[luis_a_espinal]

You should never spend more than 20% of you annual income on a car. Median income in the US is ~$50,000 per year. So half the US population can only afford a are of $10,000. Good luck finding a new car at that price.

Which is why people go for used cars, as they always have done. This are news from yesterday. New cars have never been meant for people at or below the median income. They haven't been for a long time. Hell, I alone make 6 figures, and I've only bought a new car once, and that was for my wife and kids (while I still drive the 1998 Honda Civic my wife bought as new). So in our household, we have only bought a new car twice in more than two decades.

And this is not uncommon.

So what makes people think buying a new car is a "new" concern for median-income households? Yes, buying used cars can suck, but that is an indictment in our public transportation systems and not so much on a median-income household purchasing power.

This is truly a first world problem.

Wrong factors

[luis_a_espinal]

That's in part because new cars are loaded with helpful but expensive safety features like collision-avoidance systems.

Wrong factors. Median income people haven't been able to afford new cars for a while. And this is more a function of loss in purchasing power than about new (and expensive) safety features.

People in such conditions do what they have done for a long time - buy used cars. #firstworldproblem.

Re:Wrong factors

[Dcnjoe60]

That's in part because new cars are loaded with helpful but expensive safety features like collision-avoidance systems.

Wrong factors. Median income people haven't been able to afford new cars for a while. And this is more a function of loss in purchasing power than about new (and expensive) safety features.

People in such conditions do what they have done for a long time - buy used cars. #firstworldproblem.

I agree. Unfortunately, the poorly thought out cash for clunkers during the bailout took a large number of cars destined for the used market out of circulation and destroyed them. This had the unintentional (or maybe it was intentional) consequence of driving up the prices of used cars which have not returned to normal. So, median income people can't buy new and now have to struggle to buy used.

Cars crash a lot

[zenyu]

Two million Americans are injured and over 30,000 are killed each year... The crash rate without hospitalization is even higher. What do you think happens to their cars?

There are a number of reasons why the crash rate is so much higher in the US than other countries but two big ones are that American road engineering standards are decades behind the rest of the world and traffic regulation's enforcement is largely not yet automated.

Safety and CAFE

[stabiesoft]

And with ever increasing safety and CAFE requirements, it is just going to get worse. LKA and auto braking on collision are just 2 examples that are going to add some bucks for safety, and start/stop has been the latest add on for mileage improvement. Unfortunately, as reliable as car manufacturers have become, ever increasing "stuff" is going to end up increasing maint costs as well for the newer stuff.

Re:Cars are also lasting longer though

[fnj]

Not to mention the lighter materials used and the trend towards smaller, both of which decrease survivability

Nonsense. Cars are built like brick shithouses nowadays. My 1977 Rabbit weighed 1800-odd lb. My 1999 Golf weighs almost 2900 lb. The Rabbit had more cargo space, and about the same cabin space.

Too Many New Cars

[dcw3]

I probably could have retired if I hadn't wasted so much over the years, and this doesn't include multiple used cars I've owned as well. Much of the turnover was due to moves every few years for work. What you can afford varies wildly based upon your circumstances. Are you supporting family, or single. Saving for kids education, retirement, etc., etc. Someone else made a claim here that you shouldn't spend more than 20% of your annual pay...don't know where he pulled that BS number from but YMMV, mine certainly has.

'78 Trans Am (~$7200) when I was an Airman, making about $5k/yr....Dad covered the first $5k...I could barely afford the gas and insurance, but didn't have other bills.
'82 Ford EXP (~$8k) when I was making $20k at my first real job.
'85 Vette (~$25k) when I was making ~$50k
'86 TBird..(don't recall price) daily driver so I could baby the Vette
'86 Hyundai Presto (Korean version of the Excel $4600 new!...loaded)
'88 Saab 900 (don't recall)
'91 Hyundai Elantra (~$9k)
'94 Intrepid (leased on advice of my attorney as I was getting divorced...can't split what you don't own)
'98 Grand Prix (low $20s)...think I was making in the $70k range then
'99 Grand Prix (ditto)...just met the wife, so we had twin cars.
'03 Infiniti FX45 (~$50k)
'12 Grand Cherokee (~low $40s...loaded) for the wife
'12 Charger SRT8 ($52k)
'13 Rogue (don't recall price...college grad present for daughter)

Simple analysis

[Dcnjoe60]

Back when minimum wage was $2.00/hour, you could by a new car between $2,000 and $3,000 (you could also spend more for a luxury cars and sports cars). Basically the purchase price was 1,000 to 1,500 times the minimum wage. Using today's minimum wage, that would put the price of a new car between $7,250 and $10,875.

Or, if you don't want to use minimum wage as the measure, the median household income of the time was $11,000. So a new car was between 18% and 27% of household income. The last census (2014) shows median household income $53,657, so a new car, compared to the 1970s should be $9,658 and $14,487.

Using either measure, it is readily apparant that wages have not kept up with the cost of new vehicles. The increased price of new vehicles also causes higher prices for used vehicles. So, while cars do last longer and have more features than in the past, they are at the same time less affordable by the majority of households.

That is not to say that cars are overpriced as this could easily be explained as median wages not increases with inflation for common household goods and expenses. That analysis is left to others.

Soooo..

[bravecanadian]

Take advantage of the suckers buying a new car every three years and pick up a really nice used car and save your money.

Companies are selling effing PIMPMOBILES

[knorthern knight]

Air-bags, etc, yes, you do need them. But just try getting a car without a multi-thousand dollar stereo system with satellite radio included. Or Internet connection. Or Onstar (or other brands' equivalant). Or a sun-roof that leaks rain in the summer and cold air in the winter, etc, etc, etc.

That is why people can't afford new cars.

I guess I don't get it.

[nate11000]

I make more than their median income figure, and I just bought a fully loaded Corolla for less than $18k. Am I supposed to feel bad for people that can't afford a $34k car? Maybe consider a cheaper or used vehicle.

Re:bullshit numbers

[Dcnjoe60]

typical car is 33k? that's absurd... either that or people are buying more than they need. great 5 door cars that are comfortable are around 20k... so this "study" is simply bullshit.

That is assuming the dealer ordered those base models. Often, what they order has upgrades, so while they may be available somewhere for 20K, the actual price one actually has to pay is often a lot higher.

good news is coming

[WindBourne]

Tesla Model 3 will be 35K and will be out next year. However, within 4 years, they will have their low-end $20,000 model available. And at that time, you can bet that it will be a equal to cars like Buick or Lincoln, only for 20K and under.

Re:Why do people think self driving cars will catc

[SvnLyrBrto]

People typically are bad at math and long-term planning. Specifically, people often foolishly look only at the upfront cost, and ignore the total cost of ownership. A late-model car from a reliable make like Honda or Toyota will run pretty much repair-free for over a decade following only the scheduled services in the owner's manual. Divided out, that turns out to be a better deal than the cheap Dodge you can get for half the upfront price at Uncle Al's Used Car Lot. Replacing the master brake cylinder a year in, the clutch the year after that, the ECU the next year, then the radiator, and so on... it all adds up, as does the lost use of the car while it's in the shop.

And while the average may be $34,000 (Oh, and BTW, is that the mean or the median? It kind of matters in this sort of discussion.), there are some damn fine options in the $20K range, and some very good choices even for under $20K. I bought my 2013 Mazda 3 new for $17.5K, and it's absolutely fantastic. Most MX-5s will come in under $30K, as will most models of the BRZ or FRS. Pretty much the entire Scion lineup (Toyotas by another name and about to be folded into the main brand anyway.) is in the $16-28K range. If outdoors is your thing, Subaru also has the Crosstrek and Impreza wagons running $18-25K. For in-city versatility, Honda's Fit seldom exceeds $20K. And if you want the canonical classics, Civics and Corollas start at $18K and I don't think it's even possible to configure one over $30K.

As for self-driving, I suspect the impetus will come from the insurance companies. If Google's claims about the safety of self-driving cars bears out, they will be dramatically safer than human-driven cars. And that data is easy to gather. Self-drivers are more sensor package and data recorder than they are actually cars, after all. So the only real question there is: "Is Google telling the truth?". The insurance companies will take notice of this. Their actuaries will update their tables. And the premiums will go up on human-driven cars to the point that the total cost of ownership I mentioned above makes them prohibitively expensive, except perhaps for weekend recreational driving under 5000 miles/year.

Used, Luxury

[holophrastic]

So, buying a new car remains the "luxury" that it's always been. Is there a problem with this?

How about the other side of the coin: used cars are that much better, that much cheaper, and that much longer-lasting. The same $34'000 new car, after a five-year lease, is available for $15'000, and still has another 5 years of perfectly good, warrantied life.

Sounds like the average family income can support two perfectly good, previously-enjoyed cars. I don't see the problem.

Of course, with maintenance, gas, insurance, and the purchase price, it'll still cost $8'000 - $10'000 per year for any reasonable car.

Re:Why do people think self driving cars will catc

[Holi]

You mean like Zipcar and Car2go? Both which have seen miserable stock performance, and in my experience are abject failures. The idea that the American car culture is going to up and vanish with the advent of self driving cars is ludicrous. You are asking for a cultural change, a giving up of the "Freedom of the open road". I have a really hard time seeing the American public embracing it.

Re:Why do people think self driving cars will catc

[Holi]

Maybe in Europe, but you fail to take the American Car Culture into consideration. It is a strong part of our natural identity. You will need to have a major cultural shift in this country, a shift I don't think the tech minority really understand. The majority of Americans will not give up their cars to let some computer drive them around. It's a part of the puzzle everyone ignores, it's also the part that pretty much insures that these ideas flop.

Re:Why do people think self driving cars will catc

[Holi]

Who's the moron now?

Since this is not a technical problem (the idea of shared cars has been around a long time), and they have never really taken off. Sure it may work for awhile in certain cities with certain demographics, but on a larger scale these ideas fail. Not because we can't implement them, but because a majority of people won't use them, they will not give up on freedom that car ownership provides.
I don't know about the car culture in Canada, but here in the States it is integral to the modern American experience.

Re:Why do people think self driving cars will catc

[Holi]

"PS Moron"

And you entirely ruined your argument, not that you had a good one to begin with. Car2go growth? Maybe in Seattle, or China, but Car2go and Zip have very little presence in the rest of the country. Total revenue for Car sharing in the US 400 million. compare that to the 28 Billion for traditional car rental. Those numbers really show your "growth". The people who would use the car sharing are now using Uber and Lyft, so I bet you will see what little growth the car sharing industry has seen dissipate

"You're already seeing growth in this year over year in cities with Car2Go."
Comments like these require proof, because the only place Car2go is seeing major growth is in China.
Car2go now only is in 9 US cities after dropping Miami, Arlington, LA, and Eugene. While they may be the largest car sharing service, they are the largest of a small, and shrinking market. (a million registered members is nothing for an international company).

So who really is the moron here?

Re:Why do people think self driving cars will catc

[Holi]

The exact reason why they won't catch on in the States. Car ownership here in the US is a cultural thing and that is not going away anytime soon. Car sharing companies don't really do well here. Americans like their cars.

Re: Why do people think self driving cars will cat

[tepples]

If you live in a city whose bus drivers have nights, Sundays, and major holidays off (source: fwcitilink.com), and your boss assigns you hours on Sundays, is car sharing practical to use every Sunday to commute to work?

100 hours of supervised driving at $50/hr

[tepples]

Goods transport, people transport, older kids, elderly and others with medical conditions that prevent them from holding a license, I think.

That and $5,000 invoice from a driving school to get the required 100+ hours of verifiable supervised driving practice that some states require of learners (source). Not everybody has parents who both drive and live nearby.

Re:Why do people think self driving cars will catc

[hucker75]

They can afford budget new cars or 2nd hand cars. Why should everyone be able to afford a new car? That's what the used car trade is for.

Re: Why do people think self driving cars will cat

[hucker75]

Why would anyone be proud to be a hypochondriac?

Commuting to work is productive, as is investing

[tepples]

People either are never taught or choose to ignore the idea that you should never borrow to pay for a depreciating asset unless that asset helps you be more productive than you would be without it by a margin greater than the financing cost.

A car helps you be productive because it helps you get to and from work. And if it's your first job during or out of high school, or sometimes even out of college, you lack wealth to acquire it without financing, and you lack experience to make your labor attractive to legitimate work-from-home opportunities. For many, the bus isn't an acceptable substitute because bus drives have nights and Sundays off. Bosses have threatened to lay employees off unless the employee agrees to fill in a night or Sunday shift.

And if you do have wealth, you probably have good enough credit to buy a car at an interest rate lower than the inverse P/E ratio of the company that makes it. This means your money can be productive. For example, Ford Motor Company (NYSE: F) has a price to earnings ratio in the neighborhood of 6.6 (source), for an expected APY of 100 / 6.6 = 15%. So if you can finance a Ford vehicle for less than 15% APR, then you can buy a car, put everything but the down payment into a long position in F, sell a few shares every year to make the car payments, and still come out ahead because your dividends will exceed the interest.

Re: Cars are also lasting longer though

[slew]

The increase of the size of the "A" pillar has been a result of US Federal Motor Vehicle Safety Standard 216. The NHTSA based their proposal on the following analysis.

The agency used two alternative methods to estimate the benefits of this proposal. Under the first alternative, we estimate that this proposal would prevent 793 non-fatal injuries and 13 fatalities. Under the second alternative, we estimate that this proposal would prevent 498 non-fatal injuries and 44 fatalities. The annual equivalent lives saved are estimated at 39 and 55, respectively. The estimated average cost in 2003 dollars, per vehicle, of meeting the proposed requirements would be $10.67 per affected vehicle. Added weight from design changes is estimated to increase lifetime fuel costs by $5.33 to $6.69 per vehicle. The cost per year for the vehicle fleet is estimated to be $88-$95 million. The cost per equivalent life saved is estimated to range from $2.1 to $3.4 million.

Since they had no data yet, they of course did not factor in visibility concerns into the proposal.

Although you might think it's "easy" to simply just manufacture the A-pillar out of high-strength steel, the A-pillar must also be soft enough to meet federal head impact standards which generally requires some sort of foam and other energy absorbing materials which adds bulk. Also to meet the federal mileage requirements, you want small side mirrors and to steeply sweep back the windshield to reduce drag putting more structural requirements on the A-pillar.

In comparison, let's look at the K.T. Safety Act of 2007 (apparently, 70 percent of all non-traffic, car-related childhood fatalities are due to limited visibility according to kidsandcars.org the folks that lobbied to make rear view camera mandatory on new cars by 2018). Providing for rear-view cameras, the NHTSA estimated the cost per equivalent life saved is estimated to range from $15.9 to $26.3 million and annually, it would save 13-15 lives (vs ~210 today) and reduce about 1125-1332 injuries (vs ~15,000 today). Interestingly, though a rear backup camera could potentially be a source of additional repair costs, it is estimated to provide a net *reduction* in repair costs of about $10-$13/year by helping drivers avoid damage in the first place. The estimated average cost per vehicle, of meeting the proposed requirements would be $43-$45 per affected vehicle ($132-$142 for those w/o displays). The cost per year for the vehicle fleet is estimated to be $546-$620 million.

That's quite a bit more than the A-pillar "costs" (but of course we need to think of the children).

Interestingly, though since car manufacturers will need to put in at least 1 camera to meet new safety requirements, they are all on track to eventually use cameras replace *all* mirrors for all the blind spots, so this blind spot problem may only be a temporary issue for new cars (and I'm sure after-market will be coming soon)... Maybe even your insurance company will pay for it (by giving you a discount)...

In-law discount

[orgelspieler]

My father-in-law just gives me his old car whenever he wants an upgrade. Problem solved!

Re:Why include light trucks?

[orgelspieler]

Ummm... half the families in Texas? (yes they are that common)

Re:Cars Are Not More Expensive--BS!!!

[andydouble07]

Yep: http://data.bls.gov/cgi-bin/cp...

Re:Why do people think self driving cars will catc

[Rakarra]

Since this is not a technical problem (the idea of shared cars has been around a long time), and they have never really taken off.

Yes, but the self-driving aspect certainly gets it closer to the ideal. I can understand being skeptical of how car-sharing services have worked before, but a car that can move autonomously would be a game changer. If you can make them -convenient- (car sharing never was), then people will use them. If the car is just... there when you want it, I think a lot of people will go for that. It may not entirely replace a personal car, but it might replace a number of uses for them.

Re:Cars are also lasting longer though

[Rakarra]

Not to mention the lighter materials used and the trend towards smaller, both of which decrease survivability

Nonsense. Cars are built like brick shithouses nowadays. My 1977 Rabbit weighed 1800-odd lb. My 1999 Golf weighs almost 2900 lb. The Rabbit had more cargo space, and about the same cabin space.

People might have driven pickup trucks in the 70s, but overall we've seen a bit of a weight arms-race in the US in the last decade. More and more people driving SUVs because they're big and they feel "safer," and they are safer -- because they have a big weight advantage in a collision with a car. So current cars trend towards smaller, but they're also engineered to survive impact with a much larger vehicle, which means heavier construction.

Re:It's true

[suutar]

That's not calculating the median age of car buyers, though, it's calculating the midpoint of the buying-car part of the human lifespan.

Re:Cars are also lasting longer though

[Rakarra]

Electronics are easy. "Aux In" and a Bluetooth Button. $40 and your smartphone does all the work.

I've found Bluetooth interfaces to be... unreliable. Many (I suspect lower-quality) bluetooth-enabled stereos have problems syncing. Oh, the pairing part is easy. My phone will be paired, but it will take awhile for the audio to actually start going through the car speakers (until then the car display might say things like "Samsung A900 has stopped" or "Device has disconnected."). It's not as straightforward and instantaneous as just plugging in a cable into an AUX jack. Then there's the hitching. Sometimes the audio is fine, sometimes it just hitches, and it does that with both my Samsung and my husband's iphone. I've tried with an Alpine stereo I'd bought myself, as well as with the sound system built into my 2016 Nissan. It's just a hassle sometimes.

Re:Why do people think self driving cars will catc

[CohibaVancouver]

If you can make them -convenient- (car sharing never was)

I don't understand this comment. I just checked the app and there are 10 Car2Go vehicles all under a 3 minute walk from where I am right now. If I drive one home I can probably park it outside my house - Certainly within a 1/2 block of my house.

I realize many americans are lazy bastards, but that certainly meets my definition of 'convenient.'

Re: Why do people think self driving cars will cat

[petermgreen]

Plenty of people in cities get by on public transport, and it's generally quicker in a lot of major cities.

That depends very much on when and where you are travelling. The practicality of public transport also depends on what you want to take with you.

If you live in the city center of a major city then public transport is good so you rarely need a car. Plus keeping a car in the city center is expensive. For these people Public transport takes the bulk and Taxis and/or car share services cover the minority of journeys where public transport is unsuitable. Obviously poorer people will have more of a bias towards public transport while richer people will be more likely to use the Taxi and car share services where conviniant.

Out in the suburbs public transport coverage is worse, car share services (at least where I live) are practically non-existant and the distances involved make taxi's an expensive option. For many people this shifts the balance towards owning a car. Especially for people who have already paid the upfront costs of starting to drive.

If/when self driving cars are able (both legally and technically) to operate unsupervised I would expect this balance to shift. The driver represents a large propotion of the operating costs of a taxi.

Seriously?

[KenHansen]

This is somehow 'tech-related' because the safety and convenience features driving up the cost of automobiles?
News flash - cars are going to get more expensive in 2018:

Beginning in 2018, Detroit automakers will be on the hook for the so-called Cadillac tax, a 40 percent excise tax on company-sponsored health plans as part of the Affordable Care Act. Employers will be taxed on health coverage that costs more than $10,200 for individuals or $27,500 for a family.

Source: http://www.detroitnews.com/sto...

Re:Bullshit

[ShooterNeo]

Have you considered that your analysis of the facts might be blinded by your own political agenda? Those 13k - in today's dollars - entry level cars have plenty of embedded computers, pollution controls, and some airbags. That's a ton of "simple" mechanical systems replaced with electronics.

Electronics are usually cheaper because you can use the same under a dollar microcontroller to do control tasks that would take a room sized mechanical computer. Also, you don't need to design custom mechanical components - you just program the same microcontroller to fill a different role.

Re: Why do people think self driving cars will cat

[Gussington]

If you live in the city center of a major city then public transport is good so you rarely need a car.

It also depends on which city you live. I've noticed American cities are mostly designed around suburbs and cars which is a poor design for efficient public transport networks. Europe and Asia tend to have most densely packed, geographically smaller cities that evolved around pedestrian and cycle transport, so it's more conducive to public transport.
If you were to design a city from scratch today, I very much doubt you would build as many roads. Cars simply do not scale in large cities, so the most future proof design would include plenty of public transport options.

Re: Why do people think self driving cars will cat

[houghi]

That will depend from city to city and situation to situation. In my case it would be as my company would cover the cost. And if they did, it will also be, because of the number of miles I drive the rest of the month and the distance I have to go.

If it is every sunday, reserving a car is also no problem as you can cancel for free if you do it more than 24 hours before. I used it when there were strikes in Belgium.

As everybody is in a different situation, here is what I did:
Before I sold my car I tried it out for 2 months to see if it was any good for me. That way I had a back up plan if it would not be good enough. I did not touch my car during those two months to make a fair test.

At this moment I pay around 50EUR per month on driving. This because I mainly use it only to go shopping once a week and that is what I was using my car for anyway.

Many people use it as a replacement for a second car. They still have a car they use to drive around in all the time.

They say it is cost effective if you don't drive 10.000km per year and don't use it every day. Obviously YMMV (pun intended) and it will differ from country to city to even your street if this is an option, so try it out for a month and if it does not work, you lost perhaps 50EUR. If it works, spend that less per month easily. I am spending around 200EUR less per month.

New Cars Are Too Expensive For The Typical Family

[BundyGil]

American businesses have been driving down wages and salaries for decades by attacking and demonising unions with the help of the GOP and a naive public. Now they find that their potential customers cannot afford to buy their products. Talk about shoft sighted stupidity. If your customers can't buy your products you eventually go out of business. Some states are instituting increased minimum wages, but that doesn't help as it's the decimated middle class that buys products to drive industry. America is on a long slow downhill slide to self propelled poverty and irrelevancy courtesy of industry and GOP.

Re:Why do people think self driving cars will catc

[Rakarra]

I don't understand this comment. I just checked the app and there are 10 Car2Go vehicles all under a 3 minute walk from where I am right now

Car2Go is an interesting idea, but it's not available in many cities yet. This seems more like more convenient car rental rather than "car sharing."

Always was...

[cwsumner]

It has always been true that half the people could not afford the more expensive cars. And carriages before that...

Cars are not more expensive now, it is the money that is of less value. The governments have been pushing inflation for generations. You used to be able to buy a loaf of bread for less than a dollar. Go back a bit more and you could get one for a penny. In a way, your dollar these days is only worth about a penny!

People are buying what they need, or alse someone would make what they need and get rich.

But I don't recommend buying the fancy cars with a single computer controlling all functions, they are not safe. I design that kind of stuff and they are not taking proper care with it ... yet.

Toyota FTW

[NewYork]

Toyota is virtually maintenance free;
https://news.ycombinator.com/i...

They don't want anyone buying it

[peawormsworth]

Car companies do not want to Buy a new car. They want you to Lease.

The price of a new car is not real. It is simply an inflated price the manufacturer uses to set up your lease payments. And the lease is not designed to allow you to own the car. The high sticker price ensures that when your lease is up that they will convince you to start a new lease on a new car rather than pay the remainder of the inflated debt.

The car companies are designed to extract as much as you can afford or more on a monthly basis and provide you with nothing to show for it in the end. Their goal is to extract as much as they can squeeze out of your disposable income and renegotiate this every couple of years. So you end up in an endless cycle of paying money to "borrow" their cars.

Smart people buy used cars that highly depreciated from the suckers who bought new.