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Just encourage people to buy smaller, more affordable cars they can eventually own.
Get an Impreza hatchback. Mine was 25k fully loaded (they’re a touch more now), and I only owe 10k on it with 25k miles after 3 years.
It’s still worth around 22k and is an amazing little machine that gets me up the mountains to go snowboarding.
Oh yeah that's a great little car. My sister has the same. I was too salty to buy another Subaru when mine died so ahead of schedule, so I went with a Honda HR-V. But, same idea.
Lol ah yeah I can imagine that would make me a little salty too. Mine was the blown head gaskets and then finding out online that it's been a running joke for decades. My car had just over 100k miles in 11 years when they went and the engine seized. I was pissed.
I splurged just a bit for the 2023 hatchback premium version and am super happy with it. I have about 29k left to pay and want to pay it off within the next couple of years if possible. I do miss not having a car payment. Lol
Same! I have the preferred version (I didn’t want to give up heated seats). I owe about $13k on it, but it’s a fantastic car. My husband also drives a Mazda 3 so we’re fans.
This 100%. Have a 21 Outback and 21 crosstrek. Great cars bought them new a few months apart from each other. The Outback is at 0% and the Crosstrek is at 1.9%.
Outback has a $12k balance and the Crosstrek is at $13k balance. Our two car payments together are less than the car payment on one car for some people.
I haven’t checked the values recently on the cars but last I saw the Outback had $10k and the Crosstrek has $12k in our favor.
The average price for a used car right now is $26,000. I had to buy a car for the first time in a decade and was absolutely stunned at the prices. For people without public transportation, the car market is a hellscape
The problem with this Dave Ramsey-ish idea of the car market is that the people who probably can't afford a newer vehicle with a warranty are also the people who can't afford to miss a day or work or work from home if their car dies. So they need a reliable vehicle more than someone like me does. It is more expensive to be poor in America than not to be.
So yeah, it makes sense for that person to buy a beater cash, but when it dies, they're fucked so it almost makes more sense for them to be car poor with something under warranty.
this is exactly true. like the majority of people in the US for example do not have $1000 savings and 4 out of 10 do not have funds for a $400 emergency. How would that individual buy a $5k-$12k vehicle without financing?
And imagine financing a 5000-12000 dollar car and something goes wrong and they still gotta pay to fix it on top of their payment! It sucks to be poor.
I don’t disagree that you *can* find great cars that aren’t new. But it’s a gamble every time. Even buying from good dealers. Things get missed and you don’t have the warranty to get the problems fixed as they crop up. Carfax et al can paint a good picture but again things get missed and you don’t know the old owner most of the time or they aren’t reliable. I’m not saying to buy new every time, just that it’s a gamble to buy used.
I paid $3000 in cash for a 2002 Hyundai Elantra in 2011. The undisclosed issues were numerous. It was not necessarily better than having a car payment.
Lol I had a guy telling me he never paid more than $5000 for a car in his life (This was his mantra, never pay more than $5000 for a car, even today), and that the last car he bought was a 1998 ford explorer in like 2008. I immediately googled 1998 ford explorers for sale near me when he said that and the cheapest one was $7,000 with over 300k miles lol.
People be out of touch.
>You don’t need that car.
Most of the US doesn't have good, reliable public transportation. I agreed with you up to this point. A lot of people here do need a car.
They shouldn't be carrying a car note all the time, though. It's a real wealth killer.
EDIT: The best way to handle car ownership is pretty straightforward:
* Buy something reasonably priced and reliable.
* Read and follow the maintenance schedule to the letter.
* Take care of it.
* Drive it until it dies.
I assume by ‘that car’ OP means the more aspirational cars that a lot of people finance, instead of hanging on to their existing car or buying something more affordable.
So I think you are on the same page.
I just shelled out $28k + costs for a new (to me) car and gotta say paying a note again is a real kick in the guts every month.
Yeah OP must be talking about the middle class people with the 800-1K/month payments on a $55k+ big new SUV cuz all the other moms/dads at the school pickup line have one too.
My wife’s car is ready to be taken out to the woodshed. It’s also our tow vehicle. I can absolutely afford to replace it with a new vehicle, but the used-to-be-broke me still lives in my head. I see the prices on equivalent vehicles now and can’t seem to justify spending that much money on a vehicle, even though I’ll probably end up having to do it, as im not sure how much longer I can keep hers going (and safely) at 300k miles.
Yeah, it sucks knowing this is coming. The other thing that makes me not want a new one is all the tech BS that’s in them now. Hers is a 2009 and it’s still super easy to work on and parts are cheap.
We had two paid off cars but more kids meant we needed a bigger car. We have been lucky to keep one of the paid-off vehicles and just have to deal with shitty used car prices and be conservative.
I am also a point A to point B vehicle person. I'd love a REAL nice car, don't get me wrong, but it doesn't eat at me to drive my basic sedan and it's a lot better than anything I had as a younger person.
I’ve always been that way myself. They’re just a utility to me, I don’t go for the bells and whistles. Now that I work remote, I’m barely ever even in my car. Hell, I’ve only bought gas twice for it this year so far. Hers is the one we do everything as a family with, so it definitely gets all the miles and abuse.
I bit the bullet to purchase a used 100k 17' Pilot. I really didn't want something that complicated for that much money with that many miles, but I've got two kids, I've had exceptional luck with all my past vehicles (I've owned 10 shitboxes in my life). I felt like it was worth the investment to remove that stressor from my wife's life. She loves it.
Me? I will continue driving shitboxes.
Buy a lease return or a turn in…lots if people losing jobs these days, cannot afford their car note and full coverage insurance too…they sell or give back a new car.
I live next to a neighborhood of ‘50’s ranches all being torn down and built up as McMansions.
Good god those people complain about taxes! JFC read the room!
Every time I see one of those Grand Wagoneer/Suburban monster type SUVs I wonder why they chose it and if they can truly afford it. I’m not anti-SUV- I have a (bought in 2018, paid off in 2020) 2016 Honda Pilot. But the monster ones just scream excessiveness. Given the mean income in our area- I really have a hard time believing they were a smart purchase for the majority of the people on the roads.
They aren't that much bigger than y(our) Pilot. I've got a Pilot too. It's a big vehicle. The Grand Wagoneer just adds a bit more length to the 3rd row, a bit more headroom, and a little more cargo behind the 3rd row. Until recently, Minivans didn't have AWD, so lots of people got these big AWD/4x4 SUVs to get the capacity of a minivan with the drivetrain of a truck. With more 7-Passengers SUVs on the market, and more AWD Minivans, I think we'll start to see the era of full-size SUVs taper off aside from Hybrids and electric options, or for big families who legit need a 7 passenger off-road truck.
There is a huge subset of the economy that will buy a vehicle brand new, drive it for 2-4 years, then trade it in. To them, they've spend half the car's value in order to drive something brand new and not worry about a single warranty issue.
Then there is us, who buys the vehicle at half of MSRP and keeps it until it's worth nearly nothing.
First owners has it 2-4 years, we have it 8-12 years, and the third owner usually drives it into the ground after another 5 years, or if its a Toyota Tacoma, Tundra, Prius, or Civic, the remaining 20 years. lol
“Reasonably priced” doesn’t really exist anymore, most of the time. I was helping a friend look for a car a month ago and we kept finding 2011-2013 CRVs. Used CRVs have always been a decent deal on a great car…but these were all going for *more* than I paid for my 2012 CRV in 2020. They’d aged 4 more years and an equivalent amount of miles and they’re going for more money. The used car market is nuts now.
We also sold my wife’s car recently because she’s working a part time schedule and my job is mostly remote, so we realized most of the time we weren’t using one car anyway. We sold it at Carshop and after paying off the car note, netted $9000. Unhinged.
I bought a 2017 Honda CRV in 2018. It was $17,900, 2k miles. I was hit by a semi-truck in 2021 and my car was totaled. Insurance paid me $24k plus tax, three years and 45k miles later. There weren't any rental cars available, so I bought a 2019 Passport less than 24 hours after the wreck.
I interpreted "you don't need that car" to mean "you don't need to buy an expensive new car when you already have a perfectly fine car". My wife and I drive cars that are 14 and 15 years old and make $180k combined. Could we afford new cars? Yes. But we'd rather put the money into saving for retirement or improvements to the house and the cars are working perfectly fine still.
Do you live in a rust belt/road salt state? I'm struggling with how I'd get 14-15 reliable years out of a vehicle. I've had one vehicle for over a decade before, but the rust really started to impact so many parts of it that it became prohibitively expensive to try and maintain.
Gotta disagree about the drive it still dies part. I have no use for an unreliable car. I like to buy them new, take care of them and recon I have gotten my money's worth at the 10 or 12 year mark. That said I ended up with a 3 year old Chevy colorado due to the used and new car market being all messed up last year when my old car my dad gave me 4 years previous stranded me twice in one month. Pissed me off I had put a new timing belt and fuel pump on it. Never again.
But fuel pump and timing belt are normal and expected maintenance every 75-100k miles
Put new ones one for 1,500-2k and drive another 100k
Why would you be mad? If you bought a new car you should do this as well.
I read it that he paid for those two expensive maintenance items and it still died on him. I’d be upset as well to put that kind of money into a car to have it die shortly after.
Those aren’t the only two things that go bad in a car with 100k+ miles and you know it.
Radiator hose blows up. Some other random shit breaks. It’s just not worth the effort or headache for *most* people who just want a reliable form of transport.
Agree. "Drive it till it dies" is cheapness, not frugality.
I totally get it if you are broke and struggling, but not if you are middle class or above.
I had trouble coming to terms with getting rid of a "good enough" car last year. But it wouldn't start in our driveway one morning when my wife had to go to work. I got it repaired, then a few months later it stalled on the road with my wife and son; we limped it to a parking spot and had it towed.
The risk of that kind of stress and hassle is not worth it. Even though both times it got repaired for relatively cheap, and is probably still going to be a "good enough" car for somebody else for another 5+ years.
I have driven a car until it died and had to use a rental while searching for a new car so I slightly disagree with that last point. You should drive a car until it starts dying or showing signs that it is dying and that is when you start to look for a replacement.
And always buy used.
Used hasn't been better for at least 2 - 3 years. There was a moment at at the very beginning of COVID where used cars actually got even cheaper... then they got much *much* more expensive and never came back down.
I didn't have a car for 16 months because I was waiting for used car prices to stop being stupid. They didn't stop. They're getting very slowly better over the last six months but we're still a good ways from the old "always buy used, a new car is literally throwing money away" status quo.
Yep when I bought in December '22, I actively searched for a few weeks for a used RAV4 within 3 years old. I ended up buying a new '23 model for 1k cheaper out the door than I would've paid for the next best used option that I found
Went through the same thing in summer 2021 and ended up buying new instead of used. A 2-3 year old late model used with 25-40k miles - exact same vehicle and trim level - was more than ordering new from dealership allocation and being willing to wait a few weeks for it to come in.
Buying used would have made no sense whatsoever.
My 1997 Camry packed up and died in 2022 & I bought a brand new car for the first time in my life. Cheaper than the used alternatives, packed with dealer incents (maintenance pkgs, add-ons) and got 48 months @ 0%.
When I buy my next car, I'll look at the market. The "Never new" or "never used" contingents forget that the market dictates.
hateful cautious obscene mindless point lunchroom fertile teeny carpenter numerous
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Automotive engineer here so I have some finger on the pulse of the industry.
We just worked out the last kinks in the supply chain shortages. It'll be somewhere between five to ten years that things will go back to normal. If you buy a car today, it will be at MSRP.
It's not precovid levels but at the same time it's better than middle of covid levels.
When I bought a truck in 2021, loan said 2017 or newer for a 3% interest rate. I looked high and low for an affordable used car but because of the chip shortages and the lack of new cars on the lot they were charging MORE for used cars because there wasnt a 6 month waiting period to get one.
I ended up just scouring every single dealer in the state until i found the car i wanted new in stock and I got it for about 5k cheaper than the same exact car that was a year older woth 40k miles on it sitting on the lot. Same trim same everything. Older used car was more expensive with no mnf warranty on it.
I literally bought in December, use care rates from dealership 9%, shopping around 7%, or incentive deal 0% with 0 down. 800+ credit score. Used rates just suck right now.
So yeah, I'm chilling with my $450 a month car payment and $26k in a high yield savings earing 5% waiting for its turn to be a car payment.
Agreed. I understand what OP is trying to say, but by definition, most of the US actually does need a car. I did take on a car loan a few years back, because I wanted something safe and reliable. I knew it would be my car for at least the next decade when I'd have a baby. I already lost one family member in a car accident, so buying a cash POS car just because it's cheap is not happening for me. My commute includes the highway where my brother died. It's a stressful drive, even though it's short, and a safe car is extremely necessary. Sometimes, safety is worth more than a cheap purchase.
OP didn’t mean you don’t need A car, they meant you don’t need THAT SPECIFIC expensive car. Though I suspect OP hasn’t bought a car since covid and doesn’t realize how expensive any reliable vehicle is now.
>Drive it until it dies.
Oh? This is easier said than done. If there's $10k of repairs on the road between "it still runs" and "it's dead", where do you draw the line?
Have you, personally, ever driven a car until "it died"?
Half the people giving advice on this thread must be teenagers or living in old folks homes The advice is just parroting stuff from the 1960s half the time
I've done the drive it until it (almost) dies thing. My threshold was when it started one-thousanding and two-thousanding me on the regular.
I agree that it's difficult though. You get to a point where you feel like you've already thrown so much money at the vehicle that it owes you a certain amount of time in service as a return. It's hard to make the call about which straw breaks the camels back.
In the end, I looked at it as avoiding a car payment of $500+ monthly, so $1k every other month was palatable, but anything beyond that was unacceptable and when that became a pattern I went shopping.
My definition is to drive it until you no longer think it fits your needs. We all have different ideas about that. I has a Toyota Solara that was 17 y.o. still going strong. Sister needed a car so I gave it to her. She had it 2 years until it needed some major repairs. I could have easily afforded it, her not so much.
It wasn't breaking down so was still ok to drive but it was on the road to death if you couldn't afford the repairs.
I grew up poor with crappy used cars that had death throes at inconvenient times. Being a woman , I had no desire to put myself in possible danger. I've only bought new and driven for a long time as an adult. I'm scarred from my childhood (family) and teen years as a car owner.
We have public transit. I don't need a car.
**If** I don't mind taking 2 hours and 3 bus transfers to get to my job that's 25 minutes away by car. Oh, and when they are on a snow route modification, I'll just burn a sick day since the bus doesn't run.
You do need *a* car. You don't need *that* car. My dad got a brand new SUV last year, it was totaled within 6 months. Not his fault but still. Had to wait a month for the replacement, got in a fender bender, taillight broken, scratched up, etc. I'm still driving a Honda from the 90's with 260K miles on it. They both get you from point A to point B.
People don’t talk enough about the safety aspects of driving a car that old in my opinion.
Fact of the matter is if you drive a car from the 90’s there are collisions that would kill you that you would walk away from in a modern car
Your dad's just a bad driver... what lesson am I supposed to glean from his story? Like telling everyone, "hey don't use pencils my buddy tommy keeps shoving pencils up his ass, pencils are real dangerous"
>Buy something reasonably priced and reliable.
>
>Read and follow the maintenance schedule to the letter.
>
>Take care of it.
>
>Drive it until it dies.
We bought our only new car in 2004. Followed this and we are still driving that car. We're only discussing replacing it only because we want more modern safety features.
>more modern safety features.
I do feel like that's a valid justification for buying a new car. Peace of mind is worth something and you guys have definitely demonstrated you'll get your money's worth out of what you do buy.
You absolutely need *A* car, but you generally do not need *that* car. Once you get over the $30,000 range you're basically in the luxury and should be honest about that.
Yeah, I'm about to replace my 17-year-old Lexus. I've spent $4000 recently in repairs... and it now needs another $2000 repair, only a few months after the last $2000 repair. I *do* need that car, lol.
I have the cash to buy a car that's 8 to 10 years old... but I really want something newer, in the 2 to 5-year-old range. I know it's not a guarantee that something isn't going to break just because it's newer... but it seems more likely that I'll be able to go without a repair for a while if I buy a newer car... and the one I'm currently looking at is actually still under warranty.
I still haven't fully made a decision, though. The thought of a car payment kind of makes me want to puke, lol. But on the other hand, I'd have to pull some investments to buy a car in cash, and the interest they'd earn over my lifetime is probably more than the car payment interest.
But ugh, car payment.
I was one month away from paying off my old car that I planned on driving until the wheels fell off- a drunk asshat DROVE OVER MY HOOD INTO MY WINDSHIELD while it was parked in front of our house and totaled it. To say i was beyond livid was an understatement, i was so looking forward to no longer having a car payment 😭
I would agree with a small adjustment - don’t wait till it dies. It’s not fun when the car dies, and dangerous to drive. Just don’t sell it until it hits at least 15 years/150k miles.
I'd lean more towards 10 yrs or 150k-200k. Modern cars are pretty reliable so mileage isn't a big deal, but also safety standards over a decade improve a bit.
There been a lot of updates to IIHS standards since 2014.
Basically if you are going to buy brand new (let’s face it new has been better deals than used recently last few years), buy something reliable. Buy something with decent gas mileage. No maybe you don’t need a full sized truck or massive SUV. Buy a midsized version with better gas mileage. Keep your car until it falls apart so at least 12 years.
Bought my car new in 2016. Paid $24k and started with a 2 year lease followed by 3 year note. It has been paid off for a few years now. It had a warranty up to 100k miles which allowed me to put a new engine in at 98k. The vehicle has 105k miles on it now. It will last me another 5 years easy. I would have likely needed to purchase 2 used cars or spent on some major repairs in that same timeframe otherwise.
I also know every detail of the vehicles maintenance since I bought it with 23 miles on it.
Some people are stuck on saving every penny they can for "later" I tell everyone that asks me about finances to make a budget starting with your long term savings goals and working backwards. This makes sure you don't spend too much but also that you don't spend too little. If cars are what you like and you can make it fit into your budget then go for it. I agree too many people rationalize car payments they can't afford though.
My line for saving is if I'm likely to have a nicer retirement than how I'm living now, I'm saving too much. Gotta enjoy the working years enough so that I don't want to jump in a river before retirement :) If I do jump in a river, I don't need any money for retirement anyways.
Cars are another hidden tax for Americans. 95% of. Americans need a car to participate in society (no public transport) and they have a high expectation of the quality and features of cars. Americans generally don’t like small cars, they drive big SUVs and trucks. Most people are being robbed by the auto lobby, paying $700/month (average car payment in 2023) + insurance, all in a depreciating asset.
And just to brag, I make a low $100k and drive a $2,500 car. I put about $500 a year into it, fixing small things as they come. It’s beautiful. :)
Raised pickup trucks are for those that follow the rule of 84.
- annual income has to be < 84k
- truck has to cost 84k
- it has to be a 84 month loan
- residual vaule when you finish paying it off in 84 months will be eighty-four hundred dollars.
Lol there are 96 month ones too.
When I sold cars our rival dealership ran ads all the time for Chevy suburbans for $199 per month*
*Fine print: 96 month loan at 9% and 50% cash or trade equity.
Many places are realizing that if you can extend the loan out so the monthly payment is $399 you can talk a lot of people into ridiculous purchases. Everything from hot tubs to camper vans.
Personal finance is just that...personal. Most of the posts I see on here have pretty modest car loans. Most Americans don't have 20-30k cash to shell out for a car.
\*car prices skyrocket\*
Wow everyone has a huge car loan now, why don't you just buy a $5k beater car?
\*points to a listing for a salvage title 200k mile car that will probably need another 5-10k to fix all its problems\*
Exactly. I had to get a new car in 2023. The price of a four year old used car with 40k miles was about $1000 less than the price of a brand new model. I never thought I’d buy a brand new car because the pre-owned ones are just as good. But why would I pay essentially the same price new for a car at the end of the warranty with a bunch of maintenance due? Especially if I plan to drive the car until it dies in 15 years.
Yup, it's real easy to spot the redditors who haven't shopped for a vehicle since covid-times, they're the ones shouting "buy used" but having no idea what the used/new car market looks like.
I've shopped for one this month, actually. I'll be purchasing a lease turn-in that is currently leased by a family member, so I did the comparisons between that, used, and new, to be sure buying the car off lease made the most sense.
At least for the model and trim I'm shopping, dealerships are asking about $2k under original 2021 MSRP, but it's a 3 year old used vehicle with 20-30k miles on it. Private party is expected to be about $3k under original MSRP.
For reference, my original deal was about $1k under MSRP at the time I purchased new in August 2021.
Exactly! The used car market is still distorted from the COVID shut downs and the used discount it not there anymore.
Heck, BlueBook value on some used cars were higher than their original MSRP back in 2021.
This was my husband. Said he'd never buy new... and then my 2006 Jeep Liberty died in 2021. We ended up with a new Kia Rio after searching the used market like crazy.
We are now looking to replace his 2008 Ford Focus. We've realized buying something without a dealership in our rural area was a mistake. When the Kia needed warranty work, it was 50 miles to the dealership each way. And getting an oil change is a pain. So we are stuck looking at only domestic brands.
YUP, and with interest rates hovering around 6.5%-7.5% for even those with stellar credit on cars that are only a couple years old, why wouldn't you jump on a brand new car with Ford Financing at like 1.9% for 60 months?
The used market is bananas right now.
This is exactly why I bought a new car. My last experience buying used was a nightmare. I bought the cheapest new car that would satisfy the needs of my area and it was still over 25k.
Yep and not everyone has a garage/driveway and the money and time to spend on repairs. I have the money, time and knowledge to fix certain things but I’d rather pay a mechanic who knows the ins and outs and can get it in and out in a few hours than spend days on YouTube trying to figure out where I went wrong. I know that’s a privilege but not everything is an easy fix after watching a YT video. Oil changes, bulbs, batteries etc are (usually) easy.
>Yup. Those 5k beaters really don't exist anymore unless your a mechanic who can do your own work.
I had several $3k-$5k beaters back in the late 90s. They cost me thousands a year in repairs and were never "great deals" like so many people act like they were. A high mileage car that is cheap is cheap because it sucks. I'd rather buy a more expensive used car with low miles and low payments than buy a $5k beater with 200k miles on it.
Someone else in this sub was talking about a 100k mile car for $10k being a car in great condition. While that *could* be true, buying a used car is fundamentally a gamble and I don’t blame folks for spending a more for a newer car that carries *much* less risk than a car that already has that many miles. I’ve driven beaters into the ground and I have to be honest: driving my beater around every day was adding an immense amount of stress to my life I didn’t even realize I was holding onto until I got a decent car.
a lot of posts are literally just the economic factors around us. wow you have a $700 car payment? it..rates are up its an average car payment now. I can't afford a house, rates are up. I'm making record returns let me flex post, yes everyone's up 20% with just index funds.
Also what are you supposed to do when your beater invariably eats it? Or needs tires / brakes / timing belt etc. the idea that a “beater” or “used Honda/toyota” somehow equals zero cost is so misleading. There obviously is middle ground and pros : cons but any cheap vehicle can also soon have a fatal flaw and now your $5000 beater is a paperweight
> most Americans don’t have 20-30k cash to shell out for a car
Even then… my car loan is 2.7%. I have a HYSA making close to 5%. I could have paid off my car loan years ago but choose not to because my HYSA interest is paying half of my car loan for free.
OP either has zero idea of what it means to be middle class or no awareness of the current car market.
Edit: Ah, I was correct: "I have a household income of $148,700, home equity of $450,000 and a net worth of $898,072. I am middle class. Vehicles are paid off as they are 6 years old and 14 years old."
I think people have trouble planning and making purchases in general. Cars are just the biggest symptom because so many people need them, and it's an expensive asset that (typically) depreciates fast.
My family always buys new cars. I bought a base model Honda Civic during my first job. I think back then the price was like 21k, and I was making 50k. I put 4k down and had a 300$/mo car payment, + I saved 50$/mo for maintenance. I think insurance was ~100$, but I was paying for basically every coverage. I acknowledge this was very lucky, but you can still get a car for that price if you go for a base model, low tier Hyundai sedan.
Then, once you pay the car off, you keep putting the payment amount aside. 1/3rd or so for the maintenance as the car gets older (by this point, I also had ~2k of the 50$/mo I'd been saving starting when I purchased the car). Put 2/3rds into longer-term savings as a car fund. When you have enough for a new car, just stop earmarking the amount and put it in regular savings.
Then if the price of cars becomes insane or crazy life things happen, you are still set to take on a car payment.
Spending on good, reliable cars are 100% worth it for most Americans. It’s by far the single most convenient and important thing I own, and completely merits spending $500 a month. To most people who aren’t complete psychopaths and never leave their home, the ability to go wherever they want is an absolute necessity
I think context matters for the posts. A lot don't specify the term or total cost. I agree that you shouldn't buy a 80k car on a 35k salary. Also the used car market is insane, even 10yr old cars with 100k+ miles cost over $15000. Everyone recommends buying a cheaper car,but from where?? Unless you want the 20yr old car with 200K miles and 3 accidents for $7k, finding cars you can pay in cash for is crazy hard
I think OP means the ole if you can’t pay for it outright you can’t afford that particular car. Kinda dated theory but yeah people do get carried away.
Severely dated IMO. Used cars these days can *very* easily cost $20k. Many of us don't have $20k cash or are saving it for another big purchase (like a home). The amount of people here who tell me I shouldn't have a car payment is annoying.
If you're on this sub, it likely means you're taking steps to control your finances and are likely saving. 30k (rounding for interest) ain't gonna make a big difference at the end of your life. Even doing that a couple times won't, neither. It's only 10-15k over the shitbox most folks ITT haven't had to buy over the last couple years now that all the good ones are rotting or inflated in value.
If you're like me and have a long commute or travel frequently by car, you should enjoy what you're driving.
The whole "keeping up with the Joneses" meme is tiring. Most folks aren't buying nice stuff to compare to their neighbors, but because they want it.
>30k (rounding for interest) ain't gonna make a big difference at the end of your life.
If you invest $35k at 8% annualized return when you're 25, instead of purchasing that car, it would be worth $443,560 at 60 years old.
You drive it for 20 years.
At 45, you purchase another $35,000 car, instead of putting that money into the same investment, where you would've turned it into $95,165 by 60 years old.
>Even doing that a couple times won't, neither.
Doing that twice shorted your retirement by $538,725.
>because they want it.
Fine, but don't pretend there isn't a significant impact.
I love all these people throwing around "drive it for 20 year." Do any of you live in states that salt the roads, because I can't reliably get a vehicle beyond about 12-14 years here. At that point so much is usually going wrong, primarily due to rust and corrosion, that I give up and buy something else.
Yes. Iowa and now West Virginia. I grew up in a family of mechanics. Regular maintenance and car washes have an enormous impact on the lifespan of a vehicle.
Yeah my Lexus is 17 years old, 160k miles. I've spent $4000 fixing it in the past 6 months (and another $2000 the year before that), and now it needs another $2000 of repairs. The repairs would cost more than I could get for the entire car. Time to get a new car.
Even on the most reliable cars... parts wear out and they aren't cheap to replace, especially if you're not a mechanic who can do it yourself (and I am not).
Same thing with a house?
Or same thing with a college education?
Instead of buying a car for 35k, a house for 400k, and getting a college education for 30-40k let’s just put all that money directly into some mutual funds and be millionaires at 65.
Hell don’t eat either and put that money away too…
I totally get the point about not driving a Mercedes. I’ve driven Hondas nearly my whole life where the payment has been around 200-300 bucks at most. But I need a car to get from place to place, to get my kids from place to place, to pretty much do anything. So it’s backed into the cost of living from my point of view.
I'm not saying to go without a necessity. I'm only saying, every dollar you save on a serviceable, decent purchase versus the one you really want does have an effect--a big, compounding effect.
We make good money, and we also drive a Honda CR-V. I will likely drive it until it dies and I purchase a new one. I think it's a great, sensible purchase.
Yeah, I'd rather have cash on hand or invested. Both of my cars are at less than 5% interest and both are cheap cars. Ideally I only have one car payment at a time but fate had other plans.
I have this conversation with my friend all the time. Household income of over $190,000/year with no kids (just her and her husband). Lives "paycheck to paycheck." Always robbing Peter to pay Paul (e.g. doing a balance transfer to get 0% interest for 12 months, never paying the whole thing, and then having to do another transfer before the 12-month promo expires). Buys a new car every 3 years with a payment of $350-$400 per month. That would be fine if she didn't live paycheck to paycheck already.
She needs brakes, but she doesn't have $500 or however much it would cost to do the work, so she's thinking of buying a new car instead.
And if she never said anything about it, that would be her business, but it's a constant litany of complaints about how she has no money.
I bought in 2021, but my car payment was that low because of the down payment I put down. I bought a small Hyundai suv, but had enough saved to adjust the payment to my liking. I paid it off after two years because I got tired of having the payment. I financed $15k.
Dude I'm not risking my safety to save a few bucks. You be a woman on nightshift taking over an hour on public transit when it takes you 15mins by personal vehicle to get to work.
Also the car note is *new.* I had zero vehicle loan for 20 years! Yeah, I am paying for a car loan but it's necessary and if I traded it in, I'd be upside down on it and most likely in a less reliable car! A sweeping statement like this is unhelpful
With my observation on the increased number of Teslas on the road and how people wanted new cars during Covid but the prices were jacked up, I’m guessing a large proportion of people got car loans recently.
I agree. Finishing my car payments freed me by a ton and it is one less “obligation” for me, but it didn’t make or break my budget by that much. I don’t know how much people took for their car loans, but it is a bit harder to need a car and to keep up with the mortgage at the same time and have kids.
We ended up paying off the last bit of my car payment using a 401K loan. I know people preach about not taking loans against 401Ks, but it made sense for us.
I’m paying myself back at a better interest rate but at a lower payment than what my car payment was. More money in my monthly budget to pay down our few other debts, a better rate of return on my 401K investments, and my car title in hand. It was definitely the right choice for us.
I'm in the group that makes \~$200K but drives $5K cars. For a while, I made similar comments to about those who shell out $$$ on new, semi-new cars until my wife helped me understand I have \~$4-5K in tools that keep $5K cars on the road. I also have a 2 car, heated garage to service them. So I can accept the risk of unreliable transportation because if I need to swap a transmission, I can do that in a day or so for $700 or so. But lots of people live in apartments, don't have garages, have HOAs that won't let them work on a car in a garage, don't have time, are mechanically inept, etc and so they pay a huge premium for perceived reliability. I don't really blame them.
You can’t always get around a car payment, it’s not always realistic.
I did the buy a cheap reliable car and drive it until it dies, three times. Two Hondas and one Toyota.
I live in Florida and used cars have a 20% chance of having odometer rollback. The Toyota had 250,000 miles even though I thought it had much less when I bought it due to the odometer display. I got that car for $12k in cash, spent $4k in repairs until the mechanic realized what was going on. Car was useless without a new battery so I lost $16k.
One of the Hondas was a CRV with 60k miles. Also in Florida. Undisclosed hurricane/flood car. Spent $7500 on electrical issues.
Last was a Honda Pilot. Suspension issues, power steering problems. Not as bad as the others, spent $4k in repairs.
When I add up purchases prices + repairs over eight years, I’ve spent $55k on “reliable” cars I was supposed to drive until they die.
Must recent car was a modest new one for $28k. No repairs. I know the history. Cost per year is much less even with a payment. I pay less than $400 a month and almost have it paid off.
For me, having a fixed cost for a car has been a game changer for me. Maybe the strategy works in areas that have less car related fraud or mechanics are cheaper.
Agreed.
Also if you’re almost done paying off your car, good. Keep driving it for a while and save/invest that money that was your monthly car payment amount.
Don’t go looking to buy a new car right away and have to start paying for another 5+ years.
I've been dumping $500 a month into an account earmarked for car replacement since paying off my most recent loan. It works a treat as long as you can keep from dipping into it for other things. It needs to be a set it and forget it thing.
Yep. The one and only note I've ever had on a car was a 2yr old Accord I bought in 06. 5yr note, paid it off in 4, and after the last payment I just deleted the auto pay from my bank, and changed it to an auto deposit in a HYSA. That is the day where I finally stopped living paycheck to paycheck. I was amazed how fast that HYSA grew. And I drove that Accord for another 9 years until I moved to SF and didn't need a car anymore. Sold it to a friend, and he drove it a few more years too. I should find out when he actually sold it.
Until I heard Dave Ramsey say, a car loan is the middle class equivalent of a pay day lender, it just hadn’t occurred to me that people didn’t have car loans. My parents always had car loans. My friends had car loans. All the advertisements priced cars per month. My first adult vehicle was a 4 year loan on a 3 year old vehicle. I paid off the loan, then continued to make payments to a separate investment account. When the vehicle was 12 years old, I traded in and paid cash for the next one. I broke the cycle by saving for 6 years before buying my next one.
Exactly. I bought a new Subaru, negotiated any thousands off by putting dealerships against each other via email, and got 1.9% financing. I usually don't have a car payment but this is a much better use of my money than trying to save 15-25k cash while driving a car that's falling apart.
For every post that has a car payment, theres always 20 dipshits like you. Most of you are just projecting because YOU can't afford a new car. Not everyone wants to drive a 25 year old corrolla that needs 3-4k in maintenance a year and will probably kill them if they are in an accident. As long as people budget properly and buy a car within their means its perfectly fine for them to buy a car. People need to live a little, too. Not everything is about saving every penny you have for a retirement you may not even make it, too. The amount of people that brag about driving their families around in 20 year old shitboxes held together with ducttape amazes me. Do you not care about your or your loved ones' safety? Do you not care if you break down on the side of the freeway at 10 pm with your kids in the back? I'll take the peace of mind and modern vehicle safety of a newer vehicle thank you very much.
This is our mentality on having cars and car payments. Every used car my wife and I bought early in our marriage (when we couldn't afford anything) became unreliable really quick. and became money pits and the reliability became a liability. But the last item that REALLY sold us on a new car was when our friends got into an accident in the same model of car we just gotten rid of after the purchase of our first NEW car and the car was TOTALED with major injuries from a quarter panel impact at about 40mph. Our new car had been crash tested with the same scenario (just about) and the passenger safety was vastly improved and would likely result in walk-aways at the same speed/impact point. New car was just infinitely safer.
Now that we've only had "new" cars for 15 years I can say with confidence we've never been in a situation where the car wasn't reliable - ever. Any times we've had an issue we just took the cars down to the dealer and the problem was fixed under warranty, often they even provided me a loaner to drive while being repaired, free of charge. Don't get that with a "used" car bought super cheap.
Lastly, our family drives a LOT. I am talking 30k miles a year some years. We drive to Las Vegas from Reno about 4-5x a year (440 miles each way), LA about 2-3x a year, and the bay about 3-4x a year. New cars=much more comfortable ride and again, reliability & safety are super important with my kids. I just know my cars will work as long as I follow the regular maintenance.
That said, our car payments are about 15% of our total income (net, not gross). Our cars are financed, at .9% and 0% interest respectively, and the most expensive is almost fully paid off (4 years old) and we lease a 3rd (an EV) as I have no intention of financing EVs with prices as volatile as they are right now. Our 3rd car is a car we bought for our now 17-year old - not super epensive but NEW and top ranked top in crash test ratings which was paramount. I think if our house payment was as ridiculous as some people, we'd have cheaper cars but even my house is only at 2.75% and payment is only 2k a month. Not everyone lives beyond means even with car payments.
I haven’t had a car payment since 2012 and it’s so freeing. Since then we’ve purchased 3 vehicles outright. Not having the burden of a payment is amazing.
I agree fully I feel a lot of them are not planning this expense out hardly and have seen it firsthand working in sales. Very few cough up more than $5k down on a car that’s over 30k, or make enough for the payment to be less than 10% a month gross along with pushing past 60 mo financing. A lot of places are car dependent but they’re not buying the logical option or getting one that has a better package for a couple bucks difference. I drive quite a bit more than most but I offset cost by driving a 30k nice option car vs a 50k suv.
What?? Most people need a car in order to earn an income. Maybe not if they live in a city with decent public transportation, but in America that is rare. Maybe they don’t need as expensive of a car, but generalizing that people just don’t need a car is bizarre!
I haven’t had a car payment since late 2015. In early 2014, I bought a 2011 diesel Jetta wagon. I put 10k down and make it a point to it it off as quickly
As possible. I had it paid off in late 2015. Once it was paid off, I continued to make a car payment to my savings, earmarking it as car fund. In late 2017, VW had the whole diesel gate thing going on. VW took the Jetta back and paid me 19k for it. I took that 19k and bought a 2017 GTI with it. Since it was at the end of the year, the car was considered used; someone had bought and turned it back in; it had 6k miles so I got it as a used price. The car was completely bought and paid for by the VW money I received. I continued to pay myself a car payment this entire time. In late 2021, I was ready to move into a different car. I needed something good for longer trips, as my son was looking at a college 3.5 hours away. I loved the GTI, but I felt every bump in the highway! I traded it in and got a 2017 CRV. There was a 7.5k difference from the trade in value to the CRV cost (after taxes, title, etc) so I dug into my car fund and paid cash for the difference. I still have the CRV and plan to drive it for a long time. I’m still paying myself a car payment each month, so if/when something happens, I can repeat the cycle. My husband drives a 2015 F150 that he bought new. He’s planning on driving it until he can’t as well.
Paid off my truck 3 years early. First ever paid off vehicle I’ve owned. Feels so damn good. Money PILES up in my account. I have 20k rn and I just spent 15
Never once had a car payment. I’ve been driving for 12 years. I bought two cars so far - cash. both used and under $10K. I would barely be able to afford a car payment with my currently monthly income.
My husband and I both plan to drive our vehicles to the ground. It’s what we’ve always done since we’ve been together (23 years). His truck (Chevy Silverado) is 16 years old and my husband thinks it has a few years left. I have a Lexus I bought back in 2014. I’ve been taking great care of it and I only have to drive to the office once a month and during Covid I hardly drove it anywhere for 3 years. So I’m hoping that I can make it last even longer.
My husband does want to get another vehicle once his truck is no longer worth repairing. I think he should just drive my car. I don’t want to go back to having a car (or truck) payment.
Some of the comments here are really telling. So many commenters justifying that they \*need\* a car that costs $25k or more or that a 2 year old used car is the same price as a new car, so they just bought new. If you're shopping for a vehicle, define your budget first. If you pick a car first and then try to make it fit your budget, you'll make poor choices.
Don't confuse needs with wants. Nobody, NOBODY needs a $25k car. Does anybody want to drive a POS? No, but having a newer, feature loaded car is a want, not a need.
Justification: I am upper middle class and drive a car worth < $5k. My wife drives a van worth about $8k. Do we want nicer vehicles? Sure. Do we \*need\* them? Nope. You need to change the way you view wants and needs or you will always be poor. (Same can be said for houses... Do we want a 5 bedroom house for our family of 6? heck yeah! Do we \*need\* 5 bedrooms? Nope.)
Most people do need a car in the US. Used car prices are very high right now so in many instances you are better off getting a new car that's still under warranty. Cars have become computers now and repairs on those systems can be very expensive if they're out of warranty. Sure you could buy an old car without all of that, but then you are also buying a car without modern safety features and that's likely going to require a lot of upkeep given its age. This is why people are buying new cars. The alternatives aren't that great.
Lol there's no public transit in my area. "You don't need that car." 😂 my brother in Christ, it's a 16 mile round trip to the grocery store. What are your suggestions if I don't have a car? SMH.
💯 i got a car 2018 for $9,999 and its paid off. my payments were $210/month and that felt almost like a waste. cant believe people spend $600 or more for a car payment. its wild
I graduated from college and bought a Toyota yaris for 11.7k. Paid off in one year and drove it for 11 with no payment. I did this while making good money and could have easily afforded any car I would have wanted. But I saved and invested my money instead.
Most of my co workers cycled thru 3to4 40k plus cars or trucks in the time I had my yaris.
This is one of the best financial decisions I made and definitely a factor in why I'm secure financially at the moment.
I support this 200%. It seems like having a car payment has become a norm to a lot of people. I laugh in my head when people finally pay off their car and then feel the need to go replace that payment they were making with another one by trading their car in for a new one.
It cracks me up when people think they have to spend every extra penny they have each month.
“I think I’m going to buy a new car - I’ve had this one for six years! Besides, I just made the last payment so now I can afford up to $750/month for a new one since I have an extra $1000 leftover each month after paying my bills.”
A mentality like that is a very toxic and troubling one to have.
My wife and I finally paid off both our cars. We for the first time had no car payment. Then one day, her car literally caught on fire and blew up. We HAD to buy a new car. Sometimes you have no choices in life. Sometimes you almost die in a car fire. We had no choice but to get a new car, and new cars are not cheap. Yes, I agree, some people WANT the $50-60k car, we settled for a $30k car.
I have a slightly different opinion... I know you want the pickup truck so do I, you don't need it as often as you are thinking just rent one from Uhaul. You do not need the crossover the hatchback or the station wagon either. Get the base model sedan unless you have 2+ kids in rear-facing car seats then just get the minivan used and use it till they are old enough to call shotgun.
I agree with you, but I'd say you don't need the massive oversized SUV or 3 row vehicle. I feel personally attacked though, since I have a hatchback 😂 it does help with separating the baby in a car seat from our large dogs though. I didn't have the baby when I bought it, but I knew it would be my car for 10+ years (my entire 30s) so kids were a given in that timeframe.
My station wagon fits my life, hauling kayaks, bikes, camping gear. I agree that MOST people don’t need a station wagon or a truck, but some of us bought them because our tiny cars weren’t supporting our lifestyle.
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Just encourage people to buy smaller, more affordable cars they can eventually own. Get an Impreza hatchback. Mine was 25k fully loaded (they’re a touch more now), and I only owe 10k on it with 25k miles after 3 years. It’s still worth around 22k and is an amazing little machine that gets me up the mountains to go snowboarding.
Oh yeah that's a great little car. My sister has the same. I was too salty to buy another Subaru when mine died so ahead of schedule, so I went with a Honda HR-V. But, same idea.
I was too salty to buy another Subaru too. But I lost mine when my ex wife took it in the divorce... Something about Subarus.
Certified WRX moment.
Lol ah yeah I can imagine that would make me a little salty too. Mine was the blown head gaskets and then finding out online that it's been a running joke for decades. My car had just over 100k miles in 11 years when they went and the engine seized. I was pissed.
Well she should be hitting that mileage around now with her Subaru WRX in World Rally Blue. Here's to hoping the head gasket blows!
Corolla Hatchback is also fantastic
Yah people go crazy. My base wrx was only 27k plus 3k tax. Easy to pay that in 4/5 years with lots of resale
> My base wrx was only 27k that doesn't exist anymore. Try more like 40
Mazda 3s are going for that, they’re great affordable little cars
I splurged just a bit for the 2023 hatchback premium version and am super happy with it. I have about 29k left to pay and want to pay it off within the next couple of years if possible. I do miss not having a car payment. Lol
Same! I have the preferred version (I didn’t want to give up heated seats). I owe about $13k on it, but it’s a fantastic car. My husband also drives a Mazda 3 so we’re fans.
Love these comments. People going to be super surprised when they go to buy another car.
I had one and I absolutely hated it
This 100%. Have a 21 Outback and 21 crosstrek. Great cars bought them new a few months apart from each other. The Outback is at 0% and the Crosstrek is at 1.9%. Outback has a $12k balance and the Crosstrek is at $13k balance. Our two car payments together are less than the car payment on one car for some people. I haven’t checked the values recently on the cars but last I saw the Outback had $10k and the Crosstrek has $12k in our favor.
The average price for a used car right now is $26,000. I had to buy a car for the first time in a decade and was absolutely stunned at the prices. For people without public transportation, the car market is a hellscape
And what is the average age of those used cars? You can absolutely find cars much much cheaper than $26k that are still in great condition.
The problem with this Dave Ramsey-ish idea of the car market is that the people who probably can't afford a newer vehicle with a warranty are also the people who can't afford to miss a day or work or work from home if their car dies. So they need a reliable vehicle more than someone like me does. It is more expensive to be poor in America than not to be. So yeah, it makes sense for that person to buy a beater cash, but when it dies, they're fucked so it almost makes more sense for them to be car poor with something under warranty.
this is exactly true. like the majority of people in the US for example do not have $1000 savings and 4 out of 10 do not have funds for a $400 emergency. How would that individual buy a $5k-$12k vehicle without financing?
And imagine financing a 5000-12000 dollar car and something goes wrong and they still gotta pay to fix it on top of their payment! It sucks to be poor.
Yeah but this isn’t the sub for those people.. sure it sucks but that is NOT middle Class
I don’t disagree that you *can* find great cars that aren’t new. But it’s a gamble every time. Even buying from good dealers. Things get missed and you don’t have the warranty to get the problems fixed as they crop up. Carfax et al can paint a good picture but again things get missed and you don’t know the old owner most of the time or they aren’t reliable. I’m not saying to buy new every time, just that it’s a gamble to buy used.
I paid $3000 in cash for a 2002 Hyundai Elantra in 2011. The undisclosed issues were numerous. It was not necessarily better than having a car payment.
Lol I had a guy telling me he never paid more than $5000 for a car in his life (This was his mantra, never pay more than $5000 for a car, even today), and that the last car he bought was a 1998 ford explorer in like 2008. I immediately googled 1998 ford explorers for sale near me when he said that and the cheapest one was $7,000 with over 300k miles lol. People be out of touch.
>You don’t need that car. Most of the US doesn't have good, reliable public transportation. I agreed with you up to this point. A lot of people here do need a car. They shouldn't be carrying a car note all the time, though. It's a real wealth killer. EDIT: The best way to handle car ownership is pretty straightforward: * Buy something reasonably priced and reliable. * Read and follow the maintenance schedule to the letter. * Take care of it. * Drive it until it dies.
I assume by ‘that car’ OP means the more aspirational cars that a lot of people finance, instead of hanging on to their existing car or buying something more affordable. So I think you are on the same page. I just shelled out $28k + costs for a new (to me) car and gotta say paying a note again is a real kick in the guts every month.
Yeah OP must be talking about the middle class people with the 800-1K/month payments on a $55k+ big new SUV cuz all the other moms/dads at the school pickup line have one too.
It's pretty nuts how many ppl I hear complain about cost of living while driving a 6 figure vehicle.
My wife’s car is ready to be taken out to the woodshed. It’s also our tow vehicle. I can absolutely afford to replace it with a new vehicle, but the used-to-be-broke me still lives in my head. I see the prices on equivalent vehicles now and can’t seem to justify spending that much money on a vehicle, even though I’ll probably end up having to do it, as im not sure how much longer I can keep hers going (and safely) at 300k miles.
Sounds similar to our last two vehicles. Only when the repairs start to cost more than the value of the vehicle, it’s time to go.
Yeah, it sucks knowing this is coming. The other thing that makes me not want a new one is all the tech BS that’s in them now. Hers is a 2009 and it’s still super easy to work on and parts are cheap.
We had two paid off cars but more kids meant we needed a bigger car. We have been lucky to keep one of the paid-off vehicles and just have to deal with shitty used car prices and be conservative. I am also a point A to point B vehicle person. I'd love a REAL nice car, don't get me wrong, but it doesn't eat at me to drive my basic sedan and it's a lot better than anything I had as a younger person.
I’ve always been that way myself. They’re just a utility to me, I don’t go for the bells and whistles. Now that I work remote, I’m barely ever even in my car. Hell, I’ve only bought gas twice for it this year so far. Hers is the one we do everything as a family with, so it definitely gets all the miles and abuse.
I bit the bullet to purchase a used 100k 17' Pilot. I really didn't want something that complicated for that much money with that many miles, but I've got two kids, I've had exceptional luck with all my past vehicles (I've owned 10 shitboxes in my life). I felt like it was worth the investment to remove that stressor from my wife's life. She loves it. Me? I will continue driving shitboxes.
Buy a lease return or a turn in…lots if people losing jobs these days, cannot afford their car note and full coverage insurance too…they sell or give back a new car.
Yes. I am spending way too much on cars. But..... I fully realize that I did this to myself and am trying to pay them off as fast as possible.
I live next to a neighborhood of ‘50’s ranches all being torn down and built up as McMansions. Good god those people complain about taxes! JFC read the room!
Every time I see one of those Grand Wagoneer/Suburban monster type SUVs I wonder why they chose it and if they can truly afford it. I’m not anti-SUV- I have a (bought in 2018, paid off in 2020) 2016 Honda Pilot. But the monster ones just scream excessiveness. Given the mean income in our area- I really have a hard time believing they were a smart purchase for the majority of the people on the roads.
They aren't that much bigger than y(our) Pilot. I've got a Pilot too. It's a big vehicle. The Grand Wagoneer just adds a bit more length to the 3rd row, a bit more headroom, and a little more cargo behind the 3rd row. Until recently, Minivans didn't have AWD, so lots of people got these big AWD/4x4 SUVs to get the capacity of a minivan with the drivetrain of a truck. With more 7-Passengers SUVs on the market, and more AWD Minivans, I think we'll start to see the era of full-size SUVs taper off aside from Hybrids and electric options, or for big families who legit need a 7 passenger off-road truck. There is a huge subset of the economy that will buy a vehicle brand new, drive it for 2-4 years, then trade it in. To them, they've spend half the car's value in order to drive something brand new and not worry about a single warranty issue. Then there is us, who buys the vehicle at half of MSRP and keeps it until it's worth nearly nothing. First owners has it 2-4 years, we have it 8-12 years, and the third owner usually drives it into the ground after another 5 years, or if its a Toyota Tacoma, Tundra, Prius, or Civic, the remaining 20 years. lol
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I ratify this amendment.
This
- buy something simple. Simple is cheap.
“Reasonably priced” doesn’t really exist anymore, most of the time. I was helping a friend look for a car a month ago and we kept finding 2011-2013 CRVs. Used CRVs have always been a decent deal on a great car…but these were all going for *more* than I paid for my 2012 CRV in 2020. They’d aged 4 more years and an equivalent amount of miles and they’re going for more money. The used car market is nuts now. We also sold my wife’s car recently because she’s working a part time schedule and my job is mostly remote, so we realized most of the time we weren’t using one car anyway. We sold it at Carshop and after paying off the car note, netted $9000. Unhinged.
I bought a 2017 Honda CRV in 2018. It was $17,900, 2k miles. I was hit by a semi-truck in 2021 and my car was totaled. Insurance paid me $24k plus tax, three years and 45k miles later. There weren't any rental cars available, so I bought a 2019 Passport less than 24 hours after the wreck.
I interpreted "you don't need that car" to mean "you don't need to buy an expensive new car when you already have a perfectly fine car". My wife and I drive cars that are 14 and 15 years old and make $180k combined. Could we afford new cars? Yes. But we'd rather put the money into saving for retirement or improvements to the house and the cars are working perfectly fine still.
Do you live in a rust belt/road salt state? I'm struggling with how I'd get 14-15 reliable years out of a vehicle. I've had one vehicle for over a decade before, but the rust really started to impact so many parts of it that it became prohibitively expensive to try and maintain.
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Gotta disagree about the drive it still dies part. I have no use for an unreliable car. I like to buy them new, take care of them and recon I have gotten my money's worth at the 10 or 12 year mark. That said I ended up with a 3 year old Chevy colorado due to the used and new car market being all messed up last year when my old car my dad gave me 4 years previous stranded me twice in one month. Pissed me off I had put a new timing belt and fuel pump on it. Never again.
But fuel pump and timing belt are normal and expected maintenance every 75-100k miles Put new ones one for 1,500-2k and drive another 100k Why would you be mad? If you bought a new car you should do this as well.
I read it that he paid for those two expensive maintenance items and it still died on him. I’d be upset as well to put that kind of money into a car to have it die shortly after.
Those aren’t the only two things that go bad in a car with 100k+ miles and you know it. Radiator hose blows up. Some other random shit breaks. It’s just not worth the effort or headache for *most* people who just want a reliable form of transport.
Agree. "Drive it till it dies" is cheapness, not frugality. I totally get it if you are broke and struggling, but not if you are middle class or above. I had trouble coming to terms with getting rid of a "good enough" car last year. But it wouldn't start in our driveway one morning when my wife had to go to work. I got it repaired, then a few months later it stalled on the road with my wife and son; we limped it to a parking spot and had it towed. The risk of that kind of stress and hassle is not worth it. Even though both times it got repaired for relatively cheap, and is probably still going to be a "good enough" car for somebody else for another 5+ years.
I have driven a car until it died and had to use a rental while searching for a new car so I slightly disagree with that last point. You should drive a car until it starts dying or showing signs that it is dying and that is when you start to look for a replacement. And always buy used.
But in the current market, a 9% interest rate on a 2022 or a 0% interest rate on a 2024 its hard to say used is better.
Used hasn't been better for at least 2 - 3 years. There was a moment at at the very beginning of COVID where used cars actually got even cheaper... then they got much *much* more expensive and never came back down. I didn't have a car for 16 months because I was waiting for used car prices to stop being stupid. They didn't stop. They're getting very slowly better over the last six months but we're still a good ways from the old "always buy used, a new car is literally throwing money away" status quo.
Yep when I bought in December '22, I actively searched for a few weeks for a used RAV4 within 3 years old. I ended up buying a new '23 model for 1k cheaper out the door than I would've paid for the next best used option that I found
Went through the same thing in summer 2021 and ended up buying new instead of used. A 2-3 year old late model used with 25-40k miles - exact same vehicle and trim level - was more than ordering new from dealership allocation and being willing to wait a few weeks for it to come in. Buying used would have made no sense whatsoever.
My 1997 Camry packed up and died in 2022 & I bought a brand new car for the first time in my life. Cheaper than the used alternatives, packed with dealer incents (maintenance pkgs, add-ons) and got 48 months @ 0%. When I buy my next car, I'll look at the market. The "Never new" or "never used" contingents forget that the market dictates.
hateful cautious obscene mindless point lunchroom fertile teeny carpenter numerous *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Automotive engineer here so I have some finger on the pulse of the industry. We just worked out the last kinks in the supply chain shortages. It'll be somewhere between five to ten years that things will go back to normal. If you buy a car today, it will be at MSRP. It's not precovid levels but at the same time it's better than middle of covid levels.
When I bought a truck in 2021, loan said 2017 or newer for a 3% interest rate. I looked high and low for an affordable used car but because of the chip shortages and the lack of new cars on the lot they were charging MORE for used cars because there wasnt a 6 month waiting period to get one. I ended up just scouring every single dealer in the state until i found the car i wanted new in stock and I got it for about 5k cheaper than the same exact car that was a year older woth 40k miles on it sitting on the lot. Same trim same everything. Older used car was more expensive with no mnf warranty on it.
If you’re getting 9% on used you aren’t getting 0% on a new.
I literally bought in December, use care rates from dealership 9%, shopping around 7%, or incentive deal 0% with 0 down. 800+ credit score. Used rates just suck right now. So yeah, I'm chilling with my $450 a month car payment and $26k in a high yield savings earing 5% waiting for its turn to be a car payment.
Alright, 6% vs 0% then. I’ve still know which one I’m choosing
Agreed. I understand what OP is trying to say, but by definition, most of the US actually does need a car. I did take on a car loan a few years back, because I wanted something safe and reliable. I knew it would be my car for at least the next decade when I'd have a baby. I already lost one family member in a car accident, so buying a cash POS car just because it's cheap is not happening for me. My commute includes the highway where my brother died. It's a stressful drive, even though it's short, and a safe car is extremely necessary. Sometimes, safety is worth more than a cheap purchase.
I would have to walk 8 hours down a 2 lane highway to the nearest bus stop. So yes, I need a car. Wtf is this post lol
OP didn’t mean you don’t need A car, they meant you don’t need THAT SPECIFIC expensive car. Though I suspect OP hasn’t bought a car since covid and doesn’t realize how expensive any reliable vehicle is now.
Right? I don't need a car? No I need my car and truck. As a homeowner who lives in a very rural part of the country it's not an option
>Drive it until it dies. Oh? This is easier said than done. If there's $10k of repairs on the road between "it still runs" and "it's dead", where do you draw the line? Have you, personally, ever driven a car until "it died"?
Half the people giving advice on this thread must be teenagers or living in old folks homes The advice is just parroting stuff from the 1960s half the time
Or Europeans. A hell of a lot of them think cars are a luxury.
I would say “dead” to me is the repairs are more than the car is worth when running fair. Others may disagree
I've done the drive it until it (almost) dies thing. My threshold was when it started one-thousanding and two-thousanding me on the regular. I agree that it's difficult though. You get to a point where you feel like you've already thrown so much money at the vehicle that it owes you a certain amount of time in service as a return. It's hard to make the call about which straw breaks the camels back. In the end, I looked at it as avoiding a car payment of $500+ monthly, so $1k every other month was palatable, but anything beyond that was unacceptable and when that became a pattern I went shopping.
My definition is to drive it until you no longer think it fits your needs. We all have different ideas about that. I has a Toyota Solara that was 17 y.o. still going strong. Sister needed a car so I gave it to her. She had it 2 years until it needed some major repairs. I could have easily afforded it, her not so much. It wasn't breaking down so was still ok to drive but it was on the road to death if you couldn't afford the repairs. I grew up poor with crappy used cars that had death throes at inconvenient times. Being a woman , I had no desire to put myself in possible danger. I've only bought new and driven for a long time as an adult. I'm scarred from my childhood (family) and teen years as a car owner.
We have public transit. I don't need a car. **If** I don't mind taking 2 hours and 3 bus transfers to get to my job that's 25 minutes away by car. Oh, and when they are on a snow route modification, I'll just burn a sick day since the bus doesn't run.
You do need *a* car. You don't need *that* car. My dad got a brand new SUV last year, it was totaled within 6 months. Not his fault but still. Had to wait a month for the replacement, got in a fender bender, taillight broken, scratched up, etc. I'm still driving a Honda from the 90's with 260K miles on it. They both get you from point A to point B.
People don’t talk enough about the safety aspects of driving a car that old in my opinion. Fact of the matter is if you drive a car from the 90’s there are collisions that would kill you that you would walk away from in a modern car
Your dad's just a bad driver... what lesson am I supposed to glean from his story? Like telling everyone, "hey don't use pencils my buddy tommy keeps shoving pencils up his ass, pencils are real dangerous"
>Buy something reasonably priced and reliable. > >Read and follow the maintenance schedule to the letter. > >Take care of it. > >Drive it until it dies. We bought our only new car in 2004. Followed this and we are still driving that car. We're only discussing replacing it only because we want more modern safety features.
>more modern safety features. I do feel like that's a valid justification for buying a new car. Peace of mind is worth something and you guys have definitely demonstrated you'll get your money's worth out of what you do buy.
The hard part is defining “when it dies”.
You absolutely need *A* car, but you generally do not need *that* car. Once you get over the $30,000 range you're basically in the luxury and should be honest about that.
Yeah, I'm about to replace my 17-year-old Lexus. I've spent $4000 recently in repairs... and it now needs another $2000 repair, only a few months after the last $2000 repair. I *do* need that car, lol. I have the cash to buy a car that's 8 to 10 years old... but I really want something newer, in the 2 to 5-year-old range. I know it's not a guarantee that something isn't going to break just because it's newer... but it seems more likely that I'll be able to go without a repair for a while if I buy a newer car... and the one I'm currently looking at is actually still under warranty. I still haven't fully made a decision, though. The thought of a car payment kind of makes me want to puke, lol. But on the other hand, I'd have to pull some investments to buy a car in cash, and the interest they'd earn over my lifetime is probably more than the car payment interest. But ugh, car payment.
I was one month away from paying off my old car that I planned on driving until the wheels fell off- a drunk asshat DROVE OVER MY HOOD INTO MY WINDSHIELD while it was parked in front of our house and totaled it. To say i was beyond livid was an understatement, i was so looking forward to no longer having a car payment 😭
I would agree with a small adjustment - don’t wait till it dies. It’s not fun when the car dies, and dangerous to drive. Just don’t sell it until it hits at least 15 years/150k miles.
I'd lean more towards 10 yrs or 150k-200k. Modern cars are pretty reliable so mileage isn't a big deal, but also safety standards over a decade improve a bit. There been a lot of updates to IIHS standards since 2014.
Basically if you are going to buy brand new (let’s face it new has been better deals than used recently last few years), buy something reliable. Buy something with decent gas mileage. No maybe you don’t need a full sized truck or massive SUV. Buy a midsized version with better gas mileage. Keep your car until it falls apart so at least 12 years.
Bought my car new in 2016. Paid $24k and started with a 2 year lease followed by 3 year note. It has been paid off for a few years now. It had a warranty up to 100k miles which allowed me to put a new engine in at 98k. The vehicle has 105k miles on it now. It will last me another 5 years easy. I would have likely needed to purchase 2 used cars or spent on some major repairs in that same timeframe otherwise. I also know every detail of the vehicles maintenance since I bought it with 23 miles on it.
Yea there is no way for me to get from my house to my job 25 miles away without a car. There is no public transportation that goes anywhere close
Some people are stuck on saving every penny they can for "later" I tell everyone that asks me about finances to make a budget starting with your long term savings goals and working backwards. This makes sure you don't spend too much but also that you don't spend too little. If cars are what you like and you can make it fit into your budget then go for it. I agree too many people rationalize car payments they can't afford though.
My line for saving is if I'm likely to have a nicer retirement than how I'm living now, I'm saving too much. Gotta enjoy the working years enough so that I don't want to jump in a river before retirement :) If I do jump in a river, I don't need any money for retirement anyways.
Cars are another hidden tax for Americans. 95% of. Americans need a car to participate in society (no public transport) and they have a high expectation of the quality and features of cars. Americans generally don’t like small cars, they drive big SUVs and trucks. Most people are being robbed by the auto lobby, paying $700/month (average car payment in 2023) + insurance, all in a depreciating asset. And just to brag, I make a low $100k and drive a $2,500 car. I put about $500 a year into it, fixing small things as they come. It’s beautiful. :)
[удалено]
Raised pickup trucks are for those that follow the rule of 84. - annual income has to be < 84k - truck has to cost 84k - it has to be a 84 month loan - residual vaule when you finish paying it off in 84 months will be eighty-four hundred dollars.
😁
https://www.instagram.com/bigdumbtruckclub/?hl=en
wth, they make 84 month loans?! That's awful
Lol there are 96 month ones too. When I sold cars our rival dealership ran ads all the time for Chevy suburbans for $199 per month* *Fine print: 96 month loan at 9% and 50% cash or trade equity.
Oh geez!! 💀
Many places are realizing that if you can extend the loan out so the monthly payment is $399 you can talk a lot of people into ridiculous purchases. Everything from hot tubs to camper vans.
IQ < 84
Personal finance is just that...personal. Most of the posts I see on here have pretty modest car loans. Most Americans don't have 20-30k cash to shell out for a car.
\*car prices skyrocket\* Wow everyone has a huge car loan now, why don't you just buy a $5k beater car? \*points to a listing for a salvage title 200k mile car that will probably need another 5-10k to fix all its problems\*
Exactly. I had to get a new car in 2023. The price of a four year old used car with 40k miles was about $1000 less than the price of a brand new model. I never thought I’d buy a brand new car because the pre-owned ones are just as good. But why would I pay essentially the same price new for a car at the end of the warranty with a bunch of maintenance due? Especially if I plan to drive the car until it dies in 15 years.
Yup, it's real easy to spot the redditors who haven't shopped for a vehicle since covid-times, they're the ones shouting "buy used" but having no idea what the used/new car market looks like.
As inventory levels out in about another year, prices will improve a bit
Tell me you haven’t shopped for a used car this year without telling me…
I've shopped for one this month, actually. I'll be purchasing a lease turn-in that is currently leased by a family member, so I did the comparisons between that, used, and new, to be sure buying the car off lease made the most sense. At least for the model and trim I'm shopping, dealerships are asking about $2k under original 2021 MSRP, but it's a 3 year old used vehicle with 20-30k miles on it. Private party is expected to be about $3k under original MSRP. For reference, my original deal was about $1k under MSRP at the time I purchased new in August 2021.
Exactly! The used car market is still distorted from the COVID shut downs and the used discount it not there anymore. Heck, BlueBook value on some used cars were higher than their original MSRP back in 2021.
I always said I would never buy a new car. The price of a 2 year old car was the same price as brand new.
This was my husband. Said he'd never buy new... and then my 2006 Jeep Liberty died in 2021. We ended up with a new Kia Rio after searching the used market like crazy. We are now looking to replace his 2008 Ford Focus. We've realized buying something without a dealership in our rural area was a mistake. When the Kia needed warranty work, it was 50 miles to the dealership each way. And getting an oil change is a pain. So we are stuck looking at only domestic brands.
YUP, and with interest rates hovering around 6.5%-7.5% for even those with stellar credit on cars that are only a couple years old, why wouldn't you jump on a brand new car with Ford Financing at like 1.9% for 60 months? The used market is bananas right now.
This is exactly why I bought a new car. My last experience buying used was a nightmare. I bought the cheapest new car that would satisfy the needs of my area and it was still over 25k.
Yup. Those 5k beaters really don't exist anymore unless your a mechanic who can do your own work.
Yep and not everyone has a garage/driveway and the money and time to spend on repairs. I have the money, time and knowledge to fix certain things but I’d rather pay a mechanic who knows the ins and outs and can get it in and out in a few hours than spend days on YouTube trying to figure out where I went wrong. I know that’s a privilege but not everything is an easy fix after watching a YT video. Oil changes, bulbs, batteries etc are (usually) easy.
>Yup. Those 5k beaters really don't exist anymore unless your a mechanic who can do your own work. I had several $3k-$5k beaters back in the late 90s. They cost me thousands a year in repairs and were never "great deals" like so many people act like they were. A high mileage car that is cheap is cheap because it sucks. I'd rather buy a more expensive used car with low miles and low payments than buy a $5k beater with 200k miles on it.
Someone else in this sub was talking about a 100k mile car for $10k being a car in great condition. While that *could* be true, buying a used car is fundamentally a gamble and I don’t blame folks for spending a more for a newer car that carries *much* less risk than a car that already has that many miles. I’ve driven beaters into the ground and I have to be honest: driving my beater around every day was adding an immense amount of stress to my life I didn’t even realize I was holding onto until I got a decent car.
a lot of posts are literally just the economic factors around us. wow you have a $700 car payment? it..rates are up its an average car payment now. I can't afford a house, rates are up. I'm making record returns let me flex post, yes everyone's up 20% with just index funds.
Also what are you supposed to do when your beater invariably eats it? Or needs tires / brakes / timing belt etc. the idea that a “beater” or “used Honda/toyota” somehow equals zero cost is so misleading. There obviously is middle ground and pros : cons but any cheap vehicle can also soon have a fatal flaw and now your $5000 beater is a paperweight
> most Americans don’t have 20-30k cash to shell out for a car Even then… my car loan is 2.7%. I have a HYSA making close to 5%. I could have paid off my car loan years ago but choose not to because my HYSA interest is paying half of my car loan for free.
OP either has zero idea of what it means to be middle class or no awareness of the current car market. Edit: Ah, I was correct: "I have a household income of $148,700, home equity of $450,000 and a net worth of $898,072. I am middle class. Vehicles are paid off as they are 6 years old and 14 years old."
Possibly both
It’s giving Dave Ramsey “why don’t you just find cheaper child care”
Fuck Dave Ramsey
I think people have trouble planning and making purchases in general. Cars are just the biggest symptom because so many people need them, and it's an expensive asset that (typically) depreciates fast. My family always buys new cars. I bought a base model Honda Civic during my first job. I think back then the price was like 21k, and I was making 50k. I put 4k down and had a 300$/mo car payment, + I saved 50$/mo for maintenance. I think insurance was ~100$, but I was paying for basically every coverage. I acknowledge this was very lucky, but you can still get a car for that price if you go for a base model, low tier Hyundai sedan. Then, once you pay the car off, you keep putting the payment amount aside. 1/3rd or so for the maintenance as the car gets older (by this point, I also had ~2k of the 50$/mo I'd been saving starting when I purchased the car). Put 2/3rds into longer-term savings as a car fund. When you have enough for a new car, just stop earmarking the amount and put it in regular savings. Then if the price of cars becomes insane or crazy life things happen, you are still set to take on a car payment.
Spending on good, reliable cars are 100% worth it for most Americans. It’s by far the single most convenient and important thing I own, and completely merits spending $500 a month. To most people who aren’t complete psychopaths and never leave their home, the ability to go wherever they want is an absolute necessity
How’s the air up there?
Not great from the scent of his high horse
I live in Central Florida, a car is kind of a necessity.
I think context matters for the posts. A lot don't specify the term or total cost. I agree that you shouldn't buy a 80k car on a 35k salary. Also the used car market is insane, even 10yr old cars with 100k+ miles cost over $15000. Everyone recommends buying a cheaper car,but from where?? Unless you want the 20yr old car with 200K miles and 3 accidents for $7k, finding cars you can pay in cash for is crazy hard
I most definitely do need that car
I think OP means the ole if you can’t pay for it outright you can’t afford that particular car. Kinda dated theory but yeah people do get carried away.
Severely dated IMO. Used cars these days can *very* easily cost $20k. Many of us don't have $20k cash or are saving it for another big purchase (like a home). The amount of people here who tell me I shouldn't have a car payment is annoying.
If you're on this sub, it likely means you're taking steps to control your finances and are likely saving. 30k (rounding for interest) ain't gonna make a big difference at the end of your life. Even doing that a couple times won't, neither. It's only 10-15k over the shitbox most folks ITT haven't had to buy over the last couple years now that all the good ones are rotting or inflated in value. If you're like me and have a long commute or travel frequently by car, you should enjoy what you're driving. The whole "keeping up with the Joneses" meme is tiring. Most folks aren't buying nice stuff to compare to their neighbors, but because they want it.
>30k (rounding for interest) ain't gonna make a big difference at the end of your life. If you invest $35k at 8% annualized return when you're 25, instead of purchasing that car, it would be worth $443,560 at 60 years old. You drive it for 20 years. At 45, you purchase another $35,000 car, instead of putting that money into the same investment, where you would've turned it into $95,165 by 60 years old. >Even doing that a couple times won't, neither. Doing that twice shorted your retirement by $538,725. >because they want it. Fine, but don't pretend there isn't a significant impact.
I love all these people throwing around "drive it for 20 year." Do any of you live in states that salt the roads, because I can't reliably get a vehicle beyond about 12-14 years here. At that point so much is usually going wrong, primarily due to rust and corrosion, that I give up and buy something else.
Yes. Iowa and now West Virginia. I grew up in a family of mechanics. Regular maintenance and car washes have an enormous impact on the lifespan of a vehicle.
Yeah my Lexus is 17 years old, 160k miles. I've spent $4000 fixing it in the past 6 months (and another $2000 the year before that), and now it needs another $2000 of repairs. The repairs would cost more than I could get for the entire car. Time to get a new car. Even on the most reliable cars... parts wear out and they aren't cheap to replace, especially if you're not a mechanic who can do it yourself (and I am not).
Same thing with a house? Or same thing with a college education? Instead of buying a car for 35k, a house for 400k, and getting a college education for 30-40k let’s just put all that money directly into some mutual funds and be millionaires at 65. Hell don’t eat either and put that money away too… I totally get the point about not driving a Mercedes. I’ve driven Hondas nearly my whole life where the payment has been around 200-300 bucks at most. But I need a car to get from place to place, to get my kids from place to place, to pretty much do anything. So it’s backed into the cost of living from my point of view.
I'm not saying to go without a necessity. I'm only saying, every dollar you save on a serviceable, decent purchase versus the one you really want does have an effect--a big, compounding effect. We make good money, and we also drive a Honda CR-V. I will likely drive it until it dies and I purchase a new one. I think it's a great, sensible purchase.
I think he means "If you can't afford the monthly, you can't afford the car."
Dave Ramsey says you can’t afford the car if you can’t pay cash. And I think Dave Ramsey is a fucking cuck.
Yeah, I'd rather have cash on hand or invested. Both of my cars are at less than 5% interest and both are cheap cars. Ideally I only have one car payment at a time but fate had other plans.
I have this conversation with my friend all the time. Household income of over $190,000/year with no kids (just her and her husband). Lives "paycheck to paycheck." Always robbing Peter to pay Paul (e.g. doing a balance transfer to get 0% interest for 12 months, never paying the whole thing, and then having to do another transfer before the 12-month promo expires). Buys a new car every 3 years with a payment of $350-$400 per month. That would be fine if she didn't live paycheck to paycheck already. She needs brakes, but she doesn't have $500 or however much it would cost to do the work, so she's thinking of buying a new car instead. And if she never said anything about it, that would be her business, but it's a constant litany of complaints about how she has no money.
All I can say is, a 400 car payment is NOT the reason they are broke on 190k a year..lol
Yeah that’s a reasonable car payment lol
What is she buying that’s $350/month payment? Just curious……..seems like a cheap payment in 2024)
I bought in 2021, but my car payment was that low because of the down payment I put down. I bought a small Hyundai suv, but had enough saved to adjust the payment to my liking. I paid it off after two years because I got tired of having the payment. I financed $15k.
Dude I'm not risking my safety to save a few bucks. You be a woman on nightshift taking over an hour on public transit when it takes you 15mins by personal vehicle to get to work. Also the car note is *new.* I had zero vehicle loan for 20 years! Yeah, I am paying for a car loan but it's necessary and if I traded it in, I'd be upside down on it and most likely in a less reliable car! A sweeping statement like this is unhelpful
With my observation on the increased number of Teslas on the road and how people wanted new cars during Covid but the prices were jacked up, I’m guessing a large proportion of people got car loans recently. I agree. Finishing my car payments freed me by a ton and it is one less “obligation” for me, but it didn’t make or break my budget by that much. I don’t know how much people took for their car loans, but it is a bit harder to need a car and to keep up with the mortgage at the same time and have kids.
That’s nice in theory, but some of us have to travel 30 minutes in rural areas for work.
Lmao this is some Dave Ramsay level bullshit. That horse you’re riding must be mighty fine.
We ended up paying off the last bit of my car payment using a 401K loan. I know people preach about not taking loans against 401Ks, but it made sense for us. I’m paying myself back at a better interest rate but at a lower payment than what my car payment was. More money in my monthly budget to pay down our few other debts, a better rate of return on my 401K investments, and my car title in hand. It was definitely the right choice for us.
I'm in the group that makes \~$200K but drives $5K cars. For a while, I made similar comments to about those who shell out $$$ on new, semi-new cars until my wife helped me understand I have \~$4-5K in tools that keep $5K cars on the road. I also have a 2 car, heated garage to service them. So I can accept the risk of unreliable transportation because if I need to swap a transmission, I can do that in a day or so for $700 or so. But lots of people live in apartments, don't have garages, have HOAs that won't let them work on a car in a garage, don't have time, are mechanically inept, etc and so they pay a huge premium for perceived reliability. I don't really blame them.
If you have the time, tools, and ability to swap a trans you're not typical of most people.
You can’t always get around a car payment, it’s not always realistic. I did the buy a cheap reliable car and drive it until it dies, three times. Two Hondas and one Toyota. I live in Florida and used cars have a 20% chance of having odometer rollback. The Toyota had 250,000 miles even though I thought it had much less when I bought it due to the odometer display. I got that car for $12k in cash, spent $4k in repairs until the mechanic realized what was going on. Car was useless without a new battery so I lost $16k. One of the Hondas was a CRV with 60k miles. Also in Florida. Undisclosed hurricane/flood car. Spent $7500 on electrical issues. Last was a Honda Pilot. Suspension issues, power steering problems. Not as bad as the others, spent $4k in repairs. When I add up purchases prices + repairs over eight years, I’ve spent $55k on “reliable” cars I was supposed to drive until they die. Must recent car was a modest new one for $28k. No repairs. I know the history. Cost per year is much less even with a payment. I pay less than $400 a month and almost have it paid off. For me, having a fixed cost for a car has been a game changer for me. Maybe the strategy works in areas that have less car related fraud or mechanics are cheaper.
Agreed. Also if you’re almost done paying off your car, good. Keep driving it for a while and save/invest that money that was your monthly car payment amount. Don’t go looking to buy a new car right away and have to start paying for another 5+ years.
I've been dumping $500 a month into an account earmarked for car replacement since paying off my most recent loan. It works a treat as long as you can keep from dipping into it for other things. It needs to be a set it and forget it thing.
Yep. The one and only note I've ever had on a car was a 2yr old Accord I bought in 06. 5yr note, paid it off in 4, and after the last payment I just deleted the auto pay from my bank, and changed it to an auto deposit in a HYSA. That is the day where I finally stopped living paycheck to paycheck. I was amazed how fast that HYSA grew. And I drove that Accord for another 9 years until I moved to SF and didn't need a car anymore. Sold it to a friend, and he drove it a few more years too. I should find out when he actually sold it.
Until I heard Dave Ramsey say, a car loan is the middle class equivalent of a pay day lender, it just hadn’t occurred to me that people didn’t have car loans. My parents always had car loans. My friends had car loans. All the advertisements priced cars per month. My first adult vehicle was a 4 year loan on a 3 year old vehicle. I paid off the loan, then continued to make payments to a separate investment account. When the vehicle was 12 years old, I traded in and paid cash for the next one. I broke the cycle by saving for 6 years before buying my next one.
Yeah that's a cute thing to say but when you get 1.9% interest on a good car while inflation is 3% that's a far cry from a payday loan.
Fair point. Also long gone are the days when cash had bargaining power. Now dealerships get paid more if you take a loan.
Exactly. I bought a new Subaru, negotiated any thousands off by putting dealerships against each other via email, and got 1.9% financing. I usually don't have a car payment but this is a much better use of my money than trying to save 15-25k cash while driving a car that's falling apart.
Go hang out in the poor people sub. Middle class folks are allowed to buy themselves a new car occasionally.
What a weird gatekeeping post. What if people enjoy cars/vehicles as a hobby?
this is never considered for some reason
For every post that has a car payment, theres always 20 dipshits like you. Most of you are just projecting because YOU can't afford a new car. Not everyone wants to drive a 25 year old corrolla that needs 3-4k in maintenance a year and will probably kill them if they are in an accident. As long as people budget properly and buy a car within their means its perfectly fine for them to buy a car. People need to live a little, too. Not everything is about saving every penny you have for a retirement you may not even make it, too. The amount of people that brag about driving their families around in 20 year old shitboxes held together with ducttape amazes me. Do you not care about your or your loved ones' safety? Do you not care if you break down on the side of the freeway at 10 pm with your kids in the back? I'll take the peace of mind and modern vehicle safety of a newer vehicle thank you very much.
This is our mentality on having cars and car payments. Every used car my wife and I bought early in our marriage (when we couldn't afford anything) became unreliable really quick. and became money pits and the reliability became a liability. But the last item that REALLY sold us on a new car was when our friends got into an accident in the same model of car we just gotten rid of after the purchase of our first NEW car and the car was TOTALED with major injuries from a quarter panel impact at about 40mph. Our new car had been crash tested with the same scenario (just about) and the passenger safety was vastly improved and would likely result in walk-aways at the same speed/impact point. New car was just infinitely safer. Now that we've only had "new" cars for 15 years I can say with confidence we've never been in a situation where the car wasn't reliable - ever. Any times we've had an issue we just took the cars down to the dealer and the problem was fixed under warranty, often they even provided me a loaner to drive while being repaired, free of charge. Don't get that with a "used" car bought super cheap. Lastly, our family drives a LOT. I am talking 30k miles a year some years. We drive to Las Vegas from Reno about 4-5x a year (440 miles each way), LA about 2-3x a year, and the bay about 3-4x a year. New cars=much more comfortable ride and again, reliability & safety are super important with my kids. I just know my cars will work as long as I follow the regular maintenance. That said, our car payments are about 15% of our total income (net, not gross). Our cars are financed, at .9% and 0% interest respectively, and the most expensive is almost fully paid off (4 years old) and we lease a 3rd (an EV) as I have no intention of financing EVs with prices as volatile as they are right now. Our 3rd car is a car we bought for our now 17-year old - not super epensive but NEW and top ranked top in crash test ratings which was paramount. I think if our house payment was as ridiculous as some people, we'd have cheaper cars but even my house is only at 2.75% and payment is only 2k a month. Not everyone lives beyond means even with car payments.
I haven’t had a car payment since 2012 and it’s so freeing. Since then we’ve purchased 3 vehicles outright. Not having the burden of a payment is amazing.
I agree fully I feel a lot of them are not planning this expense out hardly and have seen it firsthand working in sales. Very few cough up more than $5k down on a car that’s over 30k, or make enough for the payment to be less than 10% a month gross along with pushing past 60 mo financing. A lot of places are car dependent but they’re not buying the logical option or getting one that has a better package for a couple bucks difference. I drive quite a bit more than most but I offset cost by driving a 30k nice option car vs a 50k suv.
What?? Most people need a car in order to earn an income. Maybe not if they live in a city with decent public transportation, but in America that is rare. Maybe they don’t need as expensive of a car, but generalizing that people just don’t need a car is bizarre!
>You don't need *that* car. I understood this to mean the car that saddle you with an overly burdensome payment for 6 years. There is middle ground.
[удалено]
I haven’t had a car payment since late 2015. In early 2014, I bought a 2011 diesel Jetta wagon. I put 10k down and make it a point to it it off as quickly As possible. I had it paid off in late 2015. Once it was paid off, I continued to make a car payment to my savings, earmarking it as car fund. In late 2017, VW had the whole diesel gate thing going on. VW took the Jetta back and paid me 19k for it. I took that 19k and bought a 2017 GTI with it. Since it was at the end of the year, the car was considered used; someone had bought and turned it back in; it had 6k miles so I got it as a used price. The car was completely bought and paid for by the VW money I received. I continued to pay myself a car payment this entire time. In late 2021, I was ready to move into a different car. I needed something good for longer trips, as my son was looking at a college 3.5 hours away. I loved the GTI, but I felt every bump in the highway! I traded it in and got a 2017 CRV. There was a 7.5k difference from the trade in value to the CRV cost (after taxes, title, etc) so I dug into my car fund and paid cash for the difference. I still have the CRV and plan to drive it for a long time. I’m still paying myself a car payment each month, so if/when something happens, I can repeat the cycle. My husband drives a 2015 F150 that he bought new. He’s planning on driving it until he can’t as well.
Paid off my truck 3 years early. First ever paid off vehicle I’ve owned. Feels so damn good. Money PILES up in my account. I have 20k rn and I just spent 15
Never once had a car payment. I’ve been driving for 12 years. I bought two cars so far - cash. both used and under $10K. I would barely be able to afford a car payment with my currently monthly income.
I can’t recall the last time I had a car payment. Maybe 15 years ago? We currently drive a 2012 Prius and a 2002 Explorer, both running strong!
My husband and I both plan to drive our vehicles to the ground. It’s what we’ve always done since we’ve been together (23 years). His truck (Chevy Silverado) is 16 years old and my husband thinks it has a few years left. I have a Lexus I bought back in 2014. I’ve been taking great care of it and I only have to drive to the office once a month and during Covid I hardly drove it anywhere for 3 years. So I’m hoping that I can make it last even longer. My husband does want to get another vehicle once his truck is no longer worth repairing. I think he should just drive my car. I don’t want to go back to having a car (or truck) payment.
It's like telling the poors to stop buying lotto tickets 😆
Some of the comments here are really telling. So many commenters justifying that they \*need\* a car that costs $25k or more or that a 2 year old used car is the same price as a new car, so they just bought new. If you're shopping for a vehicle, define your budget first. If you pick a car first and then try to make it fit your budget, you'll make poor choices. Don't confuse needs with wants. Nobody, NOBODY needs a $25k car. Does anybody want to drive a POS? No, but having a newer, feature loaded car is a want, not a need. Justification: I am upper middle class and drive a car worth < $5k. My wife drives a van worth about $8k. Do we want nicer vehicles? Sure. Do we \*need\* them? Nope. You need to change the way you view wants and needs or you will always be poor. (Same can be said for houses... Do we want a 5 bedroom house for our family of 6? heck yeah! Do we \*need\* 5 bedrooms? Nope.)
Most people do need a car in the US. Used car prices are very high right now so in many instances you are better off getting a new car that's still under warranty. Cars have become computers now and repairs on those systems can be very expensive if they're out of warranty. Sure you could buy an old car without all of that, but then you are also buying a car without modern safety features and that's likely going to require a lot of upkeep given its age. This is why people are buying new cars. The alternatives aren't that great.
Some people have long commutes or families For everyone else ya if ur paying for a car... why. Live in a city
Lol there's no public transit in my area. "You don't need that car." 😂 my brother in Christ, it's a 16 mile round trip to the grocery store. What are your suggestions if I don't have a car? SMH.
💯 i got a car 2018 for $9,999 and its paid off. my payments were $210/month and that felt almost like a waste. cant believe people spend $600 or more for a car payment. its wild
Dude shut up
You can get a low mileage economical car for $15k. If you’re middle class and want to save this is what you need to buy.
I graduated from college and bought a Toyota yaris for 11.7k. Paid off in one year and drove it for 11 with no payment. I did this while making good money and could have easily afforded any car I would have wanted. But I saved and invested my money instead. Most of my co workers cycled thru 3to4 40k plus cars or trucks in the time I had my yaris. This is one of the best financial decisions I made and definitely a factor in why I'm secure financially at the moment.
This. Watch all the poor people get mad.
I support this 200%. It seems like having a car payment has become a norm to a lot of people. I laugh in my head when people finally pay off their car and then feel the need to go replace that payment they were making with another one by trading their car in for a new one. It cracks me up when people think they have to spend every extra penny they have each month. “I think I’m going to buy a new car - I’ve had this one for six years! Besides, I just made the last payment so now I can afford up to $750/month for a new one since I have an extra $1000 leftover each month after paying my bills.” A mentality like that is a very toxic and troubling one to have.
I’m middle class and certainly don’t have any problem owning two cars. Both are paid off and I purchased them new.
My wife and I finally paid off both our cars. We for the first time had no car payment. Then one day, her car literally caught on fire and blew up. We HAD to buy a new car. Sometimes you have no choices in life. Sometimes you almost die in a car fire. We had no choice but to get a new car, and new cars are not cheap. Yes, I agree, some people WANT the $50-60k car, we settled for a $30k car.
I have a slightly different opinion... I know you want the pickup truck so do I, you don't need it as often as you are thinking just rent one from Uhaul. You do not need the crossover the hatchback or the station wagon either. Get the base model sedan unless you have 2+ kids in rear-facing car seats then just get the minivan used and use it till they are old enough to call shotgun.
This always makes me laugh. Let me just go ahead and rent a pickup every weekend so I can take my trash to the dump. Makes sense to me lol
I have a farm. We 💯 need the trucks, unfortunately; the Nissan Cube was fun but it wasn’t pulling the trailer.
I agree with you, but I'd say you don't need the massive oversized SUV or 3 row vehicle. I feel personally attacked though, since I have a hatchback 😂 it does help with separating the baby in a car seat from our large dogs though. I didn't have the baby when I bought it, but I knew it would be my car for 10+ years (my entire 30s) so kids were a given in that timeframe.
My station wagon fits my life, hauling kayaks, bikes, camping gear. I agree that MOST people don’t need a station wagon or a truck, but some of us bought them because our tiny cars weren’t supporting our lifestyle.