$1000/month car payments &!$%

[change_seeker]

I found this nugget in an article about Ford raising F-150 Lightning prices:

"A growing share of Americans are committing to monthly new car payments topping $1,000 as interest rates and prices continue to rise, according to Edmunds.com. 14.3% of consumers who financed a new vehicle purchase in Q3 2022 committed to a monthly payment of $1,000 or more, the highest level that Edmunds has on record."

https://www.thestreet.com/technology/ford-delivers-very-bad-news-to-ev-buyers

[solon]

This one is pretty eye-popping too.

https://twitter.com/i/status/1563613318584999936

[Ladychips]

Oh. My. Word. I'm old enough to remember when a $1000 HOUSE payment was crazy. I can hardly get my brain around this...

[Reynold]

I've got a work colleague who wanted to replace the family's minivan (family of 7, with three under age 6 so they kind of need a car that size).  The first few manufacturers he tried all wanted a $10k premium above MSRP to get one.  He finally found a manufacturer that was only charging MSRP, and was happy to get that one. 

Auto makers can still pretty much charge what they want for in demand vehicles like a F150 right now.   And remember they have to charge high enough prices for large gas guzzlers like this to subsidize prices on the cheap econo cars that are unpopular, in order to meet CAFE gas standards, so that is where they are going to raise prices. 

[AccidentialMustache]

What econo car does Ford still sell in the US? The only classified-as-car is the Mustang.

[JLee]

I found this nugget in an article about Ford raising F-150 Lightning prices:

"A growing share of Americans are committing to monthly new car payments topping $1,000 as interest rates and prices continue to rise, according to Edmunds.com. 14.3% of consumers who financed a new vehicle purchase in Q3 2022 committed to a monthly payment of $1,000 or more, the highest level that Edmunds has on record."

https://www.thestreet.com/technology/ford-delivers-very-bad-news-to-ev-buyers

Even crazier, many new cars cost about the same as used ones. Gone are the days of "it loses 25% the moment you drive it off the lot" -- in many cases it immediately appreciates because new cars often aren't available at all.   The Ford Maverick (the awesome little ~$22k mini pickup) is already sold out for 2023 - you can't even order one, and orders for 2024 aren't open yet.

[Midwest_Handlebar]

At the risk of losing my fugal rep, I have a confession. I just priced out a new Mach-e for the wife that would put 60 month payments at ~ $1k per month. Some face punch worthy excuses below:

1. We could pay cash if we sell off ibonds/reduce real estate reserves, not worth it currently.
2. 1 year old Mach-E's are selling for more than new. Instant equity?
3. Will keep it for a long time. Owned same 2 cars for 10 years.
4. We should be worth $2M+ when it's delivered.
5. The wife is working for a couple more years to get a large payout. I will stop showing up to my mega corp job next year (assume my paychecks will stop too).
6. I was kind of a hard ass 10 years ago that got us to the position we're in. I feel like I owe it to her.

Am I getting soft in my old age?

[Fomerly known as something]

At the risk of losing my fugal rep, I have a confession. I just priced out a new Mach-e for the wife that would put 60 month payments at ~ $1k per month. Some face punch worthy excuses below:

1. We could pay cash if we sell off ibonds/reduce real estate reserves, not worth it currently.
2. 1 year old Mach-E's are selling for more than new. Instant equity?
3. Will keep it for a long time. Owned same 2 cars for 10 years.
4. We should be worth $2M+ when it's delivered.
5. The wife is working for a couple more years to get a large payout. I will stop showing up to my mega corp job next year (assume my paychecks will stop too).
6. I was kind of a hard ass 10 years ago that got us to the position we're in. I feel like I owe it to her.

Am I getting soft in my old age?

Reasons.

I’m the buy new and keep it for years type.  I’m sure I’ll have a similar story in a decade when I replace my current 7 year old Renegade.  But if I buy a Ford at least I won’t have to deal with the above MSRP thing as I’ll get the friends and family rate from a good friend who works there.

[Midwest_Handlebar]

At the risk of losing my fugal rep, I have a confession. I just priced out a new Mach-e for the wife that would put 60 month payments at ~ $1k per month. Some face punch worthy excuses below:

1. We could pay cash if we sell off ibonds/reduce real estate reserves, not worth it currently.
2. 1 year old Mach-E's are selling for more than new. Instant equity?
3. Will keep it for a long time. Owned same 2 cars for 10 years.
4. We should be worth $2M+ when it's delivered.
5. The wife is working for a couple more years to get a large payout. I will stop showing up to my mega corp job next year (assume my paychecks will stop too).
6. I was kind of a hard ass 10 years ago that got us to the position we're in. I feel like I owe it to her.

Am I getting soft in my old age?

Reasons.

I’m the buy new and keep it for years type.  I’m sure I’ll have a similar story in a decade when I replace my current 7 year old Renegade.  But if I buy a Ford at least I won’t have to deal with the above MSRP thing as I’ll get the friends and family rate from a good friend who works there.

I think the above MSRP garbage is going away soon. They quoted us an out the door price of $61k for a "mach-e premium" including tax. It has some delivery fees, but it's not egregious compared to the stories I've read.

This car is far past utility and common sense, and far into fancy pants luxury. I would never buy it for myself, but we're at the point that it won't move the "financial needle" one way or another.

[LiveLean]

I paid $17,000 cash for a new 2019 Toyota Corolla at the end of October, 2018.

It now has 40,000 miles. I could sell it for a profit. Scary.

[clifp]

I think the above MSRP garbage is going away soon. They quoted us an out the door price of $61k for a "mach-e premium" including tax. It has some delivery fees, but it's not egregious compared to the stories I've read.

This car is far past utility and common sense, and far into fancy pants luxury. I would never buy it for myself, but we're at the point that it won't move the "financial needle" one way or another.

I've never been married, so discount appropriately.  My happily married friends inevitable use the phrase, "happy wife, happy life", my divorced friends often argued about money.

Average car in the US is what about $40K, probably higher during covid, so really you are spending extra $20K or roughly 1% of your net worth.

[nick663]

What econo car does Ford still sell in the US? The only classified-as-car is the Mustang.

Nothing.  Ecosport was the "econobox" but that is dead.  Maverick is now the cheapest vehicle in the lineup.

[BlueMR2]

I just can't get over how the world has changed.  It used to be that pickup trucks were the cheap option you bought when you couldn't afford a car.  Now you can order a brand new base model Corvette for less than you can find even a used standard pickup truck!

[jinga nation]

What econo car does Ford still sell in the US? The only classified-as-car is the Mustang.

Nothing.  Ecosport was the "econobox" but that is dead.  Maverick is now the cheapest vehicle in the lineup.

You're right. Although the 2022 EcoSport is still shown on Ford's website, it is cheaper by less than $200 than the Maverick.
EcoSport was being imported from Ford's India plant, which has ceased production. (Ford quit production in Brazil and India.)

[jinga nation]

"A growing share of Americans are committing to monthly new car payments topping $1,000 as interest rates and prices continue to rise, according to Edmunds.com. 14.3% of consumers who financed a new vehicle purchase in Q3 2022 committed to a monthly payment of $1,000 or more, the highest level that Edmunds has on record."

It takes Olympic-levels of mental gymnastics to justify that.
Either people have lots of disposable income, or are cutting back in a lot of other purchases, or something that I can't think of, or something something inflation YOLO FOMO, or all of the above.
Maybe I should price my rents based on tenants' vehicles? Vee-Hick-Ull-ism?

[Archipelago]

Oh my goodness!

I bought a 2016 Honda Civic EX-T for $17k back in 2020. I bought it cash. It's amazing that a $1000/month car payment would already be more than the total cost of the car.

[JAYSLOL]

Last year we needed a second vehicle, so I decided that $1000/month was doable for us, and by that I mean we saved an extra $1000/month for three months and then bought a good little car outright in cash. 

[AccidentialMustache]

I think the above MSRP garbage is going away soon. They quoted us an out the door price of $61k for a "mach-e premium" including tax. It has some delivery fees, but it's not egregious compared to the stories I've read.

This car is far past utility and common sense, and far into fancy pants luxury. I would never buy it for myself, but we're at the point that it won't move the "financial needle" one way or another.

How confident are you of your ford dealer? How many EV techs do they have? Is there another EV certified dealer nearby? Do you think your dealer (or your alternates) may decide to go a different-than-EV direction with Farley's "go ev or die in obscurity" demands?

My local ford rather sucks, they have one tech (who was on vacation when ours died). They've failed to update the car properly and blown me off when I raised the issue.

It is a fantastic car, when it is working. The problem is when it isn't and is in the shop, which has been most of two months in just over a year's ownership.

[Midwest_Handlebar]

I think the above MSRP garbage is going away soon. They quoted us an out the door price of $61k for a "mach-e premium" including tax. It has some delivery fees, but it's not egregious compared to the stories I've read.

This car is far past utility and common sense, and far into fancy pants luxury. I would never buy it for myself, but we're at the point that it won't move the "financial needle" one way or another.

How confident are you of your ford dealer? How many EV techs do they have? Is there another EV certified dealer nearby? Do you think your dealer (or your alternates) may decide to go a different-than-EV direction with Farley's "go ev or die in obscurity" demands?

My local ford rather sucks, they have one tech (who was on vacation when ours died). They've failed to update the car properly and blown me off when I raised the issue.

It is a fantastic car, when it is working. The problem is when it isn't and is in the shop, which has been most of two months in just over a year's ownership.

I have 0% confidence in that particular ford dealer (no experience dealing with that one, or dealerships in general), but there are 11 others relatively close by with the majority EV certified. Ford and most other car companies future relies on selling EVs so they will figure it out, or someone else will. It sounds like you haven't had a good experience, but I'm not too worried about the service aspect. My wife insists on buying the car, she can deal with it. ;)

[snic]

Last year we needed a second vehicle, so I decided that $1000/month was doable for us, and by that I mean we saved an extra $1000/month for three months and then bought a good little car outright in cash.

I'm curious what you got for $3k at that time. The used car market was insane back then and has continued that way. I sold a 20 year old car with a dent in the side and a passenger seat that wouldn't recline for $4500 about a year ago. Even though it had under 100k miles and the engine was in good condition, I was amazed to get that much for it (and probably could have gotten a bit more, but I took pity on the guy who bought it - he had lost his car in a flood and lost his job at about the same time, or so he said).

[Syonyk]

I paid $17,000 cash for a new 2019 Toyota Corolla at the end of October, 2018.

It now has 40,000 miles. I could sell it for a profit. Scary.

My 25 year old truck appears to have roughly doubled in value since I got it 8 years or so ago.  There just aren't that many low miles 7.3 OBS F350s out there, and mine isn't getting many miles lately - round trips to the hardware store with a trailer only run up the ticker so fast, and i've got more "stuff to work with on the property" than I have time for, so I haven't even been doing much of that lately.  Probably will head out to help some friends with firewood in the next week or so, but... there just aren't many left with under 125k on them.

I not-quite-joke that when I can swap it straight across for a high trim F150 Lightning optioned up for towing, I'll do it.  I'm just not sure what longer cross country towing with one of those looks like quite yet.  The antique car trailer is a brick to tow.

I've never been married, so discount appropriately.  My happily married friends inevitable use the phrase, "happy wife, happy life", my divorced friends often argued about money.

There's some truth to that, though I've also seen it used as an excuse for... some pretty well absurd luxury purchases.  My goal with vehicles is to ensure that we have one modern(ish), reliable, cheap to run, boring daily driver that my wife uses for running around with the kids.  Right now, the 2012 Volt accomplishes that very, very well.  It's literally the most boring car I've ever owned, and for what I expect of it, that's perfect.  I'm perfectly fine with the less reliable options, though that's mostly because I like my weird stuff.  Urals (Russian motorcycles with a sidecar, independent evolution of a late 1930s BMW) are great, I ride them year round, but neither do I expect Japanese-bike reliability out of them - and they don't deliver it.  I only get particularly annoyed if I can't get home to work on them, but if they'll get me to a friend's place where I can leave them while waiting on parts, almost as good.

What's more important is that both parties in the marriage are on the same page with money, and that said page is achievable with the income available, given the life choices they make.

[Midwest_Handlebar]

"What's more important is that both parties in the marriage are on the same page with money, and that said page is achievable with the income available, given the life choices they make."

Agreed, we've already made the hard choices that have put us in the position we're in. My wife is essentially in a "golden handcuffs" situation for the next few years, and after that we'll be more than fine even if everything doesn't go perfect. Something that isn't talked about, and I believe just as hard, is lightening up on the frugality intensity when appropriate. I'm trying to work on that.

[AccidentialMustache]

Something that isn't talked about, and I believe just as hard, is lightening up on the frugality intensity when appropriate. I'm trying to work on that.

It gets talked about, but only as the "slippery slope to rampant consumerism", not as the "you're being cheap rather than frugal." Well no that's not true. It does get talked about, moving to someplace more expensive but also more walkable. Paying more is okay for housing, apparently. But not anything else.

We should have switched to being a 2-car family a few years before we did. As DS and our parents have grown older, we needed the added mobility and flexibility that two cars gives us, but refused because "it was expensive and we didn't need it" and then missed things, due to only having one car.

We even knew about that being an issue for us. After graduating we lived like college students for a long while and would skip out on such "expensive" pleasures as buying books (impractical to pull from the library; think RPG sourcebooks) that we'd enjoy and use for hours.

[Ladychips]

I talk about it some. I don't think I'm too frugal, but I'm definitely more frugal than my husband. It's not right for me to tell him 'we can't afford it' when we absolutely CAN afford it. Why scrimp now? So that I can leave it to a nephew who makes way more money than I ever did or to my Alma mater? That seems wrong. But it's still a conversation I have to have with myself regularly!

[JAYSLOL]

Last year we needed a second vehicle, so I decided that $1000/month was doable for us, and by that I mean we saved an extra $1000/month for three months and then bought a good little car outright in cash.

I'm curious what you got for $3k at that time. The used car market was insane back then and has continued that way. I sold a 20 year old car with a dent in the side and a passenger seat that wouldn't recline for $4500 about a year ago. Even though it had under 100k miles and the engine was in good condition, I was amazed to get that much for it (and probably could have gotten a bit more, but I took pity on the guy who bought it - he had lost his car in a flood and lost his job at about the same time, or so he said).

Yeah, the market has been a bit crazy, but with great patience watching Facebook Marketplace for almost a month, I spotted a 2012 Hyundai Elantra Touring with just under 100k on it in really excellent shape literally minutes after the guy posted it for $3k, I called him and drove over almost immediately and paid him full asking price.  It was probably worth more like $4.5 privately, maybe closer to $6k if a dealer was listing it, so it was a bit of a steal.  That was in April last year so used cars hadn’t quite peaked yet and there were still some deals popping up that were pre-pandemic pricing, but even today it can pay really well to be patient and look for underpriced cars.  It’s been an excellent little car so far, we’ve put about 15k on it, done nothing other than change oil and replace the original battery that bit the dust this year.  It even came with two sets of good tires on rims and a full service history, so I know the timing belt was done at 60k so it’s good for a few more years. 

[RainyDay]

Wow, I can't even fathom paying $1000/month for a car loan.  Never have I been happier than with my Jan 2020 purchase of a used Toyota Prius 5 for $7500! 

I do have friends who have recently bought brand-new cars, though.  One bought a new Lexus SUV and the other bought a Jeep Grand Cherokee.  I imagine their payments are upwards of $400/month and probably more, even with trade-ins. 

[JLee]

Wow, I can't even fathom paying $1000/month for a car loan.  Never have I been happier than with my Jan 2020 purchase of a used Toyota Prius 5 for $7500! 

I do have friends who have recently bought brand-new cars, though.  One bought a new Lexus SUV and the other bought a Jeep Grand Cherokee.  I imagine their payments are upwards of $400/month and probably more, even with trade-ins.

Given that $400/mo will get you a ~$22k car at 4%/60 months, it's likely double or triple that.

[Askel]

Guilty pleasure:

Reading the auto loan approval threads over at the myficoforums.  https://ficoforums.myfico.com/t5/Auto-Loans/bd-p/autoloans

Some of the deals these folks get themselves into are just absurd.   

[solon]

Guilty pleasure:

Reading the auto loan approval threads over at the myficoforums.  https://ficoforums.myfico.com/t5/Auto-Loans/bd-p/autoloans

Some of the deals these folks get themselves into are just absurd.

Uh oh, I'm afraid I'm going to be spending many hours there.

This is at the top of the last page https://ficoforums.myfico.com/t5/Auto-Loans/Auto-Loan-Approvals/td-p/252350/page/474

APPROVING BANK: NFCU
BUREAU PULLED: Transunion
CREDIT SCORE: 760

SOFT PULL/HARD PULL: HARD
CUSTOMER STATE OF RESIDENCE:
NEW/USED: New
YEAR OF VEHICLE: 2022
MAKE: Porsche
MODEL: Cayenne Turbo
MILEAGE: 0
FINANCE/LEASE:Finance
PURCHASE PRICE: $180,000
AMOUNT OF LOAN: $150,000 (only used 105,000)
TERM CONTRACTED: 60 months
APR/LEASE RATE: 2.79
MONTHLY PAYMENT: $1,867
ANNUAL INCOME: $550k
DEBT TO INCOME RATIO: 3%

[JLee]

Guilty pleasure:

Reading the auto loan approval threads over at the myficoforums.  https://ficoforums.myfico.com/t5/Auto-Loans/bd-p/autoloans

Some of the deals these folks get themselves into are just absurd.

Uh oh, I'm afraid I'm going to be spending many hours there.

This is at the top of the last page https://ficoforums.myfico.com/t5/Auto-Loans/Auto-Loan-Approvals/td-p/252350/page/474

APPROVING BANK: NFCU
BUREAU PULLED: Transunion
CREDIT SCORE: 760

SOFT PULL/HARD PULL: HARD
CUSTOMER STATE OF RESIDENCE:
NEW/USED: New
YEAR OF VEHICLE: 2022
MAKE: Porsche
MODEL: Cayenne Turbo
MILEAGE: 0
FINANCE/LEASE:Finance
PURCHASE PRICE: $180,000
AMOUNT OF LOAN: $150,000 (only used 105,000)
TERM CONTRACTED: 60 months
APR/LEASE RATE: 2.79
MONTHLY PAYMENT: $1,867
ANNUAL INCOME: $550k
DEBT TO INCOME RATIO: 3%

Ok I'm impressed.  3% DTI on $550k is under $1400/mo in debt (with over $45k/mo in gross income).

[NorCal]

Yikes, that is crazy. I realize I’m partially a hypocrite, as I’m seriously considering (and fighting the desire to) buy an overly pricey EV. But I’d be paying in cash with about 3% of my net worth, and only a couple months of income.

I can’t imagine taking a $1,000/mo loan on a depreciating asset. Particularly with interest rates high enough to disqualify most arguments about investing in higher return assets.

[lifeisshort123]

Yikes… but this is where things are heading… Car companies are making only expensive models, but even then to get up to $1k is expensive…. And by the way, since it is a depreciating asset, unless you have super low interest rates, if you actually had the money you’d pay cash.

[AccidentialMustache]

With the inflation price hikes, there's something to be said for getting in now, if you're going to get in.

While we've had plenty of issues with our problem child EV, buying (sorry: ordering, who knows how long it'll take to come in) a new one, less than 15 months later, has added over 5 figures (20%!) to the price.

Last I checked (August), offers from the carvana types actually were willing to pay us over MSRP for ours. We paid under MSRP, because of x-plan. Roll in the federal credit and we just about break even including taxes/plates/insurance/power.

Then again, some of the next gen stuff looks great on paper. Starting at 30k (Blazer) is a lot better than 50k (MME, ID.4, I5, EV6, 3, Y).

[JLee]

With the inflation price hikes, there's something to be said for getting in now, if you're going to get in.

While we've had plenty of issues with our problem child EV, buying (sorry: ordering, who knows how long it'll take to come in) a new one, less than 15 months later, has added over 5 figures (20%!) to the price.

Last I checked (August), offers from the carvana types actually were willing to pay us over MSRP for ours. We paid under MSRP, because of x-plan. Roll in the federal credit and we just about break even including taxes/plates/insurance/power.

Then again, some of the next gen stuff looks great on paper. Starting at 30k (Blazer) is a lot better than 50k (MME, ID.4, I5, EV6, 3, Y).

I preordered a Lightning on launch just in case -- and between the changes to the tax credits and MSRP increases, my MY2022 order is $15k cheaper than if I had a MY2023...

[jinga nation]

Guilty pleasure:

Reading the auto loan approval threads over at the myficoforums.  https://ficoforums.myfico.com/t5/Auto-Loans/bd-p/autoloans

Some of the deals these folks get themselves into are just absurd.

Uh oh, I'm afraid I'm going to be spending many hours there.

This is at the top of the last page https://ficoforums.myfico.com/t5/Auto-Loans/Auto-Loan-Approvals/td-p/252350/page/474

APPROVING BANK: NFCU
BUREAU PULLED: Transunion
CREDIT SCORE: 760

SOFT PULL/HARD PULL: HARD
CUSTOMER STATE OF RESIDENCE:
NEW/USED: New
YEAR OF VEHICLE: 2022
MAKE: Porsche
MODEL: Cayenne Turbo
MILEAGE: 0
FINANCE/LEASE:Finance
PURCHASE PRICE: $180,000
AMOUNT OF LOAN: $150,000 (only used 105,000)
TERM CONTRACTED: 60 months
APR/LEASE RATE: 2.79
MONTHLY PAYMENT: $1,867
ANNUAL INCOME: $550k
DEBT TO INCOME RATIO: 3%

Glanced around on that... OMFG. Some of these folks are trying to improve their low/middle credit scores, but are buying makes/models that are not that reliable, and are money pits. And the mental gymnastics and self pat on back. Debt to income ratios, purchase/lease prices are high compared to annual income. Some of those monthly payments when you look at annual income... Oy vey.
There are others who are more reasonable, buying used, buying reliable makes/models, getting decent financing.

[Midwest_Handlebar]

Yikes, that is crazy. I realize I’m partially a hypocrite, as I’m seriously considering (and fighting the desire to) buy an overly pricey EV. But I’d be paying in cash with about 3% of my net worth, and only a couple months of income.

I can’t imagine taking a $1,000/mo loan on a depreciating asset. Particularly with interest rates high enough to disqualify most arguments about investing in higher return assets.

We're in a similar situation. The only reason why I'm considering the loan is because you can make nearly 10% in I-bonds right now (have enough to buy it outright from these), and I need to stay as liquid as possible for buying opportunities in the real estate market next year. If things change, I'll pay off the loan.

[EchoStache]

I tend to be very debt averse, but financed a $45,000 EV for $779/month 60 months.  I have enough cash to pay for the car, but finding it hard to pay off the 0.9% interest loan.  I do hate the $779/payment, but its allowing me to keep $40,000 in Ibonds at 9.62%, or 8.72% net.  Looks like there will be another respectable rate for the next 6 months as well.   

[Askel]

To be fair, I can't really be too judgmental either. I've got an 84 month(!) loan on a TRACTOR. Monthly payment: $384. But hey, they were willing to loan it to me at 0% and I just can't bring myself to pay it off giving what inflation is doing.     

[snic]

Well, exactly - if your car payment is $1,000/month and your rate is 0 percent for 3 years, then you're paying $36k for a car. That's not completely outrageous for a new car these days. It would presumably be more Mustachian to buy a used car, but with the used car market as crazy as it's been, it's no longer automatically a better idea to buy used than new. And of course getting a 0% loan for something you need at a reasonable price and investing the cash you would have spent upfront is about as Mustachian as you can get.

[GilesMM]

Given average new car prices near $50k, a 3 year loan could easily be $1000/mo. Shockingly simple math.

[solon]

Given average new car prices near $50k, a 3 year loan could easily be $1000/mo. Shockingly simple math.

No one is doubting the math, just the sheer lunacy of paying that much for a car, and how much harm that causes to the retirement effort.

[Psychstache]

I tend to be very debt averse, but financed a $45,000 EV for $779/month 60 months.  I have enough cash to pay for the car, but finding it hard to pay off the 0.9% interest loan.  I do hate the $779/payment, but its allowing me to keep $40,000 in Ibonds at 9.62%, or 8.72% net.  Looks like there will be another respectable rate for the next 6 months as well.

I'm in a similar spot (though I don't have any particular feelings about debt). Financed 40K for an EV @ 0.9% for 72 months. I don't plan on paying one penny early.

[zolotiyeruki]

Given average new car prices near $50k, a 3 year loan could easily be $1000/mo. Shockingly simple math.

No one is doubting the math, just the sheer lunacy of paying that much for a car, and how much harm that causes to the retirement effort.

When I consider the fact that we bought a 60k mile Minivan car last December for $9k, or a 150k-mile sedan for $1750 a month later, I just shake my head.

A coworker bought a Tesla a while ago.  He says that because they do a lot of driving (30k miles/year on it), it'll pay for itself in 8 years.  He didn't like it much when I pointed out that I could literally throw my $1750 ICE car away and replace it every couple months and still come out ahead.

[JLee]

Given average new car prices near $50k, a 3 year loan could easily be $1000/mo. Shockingly simple math.

No one is doubting the math, just the sheer lunacy of paying that much for a car, and how much harm that causes to the retirement effort.

When I consider the fact that we bought a 60k mile Minivan car last December for $9k, or a 150k-mile sedan for $1750 a month later, I just shake my head.

A coworker bought a Tesla a while ago.  He says that because they do a lot of driving (30k miles/year on it), it'll pay for itself in 8 years.  He didn't like it much when I pointed out that I could literally throw my $1750 ICE car away and replace it every couple months and still come out ahead.

Have you actually ran the numbers? 

[zolotiyeruki]

Given average new car prices near $50k, a 3 year loan could easily be $1000/mo. Shockingly simple math.

No one is doubting the math, just the sheer lunacy of paying that much for a car, and how much harm that causes to the retirement effort.

When I consider the fact that we bought a 60k mile Minivan car last December for $9k, or a 150k-mile sedan for $1750 a month later, I just shake my head.

A coworker bought a Tesla a while ago.  He says that because they do a lot of driving (30k miles/year on it), it'll pay for itself in 8 years.  He didn't like it much when I pointed out that I could literally throw my $1750 ICE car away and replace it every couple months and still come out ahead.

Have you actually ran the numbers?

I did, actually. It's been several months since I did the calcs, but when you consider the opportunity cost of the $50k (investing it vs paying cash for a Tesla), that's how they shook out.

[JLee]

Given average new car prices near $50k, a 3 year loan could easily be $1000/mo. Shockingly simple math.

No one is doubting the math, just the sheer lunacy of paying that much for a car, and how much harm that causes to the retirement effort.

When I consider the fact that we bought a 60k mile Minivan car last December for $9k, or a 150k-mile sedan for $1750 a month later, I just shake my head.

A coworker bought a Tesla a while ago.  He says that because they do a lot of driving (30k miles/year on it), it'll pay for itself in 8 years.  He didn't like it much when I pointed out that I could literally throw my $1750 ICE car away and replace it every couple months and still come out ahead.

Have you actually ran the numbers?

I did, actually. It's been several months since I did the calcs, but when you consider the opportunity cost of the $50k (investing it vs paying cash for a Tesla), that's how they shook out.

Why in god's name would you pay cash when loans were available at 1.x%?

[zolotiyeruki]

I did, actually. It's been several months since I did the calcs, but when you consider the opportunity cost of the $50k (investing it vs paying cash for a Tesla), that's how they shook out.

Why in god's name would you pay cash when loans were available at 1.x%?

In fairness, I don't know whether my coworker paid cash or financed it.

[GilesMM]

Given average new car prices near $50k, a 3 year loan could easily be $1000/mo. Shockingly simple math.

No one is doubting the math, just the sheer lunacy of paying that much for a car, and how much harm that causes to the retirement effort.

That is what new cars cost. Someone has to buy them or there won’t be any. Should they pay cash?

[PDXTabs]

Given average new car prices near $50k, a 3 year loan could easily be $1000/mo. Shockingly simple math.

No one is doubting the math, just the sheer lunacy of paying that much for a car, and how much harm that causes to the retirement effort.

That is what new cars cost. Someone has to buy them or there won’t be any. Should they pay cash?

A quick search at Toyota.com shows three Corolla hatchbacks in stock in my neighborhood for $24~26k.

[DadJokes]

Given average new car prices near $50k, a 3 year loan could easily be $1000/mo. Shockingly simple math.

No one is doubting the math, just the sheer lunacy of paying that much for a car, and how much harm that causes to the retirement effort.

That is what new cars cost. Someone has to buy them or there won’t be any. Should they pay cash?

Brands who have cars with MSRP under $20k:
Nissan: 2
Hyundai: 2
Kia: 4
Chevrolet: 1

If you expand up to $25k (still half of what you think a new car costs), it more than doubles the number of available vehicles, even adding in some crossovers and pickups. People are sinking exorbitant amounts of money into depreciating assets, and they generally aren't getting three year loans.