$1000/month car payments &!$%

[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.

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.

If you bother to read what was posted, you will find that @GilesMM is correct.

[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.

If you bother to read what was posted, you will find that @GilesMM is correct.

He said in a later post, "That is what new cars cost." To me, that implies that you have to spend $50k to get a new car, as if you have no choice in the matter. The average is that high because most Americans are spendypants.

He also said, "Someone has to buy them." No they don't. Manufacturers would stop making $50k+ vehicles if people could control their spending a little better and opted for smaller, less expensive cars.

[JAYSLOL]

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.

Yep, almost all loans I see for new vehicles advertised here are either 84 months or 96 months!  I saw a dealership ad for a new 2022 Hyundai Elantra that was $208 biweekly for 96 months with $5k down, which works out to $48k total purchase price, granted that’s Canadian Dollars, so that works out to just under $35k US, but still that’s just stupid. 

[bacchi]

A Porsche Cayenne for $180,000 and 3 2009 Honda Civics (~$6000 each) is an average price of $49,500.

A Bugatti Chiron for $3M and and 3 2009 Honda Civics (~$6000 each) is an average price of $754,500.

The median is $6000.

The best selling passenger vehicle in California is the Civic and #2 is the Rav4. The #3 vehicle, the Model Y, actually costs above $50k as does #5, the Model 3.


https://www.edmunds.com/most-popular-cars/

[DadJokes]

When looking up cars that cost under $20k, I was shocked to learn that the major American manufacturers (Ford, Chevrolet, Dodge) have stopped making sedans. Everything is either a sports car, truck, or SUV of some sort. I don't plan to repeat the mistake that is my Ford Fusion, but that was still a surprise to me. American manufacturers have certainly made it more difficult to own a reasonably-priced car.

[zolotiyeruki]

When looking up cars that cost under $20k, I was shocked to learn that the major American manufacturers (Ford, Chevrolet, Dodge) have stopped making sedans. Everything is either a sports car, truck, or SUV of some sort. I don't plan to repeat the mistake that is my Ford Fusion, but that was still a surprise to me. American manufacturers have certainly made it more difficult to own a reasonably-priced car.

I had heard that Ford had completely exited the sedan market, but hadn't heard the same about Chevy and Chrysler.  I know the market for sedans has been cannibalized by crossovers, but holy smokes. Toyota, Honda, and Nissan must be absolutely giddy!

[JLee]

When looking up cars that cost under $20k, I was shocked to learn that the major American manufacturers (Ford, Chevrolet, Dodge) have stopped making sedans. Everything is either a sports car, truck, or SUV of some sort. I don't plan to repeat the mistake that is my Ford Fusion, but that was still a surprise to me. American manufacturers have certainly made it more difficult to own a reasonably-priced car.

I had heard that Ford had completely exited the sedan market, but hadn't heard the same about Chevy and Chrysler.  I know the market for sedans has been cannibalized by crossovers, but holy smokes. Toyota, Honda, and Nissan must be absolutely giddy!

The RAV4 is Toyota's best seller (actually the best selling car in the world). Honda's top seller in the US was the CRV, and Nissan's top seller was the Rogue.

Companies are making crossovers because that's what people want - people aren't buying crossovers because they can't get cars.

[DadJokes]

When looking up cars that cost under $20k, I was shocked to learn that the major American manufacturers (Ford, Chevrolet, Dodge) have stopped making sedans. Everything is either a sports car, truck, or SUV of some sort. I don't plan to repeat the mistake that is my Ford Fusion, but that was still a surprise to me. American manufacturers have certainly made it more difficult to own a reasonably-priced car.

I had heard that Ford had completely exited the sedan market, but hadn't heard the same about Chevy and Chrysler.  I know the market for sedans has been cannibalized by crossovers, but holy smokes. Toyota, Honda, and Nissan must be absolutely giddy!

Chevrolet currently offers two (my mistake there). The Spark is actually very cheap at $13,400, and they still make the Malibu. Chrysler offers the 300 still. I didn't even check Chrysler when I looked (only Dodge).

[Uturn]

Chrysler only sells two vehicles.  The 300 and the mini van.

[Decibel]

My only car - my 1994 Suzuki Samari, finally became terminal requiring an engine and carbi rebuild to the order of $5-6 (AUS) with 499450km on the clock. Walked into a car dealer the next day and picked up an ex demo Mazda CX30 already accessorized (as it was a demo) for cash. The Accessory and Finance departments were most put out! Made one phone call the following day and had sold my Suzuki for $2000 cash. The only way to go.

[jinga nation]

My only car - my 1994 Suzuki Samari, finally became terminal requiring an engine and carbi rebuild to the order of $5-6 (AUS) with 499450km on the clock. Walked into a car dealer the next day and picked up an ex demo Mazda CX30 already accessorized (as it was a demo) for cash. The Accessory and Finance departments were most put out! Made one phone call the following day and had sold my Suzuki for $2000 cash. The only way to go.

That's because your Samurai is a collectible: https://www.motortrend.com/features/collectible-classic-1986-1995-suzuki-samurai/
Someone will rebuild the engine and carb, and tune up. Then the Samurai will be ready to cut and slash thru the Aussie terrain (feeble attempt at samurai pun).

I follow some Aussie car channels on youtube (Haltech and Mighty Car Mods and some more); there's a lot of people modding older Suzukis.

[Askel]

Well, collectible in the US. But only because it's illegal to make anything like that without calling it an ATV now and all the originals rusted out about 20 minutes after they unloaded them from the boat.   

The rest of the world still gets the Jimny.

[Decibel]

Well, collectible in the US. But only because it's illegal to make anything like that without calling it an ATV now and all the originals rusted out about 20 minutes after they unloaded them from the boat.   

The rest of the world still gets the Jimny.

Definitgely collectable down here in Aus. I sold it to a business that imports new parts from India and they have a rebuilt engine on the shelf. They get a good body and a great project, and I get the cash to put to my ex demo. Win Win.

[prepleo]

so what happens to folks who are ~1000$ payments and then they roll the negative equity into another car loan...I assuming most of such folks do this on perpetuity...this has to come to an end somehow...

I noticed this as I have been dropping off my kid at daycare in the last year - I may not have been paying attention to this in the past. It's mostly luxury cars or monster suvs. I cant imagine myself spending 40K on a car. I was wondering about this and I stumbled on this post.

What happens to the entire industry/community? creating massive mass of folks perpetually in debt. Wont the car/finance industry run out of people or new consumers are created everyday?

Sorry this may be a naïve question.

[Michael in ABQ]

so what happens to folks who are ~1000$ payments and then they roll the negative equity into another car loan...I assuming most of such folks do this on perpetuity...this has to come to an end somehow...

Repossession and bankruptcy.


As bad as a $1,000/month payment is for a new vehicle if you've got bad credit you could end up paying that for a 10-year-old vehicle with a 20%+ interest rate.


Our minivan was $4.5k about 2 years ago and our full-size van was $10k about 5 years ago. In between I bought a small pickup truck for $2,800 and sold it for basically the same price a couple of years and ~20,000 miles later (plus about $1,000 in repairs). Even if we get a $500 or $1,000 repair/maintenance bill every year it still works out to be far cheaper. Our vehicles are at the point where another 10,000 miles barely moves the needle on the value. A running vehicle in decent condition will always be worth at least a few thousand dollars.

[dandarc]

Yeah - kind of depends on the situation of the individual as to how sustainable <insert financing approach here> is. Range of situations on this is huge - have good credit, plenty of money, and then choosing to lease or have car debt from now until you the day you die is a very workable strategy.

At the other end, if your credit is not good and you have very limited money but need a car (probably mainly to get to/from your job), all of a sudden you're dealing with the worst of the worst terms on everything - high price, high interest rate, quick reposession, likely for an older car that also needs relatively high maintenance. For this person, if a few thousand can be somehow raised to get a basic car that runs and isn't in terrible shape, then that is going to be far, far better than buying from the predatory lot. Of course "easier said than done" applies here - rare a person who can raise $3,000 relatively easily is even considering this type of deal in the first place.

Most people are probably operating between these extremes and making more or less defensible choices. I don't know - if there's so much vehicle debt out there it creates true systemic problem, I'm sure the government will do something. Cannot have all those financing operations that are masquerading as car manufacturers go bankrupt at the same time.

[TheGrimSqueaker]

so what happens to folks who are ~1000$ payments and then they roll the negative equity into another car loan...I assuming most of such folks do this on perpetuity...this has to come to an end somehow...

Repossession and bankruptcy.
<snip>

That's not really good for business, overall. Car manufacturers and dealers don't particularly want to take their product back and try to re-sell it on the used market, because then they're competing with themselves. Lenders don't really want to eat the bad loan, and I expect shareholders will get snippy when the companies' quarterly reports come out and show a bunch of bad loans. Unless... do you think they can be repackaged and sold as "derivatives" to unsuspecting buyers the way bad mortgages were passed around before the big mortgage crisis of 2008? I'd like to think that securities buyers are smarter than that.

Anyway, this notion of compulsively rolling over debt on a former vehicle into a loan for another vehicle is terrifying. I know someone who has done exactly this, and because she owes more on the vehicle than it's worth she has to pay for gap insurance on top of the loan and regular insurance. It costs her more than the value of the vehicle in loan and insurance payments every year. It's murder on her cash flow.

[zolotiyeruki]

Do we have any info on the average sales price of the subprime auto loans?

Here's my concern:  I imagine that people who are making poor financial choices by buying cars they can't afford are also likely to be the type of people to buy larger vehicles (big SUVs, pickups) and also buy higher trim levels.  Which means that if/when the auto loan crash happens, we'll see more cars hit the used market, but I won't benefit, because they're unlikely to be the kind of vehicle I'd want to purchase.

Now, combine that with the global computer chip shortage that has severely restricted car production, and the fact that car companies have responded by shifting their production to higher-end models.  It means that the market for used, cheap, small, efficient cars is going to be very tight for a lot of years.  Bummer.  Does this count as a MPP?

[Villanelle]

Do we have any info on the average sales price of the subprime auto loans?

Here's my concern:  I imagine that people who are making poor financial choices by buying cars they can't afford are also likely to be the type of people to buy larger vehicles (big SUVs, pickups) and also buy higher trim levels.  Which means that if/when the auto loan crash happens, we'll see more cars hit the used market, but I won't benefit, because they're unlikely to be the kind of vehicle I'd want to purchase.

Now, combine that with the global computer chip shortage that has severely restricted car production, and the fact that car companies have responded by shifting their production to higher-end models.  It means that the market for used, cheap, small, efficient cars is going to be very tight for a lot of years.  Bummer.  Does this count as a MPP?

You won't benefit directly, but with the prices of big fancy cars suppressed, many people who would generally have been in smaller, cheaper cars will see it as a chance to upgrade, so their cars (and the cars they would have purchased, will be available).  So I think the smaller, cheaper cars (and their buyers) could benefit from a crash in the large/luxury market. 

As to your second point, I'm so, so grateful that I bought a nearly new (<10k miles Corolla) in early 2021.  It was just before prices started skyrocketing, and it means I have years before I'll be in the market again, even as someone who doesn't drive her cars until they die.  DH's car is older (2014) but he should have at least a few more years in it before he considers an upgrade.  Only possible way that changes if if we move and our location and life situation become attractive for an EV, but even that is 18+ months out. 

It's a rough time to be needing a car!

[Metalcat]

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

I bought two houses last year, they're combined mortgage payments are around $1000/mo.

A $1500 car payment blows my fucking mind.

[Kwill]

Oh, my goodness. These are all really expensive. I sold my old car 7 years ago when I left the US for the UK. I only got $700 for it because it was old with a lot of miles and some problems. I think that has probably about covered the cost of bicycles, helmets, tyres, and so forth. I don't use taxis or buses or trains that often in my daily life, so there aren't a lot of ongoing transportation costs. It's not quite that simple because I spent more for my small flat than I would have if I had been willing to drive to work from farther away. Part of me would like having a car again for occasional use, but in some ways, I think it would be a hard transition to go back to a car culture.

[Paper Chaser]

Since this topic has drifted towards the economic impact of vehicle financing and market trends:

https://www.coxautoinc.com/market-insights/auto-market-weekly-summary-january-13/

"Auto loan performance in December saw further deterioration. Loans delinquent by more than 60 days increased by 5.3% and were up 26.7% from a year ago.

Of all loans, 1.84% were severely delinquent, which was an increase from 1.74% in November and the highest rate since February 2009. Compared to a year ago, the severe delinquency rate was 39 basis points higher. In December, 7.11% of subprime loans were severely delinquent, increasing from 6.75% the prior month. The subprime severe delinquency rate was 163 basis points higher than a year ago, and the December rate was the highest in the data series back to 2006.

Still, the high level of severe delinquencies has not led to equivalent growth in defaults. Loan defaults declined 13.5% from November but were up 16.9% from a year ago. The annualized auto loan default rate in December was 2.56%, which was lower than the 2.98% rate in December 2019. The default rate in 2022 was 2.28%, up from a low of 1.98% last year but still lower than the 2.90% rate in 2019."

[NorCal]

Since this topic has drifted towards the economic impact of vehicle financing and market trends:

https://www.coxautoinc.com/market-insights/auto-market-weekly-summary-january-13/

"Auto loan performance in December saw further deterioration. Loans delinquent by more than 60 days increased by 5.3% and were up 26.7% from a year ago.

Of all loans, 1.84% were severely delinquent, which was an increase from 1.74% in November and the highest rate since February 2009. Compared to a year ago, the severe delinquency rate was 39 basis points higher. In December, 7.11% of subprime loans were severely delinquent, increasing from 6.75% the prior month. The subprime severe delinquency rate was 163 basis points higher than a year ago, and the December rate was the highest in the data series back to 2006.

Still, the high level of severe delinquencies has not led to equivalent growth in defaults. Loan defaults declined 13.5% from November but were up 16.9% from a year ago. The annualized auto loan default rate in December was 2.56%, which was lower than the 2.98% rate in December 2019. The default rate in 2022 was 2.28%, up from a low of 1.98% last year but still lower than the 2.90% rate in 2019."

I used to work for a lending company, albeit one much more scummy than the automotive sector.

Defaults would trail the increase in delinquencies by a decent amount of time.  90 days would be my guess.  It would be easier to follow with charts of both across time.

Suppressed defaults also probably have a time lag to them, but are also influenced by the high price of used cars.  Someone might fall behind on their payment thinking they'll make it up next month.  But then they sell the car before a full default because there's positive equity.  Defaults will probably skyrocket if the price of used cars starts coming down. 

[zolotiyeruki]

Suppressed defaults also probably have a time lag to them, but are also influenced by the high price of used cars.  Someone might fall behind on their payment thinking they'll make it up next month.  But then they sell the car before a full default because there's positive equity.  Defaults will probably skyrocket if the price of used cars starts coming down.

What is a "suppressed default"?  A cursory Google search didn't seem to turn up relevant results.

[dandarc]

Autocorrect for "supposedly"? Just guessing.

[poetdereves]

I recently had a conversation in person with a guy from work that just got a new truck. I don't keep up with the vehicle market at all, but even less with giant trucks. Apparently he just put down $15k and still has a $900 monthly payment for the next 8 years!!! I don't even know what interest rate he got, but I can guarantee it wasn't zero.

Not only that, but he recently bought a new boat and matching trailer as well, which is why he "needed" a new truck to pull it.

I know his salary and couldn't imagine making the choices he's making with the income he's got coming in.

He could see the surprise on my face when he told me his payments and asked me what I thought. I told him both my rental houses and primary home had mortgages less than his truck payment. That baffled him.

[Cassie]

I have never been a fan of spending a lot of money on a car since it’s always depreciating. I have a 15 year old Toyota Corolla with only 68k miles so it’s probably my last car.

[JAYSLOL]

I have never been a fan of spending a lot of money on a car since it’s always depreciating. I have a 15 year old Toyota Corolla with only 68k miles so it’s probably my last car.

Yeah, at 68k you’ve barely even broken it in

[Artem_F]

A running vehicle in decent condition will always be worth at least a few thousand dollars.

I can't agree more. When I came to the US in 2005, I purchased Chevy Lumina'97 for 2K from a guy who invested 4K in all repairs and had to leave the country because his contract was over. I've driven it for about 100K miles with minor repairs (which I did myself) and sold for 1K in running condition in 2011 when I left the country. The same story with our second vehicle - Honda Accord'96 purchased for 3.9K in 2006 and sold for 2.5K in 2011. Even if we had to pay $100 per month for two vehicles, we would have paid twice as much as we finally did. The only reason to pay 1K /month is if using this very vehicle yields at least $900 per month in cash flow (and OK, you pay extra hundred for looks or whatever).

[ATtiny85]

I purchased Chevy Lumina'97

Best sedan body style ever (and a darn good vehicle in general).

That opinion is not universally accepted...

[cleverscreenname]

Wow... So he didn't realize he's paying over $100k for that truck?
I've bought something like 30 vehicles. All in cash, all but 3 were under 2k. Those 3 were 7k (overpriced Prius from a dealer), 9k (kind of acceptable price Volt from private party), and.... "something else". At least it was cash...

[Chris Pascale]

We were looking at vans this year and wound up getting a 2019 Toyota Carolla.

We still have our 2010 Odyssey, but it's for local-only driving, if we can help it.

[neo von retorch]

https://newsroom.aaa.com/2023/08/annual-new-car-ownership-costs-boil-over-12k/

Given their size, fuel economy, and prices, it should come as no surprise that ½-ton pickups have the highest average driving cost among all vehicle categories

Of course, if your payment is already over $12,000 / year... but we should be calculating cost of ownership based on financing costs (if any), depreciation, insurance, maintenance, and energy. Monthly payment is a mix of cost (interest) and just transferring money to reduce debt, which I don't consider as a cost as it trades money for equity (though inefficiently when you're talking about a depreciating asset.)

[Dicey]

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!

DH bought a white F-150 brand-new in 2002. It still looks and runs great, with <110k miles. He paid $20k cash, out the door. Our biggest fear is that it will get stolen. (Knock wood.)

[ATtiny85]

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!

DH bought a white F-150 brand-new in 2002. It still looks and runs great, with <110k miles. He paid $20k cash, out the door. Our biggest fear is that it will get stolen. (Knock wood.)

We dream about this in the rust belt. I got 22 years out of a 2000 small truck, 117,000 miles, but had to sweep out the rust flakes from the garage every week. The pieces were starting to get big towards the end last year. Still ran like a top though.

[Metalcat]

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!

DH bought a white F-150 brand-new in 2002. It still looks and runs great, with <110k miles. He paid $20k cash, out the door. Our biggest fear is that it will get stolen. (Knock wood.)

We dream about this in the rust belt. I got 22 years out of a 2000 small truck, 117,000 miles, but had to sweep out the rust flakes from the garage every week. The pieces were starting to get big towards the end last year. Still ran like a top though.

Lol, yeah, I'm living by the ocean now and I was just looking at the erosion on my house door handle, which looks like it's a hundred years old, but that I installed just last year, then looked at my car and thought "well shit..."

[AccidentialMustache]

If I was coastal instead of salt/snow belt, I'd be sorely tempted by a used model S. The aluminum should stand up better than steel, and the older used ones are becoming almost reasonably priced, even for the bigger packs.

Our fit (14 years, <100k miles) is going to succumb to rust not mechanical failure.

[ricelife]

Very random but I was buying some take out and waiting in the car with hubby yesterday. The pizza place is next to a Subway and a pay day loan place

Hubby and I placing bets on which type of person goes into the pay day loan place vs the fast food joints. Basically - everyone with a truck was going into pay day loan - everyone else was getting food

[life_travel]

I was listening to an ( Australian)  retirement podcast, not FIRE but for normal retirement , it's actually pretty good and I like the hosts and the info they give is excellent.

So one day they mentioned that average Australian car loan size is $1100 per month , and I was like WOW, had no idea it's THAT high!

( they proceeded to tell about buying cheaper cars for cash and then investing the difference into index funds so they were right on point)

[JAYSLOL]

I was listening to an ( Australian)  retirement podcast, not FIRE but for normal retirement , it's actually pretty good and I like the hosts and the info they give is excellent.

So one day they mentioned that average Australian car loan size is $1100 per month , and I was like WOW, had no idea it's THAT high!

( they proceeded to tell about buying cheaper cars for cash and then investing the difference into index funds so they were right on point)

Yikes, I wonder what the details were on that.  Is that new cars only, or was that an average across new and used, did it include commercial vehicles that maybe companies were purchasing for commercial use?  If it’s just light duty personal cars and including used that’s a crazy payment. 

[YK-Phil]

I really need want a RAV-4! Our aging 1995 Mitsubishi Delica van is on its last leg, a bit rough around the edges but it still looks badass. Being a real 4x4, it is the ideal vehicle for road-tripping, camping, and "overlanding", but it has no AC (at least a few $Ks to fix if I can find the parts which is a feat in itself), and we no longer trust driving it further than a few hundred kilometers from home, let alone for our bi-annual road trips to Canada and Central America...The problem is, as a permanent resident of Mexico, I cannot drive a Canadian-plated vehicle in Mexico (I can anywhere else in the world except there...) so we registered it under my wife's name but she will become a permanent resident in two years and we won't be able to drive it in Mexico after that. So we're considering buying a vehicle made for the Mexican market and that new RAV-4 LE fits the bill. Priced at 550,000 pesos (about $44K CDN at today's exchange rate), which is also around $5K more than the Canadian price of $36.2K + fees on the Toyota Canada website. Toyota also markets makes a Highlander look-alike called Avanza specifically for the Latin American market, it is a bit less roomy, FWD only, but priced at 350,000 pesos. Still, I am not sure I can justify spending so much for a car. Plus we are retired, rarely if ever drive our van except for road trips, and we'd have to pay cash. On the other hand, camping and road-tripping are a huge part of our retirement lifestyle but maybe we need to reconsider our priorities, possibly become car-free, and save our money for new hobbies? I guess only we can answer that question...

[zolotiyeruki]

I really need want a RAV-4! Our aging 1995 Mitsubishi Delica van is on its last leg, a bit rough around the edges but it still looks badass. Being a real 4x4, it is the ideal vehicle for road-tripping, camping, and "overlanding", but it has no AC (at least a few $Ks to fix if I can find the parts which is a feat in itself), and we no longer trust driving it further than a few hundred kilometers from home, let alone for our bi-annual road trips to Canada and Central America...The problem is, as a permanent resident of Mexico, I cannot drive a Canadian-plated vehicle in Mexico (I can anywhere else in the world except there...) so we registered it under my wife's name but she will become a permanent resident in two years and we won't be able to drive it in Mexico after that. So we're considering buying a vehicle made for the Mexican market and that new RAV-4 LE fits the bill. Priced at 550,000 pesos (about $44K CDN at today's exchange rate), which is also around $5K more than the Canadian price of $36.2K + fees on the Toyota Canada website. Toyota also markets makes a Highlander look-alike called Avanza specifically for the Latin American market, it is a bit less roomy, FWD only, but priced at 350,000 pesos. Still, I am not sure I can justify spending so much for a car. Plus we are retired, rarely if ever drive our van except for road trips, and we'd have to pay cash. On the other hand, camping and road-tripping are a huge part of our retirement lifestyle but maybe we need to reconsider our priorities, possibly become car-free, and save our money for new hobbies? I guess only we can answer that question...

Can you pay cash for the RAV-4 without it impacting your ability to pay for your normal expenses?  You need a new vehicle (albeit not necessarily this vehicle, and not necessarily brand-new), and a newer RAV-4 would enable the lifestyle that you already lead, so if you can afford it, it's not a stupid purchase.  Most of the time, we lambast people for buying new vehicles because they either A) can't afford it, or B) already have a vehicle that's fine or just needs some maintenance, or C) they're buying it because they think they'll use it for X when they've never done X before (e.g. towing a boat or going off-road).  Assuming you can afford it, you don't fall into any of those three categories, so I don't think you'd get many facepunches for buying it.

[snic]

Looks like this is pretty common nowadays, mostly for luxury cars.

https://www.investopedia.com/why-more-people-than-ever-are-paying-over-usd1000-a-month-for-new-cars-8347761

[Metalcat]

Looks like this is pretty common nowadays, mostly for luxury cars.

https://www.investopedia.com/why-more-people-than-ever-are-paying-over-usd1000-a-month-for-new-cars-8347761

Yeah, and it's pretty normal for weddings these days to cost more than 30K, but it doesn't mean it's a reasonable thing for most people to be spending.

[LD_TAndK]

Looks like this is pretty common nowadays, mostly for luxury cars.

https://www.investopedia.com/why-more-people-than-ever-are-paying-over-usd1000-a-month-for-new-cars-8347761

The ITI on our house, PITI minus Principle, is under $1000 a month. So stretching the logic, 17.5% of Americans are paying more for their car (a depreciating liability), than we pay for our house (a hopefully appreciating in line with inflation asset). woohoo

[Adventine]

I really need want a RAV-4! Our aging 1995 Mitsubishi Delica van is on its last leg, a bit rough around the edges but it still looks badass. Being a real 4x4, it is the ideal vehicle for road-tripping, camping, and "overlanding", but it has no AC (at least a few $Ks to fix if I can find the parts which is a feat in itself), and we no longer trust driving it further than a few hundred kilometers from home, let alone for our bi-annual road trips to Canada and Central America...The problem is, as a permanent resident of Mexico, I cannot drive a Canadian-plated vehicle in Mexico (I can anywhere else in the world except there...) so we registered it under my wife's name but she will become a permanent resident in two years and we won't be able to drive it in Mexico after that. So we're considering buying a vehicle made for the Mexican market and that new RAV-4 LE fits the bill. Priced at 550,000 pesos (about $44K CDN at today's exchange rate), which is also around $5K more than the Canadian price of $36.2K + fees on the Toyota Canada website. Toyota also markets makes a Highlander look-alike called Avanza specifically for the Latin American market, it is a bit less roomy, FWD only, but priced at 350,000 pesos. Still, I am not sure I can justify spending so much for a car. Plus we are retired, rarely if ever drive our van except for road trips, and we'd have to pay cash. On the other hand, camping and road-tripping are a huge part of our retirement lifestyle but maybe we need to reconsider our priorities, possibly become car-free, and save our money for new hobbies? I guess only we can answer that question...

Anyone in your network looking to sell their car?

[ringer707]

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.

OMG a 7.3. What a great truck. My parents bought one brand new in 2001. Used it for several years hauling me around to horse shows as a kid then "upgraded" to a 2005 6.0. Holy s!@# I'm sure I don't need to tell you what a mistake that was... My dad had the 7.3 as a work truck and my mom let him keep it in the divorce. Meanwhile, the 6.0 left us stranded on the side of the road multiple times. The 7.3 was still running when my dad passed in 2021.

You've got a real gem there.

[YK-Phil]

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.

6.0.

I am still debating whether my old F350 6.0 or my 1995 Mitsubishi Delica get the No. 1 spot on my "Biggest Money Pit" Award.

[Just Joe]

Changed the oil on our 9 year old car last weekend. Changing the oil on our 24 year old car this weekend.

Absolutely not spending huge money on a new car ever, and no expensive used vehicles anytime soon either. 

We have a nice house whose monthly payment is lower than some of these car payments.

DW and I are perfectly happy driving older cars that we don't owe anything for.

Longer term I think we'll give our older car to our older offspring who loves it and I'll drive one of our classics on the occasions when I need a second car for a little while.

We get most of our trips done with one car. Only nights like tonight where DW had a practice to attend and I needed to run to the hardware store for renovation supplies.

[theninthwall]

So not exactly car payments but insurance. I was talking to someone at our apartment complex yesterday who spends over $7k on car INSURANCE a year for her and her husband. From what I can tell, they are both under 25 and there have been a couple of accidents. She said one accident involved a drunk driver that wasn’t their fault, but they didn’t pursue it with the insurance company to fix it or something? It all sounded kinda murky.
I’ve never heard of someone’s car insurance being that high. I don’t believe they have Ferraris or anything, just regular cars.