The Money Mustache Community
Around the Internet => Antimustachian Wall of Shame and Comedy => Topic started by: change_seeker on October 06, 2022, 01:47:01 PM
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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
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This one is pretty eye-popping too.
https://twitter.com/i/status/1563613318584999936
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Oh. My. Word. I'm old enough to remember when a $1000 HOUSE payment was crazy. I can hardly get my brain around this...
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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.
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What econo car does Ford still sell in the US? The only classified-as-car is the Mustang.
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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.
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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?
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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.
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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.
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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.
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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.
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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.
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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!
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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.)
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"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://cdn.quotesgram.com/img/21/22/698015140-659092.jpg)
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?
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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.
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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.
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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.
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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. ;)
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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).
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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.
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"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.
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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.
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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!
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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.
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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.
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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.
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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.
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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%
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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).
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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.
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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.
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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).
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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...
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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.
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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.
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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.
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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.
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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.
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Given average new car prices near $50k, a 3 year loan could easily be $1000/mo. Shockingly simple math.
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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.
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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.
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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.
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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?
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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.
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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%?
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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.
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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?
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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.
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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.
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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. (https://www.coxautoinc.com/market-insights/kbb-atp-september-2022/#:~:text=The%20average%20price%20paid%20for,Book%2C%20a%20Cox%20Automotive%20company.)
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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. (https://www.coxautoinc.com/market-insights/kbb-atp-september-2022/#:~:text=The%20average%20price%20paid%20for,Book%2C%20a%20Cox%20Automotive%20company.)
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.
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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.
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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/
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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.
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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!
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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.
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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).
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Chrysler only sells two vehicles. The 300 and the mini van.
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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.
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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 $2000 cash. The only way to go.
That's because your Samurai is a collectible: https://www.motortrend.com/features/collectible-classic-1986-1995-suzuki-samurai/
Someone will rebuild the engine and carb, and tune up. Then the Samurai will be ready to cut and slash thru the Aussie terrain (feeble attempt at samurai pun).
I follow some Aussie car channels on youtube (Haltech and Mighty Car Mods and some more); there's a lot of people modding older Suzukis.
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Well, collectible in the US. But only because it's illegal to make anything like that without calling it an ATV now and all the originals rusted out about 20 minutes after they unloaded them from the boat.
The rest of the world still gets the Jimny.
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Well, collectible in the US. But only because it's illegal to make anything like that without calling it an ATV now and all the originals rusted out about 20 minutes after they unloaded them from the boat.
The rest of the world still gets the Jimny.
Definitgely collectable down here in Aus. I sold it to a business that imports new parts from India and they have a rebuilt engine on the shelf. They get a good body and a great project, and I get the cash to put to my ex demo. Win Win.
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so what happens to folks who are ~1000$ 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.
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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.
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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 $3,000 relatively easily is even considering this type of deal in the first place.
Most people are probably operating between these extremes and making more or less defensible choices. I don't know - if there's so much vehicle debt out there it creates true systemic problem, I'm sure the government will do something. Cannot have all those financing operations that are masquerading as car manufacturers go bankrupt at the same time.
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so what happens to folks who are ~1000$ 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.
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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?
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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!
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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.
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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.
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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."
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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.
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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.
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Autocorrect for "supposedly"? Just guessing.
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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.
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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.
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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
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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).
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I purchased Chevy Lumina'97
Best sedan body style ever (and a darn good vehicle in general).
That opinion is not universally accepted...
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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...
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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.
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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.)
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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.)
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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.
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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..."
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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.
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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
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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)
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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.
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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...
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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.
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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 (https://www.investopedia.com/why-more-people-than-ever-are-paying-over-usd1000-a-month-for-new-cars-8347761)
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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 (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.
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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 (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
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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?
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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.
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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.
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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.
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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.
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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.
Where I live, insurance being over $5000 for men under 25 isn't at all unheard of, and that's with no accidents. I can't imagine what it would be for two people under 25 with accidents.
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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.
Where I live, insurance being over $5000 for men under 25 isn't at all unheard of, and that's with no accidents. I can't imagine what it would be for two people under 25 with accidents.
Yup highly regional. Years ago I cut mine in half by moving from Illinois to Minnesota. Same car, same coverage.
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I’m pretty sure my under 25 self paid $1,800 a year in 2000 outside of NYC.
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I’m pretty sure my under 25 self paid $1,800 a year in 2000 outside of NYC.
I was paying around $2200 a year in North Jersey back in the mid-'90s as a thirty-year-old. I finally read somewhere that you should shop around for car insurance, and I remember switching to Liberty Mutual at the time and saving $1000 a year. It was tough before we had the internet to school us!
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You guys haven't seen crazy insurance prices until you've been a 29 year old male with a not exactly perfect driving record trying to get full coverage on a 1000cc sport bike. :D
That was probably my first lesson in "hey, maybe insurance isn't worth it if I could just buy a new bike for the cost of 2.5 years of premiums".
But back to the crazy cost of cars, lately I've been enjoying this guy's channel: https://www.youtube.com/@carquestionsanswered
Mostly because he doesn't hold back on making fun of $100k trucks and SUVs, but he also brings some eye opening data.
It's interesting how bad the car industry has screwed itself with very expensive cars:
-People can't sell their car because they are completely upside down in them
-Dealers can't sell because they need at least MSRP to break even because all their inventory is financed
-Car manufacturers have made huge bets in fields that may not be profitable like self driving and electric cars
Eventually, somebody is going to have to eat some major losses when the music stops.
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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.
I agree. It absolutely blows my mind the $$$ people are dumping into vehicles...and they ARE a depreciating asset, despite what some people think. I hate to use the word "dumb"...but many are not at all financially savvy, and the auto industry is definitely taking advantage of that. Lots of 8 year loans that people will never pay off, and are currently underwater on when depreciation is taken into account.
Quite a few articles about "YOLO spending"...and it rings true here. Scary stuff when the bills come due.
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Eventually, somebody is going to have to eat some major losses when the music stops.
During the global chip shortage, the car manufacturers had to pick and choose which models (and trims) to produce, so they naturally prioritized the models with greater profit margin. From what I've heard, you couldn't find a base model anything available for sale. Much like Cash For Clunkers a decade and a half ago, that chip shortage left a gaping hole in the car market.
I also have to wonder if we're going to see a classic case of the Innovator's Dilemma, where the established players in the market neglect the low end of the market, opening the door for up-and-comers to fill that niche. Ford abandoned the sedan market entirely (to focus on more profitable SUVs and pickups), GM is down to a single mid-sized sedan (Malibu), Honda dropped the Fit, Toyota dropped the Yaris and the entire Scion lineup. Who's filling the low-end of the market now? Mitsubishi, Kia, and Hyundai, who all offer lower-cost options.
I also have to wonder how much of the shift to SUVs has been driven by CARB requirements...
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Eventually, somebody is going to have to eat some major losses when the music stops.
During the global chip shortage, the car manufacturers had to pick and choose which models (and trims) to produce, so they naturally prioritized the models with greater profit margin. From what I've heard, you couldn't find a base model anything available for sale. Much like Cash For Clunkers a decade and a half ago, that chip shortage left a gaping hole in the car market.
I also have to wonder if we're going to see a classic case of the Innovator's Dilemma, where the established players in the market neglect the low end of the market, opening the door for up-and-comers to fill that niche. Ford abandoned the sedan market entirely (to focus on more profitable SUVs and pickups), GM is down to a single mid-sized sedan (Malibu), Honda dropped the Fit, Toyota dropped the Yaris and the entire Scion lineup. Who's filling the low-end of the market now? Mitsubishi, Kia, and Hyundai, who all offer lower-cost options.
I also have to wonder how much of the shift to SUVs has been driven by CARB requirements...
It's been 7 years since I went car shopping, but even then this was true. Both my ex and I went car shopping at the same time (beaters given to us by our parents for college that had already been in multiple accidents and repairs). We both ended up with cheaper cars that had higher trims because the base models just didn't exist. Thankfully at the time, I was able to get the nicer model for the base price because they were trying to get rid of them, but I'm not sure that's an option anymore. Also at the time my city had three floods back to back to back, so the used car market could not be trusted. So many flooded engines with enough bubble gum and duct tape to get the car off the lot but not much further. I will be holding on to my current car for as long as I can possibly can (unless i can move to no car at all).
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Eventually, somebody is going to have to eat some major losses when the music stops.
Call me cynical, but I'm betting it will be the consumers. Unless the taxpayers are stuck with the bill for yet another major auto company bailout.
I actually mourned the loss of the Scion. Yet it's the same in motor vehicles as it is in real estate: you can make a lot more selling an expensive item to a rich person (or a person willing to go into debt) than you can selling a cheap item to a poor or frugal person. If the cost to produce a luxury car isn't that much higher than the cost to produce a Scion, then the luxury cars are what's going to be incentivized by the free market.
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I don't know if the rebuilders still exist but at one time there were companies that specialized in rebuilding/refurbishing fleet vehicles like police cars. Police companies could buy something with a warranty for less than a new car.
Maybe something similar will appear for consumer grade vehicles b/c the markets are too expensive.
I mean that's what I'm doing for myself bit by bit DIY and it is a great savings as long as I don't count my hours too closely.
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There are those who specialize in rebuilding salvage-title vehicles, and it's possible to get a good vehicle at a steep discount that way. My brother, for instance, bought a Toyota Sienna that had been totalled due to flooding a few years back. The rebuilder basically replaced all the affected electronics. He more recently bought a Honda Fit that had been totalled due to body damage. The rebuilder provided before and after photos of the repair, so you could gauge the extent of the damage. He's had no problems with either car due to their history.
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Some of the same companies that are selling big cars in the US are selling tiny cars in Europe. They haven't forgotten how to make them, and if tiny cars ever start selling well in the US, some company will be happy to sell them. I just moved back to the US from the UK about 5 months ago, and everything is bigger here.
I bought a Corolla a few days ago after almost 8 years without a car, and it's fun but also maybe just a little bittersweet to be turning over a new leaf as a car owner. I worried over it for a long time but in the end got a 2021 ex-rental with a clean history. Fingers crossed it will work out well. My brother and his wife both have former rental cars, which have worked out well for them. That is one part of the low end of the market that I don't think has been mentioned yet here.
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They haven't forgotten how to make them, and if tiny cars ever start selling well in the US, some company will be happy to sell them. I just moved back to the US from the UK about 5 months ago, and everything is bigger here.
Unfortunately we have idiots in the UK as well. SUVs are stupidly popular and crew cab pickups are quite common. I parked next to a Ford F150 a few days ago and couldn't believe how enormous it was. Completely unsuitable for UK roads, they occupy 2 car parking spaces (or 4 if it's owned by a complete moron).
I cannot comprehend why anyone would want one of those over here.
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There are those who specialize in rebuilding salvage-title vehicles, and it's possible to get a good vehicle at a steep discount that way. My brother, for instance, bought a Toyota Sienna that had been totalled due to flooding a few years back. The rebuilder basically replaced all the affected electronics. He more recently bought a Honda Fit that had been totalled due to body damage. The rebuilder provided before and after photos of the repair, so you could gauge the extent of the damage. He's had no problems with either car due to their history.
I got my Subaru from a salvage dealership in Minneapolis and the experience was really nice. In the past I have also bought decommissioned police cars which are a good value for the money if you need a bigger car.
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There's a dealer in my neck of the woods that does a lot of business with salvage and buyback vehicles. A bit more risk but deals can be had. A friend of mine had good luck getting a lemon law buyback pickup at a decent discount.
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Some of the same companies that are selling big cars in the US are selling tiny cars in Europe. They haven't forgotten how to make them, and if tiny cars ever start selling well in the US, some company will be happy to sell them. I just moved back to the US from the UK about 5 months ago, and everything is bigger here.
I bought a Corolla a few days ago after almost 8 years without a car, and it's fun but also maybe just a little bittersweet to be turning over a new leaf as a car owner. I worried over it for a long time but in the end got a 2021 ex-rental with a clean history. Fingers crossed it will work out well. My brother and his wife both have former rental cars, which have worked out well for them. That is one part of the low end of the market that I don't think has been mentioned yet here.
Corollas are great vehicles...I'm sure you will enjoy it! An as far as new cars go, the Corolla hybrid is the best deal on a hybrid out there...IF you can get one anywhere close to MSRP.
Speaking of tiny cars, we love our Prius C. Daughter has it now...and we are looking for another! I'm not happy that Toyota stopped selling them in North America.
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Some of the same companies that are selling big cars in the US are selling tiny cars in Europe. They haven't forgotten how to make them, and if tiny cars ever start selling well in the US, some company will be happy to sell them. I just moved back to the US from the UK about 5 months ago, and everything is bigger here.
I bought a Corolla a few days ago after almost 8 years without a car, and it's fun but also maybe just a little bittersweet to be turning over a new leaf as a car owner. I worried over it for a long time but in the end got a 2021 ex-rental with a clean history. Fingers crossed it will work out well. My brother and his wife both have former rental cars, which have worked out well for them. That is one part of the low end of the market that I don't think has been mentioned yet here.
Yes, I'd happy drive the Nissan March I owned in Japan, which wasn't even especially small by Japan standards. It was probably roughly comparable to a Yaris. The car I had the previous time we lived in Japan was a Toyota Vitz, which was the Japanese name for the Yaris. Again, not all that small in the context of Japan cars. Neither car qualified for the yellow license plate, which goes to the really small/light cars and has cheaper registration.
According to the caption, all of these are yellow plate cars, to show some example. Of course, none are available in the US even if they are from carmakers that sell in the US.
(https://miro.medium.com/v2/resize:fit:4800/format:webp/1*vUoKpv0n5JGn4wrVRL8LMw.jpeg)
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The topmost of the three definitely resembles my 2009 Nissan Cube.
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When I was in Japan in the late 90s, I had a used Mitsubishi Minica (https://en.wikipedia.org/wiki/Mitsubishi_Minica). I don't have any photos, but I remember it being a small, white hatchback similar to the Lettuce in the Wikipedia page, except that I think I would have remembered if it said "Lettuce" on the back. That was a small K car, but it worked well enough for my needs at the time. The only thing was that I never got used to the manual transmission so I was always stalling at stop signs or traffic lights on hills.
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I bought a Corolla a few days ago after almost 8 years without a car, and it's fun but also maybe just a little bittersweet to be turning over a new leaf as a car owner. I worried over it for a long time but in the end got a 2021 ex-rental with a clean history. Fingers crossed it will work out well. My brother and his wife both have former rental cars, which have worked out well for them. That is one part of the low end of the market that I don't think has been mentioned yet here.
Are rental car companies selling direct to consumers again?
In about 2015, I bought a VW Jetta from Hertz direct, and it was a great experience. They had me pick it up as a rental and drive it until I was satisfied, and then I completed the purchase over the phone. The rental cost was credited toward the purchase. It was an excellent way to buy a used car.
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They are, but I got it from a local Toyota dealership that had bought a bunch of 2021 Corollas. I looked at the Enterprise site to compare prices, and they also had a bunch from 2021. My brother bought from Enterprise prepandemic, and he got a one-year-old car, but maybe the companies hung on a little longer with the pandemic effects and high car prices.
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This lady has been paying $1400 per month for three years but still owes $50,000 on a car. https://www.dailymail.co.uk/yourmoney/consumer/article-13302555/auto-loans-debt-car-ownership.html (https://www.dailymail.co.uk/yourmoney/consumer/article-13302555/auto-loans-debt-car-ownership.html)
I'm not sure if the cost of the car and monthly note is worse than her quote in the article
'I did not go with my husband and as a female I feel they took advantage of me. They knew I really wanted the car and that I was by myself,' she said. Damn, what a way to offload responsibility
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This lady has been paying $1400 per month for three years but still owes $50,000 on a car. https://www.dailymail.co.uk/yourmoney/consumer/article-13302555/auto-loans-debt-car-ownership.html (https://www.dailymail.co.uk/yourmoney/consumer/article-13302555/auto-loans-debt-car-ownership.html)
I'm not sure if the cost of the car and monthly note is worse than her quote in the article
'I did not go with my husband and as a female I feel they took advantage of me. They knew I really wanted the car and that I was by myself,' she said. Damn, what a way to offload responsibility
As if that wasn't bad enough by itself.....
Blaisey Arnold says she has two massive car payments every month: one for her Chevy Tahoe SUV, which she financed for $84,000 at a 10% interest rate, and the other for her husband’s GMC Sierra 1500 AT4 pickup truck, financed for $78,000 at 14%.
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This lady has been paying $1400 per month for three years but still owes $50,000 on a car. https://www.dailymail.co.uk/yourmoney/consumer/article-13302555/auto-loans-debt-car-ownership.html (https://www.dailymail.co.uk/yourmoney/consumer/article-13302555/auto-loans-debt-car-ownership.html)
I'm not sure if the cost of the car and monthly note is worse than her quote in the article
'I did not go with my husband and as a female I feel they took advantage of me. They knew I really wanted the car and that I was by myself,' she said. Damn, what a way to offload responsibility
As if that wasn't bad enough by itself.....
Blaisey Arnold says she has two massive car payments every month: one for her Chevy Tahoe SUV, which she financed for $84,000 at a 10% interest rate, and the other for her husband’s GMC Sierra 1500 AT4 pickup truck, financed for $78,000 at 14%.
Before clicking the link, I was thinking this was someone much, much older, in which case the helplessness thing would have been slightly less appalling, but, no.
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...
Three years ago, 28-year-old Blaisey Arnold entered a local auto dealership and came away with the keys to an $84,000 Chevy Tahoe.
But this month, the wedding photographer and mother shared a video to TikTok describing how she was forced to sell her dream car.
Despite paying $1,400 a month in payments totaling more than $50,000, she still owes a balance of $74,000 to her lender - GM Financial.
Not only did she not make a down payment, she said she traded in a previous car on which she had fallen into negative equity.
...
Oof.
The tone of the article makes it sound like I'm supposed to feel sorry for her. Sorry, I don't.
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This lady has been paying $1400 per month for three years but still owes $50,000 on a car. https://www.dailymail.co.uk/yourmoney/consumer/article-13302555/auto-loans-debt-car-ownership.html (https://www.dailymail.co.uk/yourmoney/consumer/article-13302555/auto-loans-debt-car-ownership.html)
I'm not sure if the cost of the car and monthly note is worse than her quote in the article
'I did not go with my husband and as a female I feel they took advantage of me. They knew I really wanted the car and that I was by myself,' she said. Damn, what a way to offload responsibility
I'm not sure which thing is more deserving of my recreational outrage this morning:
-People being dumb and buying stupid cars.
-People then whining about it on tiktok for clicks
-People then writing news articles that describe tiktok videos.
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This lady has been paying $1400 per month for three years but still owes $50,000 on a car. https://www.dailymail.co.uk/yourmoney/consumer/article-13302555/auto-loans-debt-car-ownership.html (https://www.dailymail.co.uk/yourmoney/consumer/article-13302555/auto-loans-debt-car-ownership.html)
Her video is actually quite good, the article makes her sound complainy, but in the video, she takes responsibility and doesn't blame anyone else for the decision. I'm guessing the truth is somewhere in the middle. Here are some select quotes from her video:
"I messed up 3 years ago when I bought it..."
"On Friday the Tahoe is going to be gone ... I'm buying a new car [unknown if this is "new" or "new-to-her"] and I'm paying cash for it"
"I'm going to have zero car payments and that makes me so happy because I'm so happy for the freedom of not having a car payment"
"If I have any advice for someone who is thinking about buying a car, or buying anything honestly, and that is going to be making payments on it. My advice is not to do what I did. Because it is not worth it, do not pay so much for something that is so irrelevant.
It's not necessary to keep up with the trends anymore."
"I cannot wait for the freedom."
I can think of a lot worse messages being broadcast on TikTok than this. She made a big mistake, she seems to have learned a big lesson, and is sharing a positive message.
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Some of the same companies that are selling big cars in the US are selling tiny cars in Europe. They haven't forgotten how to make them, and if tiny cars ever start selling well in the US, some company will be happy to sell them. I just moved back to the US from the UK about 5 months ago, and everything is bigger here.
I bought a Corolla a few days ago after almost 8 years without a car, and it's fun but also maybe just a little bittersweet to be turning over a new leaf as a car owner. I worried over it for a long time but in the end got a 2021 ex-rental with a clean history. Fingers crossed it will work out well. My brother and his wife both have former rental cars, which have worked out well for them. That is one part of the low end of the market that I don't think has been mentioned yet here.
Yes, I'd happy drive the Nissan March I owned in Japan, which wasn't even especially small by Japan standards. It was probably roughly comparable to a Yaris. The car I had the previous time we lived in Japan was a Toyota Vitz, which was the Japanese name for the Yaris. Again, not all that small in the context of Japan cars. Neither car qualified for the yellow license plate, which goes to the really small/light cars and has cheaper registration.
According to the caption, all of these are yellow plate cars, to show some example. Of course, none are available in the US even if they are from carmakers that sell in the US.
(https://miro.medium.com/v2/resize:fit:4800/format:webp/1*vUoKpv0n5JGn4wrVRL8LMw.jpeg)
In am part of a VERY small minority of consumers here in the USA that like small cars.
We had a Prius C and loved it ( daughter now has it ). It was small but mighty in the winter here in Minnesota as well ( with snow tires, of course ). I'm currently looking for another one. The Prius C has been incredibly reliable, and cheap to maintain ( cheap tires due to small size, etc... ). Shame they discontinued it in the USA.
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In am part of a VERY small minority of consumers here in the USA that like small cars.
We had a Prius C and loved it ( daughter now has it ). It was small but mighty in the winter here in Minnesota as well ( with snow tires, of course ). I'm currently looking for another one. The Prius C has been incredibly reliable, and cheap to maintain ( cheap tires due to small size, etc... ). Shame they discontinued it in the USA.
I don't think the minority is as small as you indicate. People simply get pressured into buying far more car than they need, want, and can use. Hedonic adaptation sets in, and people become used to the idea that what they're seeing is normal.
Personally, I like a smaller car or ultra-light truck for economy and for ease in navigating parking lots, and I have a strong preference for hatchbacks or small trucks. It's because I live alone, do my own home improvement, and nearly always have a side hustle, charitable venture, or repair project that requires me to schlep stuff around or make a dump run. A couple times a year I tend to be asked to help someone move. But it's never reached the level of requiring or justifying a full-sized work truck.
I've tried larger vehicles such as SUVs and bigger trucks but they are a pain in the duff to own. On the very rare occasions I really do need something bigger, such as the minivan I used to take my daughter and grandkids to Dallas to see the eclipse, it's far more economical to rent. For the cost of what it would cost per year to buy, insure, and fuel that extra five or six hundred pounds of vehicle mass, I can comfortably rent a vehicle for a week twice a year and still come out ahead.
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Over the weekend, we went to a marina for their in-water boat show (They had free food and a band playing. I wasn't buying a boat but the food was ok and did I mention free?). Anyway, there was a pontoon boat with two 300 horsepower motors on it. Someone had taken it out for a test drive so I never did get to ride in it. The marina's website doesn't show that one but does have one with a 350 horsepower motor and list price of $170K. Using the little calculator on their page, financing 80% of list price for 20 years gives a monthly note of $1,136!
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Over the weekend, we went to a marina for their in-water boat show (They had free food and a band playing. I wasn't buying a boat but the food was ok and did I mention free?). Anyway, there was a pontoon boat with two 300 horsepower motors on it. Someone had taken it out for a test drive so I never did get to ride in it. The marina's website doesn't show that one but does have one with a 350 horsepower motor and list price of $170K. Using the little calculator on their page, financing 80% of list price for 20 years gives a monthly note of $1,136!
Can you live on it full-time and call that your mortgage?
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Over the weekend, we went to a marina for their in-water boat show (They had free food and a band playing. I wasn't buying a boat but the food was ok and did I mention free?). Anyway, there was a pontoon boat with two 300 horsepower motors on it. Someone had taken it out for a test drive so I never did get to ride in it. The marina's website doesn't show that one but does have one with a 350 horsepower motor and list price of $170K. Using the little calculator on their page, financing 80% of list price for 20 years gives a monthly note of $1,136!
Can you live on it full-time and call that your mortgage?
I don't know about the USA, but in the UK you can do this. Seen plenty of houseboats on UK rivers.
Example: https://www.suremarinefinance.co.uk/
Most probably available in Europe too.
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Over the weekend, we went to a marina for their in-water boat show (They had free food and a band playing. I wasn't buying a boat but the food was ok and did I mention free?). Anyway, there was a pontoon boat with two 300 horsepower motors on it. Someone had taken it out for a test drive so I never did get to ride in it. The marina's website doesn't show that one but does have one with a 350 horsepower motor and list price of $170K. Using the little calculator on their page, financing 80% of list price for 20 years gives a monthly note of $1,136!
Can you live on it full-time and call that your mortgage?
I don't know about the USA, but in the UK you can do this. Seen plenty of houseboats on UK rivers.
Example: https://www.suremarinefinance.co.uk/
Most probably available in Europe too.
Yellowknife, the little northern town where I lived for a couple of decades, is known for its houseboat community which was featured in a reality TV show called Ice Lake Rebels. I "houseboat"-sat at several of these floating cabins over the years, once for a full year. It was a fun canoe ride in the summer, and very easy access on ice by car, snowmobile, or ski/foot in the winter, but a treacherous journey for a couple of weeks during the fall freeze-up and spring break-up. These floating homes on the lake are in a grey jurisdictional area so they are pretty much unregulated by government and untaxed by the city. You can't get a mortgage so most are self-built. Several are quite nice and built to code, while others are simple log cabins on old fuel barrels for floaters.
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Over the weekend, we went to a marina for their in-water boat show (They had free food and a band playing. I wasn't buying a boat but the food was ok and did I mention free?). Anyway, there was a pontoon boat with two 300 horsepower motors on it. Someone had taken it out for a test drive so I never did get to ride in it. The marina's website doesn't show that one but does have one with a 350 horsepower motor and list price of $170K. Using the little calculator on their page, financing 80% of list price for 20 years gives a monthly note of $1,136!
Can you live on it full-time and call that your mortgage?
I don't know about the USA, but in the UK you can do this. Seen plenty of houseboats on UK rivers.
Example: https://www.suremarinefinance.co.uk/
Most probably available in Europe too.
Yellowknife, the little northern town where I lived for a couple of decades, is known for its houseboat community which was featured in a reality TV show called Ice Lake Rebels. I "houseboat"-sat at several of these floating cabins over the years, once for a full year. It was a fun canoe ride in the summer, and very easy access on ice by car, snowmobile, or ski/foot in the winter, but a treacherous journey for a couple of weeks during the fall freeze-up and spring break-up. These floating homes on the lake are in a grey jurisdictional area so they are pretty much unregulated by government and untaxed by the city. You can't get a mortgage so most are self-built. Several are quite nice and built to code, while others are simple log cabins on old fuel barrels for floaters.
Well now I want to watch "Ice Lake Rebels". And living like this sounds pretty great.
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They are, but I got it from a local Toyota dealership that had bought a bunch of 2021 Corollas. I looked at the Enterprise site to compare prices, and they also had a bunch from 2021. My brother bought from Enterprise prepandemic, and he got a one-year-old car, but maybe the companies hung on a little longer with the pandemic effects and high car prices.
Am looking to buy a Hyundai Kona EV. I shopped Enterprise and the price was significantly higher. $5300 higher up front.
We'd be financing a larger amount b/c the IRS rebate is delayed to next year.
So we're buying one from an out of state Toyota dealer and we'll need to go pick it up.
Same year, same trim, same mileage. Same color in fact. Rebate baked into the price.
That's still about a $1300 difference minus gas and hotel. An overnight and a few hours of driving for say ~$1000.
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How do the Yellowknife houseboats deal with sewage? Maybe I don't want to know. ;)
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How do the Yellowknife houseboats deal with sewage? Maybe I don't want to know. ;)
If you go swimming, avoid the floaters...
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How do the Yellowknife houseboats deal with sewage? Maybe I don't want to know. ;)
That's a good question; I live where there are still a number of floathouses on the river. In the old days the fishermen would drag them around to their summer fishing spots and the families would all live on them and the toilet pretty much just sat over a hole in the floor.
These days the remaining ones are grandfathered in, but you can't build any new ones, and they have to be moored permanently. The rule on sewage was that you had to be self contained, but it was rarely enforced, and so, rarely followed. Some of them are out in the river only accessible by boat, and some are closer to shore with gangplanks leading to the bank and they have power and water.
A guy I know developed a system for his and got it approved by DEQ, and now most of the houses near shore have similar set ups; basically a miniature sand filter built in a shed on shore using 55 gallon drums.
The ones out in the river either use a portable toilet or the old fashioned way. They mostly get limited use during fishing and hunting seasons.
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very easy access on ice by car, snowmobile, or ski/foot in the winter, but a treacherous journey for a couple of weeks during the fall freeze-up and spring break-up. These floating homes on the lake are in a grey jurisdictional area so they are pretty much unregulated by government and untaxed by the city.
I know of guys who have lived in their ice (fishing) houses over a full winter, which is totally legal as far as I know. A state license is cheap, and there are no taxes.
In the lower 48 though, you've only got 4-5 months of good ice, max, so it's not a permanent living solution.
Is there anywhere in the Lower 48 where you can permanently anchor a houseboat on a public body of water without a permit? I don't know of anywhere, but that doesn't mean such a place doesn't exist.
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How do the Yellowknife houseboats deal with sewage? Maybe I don't want to know. ;)
The couple I've lived on were quite nice and had either a homemade composting toilet or a propane incineration toilet that burned all human waste at high temperatures to produce less than a cup per week of stable ashes that you could then dispose of with other accepted solid waste at a shore bin, along with recyclables. As for grey water from showers, dishes, and laundry, the houseboaters I know are usually the environmentally conscious type so they use biodegradable soaps and detergents, use little water, especially in winter, so they produce very small quantities of liquid waste which are first filtered in a small sand/gravel bed and then discharged or recycled for watering indoor plants or raised beds in the growing season. Some houseboats only have a composting toilet and no running water whatsoever so folks use facilities on land to shower and do laundry.
When I retired, I was thinking about spending 4-6 months a year in Yellowknife but with the high cost of housing in that little city, building myself a little houseboat that I would rent out for very cheap in the winter was a great option, but other things came up and I moved to Mexico. I'm flying back to Yellowknife for a couple of weeks in July and will explore that option again.