Author Topic: $1000/month car payments &!$%  (Read 17674 times)

Metalcat

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Re: $1000/month car payments &!$%
« Reply #100 on: November 29, 2023, 04:51:47 AM »
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.

Morning Glory

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Re: $1000/month car payments &!$%
« Reply #101 on: November 29, 2023, 05:54:22 AM »
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.

Fomerly known as something

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Re: $1000/month car payments &!$%
« Reply #102 on: December 04, 2023, 07:58:11 PM »
I’m pretty sure my under 25 self paid $1,800 a year in 2000 outside of NYC.

Dave1442397

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Re: $1000/month car payments &!$%
« Reply #103 on: December 05, 2023, 05:30:02 AM »
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!

Askel

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Re: $1000/month car payments &!$%
« Reply #104 on: December 05, 2023, 06:22:55 AM »
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. 


farmecologist

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Re: $1000/month car payments &!$%
« Reply #105 on: December 05, 2023, 09:30:37 AM »
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.

zolotiyeruki

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Re: $1000/month car payments &!$%
« Reply #106 on: December 05, 2023, 09:57:02 AM »
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...

glacio09

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Re: $1000/month car payments &!$%
« Reply #107 on: December 05, 2023, 12:39:22 PM »
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).

TheGrimSqueaker

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Re: $1000/month car payments &!$%
« Reply #108 on: December 05, 2023, 01:39:37 PM »
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.

Just Joe

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Re: $1000/month car payments &!$%
« Reply #109 on: December 05, 2023, 09:06:23 PM »
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.

zolotiyeruki

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Re: $1000/month car payments &!$%
« Reply #110 on: December 05, 2023, 09:25:43 PM »
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.

Kwill

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Re: $1000/month car payments &!$%
« Reply #111 on: December 05, 2023, 09:37:18 PM »
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.

bill1827

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Re: $1000/month car payments &!$%
« Reply #112 on: December 06, 2023, 04:28:42 AM »
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.

Morning Glory

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Re: $1000/month car payments &!$%
« Reply #113 on: December 06, 2023, 08:32:15 AM »
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.

ChickenStash

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Re: $1000/month car payments &!$%
« Reply #114 on: December 06, 2023, 11:02:21 AM »
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.

farmecologist

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Re: $1000/month car payments &!$%
« Reply #115 on: December 06, 2023, 12:18:28 PM »
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.

Villanelle

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Re: $1000/month car payments &!$%
« Reply #116 on: December 06, 2023, 02:03:29 PM »
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.


TheGrimSqueaker

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Re: $1000/month car payments &!$%
« Reply #117 on: December 06, 2023, 02:18:40 PM »
The topmost of the three definitely resembles my 2009 Nissan Cube.

Kwill

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Re: $1000/month car payments &!$%
« Reply #118 on: December 06, 2023, 09:08:30 PM »
When I was in Japan in the late 90s, I had a used 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.

roomtempmayo

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Re: $1000/month car payments &!$%
« Reply #119 on: December 08, 2023, 12:28:48 PM »

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.

Kwill

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Re: $1000/month car payments &!$%
« Reply #120 on: December 08, 2023, 04:21:08 PM »
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.