Clown Car Obsession continues to get worse....

[GW]

Did anyone read the following article in the USA Today? http://www.usatoday.com/story/money/personalfinance/2014/06/08/wscs-are-americans-filling-up-on-too-much-debt/10166869/

The average auto-loan term increased to 66 months during the first quarter, according to Experian Automotive, a global information services company. That is the highest level since Experian began publicly reporting the data in 2006.

Making matters worse, nearly 25% of all new vehicle loans originated during the quarter had terms extending out 73 months to 84 months, representing a 27.6% surge from a year earlier. The average amount financed for a new vehicle loan also reached an all time high of $27,612.

Almost $30K for a new vehicle loan!?!?! and apparently that's average.... gimme a break. It's amazing the addiction we have to debt in this country. Hide your kids, hide your wife..

[Emilyngh]

...And hide your husband.

[DeepEllumStache]

I was shocked a couple of years ago when the guy I was dating had a 6 year note on his massive diesel pickup truck.  He was shocked that I refused to do anything other than pay cash for a car.  Different mindset.

[homeymomma]

"If you really want to be conservative with your car buying habits, restrict yourself to only paying cash and keep the vehicle for at least five years."

At least 5 years? Only 5? That doesn't make any sense without further guidelines. If all you do is buy used in cash (with no other limits) there are surely cases in which holding for 5 years will not be sufficient? Wierd advice. Shouldn't it have been more along the lines of, don't spend more than X% of your annual income on a car, then hold it for X years per $1000, or something. That kind of rule seems to have more application, IMO.

In another vein, though, I know MMM has a post about this but it didn't quite convince me. If you have the cash to purchase the car outright, why do you HAVE to use it? Wouldn't it be better to finance some of it at 1.9% or so if available and keep the rest of said cash invested for a higher return?

[Ftao93]

Another Denverite, eh?  Welcome aboard!

Maybe it's because I never had really nice cars growing up (just good used ones), I never thought about having to have the latest and greatest car.

Of course now we have no car.   Just feet, bus passes, and scooters.  Even then I felt bad about buying new.    The motorcycle has a 5 year payment plan, it will be paid off in 2.    I figure things need to be paid in cash, or in the rare case of new, it needs to be paid off well before the warranty expires!

[wtjbatman]

...And hide your husband.

www.youtube.com/watch?v=fl9vouECjgs

[CarDude]

Yeah, it's kind of ridiculous. Imagine how much cheaper cars would be if car loans didn't exist. As someone in the comments pointed out, when the average car costs more than the average individual's salary, something's not working.

[SnackDog]

The US actually has some of the cheapest new and used cars in the world.  That same SUV would cost you double in the UK or Brazil, 2.5 in Australia, and nearly 3X as much in Norway or Singapore.  Norway actually taxes vehicles progressively on their cost, engine size and weight.   A Toyota Landcruiser will run you around US$200,000 today in Oslo; a Range Rover double that.  Your lowly Toyota Yaris is over forty grand in Norway.

[chasesfish]

Those notes are almost entirely principal payments, car loans run around 2% right now.

Its amazing how much the cost of a car has gone up with all the required safety standards, ect. 

[Hedge_87]

Imagine how much cheaper cars would be if they took all the fancy pants gizmos off. I don't need power windows, I can turn my headlights on and off as needed, same goes for windshield wipers, I don't need Bluetooth capable hands free talking because If I'm making a phone car on the road it's because the vehicle is no longer functioning. I own and can read a map (it's more fun anyway) so I don't need gps. And my biggest pet peeve of all with new vehicles is all the plastic covering every part of the motor. The only propose this serves is to piss me off before I even get to the part I need to fix and make it next to impossible to do a visual inspection as part of my regular maintenance program.

Features I don't need but enjoy
A/C
Radio (preferably with an aux jack so I cap hook up my dinosaur of an MP3 player)
Adjustable lumbar support
This is a need more than a want but heater/defroster

[Posthumane]

Its amazing how much the cost of a car has gone up with all the required safety standards, ect.

Actually, it's amazing that cars have gotten cheaper in real dollars despite all the required safety standards, improved reliability, more features (granted that many are unnecessary, as mentioned), better fuel economy, etc.

[shotgunwilly]

They gave me a 10 year note on a USED boat, which is a RECREATION vehicle!  And it was the first thing I ever financed.

[soccerluvof4]

One of my sons coaches said that his little toyota camry would be 70k in brazil over double.  To the ops opening statement it is shocking. People do it and just don't care and probably would take much longer terms if available. I think over the years when I though credit really matter I might of fianced a car or three for 1 year just to develop some credit.  But i cant remember the last time i financed a car and the dealers HATE cash sales so that makes it even better.

[MrFancypants]

Imagine how much cheaper cars would be if they took all the fancy pants gizmos off. I don't need power windows, I can turn my headlights on and off as needed, same goes for windshield wipers, I don't need Bluetooth capable hands free talking because If I'm making a phone car on the road it's because the vehicle is no longer functioning. I own and can read a map (it's more fun anyway) so I don't need gps. And my biggest pet peeve of all with new vehicles is all the plastic covering every part of the motor. The only propose this serves is to piss me off before I even get to the part I need to fix and make it next to impossible to do a visual inspection as part of my regular maintenance program.

Features I don't need but enjoy
A/C
Radio (preferably with an aux jack so I cap hook up my dinosaur of an MP3 player)
Adjustable lumbar support
This is a need more than a want but heater/defroster

They make those, and they're extremely popular, they're called "motorcycles."  :D

[RetiredAt63]

Depends where you live - here this is a necessity  ;-)

This is a need more than a want but heater/defroster

[ivyhedge]

When we visited my in laws (China) we were astounded at what folks were paying for rides.


Corollas for $40k+, Accords for $75k - $85k, A4s for $150k+, etc. And in many Chinese cities the costs to register the vehicle and get a plate can cost $5k-$15k: sometimes $20k+.


Another fun anecdote: almost *everyone* we know (save my in laws and our cuz, who has a company A4) now has a car, and paid cash for it. Oh, and only one complained about the prices (and he was one of the few with a Chinese make).


I thought: "Wazzah?!"

[Hedge_87]

Depends where you live - here this is a necessity  ;-)

This is a need more than a want but heater/defroster

That's why I said need. And yes motorcycles are awsome. :P  I know we have lots of problems with our newer trucks at work. In fact we just got a new dodge (2 weeks ago) and the windows and door locks won't work on the damn thing already.

[skunkfunk]

In another vein, though, I know MMM has a post about this but it didn't quite convince me. If you have the cash to purchase the car outright, why do you HAVE to use it? Wouldn't it be better to finance some of it at 1.9% or so if available and keep the rest of said cash invested for a higher return?

Nope. If you have a loan you have to get full coverage, which is very expensive. Additionally, it is always a risky move to buy stocks on margin, which is essentially what you are doing there. Increasing volatility whilst reducing returns, not for the faint of heart.

[GW]

And my biggest pet peeve of all with new vehicles is all the plastic covering every part of the motor. The only propose this serves is to piss me off before I even get to the part I need to fix and make it next to impossible to do a visual inspection as part of my regular maintenance program.

I agree 100%.

What's also ridiculous is an auto mechanic charging $40-$60 to replace a cabin filter or air filter for that matter. However, people pay it b.c they just don't know how easy it is to replace...

[shotgunwilly]

I agree 100%.

What's also ridiculous is an auto mechanic charging $40-$60 to replace a cabin filter or air filter for that matter. However, people pay it b.c they just don't know how easy it is to replace...

OMG!

[homeymomma]

I agree 100%.

What's also ridiculous is an auto mechanic charging $40-$60 to replace a cabin filter or air filter for that matter. However, people pay it b.c they just don't know how easy it is to replace...

OMG!

Ooh is it really that easy? Liiiike, someone who is unsure if that thing there is the coolant or the wiper fluid could do it? We have a Hyundai elantra and the in-cabin in smelly. Quick off-topic tutorial? :)

[Drakbak]

Ooh is it really that easy? Liiiike, someone who is unsure if that thing there is the coolant or the wiper fluid could do it? We have a Hyundai elantra and the in-cabin in smelly. Quick off-topic tutorial? :)

It's so easy a caveman could do it.

Buying the filter at the store is easy... there's a book where you look up your car and it tells you which filter to buy (Amazon also let's you search your car model for the right parts).

Replacing the filter is as easy as changing AA batteries in your TV remote.  Your manual will tell you where the filters are located, you open the plastic lid and switch them out.  The in-cabin one might be slightly trickier depending on your car.  I had to pull out the glove compartment to access it (not as hard as it sounds), ultimately added a few extra minutes.