Posted on 12/03/2016 8:15:15 AM PST by Lorianne
live in a society driven by debt.
Cars, for example, have become hugely expensive (even on the low end) relative to what people can afford – because of the easy availability of credit. Which is the nice word used to speak about debt, intended to encourage us to get into it.
It takes at least $15,000 or so to drive home in a “cheap” new car, once all is said and done. And the “cheap” car will have to be registered, plated and insured.
It runs into money. And most new cars cost a lot more money. Which most people haven’t got. So they get debt. A loan. Which, when it becomes commonly resorted to as a way to live beyond one’s means as a lifestyle, drives up the cost of life for everyone. Including those who try to live within their means – or better yet, below them.
When most people (when enough people) are willing – are eager – to go into hock for the next six years in order to have a car with an LCD touchscreen, leather (and heated) seats, six air bags, a six-speaker stereo, electronic climate control AC and power everything – which pretty much every new car now comes standard with – the car companies build cars to satisfy that artificial demand.
Artificial because based on economic unreality. That is a good way to think about debt. It is nonexistent wealth.
You are promising to pay with money you haven’t earned yet.
And maybe won’t.
The car market has become like the housing market – which has also been distorted by debt to a cartoonish degree. The typical new construction home is a mansion by 1960s standards. Not that there’s anything wrong with living in a mansion. Or driving a car with heated leather seats and climate control AC and a six-speaker surround-sound stereo and six air bags and all the rest of it. Provided you can afford it.
Most people can’t.
Normally, that fact would keep things in check. There would be mansions, of course – and high-end cars, too. But only for those with the high-end incomes necessary to afford them. Everyone else would live within their means. We wouldn’t be living in this economic Potemkin village that appears prosperous but is in fact an economic Jenga Castle that could collapse at any moment.
There would be a lot less pressure to “keep up with the Joneses”… as they head toward bankruptcy and foreclosure.
As society heads that way.
Like the housing industry, the car industry has ceased building basic and much less expensive cars because of easy and grotesque debt-financing.
Which is tragic.
There ought to be (and would be) a huge selection of brand-new cars priced under $10,000 were it not for the ready availability of nonexistent wealth (.e., debt and credit).
Cars many people could pay cash for.
Brand-new cars.
Not shitboxes – as the late great Brock Yates christened them.
They would have the build quality/body integrity and quality paint jobs that are now standard equipment with every new car, because of generally improved (and largely automated) manufacturing techniques, such as robotic welding and painting. Part of the reason yesterday’s low-cost cars felt shoddy – and rusted early – was because they were shoddily (and spottily) constructed. By often-aggrieved line workers, who maybe got a little too drunk the night before and so weren’t being very careful the next day, while fitting panels to the car.
It’s not like that today – and irrespective of price point. The humblest new car is built to a much higher standard than top-of-the-line luxury cars once were. Those costs have been amortized; build quality would not regress if debt-financed flim-flam went away. To think it would is like thinking we’d go back to corded wall phones.
They would have reliable, efficient – and not balky/hard-starting/stalling – engines, too. Because the cost of simple (throttle body) electronic fuel injection – an exotic technology back in the shitbox days – no longer is.
It’s everywhere – economies of scale have made it so.
Probably our less-than-$10k-car would have things like power windows and AC, if you wanted it. But wouldn’t it be nice if it were optional?
None of this is pie-in-the-sky.
Such cars are being sold all over the world right now, just not in the Western world – which is in debt up to its eyeballs.
Because the debt lifestyle has been normalized. There now exists social stigma to live below one’s means. To not give the appearance of wealth one doesn’t have by purchasing – on credit – things one can’t really afford.
That – as much as the regulatory burden of government – is what’s driving up the cost of life for all of us. Including those still trying to live within our means.
Yes, I agree, it should be possible, but the control freak liberals would consider them to be clunkers and protest them off the roads! What a great country this was before the liberals ran riot in every aspect of our lives.
Cars, for example, have become hugely expensive (even on the low end) relative to what people can afford
A 1964 Malibu SS, brand new, cost $3290 sticker price.
I know because I bought one for that.
The average income for 1964 was $4576. So the car cost 72% of a year’s wages.
Average income in 2015 was $55,775. The average car price in April 2015, per Kelley Blue Book, was $33,560. That’s 60% of annual income.
The average car today is 17% cheaper to buy than in 1964. The article starts out, then, with a lot of hooey.
If the author is wrong in his opening statements, there’s not much point in assigning veracity to anything else in the article.
Today a Crank Positioning Sensor can leave you sitting and although the tow cost more than the part unless you have access to the computer coding and a computer to diagnose it you are guessing and part replacing until you find out what is wrong. In my teens the breaker points did this sensors task and a stuck set of points could be repaired or even replaced in minutes. Men kept emery boards in the dash of the car for that purpose.
It was the imports {mostly European} which were very poorly built. The worst of them being the Renault. If one made it to 50K without a new tran-saxle or engine it was a miracle. My new cars were 10 plus year old cars I could afford usually costing no more than a months wages and I could repair myself. Anyone remember when you could sit inside the engine compartment of a Ford F-100 and work on the engine? I do.
My Mom drives a 2004 Chevy Tahoe. It is astounding at the gadgets it came with as well as the complex electrical system. She's had it six years and it's been reliable but if anything at all goes wrong it's a trip to the garage. Even getting the spare tire out is a major undertaking and far more complicated and time consuming than it ever should have been.
I bought a used one for a few grand a couple of years ago. It is my first truck. I had planned to use it just to move stuff, but now it is my daily driver, LOL, I swore I would never be one of "those" types of people.
I live debt free, at first, because I had no choice, but now, because I can.
I agree. It's just like groceries. The meat and taters consumers who can only afford the basics are subsidizing the raw Seafood and specialty meat department in stores in which has anyone actually seen anyone buy anything? My bet it they have a 95% loss due to expiration date.
Being a debt servicing slave is a drag.
I swear my old ‘02’ Ford P/U gets purtier every day.
—
‘95 F-150..Cherry
For fun (and out of sheer curiosity), I picked up a Crown Vic Police Interceptor that had been retired from the state police.
Paid cash, and cleaned it all up. Car looks and drives great. It proved to be so dependable that it replaced my other car as a daily driver.
And my 5-year-old loves it.
Do they still put ‘interceptor’ engines in them? Our local deputy sheriff, AKA ‘Pretty Boy,’ drove a 1957 Ford with an interceptor engine and sometimes offered a local to drag race against him to get out of a ticket. I don’t think anyone ever got out of a ticket.
We need a “People’s Wagon” (the original Volkswagon) that had high quality and austere, but adequate features.
Old trucks do require a little TLC but $50,000 for a new one I’m way ahead.(It’s a 4WD Diesel.)
Sounds like a business opportunity.
Produce this low-end but quality car and sell them for cash only. Order online.
Were I an investor with the funds I’d start it up.
Tell the truth! How fast will it run?
It's funny. The Crown Vic Interceptors (which ceased production in 2011) have a lot of different equipment from the regular models. They have a heavy duty cooling system, big alternator, different suspension, oil cooler, trans cooler, etc. But oddly enough, the engine has the same 250 hp as the civilian version.
They won't win many races, but they run forever.
Not too fast, but it does okay for what it is. Mine sounds cool though, because I put Magnaflow mufflers on it. :)
With the gearing mine has, it will top out at about 134 (thanks, Youtube).
Our son-in-law just bought a Dodge 2500 pickup that is a tradesman model supposedly for construction type work. That thing has so many bells and whistles/touch screen/stuff comes up in the dash with tire pressure and all that...I refuse to drive it and I have been driving pickups all my life. The idea is that is a stripped down model like construction employees would drive. ha ha
My husband needed another ranch truck and I told him it needed to be simple to drive, not all the stuff to figure out- just a normal truck. He found a 2006, not much newer without the added stuff that is like garbage to me.
My daughter has a new car that we all jumped in to go to CA last year for a family funeral...it has so much crazy stuff...I refused to drive it. My husband is keeping up with all that crud but not me. It is craziness.
My kids tell me I need a new car, mine is a 2006 and I told them if I had a new car with all that nonsense I would stop driving.
I completely agree with the author. Low cost cars are impossible to find and even the used car market is suffering. I only buy used and we keep our cars until they are basically dust.
Last year, my son got rear ended which destroyed his very well used Mercury Sable. I bought it for $1500 about 7 years before.
He had a limit of $5000 and could barely find anything in that price range that wasn’t decrepit.
All this new crap they put on cars is nice. I have a little bit of it in my company car, but I live just fine without it in personal cars.
Going in to deep debt on an item that depreciates every single day is not a worthwhile investment, nor is it a particularly conservative trait.
A low end econo-car is a thing I would consider. I’m at a point in my life that I could afford a really nice, somewhat expensive car, yet I have absolutely no desire for one.
A couple of years ago, circumstances required me to buy a used car and borrow money for it. I recently paid off that loan and am now debt free.
It feels pretty good to be debt free.
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