Posted on 12/03/2016 8:15:15 AM PST by Lorianne
I tried to point stuff out like this while teaching school. Getting flamed doesn’t describe what happened next.
I personally think cars have stayed in quite a good range of prices for a while now. The life-saving devices alone make it worthwhile to buy one of these instead of some used piece of trash. People who can’t afford something and buy it anyway are idiots. We are conservatives here. We don’t blame others. We blame ourselves when we do something stupid.
I swear my old ‘02’ Ford P/U gets purtier every day.
Reality TV and the celebrity culture have not helped things. Instead of people aspiring to be like their richer neighbors, today it’s aspirational debt on steroids.
IMHO, vehicles specifically have become more feature-laden and complicated (and thus expensive) primarily to comply with emissions and fuel economy regulations.
The manufacturers realize few consumers want to pay a fortune to comply with the latest regulations, but if they can tack on enough do-dads, then it effectively masks the cost of the regulatory compliance with bling.
There’s no technical reason why vehicles couldn’t be made more cheaply and have better longevity, and I’m not convinced all of the “innovations” are market-driven. Many are a result of market distortion through regulation.
Further, the major manufacturers are insulated from other potential market innovations by the high barriers to entry, some of which are intrinsic but many others are, again, the result of regulation. Some of those have been recently relaxed (small manufacturer exemptions to crash testing, for example), but most are still in place.
Just my observations as a gearhead...
I call BS on this article as far as car pricing goes.
Yes they could be made less expensive. But mandated safety equipment, emissions, insurance and all the paperwork involved with compliance coupled with environmental and employee costs (pensions, healthcare) make it impossible to sell cars for less than about $20,000 per. Low end cars sold today are subsidized by the $50K sales.
A big part of the cost is government required features. Some of them a good idea I suppose but some like smog controls for people who live in the middle of nowhere.
Also modern cars come with far more extras than they used to. I recall when Daddy would only add two extras. A heater and a radio. He eventually got AC which was uncommon back then.
Hard to read article - it was like broken English. I agree with the societal stigma to live below one's means. On the flip side, what do you care what others think?
I remember when standard auto loans were financed for 24 months. My first new car, a 1972 Camaro cost a little over $4,000 and my monthly payment was about $100. Of course, I made $2.00 an hour.
Now car loans can be for 72 months. Insane.
My wife and I were born during the depression era. The only monthly debt payment we have is our monthly mortgage payment as per our CPA’s advice.
Our paid off 12 year old Lexus and my 7 year Honda Ridgeline have about 50,000 miles on each vehicle. We spend maybe $500 to $1000 maintenance per year to keep them rolling. Both of them drive like new vehicles.
If one becomes too much of a maintenance cost problem, we will lease a vehicle to replace it.
“...You are promising to pay with money you haven’t earned yet...”
Exactly, nice to pay cash if you can for real estate too but....
And then there’s Student Loans.
And cars are a necessity almost anywhere you live. People aren’t interested in mass transportation.
Yep. Just traded in my 2002 basic, manual, no bells and whistles, lock the hubs myself 4WD for an AWD 2013 Rogue with “some” automatic stuff, like the windows and a few other things. Not real snazzy but newer. Boy, 15 or 20k doesn’t buy a whole lot these days. Nice basic little car that should handle Colorado winter driving okay.
Trying to live within my means. Hadn’t had a car payment in years. Will pay this one off ASAP.
“You could replace almost any consumer item in place of an auto in this article.”
You could! I LOVE my 2000 VW Golf; just over 40K miles, LOL! Been paid for for-ever.
I also love my 2008 Ford Escape. Paid for, about 70K in miles, now.
Repairs and general upkeep are SO much more desirable than a monthly car payment. :)
YMMV <—— LOL! See what I did there? *SMIRK*
So, there are people anxious to lend 10s of thousands of dollars to a 70 year old man who recently had a 90 degree blockage in his left descending artery stented. Not even talking a car loan. Talking pure uncollateralized personal loan to a person with a zero traceable net worth. Who’s crazier, the guy who takes it or the people who lend it.
Emotion drivin choices add to the problem.
Most buy a car they will look cool in rather than focusing on the fact it’s is just transportation.
Some cars hold their value better than others, have less maintenance cost, higher resale.
Even with financing you can buy right if you research.and have the patience to wait for the right deal
What I would like to see is a professional automotive rebuilding industry be formed.
For example, there aren’t any modern compact pickups like the Ford Ranger / Chevy/GMC S-10/S-15 produced today. A lot of these came with manual transmissions, roll up windows, simple climate control. Nice basic transportation with a lot of utility. Millions were produced and a lot of the parts were essentially the same for a decade.
I would think one could build a business around picking these things up for a few hundred, tearing them completely down, and rebuilding and reassembling. Parts are still plentiful and some of them are beginning to fall off the window for emissions testing requirements. They could even potentially be built to order, and also slightly modified with better parts to fix the known problems.
They’d still likely be at least $10-15k when all was said and done, but they’d essentially be new vehicle equivalents.
Tuition inflation has vastly outpaced auto prices with arguably much less content now in the available Edumacation products.
Here is a little exercise for you ... go and price out a new base model car with; manual transmission, manual windows/locks, basic interior (no carpet, std cloth seats), basic AM/FM radio (and maybe a single basic CD player ... nothing more), basic A/C.
You virtually can not even find that setup at the online car/truck build sites. And when you go into the dealership and ask for it ... you are looked at like you just dropped in from the planet Neptune.
I did that for my Ram 4500 in 2008 and it was a SPECIAL ORDER that took 12 weeks to get!
Virtually the same for when I bought my 2016 Honda Accord LX with manual transmission ... there were like 3 in all of New England and I got it for 19K and the dealer was glad to sell it since no one wanted it (19K for a new Accord is a gooooood price).
We are in the “roll it into the loan” society with cars these days.
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