Posted on 07/21/2017 9:06:34 AM PDT by Lorianne
Some people say capitalism and alligators have much in common both eat their young. While the rich get richer (and will get richer still if the #FakePresident has his way), ordinary schlubs who are working one, two, or sometimes three jobs to make ends meet are finding they can no longer afford to buy average new cars.
Thats according to a new study by Bankrate.com. It finds that people living in 24 of the 25 largest metropolitan areas in the US cannot afford the average price of new cars, which was $33,000 in May according to Kelly Blue Book. In six of those cities, people struggle to afford cars cost half that much.
Only in Washington, DC, where the median income is over $100,000, are people able to afford a new car. But the statistics for the nations capitol are wildly skewed by all the millionaires in Congress and the $1,000 an hour lobbyists who grease the wheels of democracy.
Affordability is a relative term, of course. For purposes of the Bankrate study, analysts used the so-called 20/4/10 rule. It assumes a 20 percent down payment, a 48 month loan, and a total of of insurance and loan payments that does not exceed 10 percent of a familys gross income.
The [average] household cant comfortably afford to buy a new vehicle, said Claes Bell, a Bankrate.com analyst. That means a lot of households are overextending themselves on car costs, and that can potentially crowd out other priorities such as saving for retirement.
This issue of affordability isnt just about the price of cars. Its about the stagnation of wages, Bell said. Car costs are not rising all that quickly over time, but things like health care and college costs are going up and wages arent [keeping up]. Budgets are being stretched.
People should prepare for a car purchase by saving for a down payment, Bell said. Sometimes people impulsively go to a car lot and get sold on buying a new car. But if they dont have a sufficient down payment saved, it will be hard to fit the payment into their budget.
The total of auto loan indebtedness now stands at $1.2 trillion about 10% of all consumer debt according to the Federal Reserve. Late payments on car loans is rising. Nearly 4% were delinquent at the end of March according to data compiled by the Federal Reserve Bank of New York.
People fall in love with cars they cant afford, and thats how they get in trouble, said John Gajkowski, a certified financial planner and co-founder of Money Managers Financial Group.
Capitalism assumes constant growth a model that is inherently unsustainable. Real wages for workers have been falling slowly but surely in America for 40 years. The cost of living continues its upward climb while globalization forces American workers to compete with the low paid labor in other parts of the world.
Car makers are subsidizing sales with low interest rates and extended term loans. On some high end models, it is now possible to get loans that extend out to 96 months or more. But people seldom keep a car that long, which means they find themselves owing more than their car is worth when it comes time to go car shopping again. Its a vicious circle that is not likely to end well for manufacturers or consumers.
Let them drive Teslas!!!
And they couldn’t before — so Obama gave them away....
Or you can get an EZ-Go for $7299!!!!
http://www.ezgo.com/Home/Personal/Freedom/FreedomRXV
I will not buy a new car because of the insidious property tax. Why pay an extra $500 a year just to own a new car?
Lets not blame the rich for this one...
Unions have driven the cost of cars up more than anything else.
Retirement plans for many in the industry are the envy of even congress itself.
“Capitalism assumes constant growth a model that is inherently unsustainable.”
I see this writer’s confusion. Capitalism doesn’t assume constant growth, but it often sustains it. Other economic systems tend to do the opposite.
My last vehicle purchased new was a company vehicle, bought in 2007 just before everything started to come apart due to the real estate crash and associated financial crisis. It was a fairly loaded 2008 GMC Acadia SLT1, leather, panoramic sunroof, 19” polished alloy rims with low profile tired, upgraded stereo plus all the options that came with the SLT1 package. Good-looking vehicle, I was quite pleased with it. Pretty upscale at the time, and the most I’d ever spent on a vehicle. It was a little over $33,000.00 out the door. That’s how badly the price of a new car has inflated in ten years, now that fairly expensive $33,000.00 is the average cost of a new car.
I’m so confused.
Did all this happen since January ??
That one sentence alone tells you what is truly wrong with the very sick United States of America.
Shut down Wash D.C. Have all Congress critters live year 'round in their home districts. Conduct all business using WebEx. Get the govt close to the people. Avoid new members from getting corrupted by the good old boys in Wash D.C.
Remote TVs, side air bags, GPS, power windows, lower weight requirements all increase costs.
And in many cities, the average family income is not enough for the average family to buy an average cost house.
So where does this leave us? Average earnings can’t buy a house or a new car. Decades ago this was not the case. What changed??
And ‘cash for clunkers’ was one of the most wasteful programs ever - those old cars were the ones my low-income Hispanic neighbors would buy, fix up, and use for years. A lot of low to middle income people do that, and never buy new cars - the people liberals are supposed to care so much about.
Average new car loan is longer than 48 months, and there are a lot of six and seven year loans, not to mention leases that ratchet monthly outlays down.
How much do various government regulations drive up the cost of a new car?
In 2015 I bought a certified pre-owned 2014 Jeep Rubicon with just over 14K miles. Some poor schlub paid a lot of money for the privilege of breaking in the engine for me :)
$33,000.00 is the average?
Then these people could buy a smaller car-—a new Corolla can be had for about $19,000.00
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I have only ever bought used. Pay cash, drive it til it dies.
My last new “vehicle” was in 2015 (motorcycle). My last new car purchase was in ‘94. Bought a used ‘98 pickup in 2000.
Agree. Capitalism is freedom in business and just like personal freedom YMMV. It promises nothing except that you are free to conduct business as you see fit. Many Freepers do not like the concept and favor all sorts of government intervention.
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