It’s wild to think that 15% of your income going to your car is just expected now.
Car companies and loan companies are vultures, but our car culture is absolutely out of control, with the amount of money people are willing to spend on a car.
I work for a large retailer and we had a customer pick up a 19 Infiniti qx60 for 40k. They qualifies for fucking 16% interest. 909$ a month for 72 months. $66000
$26K in interest... absolute nightmare. Then again, the chance this dude pays that note off is roughly the same as gas dropping to $2/gallon next month
Shit's wacked! I wanna be shocked but I've become numb to the insanity. I listen to guys at work compare loans like kids comparing baseball cards yet make fun of me for driving a 15-year-old vehicle
It's awkward when you realize that people making way more money than you actually get less takehome pay because they spend like 2k a month total on their trucks which are just glorified suvs.
It’s so normalized for transportation to actually be this massive chunk of the monthly budget. A car is just transportation, that’s all it is. But between the auto loan, the monthly insurance (don’t you go trying to use that insurance you pay for every month either, or you’ll end up paying more), the maintenance and gas costs that both fluctuate based on economic forces, the depreciation, the repairs it will inevitably need that get more costly as the car gets more mileage…it becomes this ballooning expense with a continually deteriorating value. And it’s *transportation*. Civilized countries have a metro card that works for all the buses/trains/trams in the city and it’s a flat monthly fee or a per-use single ticket. And it doesn’t cost anywhere near $12k per year of your post-tax money to have.
I’m assuming you walk to all your destinations to save money, but in the rare case you take a flight, as you walk to basic economy past all the first class passengers, business class passengers, I want you to tell them what you just told us. Tell every passenger, until those waiting behind you get riled up. Record it and share it on Reddit. I need a good laugh.
If you want to know my reaction, I’m going to hold my nose with one hand and do a shoo-ing motion with the other.
Am I to assume you fly to all your destinations? What an odd thing to say when we’re talking about a country where the average person drives 13k miles a year.
It's not just that - the cost of cars has skyrocketed after COVID. It's incredibly expensive to buy a car these days and if you have bad credit, double oof.
Yeah my old school logic was that I had to have a car paid off before it hit 100,000 miles. That line of thinking won’t work anymore. Unless I park it in the driveway and hide the keys.
Eh, the used car market had a spike during COVID, but it's returned back to where it was relative to median household income. Financing costs are a lot higher though. After 40 years of falling interest rates, that was a shock to a lot of people.
Civics have always held good resale value, so not too surprised. 115k miles used to be a bad thing but that car should easily hit 200k without any major issues.
I sold my 2012 Wrangler last fall. 160k miles. Got $11k for it. Resale value was one of the primary reasons I bought that vehicle in the first place.
On the EV side of things, a lot of manufacturers rolled out high-end EVs and tried to tap into a luxury EV market that was already saturated. At the same time the Chinese were switching to the cheaper LFP battery chemistry and rolling out tons of incredibly affordable cars.
Some of the major manufacturers have indeed largely abandoned pure electric BEVs and are focusing on EREVs and gas again, but many others that canceled luxury EV lines will be switching production to more affordable options. Ford has a $30,000 electric mid-size truck coming out soon based on LFP, the Kia EV3 should be sub $35k, and Subaru has a smaller crossover planned from $30,000.
I hear this all the time, and in my admittedly useless opinion, I have a gut feeling the system is deliberately holding back parts just to drive prices up under the banner of supply and demand. Repeat it often enough, and people start treating it like the truth.
Imagine a 5 year old vehicle and the main seal is on back order with no availability date. Or the CVT decided to grenade outside of warranty and the whole unit needs to be replaced as individual parts are not available. Something is wrong with the system.
I don't think it's surprising as people struggle to lower their expenses, get older cars and just swap parts. No one wants to buyer brand new because it's ridiculously expensive. The transportation issue due covid was seen not just in auto but also for computers and chips, gaming and healthcare. Things don't just return to the state it was. Then you also have to factor in the goverment and the choices they make that affect this as well. Tariffs and trade deals. Everything boils down to the expense for the business and consumer.
Yep. My in-laws live in what looks like a chicken coop. But they have a Benz and Escalade in the driveway. Why? They said only family knows where they live but everyone else sees they drive fancy cars.
A lot of people get into these situations at least in my area because we're pretty rural and there's no public transportation, taxis, or Ubers.
Basically to have a job you have to have a vehicle because nothing's in walking distance and I guess some places are close enough you could e-bike or something like that but it's just dangerous roads that you would have to be on.
Because they need a reliable car and that’s how much those cost now. I drive an 8-year-old Subaru (paid off) and am dreading when it has to be replaced, car prices are insane.
I know what you mean. My brain still tells me a Honda civic should be 20k.
But if you add 3% inflation for the 8 years you had your car, suddenly that 20k civic is basically 25k, then they stuff in all the options and no longer sell basic models
Same thing as the Miata. It's actually cheaper than it was on release when accounting for average inflation over that period, but in my head it's supposed to be that sub 20k sports car.
I can say on the used market having bought and sold a few over the past few years- there are alot of good deals out there but also alot of people and dealerships still selling at Covid pricing and hoping people don't shop around.
Plenty of sub 40k miles 2020-2023 Corollas for like 12k for instance around me, one of which I drive now because they are reliable little things.
At a reasonable loan rate with tax, title, and registration rolled in, along with full auto insurance required by financing, that $25,000 is going to give you a monthly cost of $600.
Nah bro. You can buy a used japanese hatchback or small sedan for much less and those are reliable as they come. People have just been brainwashed that they need big trucks or SUVs to flash the wealth that they don't even have.
That's what a mechanic is for. And despite what people say there is no world in which a 5k car costs more to fix at the mechanic than the price of a 40k+ car
Got a new Subaru Impreza a few years back. Base model. All my friends make fun of it. It’s got AWD, touch screen, apple play, and it’s all grey. I have taken impeccable care of it and it’s almost paid off. Is it flashy? No. But it’s a great car and I paid a fair price and should last me until the wheels fall off. If more people demanded fairly priced, reliable cars we would have more of them.
And it's not easy to get built. Look at the Alto feedback on their website (the HSR being studied in Canada). The people in the right of way (super rural) are doing everything they can to derail the project.
Expected or by design? Why do they sell small more efficient cars outside the us. I no longer believe their message of “US buyers want big”. I think it’s more like, we will force them to buy the most expensive things we make.
I have a 30 mile commute to work (each way). It's a fairly rural 2 lane highway.
I don't feel comfortable in a sedan. With every other car being a lifted pickup, a 3rd row SUV, or a brine/chemical truck, I feel very vulnerable because any traffic collision would be much more devastating to my cockpit contents.
So I feel compelled to also buy big the next time I make this inelastic purchase because there's not a bus or passenger train anywhere near me.
There needs to be the equivalent of an arms control treaty, like new vehicles that don’t require a special license cannot exceed X weight. Then over the years gradually bring that down.
And ban the pointlessly high front ends that do nothing but reduce visibility and make pedestrians die more.
I feel the same way you do. I had a tiny Miata as my daily driver for ten years. I lived close to my office so I was only driving a little bit and it was all surface streets.
During covid, we were working from home and I finally bought a house. When they eventually told us to return to the office, my commute was now 20 miles and most of it was on a highway used by tons of semis and oversized pickups. I had several close calls where the pickups tried to mush the Miata. I was convinced I was going to be hit by a truck on the highway.
So I bought a red CR-V to be my commuter vehicle. I wanted something bigger and more visible. Within 6 months, the CR-V had been rear ended by a semi on the highway. (100% truck's fault - we were stopped in a construction zone and the truck didn't stop in time) That collision would have been fatal in the Miata.
Kind of similar boat. I had a Corolla as a daily drive for my 30 mile commute, and I drove a tiny first gen Prius around all over the place during the day at work. Pretty much every week I almost got crushed by a semi not paying attention in multiple construction zones and highway splits.
Got promoted to a desk job working from home, sold the Corolla, and just drive the truck everywhere.
It's mind boggling. Like people are putting themselves in their own prison.
I bought a NEW Prius plug in last year. My payment is lower than the average American USED auto loan. What are people even buying? When I bought this I couldn't believe how much I was paying for it and I almost wanted a Corolla that was several thousand dollars less.
But I stuck to the Prius thinking gas was eventually going to go up. Now 7 months later I've only filled up the car once. Lol.
America, amirite? Yikes. What are people even doing?
Trucks and SUV. Fully loaded. Not just any trucks but like F250s
Go to my local hospital, Walmart, etc and it’s packed with trucks which are way too big to even fit in the parking garage. They are a status symbol and cost 70 to 100k. The SUV are not any cheaper cause people have to have. Suburban or other large one.
Maybe people are fat and need the space or maybe they use it for work. I for the life of me can not find a valid reason a 70 year old person with handicap tags needs an F250
As the electric vehicle credits were expiring I was seriously looking at a Prius or blazer ev because they were just so cheap with that credit and while my 16 year old Hyundai is still running fine for now I worry it’s on borrowed time.
I let my wife talk me out of it though, really regret that and since she’s the daily commuter she’s been bugging me about getting something she can drive on a daily basis that’s better on gas than her van…
New Prius didn't have the credit unfortunately because they are built in Japan.
Only reason I even bought a new car was my old one, 15 years old, developed a rainwater leak and no auto shops even wanted to look at it. So I couldn't keep the mold out and decided it was time to move on.
If it weren't for that I would have kept the old car. Engine still ran amazing.
Yeah, I should clarify. The blazer ev I was looking at because it was cheapest with the credit and the Prius and Leaf were next cheapest without credits.
People are dumb as rocks and the dealership model is as bad as it gets. Most dealers couldn’t think their way out of a double ended bag and most discussions center around monthly payments. Nobody is doing the math on total costs or interest. It’s all that monthly number because the goal is selling auto loans not cars.
You can’t be surprised this is what we get. Add to that we produce inefficient, expensive cars and then don’t let consumers import cost effective cars from other countries. It’s just an idiot race to the bottom.
I too bought a plug in hybrid a few years back. Came with a cashiers check for the price I was willing to pay. Damn near took an entire day to walk these morons through how to process a transaction without one of their high interest 7 year loans for dummies.
You should fill up more often, 6 months is about the expected lifetime of gasoline in a tank. Depending on the local environment it can be shorter. Don’t want to mess up your fuel filter.
I’m eyeing the plug in Prius, glad to hear you like it.
It is wild and how many people I have seen driving brand spanking new trucks, suvs and high end vehicles in my small suburban town boggles my mind. Literally see a house down the road with two new Broncos and im like why? My neighbor and his wife have four vehicles and no kids in the house. My wife and I started car pooling and only have one car, because this is ridiculous to spend that much on just transportation. I highly hate the commodified and grift culture everything has become.
I meet so many people in the military that have told me they wouldn't be caught dead driving anything but a truck. Its literally ingrained into their identities. So they drive from the barracks, or on post housing, to the unit every day in an F250 or whatever and nowhere else. Its the stupidest thing I've ever seen. Payments pushing 1k a month to drive what should be walking distance every morning.
Meanwhile I get there by walking, or in my 2002 Corolla with 310k miles if the weather is bad. People act like Im a fucking lunatic for doing so. I cant help but feel the same way about them.
I heard that before and thought it was an old joke only to find out its the truth lol. Even non military folks just keep up with the joneses and I just shake my head.
I only got a pickup because "I'm a country boy and that's what we drive". I eventually grew up though and don't see myself ever owning one again unless I start a farm or a job that actually necessitates owning one.
If you’re on a budget and not living in the upper crust of our K shaped economy, never sink your money into a new car. The rapid deprecation is horrible, the interest on a loan only adds to the loss. Pick a used car within your means, pay cash and drive it into the ground.
Well, when the CEO of Ford is driving a chinese made car, it tells you sonething. Its like 30k and looks pretty cool. 30k might get you a mid range accord.
People keep paying for it so companies keep doing it. The average cost of a vehicle being over 50k now??? I know these people with 3x the vehicle cost of my own car aren't making 3x my paycheck, yet here they are taking out these loans.
I love that part of the UFO info coming out is that the craft are often dug up in archeological digs and then they’re able to still pilot them. Build it once, lasts forever. What a concept. 🛸
It is pretty crazy. Cheap new cars just doesn't exist anymore.
I've got a Versa, and yes, it's a piece of crap that feels awful to drive. But it works, maintenance is cheap, and I was able to buy it out of pocket.
And maybe we shouldn't put up with crappy cars either necessarily. But we don't have to, China has a formula that we can learn from. It's not bad to learn from your competition.
I went to a friend's dinner party last night. Couple people There were talking about cars and I was shocked how easily some people were able to justify spending $70,000 on a car or what's kind of worse spending $45k on a car every 7 to 8 years. All done with financing. I know if you've got a great job that might not seem like a big deal. But if you do that three times in your life, you're almost certainly working at least one year extra just to pay for your cars, but probably two or three years. (Depending on how the financing works And how expensive the car is)
And I have never had a car loan in my life. I've always just bought a car for around $2k to 3$k When I was really struggling and then about $5k to $7k When I was looking for a better car after I graduated college.
I just had such a eye-opening moment that I value my time. So much different than everyone else. Because I would never while I'm accumulating money trade 2 years of working at 55 for a new car when I'm 30.
15% is crazyyyy, my wife and I are less than 2% including insurance. Shit throw my boat payment in and we barely hit 4%. Wtf kinda cars are people buying lol
You have a boat, you’re not on the same playing field as most people. Where I’m from, South Florida, it’s well known “Boat” is an acronym for “bust out another thousand.”
My boat cost less than the average new car, not talking about a yacht here.
Even when I bought my car (new) back in 2022 I was making about 60k a year, my payment was 7.4% of my income. My income has gone up but regardless 15% is INSANE.
Why are you giving born on third but bragging he hit a triple vibes? LOL. You can get a boat for a few grand, yet you have one that “is less than the average new car.” That’s not saying much, considering it could be $30k. A boat is a pure luxury item, unless you’re a fisherman of course. You don’t even realize how privileged you are.
“Privileged” lol, I grew up poor and busted my ass. My parents had 5 kids and never made more than $50k/yr combined as I grew up, we lived in one of the highest COL states in the country.
Also I am yacht captain and boating is a source of income for me. Yall just assume too much and didn’t get the point that people who can’t afford new expensive cars are still getting them. I can afford new cars and boats but I still bought a used boat that is below my means and had to take a loan out on it. But people who make half as much as me are buying cars that are more expensive than my boat but I’m the one who’s privileged simply for having a boat? Ffs man
Cars are becoming more and more expensive here because of market distortions created by government policy choices and the decisions of automakers, not some natural law of economics. China is making EVs that sell for $10K a unit. This is not a situation that can endure forever, and it won't.
Yep and while they may get some sales abroad, American bricks just aren't that popular. Will likely end in a usst style situation, because you can only sell so many cars in this type of market.
The head of Capital One Auto, one of the nation’s largest auto finance lenders, told CNBC he isn’t overly concerned about rising consumer automotive debt and inflated used car prices leading to so-called “forever loans.”
While median monthly car payments have jumped from $390 to $525 since 2019, data provided by Capital One Auto suggests vehicle costs have been stable compared with income.
The lender found 80% of car purchasers who finance a vehicle are below the generally recognized payment to income threshold of 15%, even though they’re taking out longer loans to get to that goal.
The more everything goes up the more and more and more money gets diverted from savings and investment by the vast majority of people , i cant imagine why people struggle to save and retire ............. the article can try and spin it all they want , sugar coat it all they want but paying this much more for a depreciating asset
> below the generally recognized payment to income threshold of 15%, *even though they’re taking out longer loans to get to that goal*
The longer the loan, the more interest is generated. Of course auto loan lenders think this is great. And if borrowers are only below the threshold because they have to take out a loan that screws them more in the long run, then threshold be damned. It doesn’t really matter what the income to loan debt ratio is anymore.
Longer loans ultimately generating more interest I guess can be okay in principle. But it seems like two things are competing concerns. In the one hand, cars do get better - 7-10 year old cars today are much better than the cars that were 7-10 years old in 2010. But then the residual structure hasn’t changed that much (and EVs have come to have rapid or even more rapid early depreciation). As the article notes and we’ve talked about in this sub before, this yields underwater loans.
Underwater collateralized loans are always a risk factor. It doesn’t matter if some suit at a lender thinks they are or they aren’t. If it was such a non issue you wouldn’t need to collateralize the loan.
Median car payments are often now based on 72 or 84 months financing. 20 years ago loans were 48 and then 60 months. I think that this is being lost in the discussion. Also lost is the introduction of even more obnoxious leases, while cheap per month, long term, no so much.
When we bought our Wrangler, I was very pissed that I couldn’t get a 2 year term for a loan. I put 55% down on the vehicle and the shortest they would entertain was 48 months. I had the cash to pay it in full, but my wife was worried about digging into our savings, and she wanted us to build credit since we don’t finance anything nor use credit cards.
Ultimately it was the right move from a credit score perspective, but I am still really mad that we didn’t just buy it outright.
Ill just what does CNBC expect the head of Capitol One Auto to say? The guy isn’t going to trash the current car prices or loan terms. This is is his business. Even he can’t believe this situation is sustainable or makes sense but it’s his job to say otherwise.
Why does the internet, specifically Reddit rolls eyes get so passionate about car payments? I never understood this. If you want to take public transportation or ride around in a low cost shit box, do that. If they want to spend 15-20% of their income on a car that makes them feel better, they should also do that.
Maybe those people have less children or don’t spend thousands to travel or eat out less. You’ll see people spend every dime to their name traveling and the internet will applaud them for doing so. “They lived a full life”, but if that car payment is higher than the financial internet gurus suggest then you’ve made the biggest mistake of your life.
They’re maneuvering their slice of the income pie slightly different than yours. You can go to other subs and see people losing their ass gambling on the market, which is really gambling on daily Trump tweets. No one says anything about that.
TDS is a depreciating asset, bad for your financial health.
You utterly miss the point. No one wants to spend 15-20% of their income just to have a non-shit box. It wasn't always like this. Are you just not old enough to remember?
I'm not sure what this has to do with TDS. Like most people I'm prejudiced against pedos, and it's not really okay if you're not, but no one was talking about that until you brought it up.
It’s the interest, length of loan and total costs that is the problem. Obviously people can choose this , sure. But it’s dumb to be throwing such high rates of interest over so many years on a depreciating asset. That’s just common sense. You can certainly choose to do it.
I would bet any person that lives in an area with zero reliable public transportation (so ab auto purchase and gas/elec charge prices become inelastic goods) pays way more less for their home and has a lot more room in their budget for other things.
The auto loan industry is full of lobbyists and vultures, sure, but it's a personal budgeting choice a lot of financially responsible people make.
Maybe people that realized they can have a house and land big enough to do anything they want with AND whatever car they want if they don't live in the middle of some gentrified urban hub.
I started 30 years ago paying cash for a used car, and then starting to save for a newer one right away. Repeat for decades, paid cash for every vehicle.
I'm starting to think that I may be the odd one out here. I'm not rich, just debt averse.
I'm not even sure who to blame here. Obviously lenders and salespeople are predatory, but there also has to be some responsibility here from consumers, who absolutely just have a burning need to drive new vehicles all the time, and preferably nice ones.
Someone is handing them the crack pipe, but they are firing up the rock themselves.
Have you tried buying a new car recently? Car dealerships make most of their money on financing and buying cash is something you'd best keep to yourself untill the last moment
Totally true. I bought last year, and I found a 3 month old vehicle that the owner got into trouble with and was desperate to escape the payments.
From dealers, not sure how it works elsewhere, but in Canada you can just get financing so that the dealer gives maximum discounts, and then pay it off the next month. I've done it, dealers hate me, because they lose the discounts. Too bad, so sad.
You can do that in the USA if you check your contract before signing. Some loans will have early repayment penalties, but the last two cars I bought did not include those and I would not have agreed to the Lon if they did.
Honestly, I’d rather just get their best deal and finance it with no finance fees, and no early termination fees, paying whatever down payment they require. Then paying the loan off 100% before the 2nd month starts on it. Sure, this will cost a tiny bit of interest, depending on how many days it takes to get your online portal set up and a payment submitted.
But to your point, they make most of their money on financing. If they know they’re not getting anything from you there, they’re not apt to offer deals to incentivize buying with them over the place across the street with the same sticker price.
I used to live in a really ghetto complex, where everyone rented. Most of them had newer vehicles, often fairly expensive ones. These people weren't going into debt because they needed to get to work, they were going into debt to flex a vehicle to other people.
I lived in a suburban area of NJ right before the GFC. The neighborhoods were all huge McMansion developments. Neighbors always had brand new Hummers, Suburbans; guys drove Porsche or Maserati SUVs. No one had more than 25% of their house furnished. After 2008 many of them had to radically downsize their lives because their credit was shit. So it’s not a class thing, it’s a human thing.
Some people have no other accomplishments in life and need to feel good sometimes. Buying new shiny things such as cars makes them feel good for a bit.
Not sure what kind of support you are talking about, the warranties are the same, some even more generous and you can get the car serviced here in the same factory service shops.
Maybe we are talking about something different. I'm referring to importing EVs, for example, like the Xiaomis. Amazing vehicle that would wreck available brands, but you won't find service here as far as I know.
The manufacturers and lenders are working together, every year the minimum price for each model increases in price to increase profitability for the car maker, then the lenders approve an avg higher loan but increase interest to make up for the risk. Called "automotive Model creep"
Americans are raised with credit being the typical way to purchase everything.
Not because of their parent necessarily, but advertised and parents are encouraged to give teen credit cards .
Supposedly to teach them fiscal responsibility. 🤣🤣🤣
They want what they want and they want it now! The avg. new car loan used to be 3 yrs. I don't know what it is now.
the longest i have seen in most places is 84 months .............. i am sure someone has longer options spun as being hugely beneficial to you and your family LOL !!
72 is pretty typical. 60 and 84 also. When my niece went to buy a new car 60 was the shortest they offered. She bought a civic nicely equipped for 32k.
I am not sure what you’re criticizing here. I purchase everything in my life with credit cards and rack up cash back rewards. The flights to Italy for our honeymoon were covered 100% by the points we had saved over the years.
Exactly people are affording the cars because they have to. People no longer have jobs with pensions or good 401k matches and are not saving. 15% of income to a car every month forever essentially is crazy
This is exactly how the rich keep the middle class down. "Oh, i see your wages increased a bit, we'll just go ahead and raise our prices to match your raise". This is why it feels like you can never get ahead. billionaires are conspiring agaisnt you.
Allowing public transit to be so terrible that no person with a choice will use it is a tax on the working classes that pushes what should be a collective cost of living in cities down to individuals. It's been this way since general motors bought streetcar lines to rip them up.
The entire buying process at most dealers revolves around monthly payment. That frustrating, ignorant 4 square method has been the norm for longer than I can remember.
As long as consumers keep allowing salespeople to dictate that this is how the process will go, nothing will change. We will continue to get fleeced at every opportunity the dealer and banks have in the buying process.
Cash isn’t an option for most, so arrange financing before walking in the door and focus the haggling part on OTD price? I’m just a guy behind a screen, but this is what’s worked for me. “I don’t care about your 4 squares. I arranged for financing already. What’s your out the door price?”
I understand that the entire system is structured in an away that effectively requires the focus to be on the monthly payment. But as consumers we can still have some leverage if we approach the whole thing differently.
tl;dr: they're not worried because they can just keep extending the loan term to keep monthly payment within a manageable level of income, 5y to 7y etc. It's basically financial engineering to siphon people's money slowly so they won't notice a big sudden change. The slowly boiling the frog strategy.
Most people are struggling not because they don't make enough money or uncontrolled spending due to some moral failing. It's because most institutions out there have a fiduciary duty to figure out the best way to extract money and labor from everyone else without triggering massive backlash.
How much of Capital One's business is subprime auto loans? I doubt they expect the economy to impact their business model. I want to hear Credit Acceptance, Santander and Westlake CEOs opinion.
They all just bank on a bailout if things get too too bad ............ until they get to that point just keep pushing for more and more and more !
here is a partial answer to your question from Gemini :
As of late 2025, subprime borrowers (FICO scores of 660 or below) represented nearly half—49%—of Capital One's auto loan portfolio. While Capital One is a major player in this segment, its auto lending makes up a smaller portion of its total business compared to its dominant credit card segment
and don't forget the proposal floating around to cap CC rates at 10% , if people cant even get credit period , what will that do to everything ................ ya cant go cold turkey and the companies arent willing to fix things to make it more palatable for the consumer ........... pick your posion and how your survive
It’s a thing, but a lot of Americans are dumb and fell for the propaganda/living up to the Jones’, so they think they need a new luxury SUV.
Also, used cars are pretty expensive here. In 2022 I bought a new car because a 4-5 year old model with 75k-100k miles was only $3k cheaper than a brand new model, financing on a new car is often at lower rates actually making it cheaper (if you didn’t pay all cash, but even so 3k to get a new car is worth it). I probably could’ve found a 10+ year old car but for anything that wouldn’t need work shortly after it’d still be $7500-10k.
My issue with people buying new cars is they get cars they can’t afford or buy new cars every 2-3 years rolling over their under water loans. The average new car in the US is over $50k, but you can get a perfectly good crossover SUV or sedan for under $35k.
Yeah since covid used car prices here went up too. But we can get new cars for $35k-$45kAUD. But we can get Chinese cars here. BYD is popular and see more of them on the road each month. Also see lots of European, Japanese, Korean, and American cars, including the “yank tanks” (trucks as Americans call them) here.
Still a lot of people that buy new cars here, but it mostly seems to be people who can afford it, or have work vehicles.
You are just misinformed, or choose to believe what you wish to be the truth. Australians use car loans as frequently as in the US, at similar amounts. If you wish to see discussion about this, you might want to go here:
It obviously is. I just don’t get why it’s so common to see people budgeting for car repayments in the US when it’s not something we really see here in Australia. You can buy a shitbox that’s road worthy for $5kAUD here (used to be $3kAUD before covid).
During the Obama year we had a program called "Cash for Clunkers" that bought up and destroyed a lot of very good used cars. You add in extreme weather conditions in a lot of the US and the average amount of driving we all have to do... and there's not a whole lot out there. Therefore, what is available second hand is greatly over priced, gas gusselling, has a ton of miles or work to be done, or was never a very reliable vehicle to begin with.
Where do you think those used cars come from? Believe it or not, people are buying new cars in Australia too, despite your survey of a few friends in the same income bracket that bought used cars.
I never said people don’t buy new here. Plenty do. But lots of used cars here are cars that’s companies and businesses leased for a few years that then went to the 2nd hand market. It’s probably the same in the US.
And there are a lot of new Mercs, BMWs, Ford Rangers, Hilux’s, etc. that people with plenty of cash are buying new. But that’s not the average person.
At the behest of car manufacturers and financiers, the govt bought millions of perfectly good used cars and destroyed them. This was done to remove low priced affordable cars from the market and force folks to buy cars new and finance them.
Growing up, I always bought used. Now, the used market is out of whack. Buying used, in many instances, isn’t much better than buying new.
"Millions" of perfectly good used cars? The number was under 700,000. I know that sounds like a lot, except that we sell about 16 million cars every single year.
The #1 most commonly destroyed vehicle? The 95-03 Ford "Exploder" which was notorious for killing people in rollover crashes and launched the burgeoning SUV market into scandal. Oh, wow, what a fucking shame.
Not your classics, not whatever car you wanna complain about not being able to buy anymore... The fucking Ford Explorer was the most commonly destroyed car, because it was a piece of shit Ford, they sold a lot of em (as Ford does), and everyone hated them.
Get over your fucking almost 20 year old obsession with the black guy already.
I have a 2023 SUV with 7,500k on it, I paid for upfront, and this is pretty typical for me, I didn't drive very much and keep them for many years, I'm the buyer he hates and has nightmares about.
BigMax | a day ago
It’s wild to think that 15% of your income going to your car is just expected now.
Car companies and loan companies are vultures, but our car culture is absolutely out of control, with the amount of money people are willing to spend on a car.
Fringelunaticman | 23 hours ago
Thats your car payment. Registration, gas, insurance and maintenance make it cost more.
Anonymoushipopotomus | 22 hours ago
I work for a large retailer and we had a customer pick up a 19 Infiniti qx60 for 40k. They qualifies for fucking 16% interest. 909$ a month for 72 months. $66000
JeeeezBub | 21 hours ago
$26K in interest... absolute nightmare. Then again, the chance this dude pays that note off is roughly the same as gas dropping to $2/gallon next month
Anonymoushipopotomus | 21 hours ago
Perpetually in debt. We had a Cybertruck trade in that was 40k underwater, and he rolled it onto a Land Rover lol.
JeeeezBub | 21 hours ago
Shit's wacked! I wanna be shocked but I've become numb to the insanity. I listen to guys at work compare loans like kids comparing baseball cards yet make fun of me for driving a 15-year-old vehicle
MDCCCLV | 13 hours ago
It's awkward when you realize that people making way more money than you actually get less takehome pay because they spend like 2k a month total on their trucks which are just glorified suvs.
JeeeezBub | 9 hours ago
That it is. And it's awkward to the point where I start to question if I'm the moron for missing out on all these great loans, lol!
JumpEnvironmental741 | 20 hours ago
damn, i remember the pain of rolling 10k into another vehicle, and that was over 20 years ago. As i have gotten older i have kept my cars longer.
DoeBites | a day ago
It’s so normalized for transportation to actually be this massive chunk of the monthly budget. A car is just transportation, that’s all it is. But between the auto loan, the monthly insurance (don’t you go trying to use that insurance you pay for every month either, or you’ll end up paying more), the maintenance and gas costs that both fluctuate based on economic forces, the depreciation, the repairs it will inevitably need that get more costly as the car gets more mileage…it becomes this ballooning expense with a continually deteriorating value. And it’s *transportation*. Civilized countries have a metro card that works for all the buses/trains/trams in the city and it’s a flat monthly fee or a per-use single ticket. And it doesn’t cost anywhere near $12k per year of your post-tax money to have.
Preme2 | 22 hours ago
I’m assuming you walk to all your destinations to save money, but in the rare case you take a flight, as you walk to basic economy past all the first class passengers, business class passengers, I want you to tell them what you just told us. Tell every passenger, until those waiting behind you get riled up. Record it and share it on Reddit. I need a good laugh.
If you want to know my reaction, I’m going to hold my nose with one hand and do a shoo-ing motion with the other.
DoeBites | 22 hours ago
Am I to assume you fly to all your destinations? What an odd thing to say when we’re talking about a country where the average person drives 13k miles a year.
Caracalla81 | 22 hours ago
You want him to tell all these people that cars are expensive? Could you explain the joke?
MarmotFullofWoe | a day ago
Why would anyone do that to themselves. It’s mindblowing.
Sandscarab24 | a day ago
Trying to impress people they don't know or like
Ok_Potential359 | 23 hours ago
It's not just that - the cost of cars has skyrocketed after COVID. It's incredibly expensive to buy a car these days and if you have bad credit, double oof.
FartingWithStyle | 22 hours ago
Even the used car market is still nuts, just saw a 10 year old civic with 115k miles on it for $15k; like cmon man.
son_of_early | 20 hours ago
Yeah my old school logic was that I had to have a car paid off before it hit 100,000 miles. That line of thinking won’t work anymore. Unless I park it in the driveway and hide the keys.
Jest_out_for_a_Rip | 15 hours ago
Eh, the used car market had a spike during COVID, but it's returned back to where it was relative to median household income. Financing costs are a lot higher though. After 40 years of falling interest rates, that was a shock to a lot of people.
https://fred.stlouisfed.org/graph/?g=kvFA
https://fred.stlouisfed.org/series/TERMCBAUTO48NS
AliveInCLE | 22 hours ago
Civics have always held good resale value, so not too surprised. 115k miles used to be a bad thing but that car should easily hit 200k without any major issues.
I sold my 2012 Wrangler last fall. 160k miles. Got $11k for it. Resale value was one of the primary reasons I bought that vehicle in the first place.
FartingWithStyle | 22 hours ago
I feel for the poor soul who bought that from you.
AliveInCLE | 19 hours ago
He's only ever owned Wranglers and this one from me was for his daughter. He's not uneducated at the least.
VideogamerDisliker | 20 hours ago
Yeah this is that same trash excuse every reseller on the market uses. “It has good resale value,” or “it’ll last a long time”
Meaningless metric and a stupid rationale to gouge other people for every penny they have
AliveInCLE | 19 hours ago
You're right. I should have given it away for free. How inconsiderate of me.
Resale value is not an excuse. It's about supply and demand, which should not be a foreign concept in this sub.
Cicero912 | 20 hours ago
Theres still plenty of decent cars that aren't absurdly expensive, though. Even in the "Crossover" market which people for some reason love.
cogit4se | 21 hours ago
On the EV side of things, a lot of manufacturers rolled out high-end EVs and tried to tap into a luxury EV market that was already saturated. At the same time the Chinese were switching to the cheaper LFP battery chemistry and rolling out tons of incredibly affordable cars.
Some of the major manufacturers have indeed largely abandoned pure electric BEVs and are focusing on EREVs and gas again, but many others that canceled luxury EV lines will be switching production to more affordable options. Ford has a $30,000 electric mid-size truck coming out soon based on LFP, the Kia EV3 should be sub $35k, and Subaru has a smaller crossover planned from $30,000.
FartingWithStyle | 19 hours ago
When’s that truck supposed to hit the market? Is it just an electrified version of the Maverick?
cogit4se | 12 hours ago
https://www.caranddriver.com/news/a71204448/ford-ev-truck-future-details/
_Arlotte_ | 22 hours ago
There's been a shortage of parts and used cars for a while now. Covid had made it even worse due to issues with shipping from what I was told.
AlarmedAd5034 | 21 hours ago
I hear this all the time, and in my admittedly useless opinion, I have a gut feeling the system is deliberately holding back parts just to drive prices up under the banner of supply and demand. Repeat it often enough, and people start treating it like the truth.
Imagine a 5 year old vehicle and the main seal is on back order with no availability date. Or the CVT decided to grenade outside of warranty and the whole unit needs to be replaced as individual parts are not available. Something is wrong with the system.
_Arlotte_ | 17 hours ago
I don't think it's surprising as people struggle to lower their expenses, get older cars and just swap parts. No one wants to buyer brand new because it's ridiculously expensive. The transportation issue due covid was seen not just in auto but also for computers and chips, gaming and healthcare. Things don't just return to the state it was. Then you also have to factor in the goverment and the choices they make that affect this as well. Tariffs and trade deals. Everything boils down to the expense for the business and consumer.
Any_Sale2030 | 20 hours ago
Yep. My in-laws live in what looks like a chicken coop. But they have a Benz and Escalade in the driveway. Why? They said only family knows where they live but everyone else sees they drive fancy cars.
MowvayFronsay | 19 hours ago
Jeez. I have to be honest, that’s probably one of the more sad and pathetic things I’ve read on here in a while.
culinaryinterests123 | 9 hours ago
Question is will they be able to retire?
Jafar_420 | 20 hours ago
A lot of people get into these situations at least in my area because we're pretty rural and there's no public transportation, taxis, or Ubers.
Basically to have a job you have to have a vehicle because nothing's in walking distance and I guess some places are close enough you could e-bike or something like that but it's just dangerous roads that you would have to be on.
Cicero912 | 19 hours ago
But thats different than always leasing/buying the expensive new BMW/Benz etc.
I grew up in a rural-ish area (right on the edge) and my first car was a 14 year old Ford Edge I was easily able to pay off after a single summer.
cmc | 23 hours ago
Because they need a reliable car and that’s how much those cost now. I drive an 8-year-old Subaru (paid off) and am dreading when it has to be replaced, car prices are insane.
more-gruel-please | 22 hours ago
My son bought a Subaru Impreza for 25,000 less than a year ago.
cmc | 22 hours ago
Im obviously existing in a different price point in my head, because that seems expensive to me for that car.
IKillZombies4Cash | 22 hours ago
I know what you mean. My brain still tells me a Honda civic should be 20k.
But if you add 3% inflation for the 8 years you had your car, suddenly that 20k civic is basically 25k, then they stuff in all the options and no longer sell basic models
Nukemind | 22 hours ago
Same thing as the Miata. It's actually cheaper than it was on release when accounting for average inflation over that period, but in my head it's supposed to be that sub 20k sports car.
I can say on the used market having bought and sold a few over the past few years- there are alot of good deals out there but also alot of people and dealerships still selling at Covid pricing and hoping people don't shop around.
Plenty of sub 40k miles 2020-2023 Corollas for like 12k for instance around me, one of which I drive now because they are reliable little things.
Cicero912 | 19 hours ago
The modern Honda Civic is cheaper (and better) inflation/income adjusted than the Civic of the 90s.
paxinfernum | 5 hours ago
At a reasonable loan rate with tax, title, and registration rolled in, along with full auto insurance required by financing, that $25,000 is going to give you a monthly cost of $600.
PoshDota | 22 hours ago
Nah bro. You can buy a used japanese hatchback or small sedan for much less and those are reliable as they come. People have just been brainwashed that they need big trucks or SUVs to flash the wealth that they don't even have.
cmc | 16 hours ago
That’s true of some people, but I don’t believe that’s true of most people.
AltruisticTomato4152 | 19 hours ago
EVERY car can be reliable, if you put in the effort to maintain them.
cmc | 16 hours ago
Not everyone has the time or the skill. Or the interest, frankly.
crunchyjoe | 10 hours ago
That's what a mechanic is for. And despite what people say there is no world in which a 5k car costs more to fix at the mechanic than the price of a 40k+ car
Critical_Reveal_5984 | 21 hours ago
Got a new Subaru Impreza a few years back. Base model. All my friends make fun of it. It’s got AWD, touch screen, apple play, and it’s all grey. I have taken impeccable care of it and it’s almost paid off. Is it flashy? No. But it’s a great car and I paid a fair price and should last me until the wheels fall off. If more people demanded fairly priced, reliable cars we would have more of them.
centosanjr | 22 hours ago
Import Chinese cars now
The__Amorphous | 20 hours ago
Sorry, we don't allow competition in this country. Best we can do is preventing duopolies from becoming monopolies.
50_61S-----165_97E | a day ago
Car culture will never change when other transport infrastructure doesn't exist
Euler007 | 23 hours ago
And it's not easy to get built. Look at the Alto feedback on their website (the HSR being studied in Canada). The people in the right of way (super rural) are doing everything they can to derail the project.
Any_Sale2030 | 20 hours ago
So build it in the damn median of the interstate.
Paganator | 20 hours ago
> derail the project
I see what you did there.
jiggajawn | 18 hours ago
And it'll never get built if we keep all of the laws that reinforce car dependency and make transit unviable.
Local zoning basically forces people into cars.
Puzzleheaded-Ad7606 | a day ago
Rent is now 25% for most people- so just rent and a car payment would be 40%
FFF_in_WY | 23 hours ago
Time for something.. different, I guess
https://kmph.com/amp/news/nation-world/toyota-unveils-10000-imv-0-pickup-a-rugged-truck-not-destined-for-us-market-people-community-buying-inflation-affordable
QuickAltTab | 22 hours ago
That thing looks cool, I'm not a truck person, but I'd make that a daily driver for 10k
Qiagent | 21 hours ago
Manual transmission is going to be a tough sell for a lot of the US market at this point
Bobcat-Stock | 20 hours ago
For $10k? I doubt it. That low of a price is incentive enough for more people to learn to drive a manual transmission. Plus it’s more fun.
Domitiani | 22 hours ago
Damn - I even like the look of that thing (with the add-ons it shows)
hamb0ne80 | 22 hours ago
Expected or by design? Why do they sell small more efficient cars outside the us. I no longer believe their message of “US buyers want big”. I think it’s more like, we will force them to buy the most expensive things we make.
DisraeliEers | 22 hours ago
Here's a different perspective.
I have a 30 mile commute to work (each way). It's a fairly rural 2 lane highway.
I don't feel comfortable in a sedan. With every other car being a lifted pickup, a 3rd row SUV, or a brine/chemical truck, I feel very vulnerable because any traffic collision would be much more devastating to my cockpit contents.
So I feel compelled to also buy big the next time I make this inelastic purchase because there's not a bus or passenger train anywhere near me.
RussiaIsBestGreen | 21 hours ago
There needs to be the equivalent of an arms control treaty, like new vehicles that don’t require a special license cannot exceed X weight. Then over the years gradually bring that down.
And ban the pointlessly high front ends that do nothing but reduce visibility and make pedestrians die more.
Neither of these will ever happen.
KellyAnn3106 | 22 hours ago
I feel the same way you do. I had a tiny Miata as my daily driver for ten years. I lived close to my office so I was only driving a little bit and it was all surface streets.
During covid, we were working from home and I finally bought a house. When they eventually told us to return to the office, my commute was now 20 miles and most of it was on a highway used by tons of semis and oversized pickups. I had several close calls where the pickups tried to mush the Miata. I was convinced I was going to be hit by a truck on the highway.
So I bought a red CR-V to be my commuter vehicle. I wanted something bigger and more visible. Within 6 months, the CR-V had been rear ended by a semi on the highway. (100% truck's fault - we were stopped in a construction zone and the truck didn't stop in time) That collision would have been fatal in the Miata.
Longshot726 | 20 hours ago
Kind of similar boat. I had a Corolla as a daily drive for my 30 mile commute, and I drove a tiny first gen Prius around all over the place during the day at work. Pretty much every week I almost got crushed by a semi not paying attention in multiple construction zones and highway splits.
Got promoted to a desk job working from home, sold the Corolla, and just drive the truck everywhere.
Djamalfna | 23 hours ago
It's mind boggling. Like people are putting themselves in their own prison.
I bought a NEW Prius plug in last year. My payment is lower than the average American USED auto loan. What are people even buying? When I bought this I couldn't believe how much I was paying for it and I almost wanted a Corolla that was several thousand dollars less.
But I stuck to the Prius thinking gas was eventually going to go up. Now 7 months later I've only filled up the car once. Lol.
America, amirite? Yikes. What are people even doing?
ThornyRose_21 | 22 hours ago
Trucks and SUV. Fully loaded. Not just any trucks but like F250s
Go to my local hospital, Walmart, etc and it’s packed with trucks which are way too big to even fit in the parking garage. They are a status symbol and cost 70 to 100k. The SUV are not any cheaper cause people have to have. Suburban or other large one.
Maybe people are fat and need the space or maybe they use it for work. I for the life of me can not find a valid reason a 70 year old person with handicap tags needs an F250
DeliciousPangolin | 17 hours ago
It's for towing their 10,000 lb RV three weekends a year.
Djamalfna | 16 hours ago
> Maybe people are fat and need the space
I'm fat. 400 pounds. I fit in a tiny ass Prius. It's not that.
LiterallyJoeStalin | 23 hours ago
As the electric vehicle credits were expiring I was seriously looking at a Prius or blazer ev because they were just so cheap with that credit and while my 16 year old Hyundai is still running fine for now I worry it’s on borrowed time.
I let my wife talk me out of it though, really regret that and since she’s the daily commuter she’s been bugging me about getting something she can drive on a daily basis that’s better on gas than her van…
Djamalfna | 22 hours ago
New Prius didn't have the credit unfortunately because they are built in Japan.
Only reason I even bought a new car was my old one, 15 years old, developed a rainwater leak and no auto shops even wanted to look at it. So I couldn't keep the mold out and decided it was time to move on.
If it weren't for that I would have kept the old car. Engine still ran amazing.
LiterallyJoeStalin | 21 hours ago
Yeah, I should clarify. The blazer ev I was looking at because it was cheapest with the credit and the Prius and Leaf were next cheapest without credits.
EdLesliesBarber | 21 hours ago
People are dumb as rocks and the dealership model is as bad as it gets. Most dealers couldn’t think their way out of a double ended bag and most discussions center around monthly payments. Nobody is doing the math on total costs or interest. It’s all that monthly number because the goal is selling auto loans not cars.
You can’t be surprised this is what we get. Add to that we produce inefficient, expensive cars and then don’t let consumers import cost effective cars from other countries. It’s just an idiot race to the bottom.
I too bought a plug in hybrid a few years back. Came with a cashiers check for the price I was willing to pay. Damn near took an entire day to walk these morons through how to process a transaction without one of their high interest 7 year loans for dummies.
Alan_Turings_Apple | 21 hours ago
You should fill up more often, 6 months is about the expected lifetime of gasoline in a tank. Depending on the local environment it can be shorter. Don’t want to mess up your fuel filter.
I’m eyeing the plug in Prius, glad to hear you like it.
Djamalfna | 16 hours ago
I'm trying lol. I intentionally burned some gas yesterday just to make some room for new gas. I'm down 1/8th of a tank...
This thing is ridiculous. I should have gone full-electric. But they don't sell Prius-sized BEV's in America...
Alan_Turings_Apple | 16 hours ago
lmao real suffering from success moment
Conscious-War5920 | 23 hours ago
It is wild and how many people I have seen driving brand spanking new trucks, suvs and high end vehicles in my small suburban town boggles my mind. Literally see a house down the road with two new Broncos and im like why? My neighbor and his wife have four vehicles and no kids in the house. My wife and I started car pooling and only have one car, because this is ridiculous to spend that much on just transportation. I highly hate the commodified and grift culture everything has become.
The_Demolition_Man | 19 hours ago
I meet so many people in the military that have told me they wouldn't be caught dead driving anything but a truck. Its literally ingrained into their identities. So they drive from the barracks, or on post housing, to the unit every day in an F250 or whatever and nowhere else. Its the stupidest thing I've ever seen. Payments pushing 1k a month to drive what should be walking distance every morning.
Meanwhile I get there by walking, or in my 2002 Corolla with 310k miles if the weather is bad. People act like Im a fucking lunatic for doing so. I cant help but feel the same way about them.
Conscious-War5920 | 19 hours ago
I heard that before and thought it was an old joke only to find out its the truth lol. Even non military folks just keep up with the joneses and I just shake my head.
Kataphractoi | 17 hours ago
I only got a pickup because "I'm a country boy and that's what we drive". I eventually grew up though and don't see myself ever owning one again unless I start a farm or a job that actually necessitates owning one.
crispy_attic | 21 hours ago
The American people should never have been asked to bailout the auto industry without concessions.
Roboticpoultry | 22 hours ago
It’s less the manufacturer themselves (though they allow it) than it is the dealers
128-NotePolyVA | 21 hours ago
If you’re on a budget and not living in the upper crust of our K shaped economy, never sink your money into a new car. The rapid deprecation is horrible, the interest on a loan only adds to the loss. Pick a used car within your means, pay cash and drive it into the ground.
BlueBonneville | 21 hours ago
It’s more than 15%
Sweaty_Assignment_90 | 20 hours ago
Well, when the CEO of Ford is driving a chinese made car, it tells you sonething. Its like 30k and looks pretty cool. 30k might get you a mid range accord.
ClaymoreMine | 18 hours ago
Has there been any recent studies or books done on the current state of rent seeking?
SmokeyDawg2814 | 18 hours ago
Pretty sure the rule of thumb is 35% of income for housing...
That means we expect 50% of someone's income to cover just housing and vehicle? Absolutely wild.
RustyNK | 18 hours ago
People keep paying for it so companies keep doing it. The average cost of a vehicle being over 50k now??? I know these people with 3x the vehicle cost of my own car aren't making 3x my paycheck, yet here they are taking out these loans.
Ok_Let3589 | 17 hours ago
I love that part of the UFO info coming out is that the craft are often dug up in archeological digs and then they’re able to still pilot them. Build it once, lasts forever. What a concept. 🛸
Paetolus | 14 hours ago
It is pretty crazy. Cheap new cars just doesn't exist anymore.
I've got a Versa, and yes, it's a piece of crap that feels awful to drive. But it works, maintenance is cheap, and I was able to buy it out of pocket.
And maybe we shouldn't put up with crappy cars either necessarily. But we don't have to, China has a formula that we can learn from. It's not bad to learn from your competition.
leathakkor | 11 hours ago
I went to a friend's dinner party last night. Couple people There were talking about cars and I was shocked how easily some people were able to justify spending $70,000 on a car or what's kind of worse spending $45k on a car every 7 to 8 years. All done with financing. I know if you've got a great job that might not seem like a big deal. But if you do that three times in your life, you're almost certainly working at least one year extra just to pay for your cars, but probably two or three years. (Depending on how the financing works And how expensive the car is)
And I have never had a car loan in my life. I've always just bought a car for around $2k to 3$k When I was really struggling and then about $5k to $7k When I was looking for a better car after I graduated college.
I just had such a eye-opening moment that I value my time. So much different than everyone else. Because I would never while I'm accumulating money trade 2 years of working at 55 for a new car when I'm 30.
Historical_Air_8997 | a day ago
15% is crazyyyy, my wife and I are less than 2% including insurance. Shit throw my boat payment in and we barely hit 4%. Wtf kinda cars are people buying lol
TkilledJ | a day ago
You have a boat, you’re not on the same playing field as most people. Where I’m from, South Florida, it’s well known “Boat” is an acronym for “bust out another thousand.”
Historical_Air_8997 | a day ago
My boat cost less than the average new car, not talking about a yacht here.
Even when I bought my car (new) back in 2022 I was making about 60k a year, my payment was 7.4% of my income. My income has gone up but regardless 15% is INSANE.
TkilledJ | 23 hours ago
Why are you giving born on third but bragging he hit a triple vibes? LOL. You can get a boat for a few grand, yet you have one that “is less than the average new car.” That’s not saying much, considering it could be $30k. A boat is a pure luxury item, unless you’re a fisherman of course. You don’t even realize how privileged you are.
Historical_Air_8997 | 17 hours ago
“Privileged” lol, I grew up poor and busted my ass. My parents had 5 kids and never made more than $50k/yr combined as I grew up, we lived in one of the highest COL states in the country.
Also I am yacht captain and boating is a source of income for me. Yall just assume too much and didn’t get the point that people who can’t afford new expensive cars are still getting them. I can afford new cars and boats but I still bought a used boat that is below my means and had to take a loan out on it. But people who make half as much as me are buying cars that are more expensive than my boat but I’m the one who’s privileged simply for having a boat? Ffs man
MajesticBread9147 | a day ago
It's only for the life of the loan.
Cars typically last 200,000 miles or 15-20 years. Most of those years are loan free.
honeymustard_dog | a day ago
Man I wish that was me! Real estate agent here in rural America...170k on my car in 6 years! Haha
grandmawaffles | a day ago
Are you justifying it…
Xeynon | 22 hours ago
Cars are becoming more and more expensive here because of market distortions created by government policy choices and the decisions of automakers, not some natural law of economics. China is making EVs that sell for $10K a unit. This is not a situation that can endure forever, and it won't.
Z3r0sama2017 | 54 minutes ago
Yep and while they may get some sales abroad, American bricks just aren't that popular. Will likely end in a usst style situation, because you can only sell so many cars in this type of market.
[OP] TACO_Orange_3098 | a day ago
The more everything goes up the more and more and more money gets diverted from savings and investment by the vast majority of people , i cant imagine why people struggle to save and retire ............. the article can try and spin it all they want , sugar coat it all they want but paying this much more for a depreciating asset
HARD PASS !!
DoeBites | a day ago
> below the generally recognized payment to income threshold of 15%, *even though they’re taking out longer loans to get to that goal*
The longer the loan, the more interest is generated. Of course auto loan lenders think this is great. And if borrowers are only below the threshold because they have to take out a loan that screws them more in the long run, then threshold be damned. It doesn’t really matter what the income to loan debt ratio is anymore.
[OP] TACO_Orange_3098 | 22 hours ago
lather rinse repeat
lather rinse repeat
lather rinse repeat
lather rinse repeat
lather rinse repeat
lather rinse repeat
lather rinse repeat
lather rinse repeat
lather rinse repeat
lather rinse repeat
lather rinse repeat
lather rinse repeat
and on and on and on it goes ...................
TacosAreJustice | 21 hours ago
Until people get fed up and burn it all down…
What’s interesting is modern society is built on trust to such a huge extent that people tend to not even think about it…
Eventually, people will stop paying their debts and the whole thing falls apart.
themiracy | 23 hours ago
Longer loans ultimately generating more interest I guess can be okay in principle. But it seems like two things are competing concerns. In the one hand, cars do get better - 7-10 year old cars today are much better than the cars that were 7-10 years old in 2010. But then the residual structure hasn’t changed that much (and EVs have come to have rapid or even more rapid early depreciation). As the article notes and we’ve talked about in this sub before, this yields underwater loans.
Underwater collateralized loans are always a risk factor. It doesn’t matter if some suit at a lender thinks they are or they aren’t. If it was such a non issue you wouldn’t need to collateralize the loan.
FartingWithStyle | 22 hours ago
Yeah if they’re going to make “forever car loans” they need to start making “forever cars”
BlueBonneville | 21 hours ago
Median car payments are often now based on 72 or 84 months financing. 20 years ago loans were 48 and then 60 months. I think that this is being lost in the discussion. Also lost is the introduction of even more obnoxious leases, while cheap per month, long term, no so much.
Kershiser22 | 11 hours ago
I think a 48-month loan still would have been pretty rare 20 years ago.
NTJ-891 | 18 hours ago
When we bought our Wrangler, I was very pissed that I couldn’t get a 2 year term for a loan. I put 55% down on the vehicle and the shortest they would entertain was 48 months. I had the cash to pay it in full, but my wife was worried about digging into our savings, and she wanted us to build credit since we don’t finance anything nor use credit cards.
Ultimately it was the right move from a credit score perspective, but I am still really mad that we didn’t just buy it outright.
joepez | 22 hours ago
Ill just what does CNBC expect the head of Capitol One Auto to say? The guy isn’t going to trash the current car prices or loan terms. This is is his business. Even he can’t believe this situation is sustainable or makes sense but it’s his job to say otherwise.
General_Tso75 | 20 hours ago
Could this just be a PR move to calm markets in the face of high gas prices and inflation?
The average consumer is not going to agree “forever loans” are ok moving forward.
Preme2 | 23 hours ago
Why does the internet, specifically Reddit rolls eyes get so passionate about car payments? I never understood this. If you want to take public transportation or ride around in a low cost shit box, do that. If they want to spend 15-20% of their income on a car that makes them feel better, they should also do that.
Maybe those people have less children or don’t spend thousands to travel or eat out less. You’ll see people spend every dime to their name traveling and the internet will applaud them for doing so. “They lived a full life”, but if that car payment is higher than the financial internet gurus suggest then you’ve made the biggest mistake of your life.
They’re maneuvering their slice of the income pie slightly different than yours. You can go to other subs and see people losing their ass gambling on the market, which is really gambling on daily Trump tweets. No one says anything about that.
TDS is a depreciating asset, bad for your financial health.
Caracalla81 | 22 hours ago
You utterly miss the point. No one wants to spend 15-20% of their income just to have a non-shit box. It wasn't always like this. Are you just not old enough to remember?
I'm not sure what this has to do with TDS. Like most people I'm prejudiced against pedos, and it's not really okay if you're not, but no one was talking about that until you brought it up.
EdLesliesBarber | 21 hours ago
It’s the interest, length of loan and total costs that is the problem. Obviously people can choose this , sure. But it’s dumb to be throwing such high rates of interest over so many years on a depreciating asset. That’s just common sense. You can certainly choose to do it.
DisraeliEers | 22 hours ago
It is odd.
I would bet any person that lives in an area with zero reliable public transportation (so ab auto purchase and gas/elec charge prices become inelastic goods) pays way more less for their home and has a lot more room in their budget for other things.
The auto loan industry is full of lobbyists and vultures, sure, but it's a personal budgeting choice a lot of financially responsible people make.
Maybe people that realized they can have a house and land big enough to do anything they want with AND whatever car they want if they don't live in the middle of some gentrified urban hub.
Dadoftwingirls | a day ago
I started 30 years ago paying cash for a used car, and then starting to save for a newer one right away. Repeat for decades, paid cash for every vehicle.
I'm starting to think that I may be the odd one out here. I'm not rich, just debt averse.
I'm not even sure who to blame here. Obviously lenders and salespeople are predatory, but there also has to be some responsibility here from consumers, who absolutely just have a burning need to drive new vehicles all the time, and preferably nice ones.
Someone is handing them the crack pipe, but they are firing up the rock themselves.
struct_iovec | 23 hours ago
Have you tried buying a new car recently? Car dealerships make most of their money on financing and buying cash is something you'd best keep to yourself untill the last moment
Dadoftwingirls | 23 hours ago
Totally true. I bought last year, and I found a 3 month old vehicle that the owner got into trouble with and was desperate to escape the payments.
From dealers, not sure how it works elsewhere, but in Canada you can just get financing so that the dealer gives maximum discounts, and then pay it off the next month. I've done it, dealers hate me, because they lose the discounts. Too bad, so sad.
SnoopRion69 | 20 hours ago
I've had a salesman tell me this is a good strategy, and it might affect dealerships or banks, but it helped his numbers on the month so he was happy.
Ranccor | 21 hours ago
You can do that in the USA if you check your contract before signing. Some loans will have early repayment penalties, but the last two cars I bought did not include those and I would not have agreed to the Lon if they did.
Any_Sale2030 | 20 hours ago
I’ve done that too. But I’m guessing most don’t. And just pay the minimum and get raped by the interest expense.
Virtual_Childhood626 | 22 hours ago
Honestly, I’d rather just get their best deal and finance it with no finance fees, and no early termination fees, paying whatever down payment they require. Then paying the loan off 100% before the 2nd month starts on it. Sure, this will cost a tiny bit of interest, depending on how many days it takes to get your online portal set up and a payment submitted.
But to your point, they make most of their money on financing. If they know they’re not getting anything from you there, they’re not apt to offer deals to incentivize buying with them over the place across the street with the same sticker price.
LaxBroFoEvaMeow | a day ago
If only you could ride a crack pipe to work.
Dadoftwingirls | a day ago
I used to live in a really ghetto complex, where everyone rented. Most of them had newer vehicles, often fairly expensive ones. These people weren't going into debt because they needed to get to work, they were going into debt to flex a vehicle to other people.
Famous_Owl_840 | 23 hours ago
Which makes no sense.
Ghetto rich I guess.
Among the wealthy people I know, cars don’t mean much. G wagon vs a wrangler-no one gives a shit. That small construction owner has a 100k diesel.
The Indians seem to be really concerned about having a BMW or Mercedes. The ‘new rich’ bar owners in my area all aspire to Ferraris.
The only people impressed are other folks just like themselves. They can’t stand each other!
Lil_Odessa74 | 21 hours ago
I lived in a suburban area of NJ right before the GFC. The neighborhoods were all huge McMansion developments. Neighbors always had brand new Hummers, Suburbans; guys drove Porsche or Maserati SUVs. No one had more than 25% of their house furnished. After 2008 many of them had to radically downsize their lives because their credit was shit. So it’s not a class thing, it’s a human thing.
Dadoftwingirls | 21 hours ago
Absolutely. I am an accountant and financial planner, and I see all the fakers out there. Those people who look wealthy are often pretenders.
My point is that it hurts poor people more to be fakers. The middle class trying to look wealthy don't usually destroy themselves completely.
Everyones_unique | 23 hours ago
Some people have no other accomplishments in life and need to feel good sometimes. Buying new shiny things such as cars makes them feel good for a bit.
Dadoftwingirls | 22 hours ago
Yes, that's obvious. It's also a terrible way to 'reward' yourself, and leads to lifetime bad habits.
Everyones_unique | 22 hours ago
Yes. So is eating ice cream, but I’d do it. Such is life. If you want to spend money, why not.
Dadoftwingirls | 21 hours ago
Because it is temporary joy for future pain? Why handicap your future self, when you really can't afford it?
Everyones_unique | 21 hours ago
You’re right. I find those people would have failed the marshmallow test 100%
HalfCrazed | 21 hours ago
This country has essentially blocked out any sort of competition and that fucking sucks
We're stuck with overpriced subpar vehicles compared to what's going on in other countries.
[OP] TACO_Orange_3098 | 20 hours ago
yeah but it is bringing back manufacturing jobs to America and big beautiful clean coal to America and
LOL !!!!! sorry i cant keep going i am laughing too much 😃
Sturdily5092 | 12 hours ago
It's not that hard to buy a car in Mexico and nationalize it for less than half the price the same vehicle you can get here, I've done it.
HalfCrazed | 11 hours ago
The problem is the lack of support if something goes wrong. It's a small risk, but still a risk I don't want to have to deal with.
Sturdily5092 | 9 hours ago
Not sure what kind of support you are talking about, the warranties are the same, some even more generous and you can get the car serviced here in the same factory service shops.
HalfCrazed | 9 hours ago
Maybe we are talking about something different. I'm referring to importing EVs, for example, like the Xiaomis. Amazing vehicle that would wreck available brands, but you won't find service here as far as I know.
Own_Help9900 | 20 hours ago
The manufacturers and lenders are working together, every year the minimum price for each model increases in price to increase profitability for the car maker, then the lenders approve an avg higher loan but increase interest to make up for the risk. Called "automotive Model creep"
Remote-Ad2046 | a day ago
Americans are raised with credit being the typical way to purchase everything. Not because of their parent necessarily, but advertised and parents are encouraged to give teen credit cards . Supposedly to teach them fiscal responsibility. 🤣🤣🤣 They want what they want and they want it now! The avg. new car loan used to be 3 yrs. I don't know what it is now.
[OP] TACO_Orange_3098 | a day ago
the longest i have seen in most places is 84 months .............. i am sure someone has longer options spun as being hugely beneficial to you and your family LOL !!
Nyotree-001 | a day ago
7 years is average now.
Berkut22 | 21 hours ago
7 years for a finance.
I've seen 10 year "lease to own" for $100k+ work trucks.
Any_Sale2030 | 20 hours ago
72 is pretty typical. 60 and 84 also. When my niece went to buy a new car 60 was the shortest they offered. She bought a civic nicely equipped for 32k.
ghostpos1 | 22 hours ago
And Americans brag about their credit use with 'all the points I get'.
khearan | 19 hours ago
I am not sure what you’re criticizing here. I purchase everything in my life with credit cards and rack up cash back rewards. The flights to Italy for our honeymoon were covered 100% by the points we had saved over the years.
SpecialBelt6035 | a day ago
Exactly people are affording the cars because they have to. People no longer have jobs with pensions or good 401k matches and are not saving. 15% of income to a car every month forever essentially is crazy
hw999 | 22 hours ago
This is exactly how the rich keep the middle class down. "Oh, i see your wages increased a bit, we'll just go ahead and raise our prices to match your raise". This is why it feels like you can never get ahead. billionaires are conspiring agaisnt you.
FrankGrimesApartment | 21 hours ago
“The poor are there….just to scare the shit out of the middle class. Keep em showing up to those jobs.”
George Carlin
Puzzleheaded-Bat8657 | 20 hours ago
Allowing public transit to be so terrible that no person with a choice will use it is a tax on the working classes that pushes what should be a collective cost of living in cities down to individuals. It's been this way since general motors bought streetcar lines to rip them up.
TeflonBoy | a day ago
They will never take my fully paid up old beater from me! I will pay out good money to keep it alive.
I refuse the line the pockets of CEO’s and shareholder buy backs.
frawgster | 22 hours ago
The entire buying process at most dealers revolves around monthly payment. That frustrating, ignorant 4 square method has been the norm for longer than I can remember.
As long as consumers keep allowing salespeople to dictate that this is how the process will go, nothing will change. We will continue to get fleeced at every opportunity the dealer and banks have in the buying process.
Fractales | 22 hours ago
What’s the alternative?
frawgster | 20 hours ago
Cash isn’t an option for most, so arrange financing before walking in the door and focus the haggling part on OTD price? I’m just a guy behind a screen, but this is what’s worked for me. “I don’t care about your 4 squares. I arranged for financing already. What’s your out the door price?”
I understand that the entire system is structured in an away that effectively requires the focus to be on the monthly payment. But as consumers we can still have some leverage if we approach the whole thing differently.
domonx | 21 hours ago
tl;dr: they're not worried because they can just keep extending the loan term to keep monthly payment within a manageable level of income, 5y to 7y etc. It's basically financial engineering to siphon people's money slowly so they won't notice a big sudden change. The slowly boiling the frog strategy.
Most people are struggling not because they don't make enough money or uncontrolled spending due to some moral failing. It's because most institutions out there have a fiduciary duty to figure out the best way to extract money and labor from everyone else without triggering massive backlash.
mexicanjesuslovesyou | 22 hours ago
How much of Capital One's business is subprime auto loans? I doubt they expect the economy to impact their business model. I want to hear Credit Acceptance, Santander and Westlake CEOs opinion.
[OP] TACO_Orange_3098 | 22 hours ago
They all just bank on a bailout if things get too too bad ............ until they get to that point just keep pushing for more and more and more !
here is a partial answer to your question from Gemini :
As of late 2025, subprime borrowers (FICO scores of 660 or below) represented nearly half—49%—of Capital One's auto loan portfolio. While Capital One is a major player in this segment, its auto lending makes up a smaller portion of its total business compared to its dominant credit card segment
and don't forget the proposal floating around to cap CC rates at 10% , if people cant even get credit period , what will that do to everything ................ ya cant go cold turkey and the companies arent willing to fix things to make it more palatable for the consumer ........... pick your posion and how your survive
Hugsy13 | a day ago
Is buying used cars with cash not a big thing in the US? Or used cars with cash and a smaller loan?
I only ask because as an Aussie I only ever see discussion about auto loan repayments from America, never here in Australia.
People here very often buy used cars and avoid large loans.
Yet I see lots of talk about home ownership costs, rental costs, and cost of living, from both countries.
Historical_Air_8997 | a day ago
It’s a thing, but a lot of Americans are dumb and fell for the propaganda/living up to the Jones’, so they think they need a new luxury SUV.
Also, used cars are pretty expensive here. In 2022 I bought a new car because a 4-5 year old model with 75k-100k miles was only $3k cheaper than a brand new model, financing on a new car is often at lower rates actually making it cheaper (if you didn’t pay all cash, but even so 3k to get a new car is worth it). I probably could’ve found a 10+ year old car but for anything that wouldn’t need work shortly after it’d still be $7500-10k.
My issue with people buying new cars is they get cars they can’t afford or buy new cars every 2-3 years rolling over their under water loans. The average new car in the US is over $50k, but you can get a perfectly good crossover SUV or sedan for under $35k.
Hugsy13 | 23 hours ago
Yeah since covid used car prices here went up too. But we can get new cars for $35k-$45kAUD. But we can get Chinese cars here. BYD is popular and see more of them on the road each month. Also see lots of European, Japanese, Korean, and American cars, including the “yank tanks” (trucks as Americans call them) here.
Still a lot of people that buy new cars here, but it mostly seems to be people who can afford it, or have work vehicles.
FartingWithStyle | 22 hours ago
I wish we had access to that Chinese ev market.
RagePoop | 22 hours ago
Thanks, Biden
FartingWithStyle | 21 hours ago
I mean thanks to automakers suckling at the governments teet for the last 25 years.
oscarnyc | 23 hours ago
You are just misinformed, or choose to believe what you wish to be the truth. Australians use car loans as frequently as in the US, at similar amounts. If you wish to see discussion about this, you might want to go here:
https://www.reddit.com/r/CarsAustralia/s/lZiK7Mt7tm
Hugsy13 | 23 hours ago
Fair point. Good to see someone with some links and evidence for the point being made.
Still… I wonder why I see it being discussed much less when it comes to cost of living here.
herlanrulz | a day ago
That's how I did it, saved up and paid cash for a 5 year old vehicle with low miles. WIth any luck, I'll never need another car. (47 yo)
ScienceWasLove | 23 hours ago
Of course buying used cars in the US is a big thing.
Hugsy13 | 23 hours ago
It obviously is. I just don’t get why it’s so common to see people budgeting for car repayments in the US when it’s not something we really see here in Australia. You can buy a shitbox that’s road worthy for $5kAUD here (used to be $3kAUD before covid).
Bpjk | 23 hours ago
And sometimes financing with the dealer you can get a better deal on the price.
Puzzleheaded-Ad7606 | a day ago
During the Obama year we had a program called "Cash for Clunkers" that bought up and destroyed a lot of very good used cars. You add in extreme weather conditions in a lot of the US and the average amount of driving we all have to do... and there's not a whole lot out there. Therefore, what is available second hand is greatly over priced, gas gusselling, has a ton of miles or work to be done, or was never a very reliable vehicle to begin with.
OkProcess5800 | 23 hours ago
>that bought up and destroyed a lot of very good used cars
The #1 most destroyed car was the 95-03 Ford Explorer which was notorious for rolling over and killing people when you took a turn at highway speeds.
Please, try to be serious with your propaganda.
Puzzleheaded-Ad7606 | 23 hours ago
Did I say all were good? No. I said a lot.
Reading comprehension is important before you throw insults.
OkProcess5800 | 22 hours ago
Top 10 models:
Literally nobody wants these cars.
Try to have a less shitty argument before you talk about reading comprehension.
NTJ-891 | 18 hours ago
I can assure you that the 84-01 XJ Cherokee is highly sought after.
77Pepe | 7 hours ago
This is a red herring argument, and your previous propaganda point is simply stock faux news tripe that has been debunked.
Z3r0sama2017 | 51 minutes ago
It is even Buffet said it's what he did as a younger man. Looked at how hard it would depreciate as an asset and noped right out.
thekingofcrash7 | 23 hours ago
Where do you think those used cars come from? Believe it or not, people are buying new cars in Australia too, despite your survey of a few friends in the same income bracket that bought used cars.
Hugsy13 | 23 hours ago
I never said people don’t buy new here. Plenty do. But lots of used cars here are cars that’s companies and businesses leased for a few years that then went to the 2nd hand market. It’s probably the same in the US.
And there are a lot of new Mercs, BMWs, Ford Rangers, Hilux’s, etc. that people with plenty of cash are buying new. But that’s not the average person.
Famous_Owl_840 | 23 hours ago
This is another pass given to obama.
At the behest of car manufacturers and financiers, the govt bought millions of perfectly good used cars and destroyed them. This was done to remove low priced affordable cars from the market and force folks to buy cars new and finance them.
Growing up, I always bought used. Now, the used market is out of whack. Buying used, in many instances, isn’t much better than buying new.
OkProcess5800 | 23 hours ago
You propagandists are so stupid.
"Millions" of perfectly good used cars? The number was under 700,000. I know that sounds like a lot, except that we sell about 16 million cars every single year.
The #1 most commonly destroyed vehicle? The 95-03 Ford "Exploder" which was notorious for killing people in rollover crashes and launched the burgeoning SUV market into scandal. Oh, wow, what a fucking shame.
Not your classics, not whatever car you wanna complain about not being able to buy anymore... The fucking Ford Explorer was the most commonly destroyed car, because it was a piece of shit Ford, they sold a lot of em (as Ford does), and everyone hated them.
Get over your fucking almost 20 year old obsession with the black guy already.
jmstallard | 23 hours ago
He was as much white as black. Why does everyone forget that?
77Pepe | 7 hours ago
Ignorant tripe.
Sturdily5092 | 12 hours ago
I have a 2023 SUV with 7,500k on it, I paid for upfront, and this is pretty typical for me, I didn't drive very much and keep them for many years, I'm the buyer he hates and has nightmares about.