If you were to assumption: v what the average new car price is nowadays, what would you guess? i guessed $23,000, due to the fact that my Honda fit is sweet for an economic climate car and also only prices $19,600 new.Given I’m frugal, leave a 20% upside pricing buffer seemed logical. Too bad I was way off!

According to the valuation analysts at Kelley Blue book reported the approximated average transaction price for a light automobile inthe unified Stateswas$37,876in 2020.New-vehicle pricesincreased$975(up 2.6%) fromFebruary 2019, when falling$126(down 0.3%) from last month. Room you kidding me? back in 2020, the average brand-new car price was virtually $38,000?

It it s okay worse. In 2021, Edmunds.com reported that the average new car price is $39,950. That’s nut! The average brand-new car price has risen partially due to production shutdowns and supply chain issues during the an international pandemic.

You are watching: Average price of a car today

I guess we have to all be quite wealthy due to the fact that I don’t know many human being with a median family members income that $68,000 who can afford such an average new car price.

What’s also surprising is the the median used car price has actually skyrocketed together well. As result of the pandemic, an ext people room buying used cars and also taking less public transportation.

Related: Is It feasible To usage A credit transaction Card come Buy A Car?

The Average new Car Price Is crazy High

Take a look listed below at the many popular vehicle brands and models ~ above the industry today and also their prices. The data comes from Kelly Blue publication to get the average vehicle price of $37,876 for 2020. Again, the average brand-new car price in 2021 is closer to $40,000.

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Zorba says

February 15, 2021 in ~ 8:46 am


As others have actually noted: Stupid packages, completely useless and completely unreliable “technology”, plus the demands for very same promulgated by our “benevolent OverLords” have actually not just driven acquisition costs through the roof, however maintenance prices as well. I’m “done” with brand-new cars, i don’t want the stupid “technology” – ns don’t desire to pay for it, ns don’t desire to preserve it, and also I absolutely don’t desire to attend to it. I refuse to very own a vehicle with a display screen in the dashboard.I’ll keep driving my 36 year old Mercedes Diesel. No microprocessors, no exploding dashboards, no touch screens, no garbage, no stupidity. Cheapest auto to own/run I’ve every had!


Obg! It’s like you check out my mind. I’ve to be backing up there is no a camera for over 30 years. I just bought a 2020 Subaru Crosstrek. Can’t wait to eliminate it. I think my next vehicle might be a 57 Chevy


I read one more financial guy’s blog and he was/is for this reason proud the his old Honda CRV with a driver’s side window that doesn’t work, no waiting conditioning and also other things.Here is the thing. None of you know if you are going to endure until retirement. You want to drive a POS therefore you can retire early, have at it. I buy provided cars generally and also they have worked well because that me. Ns am really mechanically inclined, so the helps a lot. Bought a brand-new 2013 hyundai Santa Fe. It has been flawless. So, ns will invest some money on points I enjoy while ns am here. Oh, we live the end in the middle of i do not have anything so no public transit. Never will be.


“Nobody I recognize would pick owning a brand-new car over being able come retire year earlier.”

Choosing to never ever retire helps the math. Ns do have actually a couple of rainy day funds however don’t ever see myself no working.

I remember going to bar trivia pre-pandemic, and there was a question about average vehicle cost. Everyone else in my group wanted to say 20-25k, however I grounding to my weapons with response of 35k, due to the fact that I knew the high worth vehicles would bring that number up a bit. My allude is that even though for many people, cars space a completely rational thing, they room not for part people. Reasonable should use to just how you pay because that it (interest, budget), however not necessarily WHAT you buy. Human being buy lot of of points they enjoy– RVs, boats, pools, vacations, etc. Think I’m in the minority below (seeing a lot of frugal/puritan types), but I think you must buy what allows you live your finest life so lengthy as it works v your various other financial plans.


How true the is. Went into cardiac arrest in ~ 41yo (42 now). And while I’d love come think we will certainly all be about until we space 83, it simply isn’t so. Life is short.

Nothing more pathetic in my book than someone the skimps and scrounges their entirety life come die with 5 mil in their bank account. Love don’t price a thing (if you think that), but all the various other cool ingredient in this human being sure does. Therefore yep, mine advice is don’t it is in frugal sometimes.

Moral the the story. Balance in all things is good.


How in the human being do u supposedly do $250,000 a year? especially being retired? We’re girlfriend born through a silver spoon or go you achieve this outrageous lot of alleged earnings on your own? since I would certainly love to number out a method to make fifty percent that and I’d job-related if I had actually to however would love to make that retired together you in which method do!! What’s your secret?


Goodness gracious, this man is therefore snarky and egotistic. Quite pointless short article imo, because obviously an ext expensive cars space being made over the years, make the typical price walk up. Of food the average is going come rise, offered the hyper cars that are out there price dozens of times more than the common commuter car. Average statistics would certainly be actually beneficial to analyze, if possible. This short article doesn’t teach everyone anything, yet instead simply shames human being for buying brand-new cars. Sounds like the author is simply jealous or other lol.


Where walk you acquire the numbers that an Accord and Camry room $26,000 completely loaded? one Accord starts in ~ $23k. You’re accurate 10’s of thousands of dollars off.


I nothing understand. Tens of thousands of dollars off? and are girlfriend saying over there is just one price for a completely loaded Honda accord in every one of America?


He’s right. In regards to “fully loaded” you’re about $10,000 turn off (maybe a little less). Just bought a tricked-out midsize (Hyundai Sonata). I looked at stacked versions of the Camry, Accord, and Mazda. I looked at number of dealers because that each. The average cost for a fully-loaded Accord and Camry were above $35,000. Your other points remain and are spot-on, however even a relatively “average” car like this can quickly be in the high $30s.


Gotcha. Ns was looking in ~ a Honda Accord sports for $26,000 in 2019. That looks sweet. However I check out it can go higher. However the distinction is not 10s of hundreds of dollars off. That method at the very least $20,000 off.


While literally you space not “10s” of hundreds of dollars off, also being off by a single $10k is substantial – based on your declared Accord sport price of $26k, $10k is nearly 40% the that. That is tough for the reader to think about you a financial professional when you have actually a questionable master of the straightforward facts here, especially given just how easy it straightforward to walk to an automaker’s website and also build & price a automobile to watch what the MSRP is. I literally just did this for a brand-new Accord and, through optioning it out, was able to acquire the MSRP above $40k. So while you are not “10s” the thousands off, it could be way for you come spend more time researching facts versus saying with posters who are disagree v your conclusions, especially when said posters space correct :)


Three key drivers that this phenomenon:1) historically low attention rates. When you have the right to borrow at 1-2% you room not paying lot for the money, and if you deserve to instead put your cash in the market and earn 5-7%, you practically end up acquiring a vehicle for cost-free (almost)

2) The ahead ‘Great Recession’ stopped a most cars from gift replaced once their owners would have liked to. The an outcome is a pent up need that drives brand-new car sales

3) these numbers space averages, as soon as in fact we space thinking about medians. Those $500,000 supercars the the 0.1% really journey up the typical sale price, but don’t tell us anything around what most people are paying for a car. To gain a handle on that you need to look at the median price, which, oddly enough, is all however impossible come find.


To it is in fair.. I simply bout a Honda Clarity for $32K…but I’m obtaining $9K back in taxation breaks state and also federal cause it’s a Plug-In hybrid… that way I’m really only paying $23K. I don’t think this EV rebates are factored into the equation.


If a car cost 50k. And also I have 50k in cash, I’d quiet lease it because that 3-5 years. If my i retest is 4% and also I take it the remainder of mine money and invest it, I’ll gain a return of 8% which will be offered to pay turn off my car and interest through an extra 4% come spare.

So as soon as it concerns buying or financing, jae won is the method to go.


Return of 8% is far from guaranteed. And is taxable. You’re attention on a vehicle loan is after-tax money being paid to the creditor. If financing to be the obvious method to go, civilization would lend money simply to invest it. And also that is seldom the clever move.


Just discovered this, and I have actually a couple quick notes.

– some of us lack a family members support structure / mechanic skills / etc. Because that folks in that situation, it’s advisable to invest a little an ext over the size of a loan to acquire something in better condition / much less miles / much more dependable. It just takes a reasonably minor event to burn one’s to save on a repair-and-rental situation.

– All too often, a vehicle is needed in order to even attempt to obtain financial independence. Particularly if you’re in one area in i m sorry public transit is garbage, prefer the vast bulk of the mid-west. Alas, that usually means getting something the doesn’t make sense financially, because no one is walk to create a loan for a 1995 Jeep Cherokee Sport.

– A great alternative appropriate now, if you have actually a controllable commute (Reply

Hi. I resided in Singapore for years however failed to yes, really save. It was too straightforward to go out every night and get bottle service to impress warm Asian and also Russian chicks. Ns had good fun however saved little. I really to let go driving too. In 2015 i moved back to the US. Through flights, rental dare to obtain around, many hotels to sleep in, and the need for a substantial deposit top top apartment ns blew most of mine savings, which to be close to $20,000, just to relocate back.

After a month, i bought a brand new car for $28,951 ~ above a 72 month loan through no money under (I KNOW). The believed was that ns couldn’t live in the united state without a car, which in my case was really true (I to be from Montana). I drove it everywhere the us in a severe of roadway trips. I put 35,000 miles on it in a solitary year. The was an excellent but left me yearning for something. I made decision that the us was actually no for me and also moved earlier to Singapore last month. The auto did not come with me.

My monthly payment is $506 with 7% interest. Insurance money is $99 a month. My loan is now down to $24,655. The car, i beg your pardon is currently worth just $17,500, is parked in a friend’s garage. No one is using it.

So here I am. What do you think I must do? If ns just offer it ago it will crush my credit for years, right? however should ns really salary thousands more to catch up if the vehicle continues to lose value? v the auto payment and insurance ns will finish up paying one more 30,360 top top the vehicle over the remainder that the loan. In ~ the end I will have something to sell, however you’re talking one more 5 years and I’ll only have a auto worth probably $10,000.

If I had the lump sum to comprise the difference I would simply pay it to the financial institution then market the auto for value and get the end of the deal. Yet I don’t. I’m just able to save around $1000 a month right now, and over 600 goes to the car that i don’t use.

Look forward to your advice!


There space a most parallels in between the auto market and diamond market. Through brilliant marketing over long periods the time, society has to be largely encouraged that cars space status symbols, etc. There financial value is much greater than your true worth.

On the upper and lower reversal side, human being spend loads of money on travel, i beg your pardon is obviously not an asset at all. They do it because they derive pleasure indigenous it. Very same thing through a auto – completely looking at it together an legacy or a sensible tool doesn’t paint a full picture.

I to be both a vehicle guy and also frugal, and it’s been difficult to reconcile those two things. I operated in the car business for 10 year (the Doug DeMuro reference over made me chuckle as I worked with Doug), and also I take good pleasure in steering (…says the guy who just paid $6600 for a 2.5 year old Nissan Leaf with 20,000 miles on it). I don’t care around cars together status straightforward (which is why if ns splurge top top a performance car in the close to future, it would more than likely be a Subaru WRX), yet I carry out love driving performance vehicles.

The real inquiry is how do you worth pleasure? I can have conserved 100% of my discretionary income and been comfortable retired by 40 – with enough money to execute things ns enjoy, but not over the top. Would it have actually been worth it? probably if i absolutely hated what I perform for a living. Yet if ns hated what ns do, I’d execute something else. Point being, the id that the score of acquiring to retirement as easily as possible trumps whatever is a grossly oversimplified means of looking at it. And if steering isn’t other you derive pleasure from, an ext power to you, and also a bit of me envies you as cheapness vs car loving is a tough inner battle to fight!


My grandfather owns numerous apartment structures in mountain Francisco drives a 1980 Chevette. He drives it to collect the rent and does not ever before worry about the auto when the parks it. He thrived up bad in Chinatown and also knows the worth of the dollar. He is more concerned about savings and also investments. Unfortunately for me that I prospered up with a distaste for rental units after witnessing just how much job-related goes right into it. I was constantly painting, tiling, repairing electrical outlets, windows, drywall and also clogged drains. Most civilization do not care about the units they space renting and upkeep is a pain. As a child farming up I always felt poor due to our frugal lifestyle. Ns did not also know the the buildings that i was functioning on belonged to us. I simply did the repairs to earn an allowance. I obtained $5.00 each day top top the weekends. Little did I recognize that i was discovering invaluable skills while the also permitted me to spend time through my grandfather. To my grandfather a auto is something the he uses to collect rent. The does not desire the tenants reasoning that that is charging castle too lot if he to be to journey up in a Cadillac. I simply so occur to really like vehicles, however I have the right to appreciate his allude of view.


Being in the south, pickups are a priority. With a new cost avg 39k you will certainly see many on the road. I constantly ask exactly how does the avg human (not) bought one? In fact, ive seen plenty of truck walk for phibìc of 70k. This is why i drive a 17yr old truck that i paid cash for, offered it because that work and got paid to usage it, therefore “paying for itself”… Is the pretty? No. Is the comfortable? No. Does it have all the bells n whistles? Nah… the runs, it tows and also it it s okay one from allude a to point b. Walk I cite that I provided 3k for it? maintain runs about 500 a year (tires, brakes etc(Im able to do most repairs myself)). As soon as I obtain ready come get an additional one, Ill offer it for about the same and put that in the direction of a nicer one but still well below the 10k mark. Oh and uh, thats still listed below the 10% that 170k avg salary you mentioned… crazyI constantly enjoy your automobile posts… :)


Howdy Whiskey,

Sounds prefer you’ve acquired a great truck that keeps you going from suggest A to allude B simply fine!

Int he south, space a lot of of world in building or businesses that need a most hauling? Or is a truck more of a standing symbol type vehicle based on the remnants that the an excellent old farming days?

It’s difficult to have a truck in the large city as result of parking. And most folks just go to job-related in an office and stare in ~ the computer system screen every day.

Sam


I extremely doubt her average new car the person who lives is making approximately $170K a year. Carry out you have data to assistance that assertion?


Question:

I lease my car and also as much as i’ve crunched the numbers, ns cant view why it would certainly make more sense for me come buy instead? (yet the consensus is that leasing is for suckers).

Yes, ns will have actually a lease payment forever. But, i will always have a vehicle under warranty so repairs will be limited to oil changes and maybe transforming the prior tires. Lease costs $275/month for an Accord EX with 15k miles/year vs. $450 to buy the new.

If ns bought it would certainly be 8 years till I broke even. Then i’d have actually a vehicle with 120k mile on it the I could maybe trade/sell because that $7-8k (vs having actually nothing if i leased). The said, i’d likely have spend a few grand top top repairs over the year so perhaps i’d just be front $2-3k. In my eye it’s precious the extra $2-3k over 8 year to constantly have as new/reliable/warrantied car.

Thoughts? What am ns missing?


Others have already mentioned it, however it can’t be declared often enough – one of the easiest “life hacks” in this area is to merely BUY USED. You can pick up a still-very-good-shape “luxury” auto that might be 5-7 year old, but is still lot nicer than a brand-new vehicle at the same MSRP sticker price.

I’m gladly rolling around in a 2009 Audi Q7, totally loaded trim package. I paid $16,000 because that it. Cash, no payments. Short insurance cost. It’s perfect for a family guy needing to haul youngsters around, with enough of the bells and also whistles the come with a “luxury SUV” – *without* paying the ~$85,000 it’d expense to journey a 2017 model. Every time I see a 2017 Q7 that looks very much favor my 2009, I smile a little knowing how much less I paid for practically the precise same car.

Buy high finish if friend want, however buy used. You may forgo several of the latest and greatest tech, yet you’re quiet driving a very capable automobile – enjoying ~90% of whatever “prestige” you’d acquire from steering the existing year design – there is no paying as well much.


the auto industry is the reason the poor and middle course cannot level up


Ha ha, the is awesome! ns loved having my 10+-year-old car also because ns didn’t offer a crap if who bashed into it. The one thing that I’m thinking more about his safety. More recent cars have more accident avoidance technology. Deluxe cars Joey have more reinforced armor. This is the subject of my following auto post next month. I go to an are them out!


Sam –

Good post. I am 29 and also had mine 2006 accord due to the fact that initial purchase. I think a pair more year it may be considered a beater. My friends and also people in my network have opted for new luxury cars or newer cars, yet I am trying come grind the end my auto for at the very least 2-3 an ext years before a new purchase.

I have the right to probably acquisition an entrance level luxury car so I carry out not have live in shame once the valet pulls up my automobile in former of friend or colleagues, but I will most likely opt not to and purchase a Prius due to the fact that I to be weird/crazy and not normal :)

Hope i am make the ideal decision because that this delay gratification that I have actually adopted!


This is a great post, and one of mine favorites…combining finances and cars. This is my an initial post come FS and mainly due to the fact that I feeling I have a various view and also approach come this then many people. All my life I have been conservative, native savings rate to investment threat tolerance. However, one passion I have always loved that did not align through my conservative life layout was cars. What’s more…I love distinct cars (and that typically leads to higher prices). It was a hobby and passion that ns couldn’t let go. What’s a man to do?

I obtained it…build a agency from the ground up that would certainly “force” me to buy a new car every several years, do them unique, and also somehow still make money indigenous it. After many long hours, weeks, months and years, what was developed in 2005 was a agency that designs and also sells aftermarket parts and also accessories for modern cars (we specialize in American muscle cars – sorry not lot for your Honda Fit). So to showcase our products, every numerous years i buy a brand-new car and also design new products because that it. The auto has now end up being an asset, a marketing tool. I only buy the low end models and customize your looks. Ns respect performance, however am yes, really passionate about design. Rather of spending money ~ above the peak of the line cars, we invest it top top designing commodities for those cars.

As one more contributor wrote, cars come some civilization are an ext than just a car. I know that, and help make that connection even much more unique. Comparable to how you make the connection for human being passionate on jae won stability and also independence. Yet I still think in gaue won responsibility. I had a client once speak to me because that a higher discount on a hood since he can barely feeding his kids. Ns kindly told that to walk feed his kids and when he’s ready and also able, we would certainly be right here to serve him.

And that knows, maybe adding a brand-new custom component to your vehicle would do you desire to organize onto it little longer…helping postpone the acquisition of a greater valued and faster depreciating car.


As united state accountants like to to speak the evil one is in the details. You mention that a new Honda Accord/Toyota Camry can be had totally loaded for 26k. In shock I automatically went come the Honda website to inspect this out. Turns out this statement is no accurate. Certain the pure lowest base version LX-S have the right to be had about that mark but upgrading to the V6 w/ some simple upgrages choose navi/leather can easily eclipse the 35k mark. An alert Experian doesn’t point out trim levels, yet my assumption: v is most people aren’t buying the basic model..


I’m in reality at the Honda dealer ideal now and a fully loaded Honda Accord sports V-6 is about $28,000. However I guess prices count on whereby you go and also how room you negotiate.

If civilization want to invest $35,000 top top a Honda accord or Toyota Camry, they have actually every ideal to do so.

I can adjust the native “fully loaded and “to “well equipped” if friend like?


Sam. To follow up on her A7 question, ns am closer to 205k a year in income. Yes, in fact, we room a family of 4. Job-related in a nursing and also see people coming to be ill or dying every the time. I figured ns might too enjoy part fruits of my labor prior to i am can not to execute so. No everyone in a nursing residence is old. Obtained a 30 yrs old v amputation of best leg and a 40 miscellaneous who succumbed to cancer dues weeks ago just as examples. So whatever in perspective. Besides, i deserve to tax right it every off together a 1099 P.C.


Working in education must absolutely put things much more in perspective. It’s the same means the rich room spending an ext of their money now after hearing around so many deaths in ~ young ages.


Many of my friends go something a lot of people here will disagree with, yet I’m thinking about doing the too. Castle went with this dealer who buys and fully repairs salvaged car (late 2014-2016 models through low 5-10k miles and also usually high-end fully-loaded) and also sells castle for basically half…YES fifty percent the KBB dealer price! He problems a rebuilt title for DMV purposes. He mirrors the pics of wherein the damages was and if you choose something and also he’s not comfortable selling you that, he’ll directly up speak no friend can’t purchase that because I can’t resolve it to a satisfactory level.

Everyone who’s purchase from the has had actually no troubles with your cars (apart from continual maintenance the course). Yes over there is a greater risk, yet he’s constructed a call over 15 years cause I know world have bought from him. Just wondering what her thoughts would be for this kind of a situation?


This short article is as well much fact to handle. I’ve got plenty of college friends who financed 20-30K brand brand-new cars short article graduation, properly blowing away your head start at developing wealth early on in your lives.

I didn’t recognize that the rich were just purchasing them up to acquire hard assets, ns figured they would certainly all prefer real estate end vehicles, however then again, ns guess that’s diversification.


I can fully relate come this article. Lastly in the mid/late 20s and beginning to have more disposable earnings really renders you desire to splurge top top housing and transportation!

I catch myself reading through brand-new car sites and yearning because that a sweet crossover Audi or Lexus, but I simply can’t gain over the reality that my currently 4-yr old vehicle is just fine, and also even if i traded the in, I’d probably have to pay an additional $15-20k to get it!

I tho think the lightly used (1-3 yr) range is a good time to buy cars. You miss the big hit in depreciation up front, acquire a new-ish car, and save a most dough! Additionally, if you feel the urge to trade in ~ 3-5 years, friend won’t need to sell your first (or second) born to consist of the difference since depreciation on the car should have actually moderated.

I to be shocked when I to be looking roughly that the new Cadillac XT5 crossover was priced at $60k (fully loaded) because that a brand-new car, while the exact same design year, trim, and content through 5k miles was offering at $50k. A $10k discount simply for someone else who broke a lease (or sold at a big loss)??? also that’s a huge savings contrasted to buying new, and it more than likely still smells prefer a new car!

Sure, it needs a little of research, and you additionally won’t always get to buy the EXACT automobile with the precise specs you desire (color, trim, miles, etc.), but saving 20%+ off a brand-new car price just by being functional seems choose a win to me. Better yet, wait ~3 years and get it for 2/3 the the brand-new value.

Let the suckers pay!


Summary: an ext number of Pickups/SUVs room being marketed – which sells for greater prices (and a entirety lot an ext Profits – cha-ching!!) compared to cars! dare which can attain higher-mpg are sold at really low-profits or dare-to-say, in ~ subsidy by part manufactures to achieve CAFE mpg numbers across their fleet (or incur newly tripled-up EPA penalty). High-number that Pickups/SUVs which sell for much-higher average selling price – are pushing the median selling price of the automobile mix to ever increasing typical transaction prices. Manufactures have luxury of giving low-rate jae won to sell their vehicles (as your profits and profit-margins have increased due to ever-increasing higher-prices !). Top top the high-amount the loan-balances — its noticeable – as average car prices increase, the loan-balances rise too !! Worse yet – as result of ever increasing prices, and high-depreciation., god forbid if you ever before trade her recent-model car/vehicle., you will certainly most most likely be upside-down on your new loan — resulting in further-increase in loan-balance together reported by Experian!! Leasing has additionally increased to nearly 1/3rd of all new-auto transactions to combat ever increasing monthly payment battle for average customer (loan payment the $503/month vs $406/month because that avg lease – a saving of $100/month if girlfriend lease – however expect no equity in a lease though!).

Sam – would it it is in ‘more’ applicable and realistic come tweak her 1/10th formula to accommodate payment version ? Say: approximately no-more-than 1/20th of your monthly earnings (5% the monthly income) need to go towards car-payment(s) ?

To meet/achieve/exceed café fuel-economy fleet requirements – auto manufactures have to have/sell sufficient number of “high” mpg autos in that fleet. Assumption: v – truck/SUV mileage barely budged increase from 18 to 22 mpg in the critical 5 years? Current an unified mpg is about about 25.(pdf:

What gives ?

In fact – it expenses less to build/manufacture a pickup truck, slightly more-so for an SUV (the extra metal/weight/hulk/volume doesn’t price all that much more, if you are thinking follow me those lines). Auto manufacturers certainly love offering you ‘more’ trucks/SUVs come make an ext profit every ever-increasing SUV/Truck volume! No wonder auto manufacturers room making record amounts of revenues, and profits ! If you ever before see ‘largest profit’ by vehicle kind – Top-10 profit-making vehicles list is gobbled-up by high-volume Trucks/SUVs, adhered to by low-volume luxury-car models.

Cars achieve greater mpg – this can be attributed to car’s reasonably lesser weight, centralized shape, lesser coefficient that drag, relatively lesser engine size, less variety of cylinders, and less hauling/towing capacity compared to SUV/trucks; In-addition come these: Hybrid, turbo and CVT technologies space mostly integrated in come cars, which doesn’t fit hulking Truck/SUV’s very much — also contributes to greater mpg.

Back come the topic of café fleet economy standards to be accomplished by auto manufacturers across its fleet: auto manufacturers have to sell certain number of ‘high’ mpg achieving cars come compensate for low-mpg that its more-profitable SUV/trucks ! In a way – part auto manufacturers are just fine to get rid of ‘cars’ in ~ near-cost (or in ~ loss at times!). This “low-profit or loss per car” becomes ‘more’ that a need if that particular manufacturer sells high-volume, ‘highly profitable’ (but low-mpg achieving) SUV/Pickup van – as each manufacturer is organized liable to meet CAFE mpg numbers across its fleet – or incur EPA penalty ! BTW – the EPA penalties have almost tripled for 2016 for no meeting the café standards! would you incur penalty – or rather dump/sell high-mpg achievable dare at low profit-margin (or also at minimal loss however lesser loss than EPA enforced penalty – i beg your pardon is far better trade-off!) ? median selling prices of cars, small-cars have actually barely budged or in-fact reduced year end year – where as pickup-truck prices have actually increased to over 5% in a single-year !! take a look in ~ Kelly’s article (Mar 2016 — yet you obtain the gist):https://mediaroom.kbb.com/new-car-transaction-prices-up-2-percent-march-2016


Not for this reason much about the features and also costs that cars these days, but in general:

Charlatanish, scaremongering, sophistry-filled, condescending-lir (at least), feigning certainty or super-high degree of statistical confidence w/o backing it up (soundly, if in ~ all), economic myths, moral release sanctimony and unrealistic requirements on less-$-endowed, hardworking Americans, explains alot of her words racket, FS.

Happy Holidays, nonetheless!

Alan


Well, your post was begging for a comment from who in the engine City, so I had to include this…

I was actually surprised that the average new car sale is just $30,000ish. Cars are extremely expensive to build because of every the labor the goes right into design, manufacturing, legitimate costs, etc. It’s absolutely true though that particular cars subsidize the expenses of other cars. I maybe should include a disclaimer right here that mine husband is to work by the auto market so we’re significant car people.

What i DO uncover appalling is the average auto loan. That’s the real trouble here in my opinion. We’re certainly going to spend an ext on cars than one more family in a similar situation due to the fact that 1) we love cars 2) mine husband is in a place where that is compelled to journey a automobile newer 보다 3 year old. However, we don’t have actually a vehicle loan at all and don’t spend as much as a similar family top top other species of points like substantial traveling, entertainment, etc.

I think her 1/10 dominance needs a small tweaking. Very first starting v whether or no you live in subway Detroit (haha). Then adjusting for her cash financial situation and also not just income level.


DivorcedOnFIRE says

January 12, 2017 at 3:28 pm


It’s exciting to see exactly how much people are willing also pay for there cars, and there room probably numerous reasons as to why world do this. If someone desires to to buy a luxury car, who room we to tell lock they can’t? It could be various when your financial case is in ~ risk. But then it’s not about the auto itself, but around people spending an ext then they have actually available. It’s a psychological thing the people always want to own better, nicer feather or comfortable products since it renders them feel good or lock think they require it.

We own a luxury car not also long ago (and is still for sale actually). Us loved talk it and also have certain no regrets regarding buying it a couple of years ago. At the time we had actually the chance (and jae won assets) to carry out so. And also yes, based on all the reactions we acquired it sure is around status to most people. The funny point is the a lot of of people didn’t understand why us would ever want to offer such a car. But when talking about our goals and also how much money we would certainly save, anyone understood. Civilization know cars aren’t a an excellent investment. Ns think the ‘problem’ is that people buy out of emotion, no out of ratio.


Seriously eye opening numbers. And this is all discounting the truth that most human being get a new car every 5-6 yearsSo let’s obtain one easily depreciating asset, profession it in to the dealer who will lowball the value making the asset worth even less, and roll that into an additional depreciating asset. Insane! also if you establish the mistake of overpaying for a car, at least hold onto that as long as you can by taking care of that so you can drive it for a decade or more. Or offer it and get a used Corolla. They’re a dime a dozen.

The SUV and minivan industry is crazy and also every new couple thinks they need one if they are having actually a kid. Minivans easily run into the $30K range for basic models.


The economy is not booming, human being are not making tons of money. You require to gain out the SF or Honolulu and come to my neck the the woods i m sorry represents usual America. Human being who can’t afford brand-new cars purchase them. People who can afford new cars buy used unless they very own their very own business and also can lease or compose off depreciation.

Whenever i buy a vehicle (used) I have actually a lengthy conversation with the salesman. His very first question is “what do you desire your payments to be. We have 60 month low interest payment plan available” The salesperson is shocked once I say, “I’m purchase cash after my trade-in. My critical purchase, ns took out a 3 year loan top top a one year design only since the price was 0.9% APR. (I payment it off beforehand anyway) The salesman stated to me that he had actually not viewed a $129/month payment in 15 years!

The allude is the majority of people walk out of dealerships v $400+ a month payments and also they make $60-$75k every year. One third of auto trade ins are under water. That tells me civilization have no patience to own a auto long sufficient to be payment free. They merely roll the old loan into the new one which means the price of a brand-new car is even more expensive as soon as you factor in they are paying for the old vehicle with the new one!

I know world like this and they room not making money. They have small saved because that retirement and simply live week to week.

The $175k executives I know are frugal much like the human being portrayed in “The Millionaire following Door” .


The just reason I might buy a newer (still used) automobile is to go for an electric car. Ns drive one hour right into San Francisco when or twice a month and also am exhausted of 1) paying because that gas and also 2) not riding in the HOV lane. Through an electric automobile in Cali girlfriend can obtain a pass to journey in the HOV lane together a single person….

I will just be law this if my job ends increase requiring a weekly commute into town. Otherwise my commute is 3 mile each way and I number I deserve to make my existing 6 year old vehicle last an additional 15….or at the very least until i retire…so 24?


That’s true. Yikes, 1 hour commute each way? Tell your boss, “I QUIT! LIFE IS TOO quick TO COMMUTE!” do it. You’ll love it.

Why not live closer to job-related or uncover a closer job? space you driving into SF to accomplish clients? Commuting makes me very unhappy.


I am a physician and had been coming into town to aid cover some shifts and also meet all of the docs in ~ the key campus (we send a many patients indigenous up here in Santa Rosa to san Fran)….I have actually 2 an ext shifts in January and then am done. After the it is a 3 mile commute day-to-day from my house to the neighborhood hospital. I have actually thought about biking it but I live up a 700 ft mountain and have not gotten over the psychological block that has kept me native biking it yet.

The just caveat might be if I start to collection up a local program. If the is the case, then I may need to pertained to the city 2-4 time a month. If i do should do that, hello electrical vehicle and HOV lane.

Commuting does blow, an especially during rush hour. At some point it take it me 3 hrs to walk 70 miles. Terrible.– EJ


Man, that’s amazing you’ll no longer need to do the mega commute ~ January. Every time I’m grounding in traffic, I gain mad. But then ns think come myself, every this traffic must mean the economy is good. Then ns think around my investments. Then i think around all the civilization working to do a benefit for mine investments. Then I’m kinda happy again.

I never publication anything approximately rush hour anymore. It’s always 10am – 3:00pm meetings for me. Life changer.


Hi Sam,

I’d lean towards these factors:1) many cars space even much more reliable and also lasting longer, top to greater prices indigenous the manufacturer.2) less maintenance required. The more efficient models require 1/2 as much continual maintenance, that’s less trips to the service department, where much more profit is made.

On the customer end, ns purchased mine vehicles (20k) with 0% financing, so it’s not so much the interest as chance cost. In the meantime, money the would have actually gone to the vehicle instead went to my retirement accounts. I operation pretty lean on the budget, for this reason it’s pretty not having a lot of money immediately shipped into the car.

Why no stick through the old ones? I’m no a mechanical mind. Our first two car were about 15 year old and driven into the floor (almost literally). Commuting 120 miles round pilgrimage will execute that.

Getting a brand-new car that i maintenance yet never worry “will it start” to be worth it. Not getting a big car and also stuffing my household into a 4 door sedan is entirely worth no spending double as much for a righteousness Van. I’ll recognize I was tempted. If only to speak to it the daily and annoy those ns love most. ❤️


Wow, that’s crazy!

Another element would be human being trying come one-up one one more by having a newer and an ext fancy model. They shed a most money once they trade-in your existing vehicles because that a model that’s just 1 or 2 year newer!

If the average customer had terrific credit (>720), they can even qualify for a 0% interest car loan! That would certainly be much more beneficial as they could then slowly pay off the loan while keeping their money in the markets.

It’s a shame really, however what can we perform until we have actually a better financial literacy system.


Is trying to one-up someone really that common about cars though? There’s literally an unlimited amount you have the right to spend ~ above a car.

Perhaps b/c i don’t drive to one office v colleagues v cars, why ns don’t feel any kind of of that. Ns mean, I’d much rather be cost-free and NOT have to go to work-related in a nice car than walk to occupational in a deluxe automobile and be grounding in an office for 10 hours a day!


I would echo that one-upping is pretty strong in the only area.


SDnerd wrote:

“As a California resides – “Tesla’s, Tesla’s Everywhere!”

I love the car. The amazing. I want one. However it’s a $90-100,000 auto + a couple grand in home power installation. I’m blown away by how numerous I check out on the road. Anyone I understand who owns one is a multi, multi, multi millionaire but there’s obtained to it is in a fair variety of people the end their acquisition out substantial loans to own that car (or leasing that for your crazy rates).”

I’m the type that buys a brand-new car and also drives it until it dies. I figure it’s cheaper to repear 보다 a new car payment and I have much more important points to conserve for than a stupid car. Right now driving an ’01 and ’08 truck and sedan. To buy both top top 0% credit transaction cards before low attention financing to be introduced prior to the recession. Never paid any type of interest. Actually, I have made a most purchases in my life ~ above 0% cards to protect against finance charges. Toyotas and also Hondas seem to walk forever. Also, purchase a nice ’07 with low mileage for my daughter for 8K when all she friends are getting new.

That said, I’m one of the countless that put the 1K deposit down to organize a design III Tesla. Simply too cool to happen up if it really ends increase being almost everywhere near 35K prefer they promise. It has actually the potential come be another 20 year automobile written everywhere it v the “million mile motor.” As long as the battery lasts it seems like a no brainer.


You know that as soon as the design III come out, the variation you will want will price close come $60,000! It’s simply the method it is once you add everything up.

I wouldn’t count on the the battery lasting much more than 10 years.


As of today, the base price of a Tesla EV is $44,500, yet withtax credits/rebates in mountain Francisco ($3750 commonwealth credit, $2500state rebate, $800 PG&E rebate) the reduces to $37,450.

With the average new car price at $37,577 (Dec. 2018, Kelley Blue Book),I say hmm …

Of course, people pay one more $10-15K because that things prefer non-black paint,better sound and navigation, more battery range, AWD, fancierautopilot function, etc. Also, we acknowledge that the median priceof a fixed market vehicle makes for a much better comparison.

That said, I only drove beater cars throughout life with children + residence asdistractions, to add maxing the end the retirement account. After paying for their college, ns retired early on taking the advice similar to that of financial Samurai. So, only now the Tesla.


if you room buying a car under a lease, the expense to girlfriend is depreciation + attention + to run costs. So for a 3 yr lease with 50% residual value depreciation is around $17k, which turns out to it is in $472 per month + running costs. Hardly the end of the world.

If you space a “buy and hold” guy, and you keep your car for 16 years (as is the current stat); climate you totally amortize the expenses of the car and that’s $177 per month + running costs.

In the modern world, car are much more reliable than prior to (hence they critical longer and cost less to replace parts) and they use much less fuel. So deserve to afford to buy more expensive cars than prior to (inflation notwithstanding).

I understand in suitable world you would invest nothing ~ above a car, but in the real civilization you would certainly be paying train, Uber, subway pass because that at least $ 300 per month.

if you room really cheap – buy a 1998 civic for $700 and also run that for another 5 years. Even then, you’ll be spending money.


Just obtained a 2017 audi A7. Umm. No sure just how I have to feel, yet love the car.


Bought a new SUV for $19,000 last year; which to be cheaper than you could get a 2-3 year old design for. Prior automobile had airbag walk off and insurance called it a full loss and gave me $7K. Sponsor the car for 3 year at a 1.4% rate because at that price why wouldn’t you.

As a California residents – “Tesla’s, Tesla’s Everywhere!”

I love that car. It’s amazing. I desire one. Yet it’s a $90-100,000 vehicle + a couple grand in home power installation. I’m blown away by how countless I check out on the road. Anyone I recognize who owns one is a multi, multi, multi millionaire however there’s acquired to it is in a fair number of people the end their acquisition out large loans to very own that vehicle (or leasing that for their crazy rates).


Nice post and a most thoughts popped in my mind:

First, Auto sector Marketing – how countless $billions perform the auto makers drain to convince united state we require that shinny brand-new vehicle? just how much psychology carry out they employ to induce me come lust after ~ what the Jones’s have actually OR take into consideration what my auto says about me?! I desire to throw-up every time I watch that Lincoln commercial with Matthew McConaughey…but ns digress.

My father in-law (car nut job and also at any allude in time has 4 dare in his driveway) – make a comment to me when stating “You treat your auto like one appliance.” now he wasn’t providing me a compliment and actually was much more of a diss since I don’t to wash it weekly favor he does….but he’s right. I watch my car as transportation – gaining from allude A to suggest B….i don’t view it as any extension that myself….it seems to me Americans have actually a most self precious tied increase in this possession and want to placed their ideal foot forward (about themselves and also to the world) – hence paying increase for that car.

Another point is the quantity of really time world spend in your vehicles, therefore they want the comfort and the newness. Ns am definitely an outlier at my corporate gig – meaning I in reality live in the city and less 보다 5 mile from whereby I work. The majority live the end in the burbs and also ex-burbs – steering 30, 40, 60 minute plus. I guess if i were to invest that kind of time sheathe in steel and plastic, ns might think about a drive that had the ability to pound the BASS!!!!


Sam,

I certainly agree with Apathy. The truck and also SUV room what are pulling up the average price the the vehicle in america. Look in ~ the F-150 ideal selling truck in America for 40 years starts 26,750, yet thats simply the base model used by landscapers and also contractors. The “Lux” trucks go for 50k-70k and also are all over the country.

Another quick point. The one thing you might not have actually thought around is the increase in as whole quality of every vehicles today contrasted to the past. Cars and trucks can conveniently put 200-400k miles on themselves currently numbers the were unthinkable 20-30 years ago. Modern manufacturing techniques and also newer and far better motor oils have actually made this really possible. This does do the upfront price the the automobile or truck worth it if you intend to very own it because that 10-20 years (which practically nobody go anyway). This increased quality does also make the situation for the used vehicle much stronger as well.

links below illustrating sales number differences between popular car and truck

accord sales stats: https://www.goodcarbadcar.net/2011/01/honda-accord-sales-figures.html

F-series sales: https://www.goodcarbadcar.net/2011/01/ford-f-series-sales-figures.html

P.S.

Found this site about 3 months ago absolutely love it really interesting takes on a range of topics and consistently well written and hilariously open to criticism contrasted to the rest of the internet, also your comment section is educational and also rational 99% of the time which is a real unicorn these days. Keep up the great work


Howdy Dave, welcome to mine site!

Is the rise in pickup trucks since many more of us are ending up being contractors on hefty load haulers?

I favor to ask mine neighbor who drives a Chevy Suburban whether she’s part of the off roading society of mountain Francisco. She didn’t find it funny.


It’s a standard “everyone is purchase it” syndrome. You room the amount of five people about you. I was flabbergasted when I visited the united state for the first time. The number of cars, and their sizes, to be daunting. I guess anyone from another country would feel the exact same way.

After much more than a te of travel in and also out, i still get surprised looking at those long lines of big cars carrying simply one soul.

I now know my net worth is far an ext than many of those people however I quiet can’t gain used to those large bad cars! ns guess it’s a social thing.


When I was in college, they come out with the Camaro concept car, and I want one. A the majority of days, I only stayed in college so the I could get a an excellent job and also buy a Camaro, and also I did in 2012. Ns paid $31,500 every cash. Human being kept telling me I should be rich, also though they to be driving $40,000-$50,000 pickup trucks and also SUVs. My auto still watch new, and most the them have actually gone with one or two new cars because then. I spend much less than they do, less often, and also they think I’m the one the wastes money. Mine flashy vehicle costs less than their tricked the end pickup. Come on, guys.


I agree through the comments on SUVs and Trucks, here in Texas they comprise a pretty large slice the the auto population, and they have tendency to market for a greater premium than traditional cars. The probably has actually an impact on the average, especially because low oil prices have actually driven people back to those inefficient species of cars. I meanwhile took advantage of low oil prices by leasing one electric auto a year back when mine 10+ year old car started providing me problems. Once I variable in the gas to save & electricity costs, my lease is only costing me $200/month, and that’s for a $55K car! I absolutely got lucky and also will not likely find one more deal favor that once my lease ends at the finish of this year. The best component is I sold my auto for an ext than the lease period cost me.


wenthere8this.com says

January 12, 2017 in ~ 5:47 am


I’ll make the key for auto leases.

If you effectively negotiate the imputed interest price

As an accountant, I have actually to allude out that the IRS meaning of useful life of a vehicle is 5 years and I uncover it absurd that the average term that the auto loan is better than the valuable life that the asset itself. Granted, you have the right to usually big the life the the vehicle past 5 year if girlfriend take treatment of it correctly, however on document your vehicle becomes completely depreciated before you pay it off. Yikes!


I have a feeling with electrical cars, automatically cars and uber that car ownership will be a point of the past and also we’ll all be owning spring time shares or treating it choose semi-public transportation.

In some means the only people that will own them room the rich will climate treat them together their very own money making fleet.

So the car manufacturers should shot to fee as much as lock can prior to they become disrupted in 10 years prefer the music sector was.


From my very own observations, almost everyone I recognize drives one SUV fairly than a sedan or minivan. Maybe I let go it, but if the average auto price also includes SUV in the definition of a ‘car’, i think the may contribute to the an enig of the substantial average automobile price. Some of those monstrosities cost much more than my an initial house.

Also, ns can’t aid but point out that many people just desire the status symbol or experience the enjoyment of driving a certain new vehicle and also will gladly fork out the money.

I deserve to speak indigenous experience. After gaining a brand-new job number of years back, i ran best out and traded in my trusty compact car for an entry-level luxury model. Worst mistake I ever made. Ns love the car and also it is good fun to drive, however the payments are brutal and a consistent reminder of how dangerous an impulse buy as result of extra income deserve to be.


It’s definitely the average auto buyer. My own mother had to purchase a 33k Honda Odesey minivan. Mind girlfriend I’m an only child. My family and also two kids ride around in a tiny Mazda 3. I tried to talk her out of it, but it didn’t work. I have a tough time believing she’s an outlier and she’s definitely not a top earner.

However, I will certainly admit I have actually a car in my driveway that i bought for 45K once I make a lot much less then 170k. Ns bought a new Corvette end 9 years ago. That wasn’t bought together a transport device, it was bought as a hobby and outlet. An expensive one in ~ the time, though as luck would have actually it a far better deal then buying a home at the time. The was pure luck and I’d never recommend together a course of action, however it functioned out. So ns guess I’ll litter in a caveat to her number. The quantity of time you intended to own the vehicle has a component to pat here. Purchase a 34k vehicle every 3 years is not the equivelent that doing for this reason every 13. It’s still no the ideal financial move.


True. And also I’m certain you loved her Corvette! No regrets using any type of of the $45,000 9 years earlier to invest in 2009 and onwards though?

I plan to organize my next auto for 5+ years. Modern technology is now moving so fast that maybe in 5 years, they’ll have actually affordable electrical vehicles that have 300+ mile arrays so I can go to Tahoe.

A model X expenses $100,000 – $140,000.


Always interesting to check out an automotive related write-up here! Though i have constantly strived to be “above average” of the above average person, I’ve always find it an overwhelming to understand the 1/10th rule. V income roughly $100k a year, or $10k to occupational with, the is a good amount of money because that a sensibly reliable used cars. However what around the median family members with income under $60,000 needing 2 cars (either 2 working parents or 1 parent works and also the various other take care of young ones)? would be very difficult to uncover reliable cars at $3,000 a piece!

I don’t think there are any disagreements the buying a car is a destructive financial move, but at the exact same time when the price of a new Toyota Corolla starts at $18,500, my emotion is the a many of human being feel “trapped” by the raising expense of even a no thrill barebone vehicle, comparable to the rising cost of rental in most major cities! Besides, human being who are not as mechanically inclined, could be worried the buying an enlarge used vehicle will come v problems and end increase costing an ext in the long run. The fear of the absence of warranty v an older vehicle may be irrational in a gaue won sense, but isn’t the the some factor why people buy insurance? because that the tranquility of mind and coverage the something may go wrong and will expense a fortune, even if the likelihood of happening is slim?

Maybe ns am in denial, but when my girlfriend obtained a basic trim offered Rav4 for $14,000 in good mechanical shape. Ns am no sure exactly how I can consider it a frivolous purchase also though she does not make $140,000!


I think you’re leaving the end the fact that the sedan sector is collapsing because small SUVs and also crossovers are trending, which drives the average brand-new car price increase while the sedans offer reduced prices and better incentives in order to move them at all.


MakeSmarterDecisions says

January 12, 2017 at 3:45 am


I wouldn’t spend lot on a auto myself. The said, getting an auto loan is not immediately stupid. Present rate in ~ my credit transaction union is 1.79% . Why placed down cash once you can keep your liquidity at low cost? If nothing rather you could invest the money in bonds and pocket the difference.


Agreed. Just bought a new car in ~ 0.9%. Still arrangement to pay it off early, however why sneeze up a ton of cash up front through that short of a rate.


Ryan,

See this write-up to measure up whether you’re on track. Https://www.vxcialistoufjg.com/the-average-net-worth-for-the-above-average-person/


You can acquire an auto loan if the car is 1/10th your earnings or less. Yet at that point, friend might also buy the out ideal or store things easy and lease it. The goal is to make the price of your vehicle as negligible as feasible so you can not worry around it and grow your wealth.


Does anyone understand if over there is any type of data out there that indicates a cash buyer gets a much better price than a borrower? Is there any type of relationship?

If the is fact, it may impact my decision also if I might get a “deal” top top an attention rate. Ns would have to run the NPV for each scenario.

See more: Andy Puzder Ceo Of Cke Restaurants, Andrew Puzder

Cars are not one emotional purchase for us. We have actually only purchased 5-6 in 30 rs that marriage and only one of those to be new. We save two around and tend to run them into the floor (or when one that the kids wrecked them).

Currently to run a 12 yr old Pontiac and also 15 yr old Ford F150. They still look really good and drive just fine. A few squeaks however hey every month ours $ continue to be working for us is much better than functioning for automobile dealer.