Interesting article popped up on my new feed yesterday...

https://usa.streetsblog.org/2024/03...eping-americans-from-financial-stability

I fell into this mindset for a long time in my life and my father sure did. He always had to have a nice new car and always had to keep my mom in one too. As far as I know my Dad always had a car payments until the very end when he was living in our house in Trussville and I pretty much made him get a nice used car that was paid for.

We as Americans in general view automobiles as more a status symbol than an appliance that gets us from point A to point B. (Me included) We typically don't invite our friends into our houses to show off our washing machine or our fridge, but we will sure as hell pull up in our Mustang 5.0 or F-150 Raptor and stick our chest out like we built the damned thing with our own hands, despite the fact that we don't even own it... The bank does.

Back in the day before WWII I don't think that most people lived their whole lives making payments to large companies for the privilege of living somewhere or driving somewhere, but one everyone moved off the farm, went to work in factories and businesses and moved into suburbia, we were all sold this lifestyle that we had to have what everyone else had and we had to have it now. And the way to so that was the supposedly easy road of financing. Mrs. Irish told me the story of how her parents financed a set of encyclopedias back in the '70's. She doesn't even know what happened to them.

You see with financing the seller wins twice, and the customer loses twice. The seller has the upper hand on both transactions. The buyer can fool themselves into thinking that they got a good deal on both the price and the finance terms, but it is a false economy.

Sure you have a nicer truck to drive around than Joe Tightwad, but you are a slave to the finance company .

A few quotes from the article:

Ten percent of surveyed drivers, meanwhile, estimated they spent 30 percent of their take-home pay on car payments alone, while more than 12 percent "found themselves living paycheck to paycheck due to the financial strain of their cars," the report authors wrote. Close to 17 percent of the survey respondents say they'd gotten a second job specifically to afford their vehicle.

"Car ownership is deeply ingrained in the culture and is often viewed as a symbol of independence, success, and social status," data journalist Ricardo Rodriguez, who worked with MarketWatch Guides on the report, told Streetsblog. "As a result, there is societal pressure to own a car, regardless of one's financial means. This expectation can influence individuals to prioritize car ownership over other financial responsibilities, even if it means stretching their budget."

The average price of a car, meanwhile, has ballooned in response to a surge in inflation and a raft of supply chain issues, with the average amount U.S. consumers borrowed to buy cars skyrocketing 50 percent between the first quarter of 2020 and the last quarter of 2022.

And because predatory auto lending is so poorly regulated, many borrowers have found themselves trapped in huge loans they can't afford and car-dependent landscapes that make driving non-negotiable.

True Story.

My son fell into this mindset when young. Just couldn't wait to earn money and get nice vehicles. He's 26 now. He has a house and a car payment. His fiancé has a car payment. He will be completely debt free, including the house, by the end of next year. He will be debt free, with the exception of the house within 6 months from today. Probably closer to 4 months if he doubles down hard.

I couldn't be more proud of him. He's realized debt is indentured service.

I’m pretty sure my Daddy never had a car payment. Mom did.

Average new car payment is $750, 20% of buyers have a payment greater than $1,000 per month

Crazy. I have a friend like that. He gets real pissy with me that I dont care about new vehicles. I'm happy with my old truck. I havent had a payment since 2010. IMO (unless used for business) vehicles rob more americans of wealth than anything else.

For that I would buy a rental house.

I try to buy used 3-4 yr old vehicles with low mileage. It takes a long time to find one that meets my criteria if I even do. The last couple of trucks I bought were new because the used market was so high it just didn't make sense. Sold my 2011 GMC Z-71 last year just because the market was higher than giraffe coochie. Drove the damn thing 12 years and sold it for 10k less than I paid for it new. That's pretty cheap transportation in my book.

I'm now looking to buy in the next couple of years a newer truck and suv for wife and I to start the early retirement years. Know whatever I buy will be the equivalent of the most appliances we buy now a days. DISPOSABLE in 5 years. Quality and dependability just aren't what they used to be.

As stated in previous thread, I hope to never have to buy another

I hate car payments, haven't had one in years. Have almost generally always bought used or bought cars from my mom and step-dad when they were ready for new cars (they had the means to pay cash and got new cars about every 3 or 4 years. Now that my mom is a widow I'm trying to break her of that habit) except when it made more sense to buy new. Example - my 2013 Hyundai Genesis bought new, we were looking for something sensible like a used Sonata or Camry but Hyundai had a thing on new Genesis, they had a $5,000 bonus for trading in a competing luxury model (Benz, Lexus, BMW) so I traded up from the 2000 Lexus I had bought from my mom it was cheaper than anything late-model used. And allowed me to get rid of a 13 year old Lexus with a blown head gasket for way more than I could have got for it anywhere else.

Motor blew out on wife's Hyundai Santa Fe (known connecting rod bearing defect that Hyundai refuses to warranty) so in a bind went out and bought her a new store-bought Ford Edge (fairly reasonable vehicle) using the ford X-plan partner through work (get to buy at dealer invoice), sucked not having a trade in but we had a little money left from her dad's life insurance for a down payment and got zero percent financing, so the first car payment I've had in no telling how many years is not too bad.

In a separate post I'll tell stories from the 2 weeks I spent selling cars lol.

My primary truck is 24 years old and it’s in as good a shape as most trucks that are two years off the lot. My work truck is 12 years old and is the newest I’ve ever owned. I know folks who have truck payments considerably more than my mortgage. Nothing wrong with owning new, but I wouldn’t put myself in a situation where it stressed me financially to own one.

I had a middle aged co worker tell me once when I was in college after asking her why she drove such a nice vehicle, but lived in a tin can “People you meet every day don’t know where you live, but they see what you drive.” I thought, how silly, foolish and vain is that? My trucks are a tool to get a job done, not a status symbol.

I know for a fact , mine didn't . He'd buy the absolute cheapest truck on the lot, didn't care what color or if it even had a radio , pay cash . When he got ready for a new one , you didn't want the old one, it was worn out and beat up pretty bad.

See it often nicer vehicles and toys boats sxs than the house is worth. Drop a few of those and have a land payment. 04 F150. Wife 2018 explore

Saw some stupid and crazy stuff selling cars at CarMax for 2 weeks in between jobs. People coming in and trading in a car they were upside-down on and financing the negative equity into a 125% LTV loan on the car they were buying, at 24% interest for 72 months. You can probably guess the demographics.

And families coming in to buy a car with their only documented income being welfare and government disability. Even the teenagers and babies getting SSI crazy checks. Family of 6 or 7 can make pretty good money that way.

Joke on the sales floor at the time was if they came into the showroom with a Bluetooth phone thing in their ear they wouldn't qualify for credit. Which was generally true lol.

There was no way I could afford a car without a loan when I was young and starting out in life. I also needed reliable transportation and purchasing a later model vehicle was what I wanted if possible for reliability. Seems like I had car payments through my schooling and early in my married life. I think the last car I financed was a new "demo" mini-van to have a reliable/safe vehicle for my wife to drive our family around in and also for road trips to see family etc. I always tried to pay off the loan as quickly as possible.

So when I see a large percentage of folks with an auto loan it is not surprising. Even used car prices are very high and if you work away from home you got to get there. Glad I am past the point where I need to finance and with getting new cars I haven't had a breakdown with the exception of a few flat tires in probably 25 years and that is almost priceless!

I’ll keep rolling these 10yr old vehicles .. Will NEVER pay these ridiculous new car prices

I know you are proud. That's an awesome story.

No kidding.

I am 57 and have only bought 1 vehicle new. I have an 02 Tundra that my son drives that is approaching 400K miles. My 05 Tundra DC has about 170K on it. When I was looking for trucks when I bought the 05 about 6 years ago, $25K didn't buy you much as far as a used truck with 4wd. I hate making a car payment.

And the truck market frustrates me now anyway. Buy a GM and you deal with transmission issues, and the whole cylinder deactivation headache. Fords, have phaser issues, and I don't think I like the idea of an aluminum bed. If I buy a midsize, the only real benefit is its smaller, they really don't get any better mileage. Diesels are expensive and require DEF. I don't like this 0w-16 or 20 motor oil. That is to thin. I don't like low tension piston rings either. Both those cause excessive oil consumption in my opinion.

It used to be you could have a clean and uncluttered engine bay. Engines used to look like a work of art. Now they are a jumble of hoses and wires. They put big plastic covers on the engines so you can't see the mess, and the cover just holds heat in under it, cooking everything they want to cover up. Not to mention, its just more crap you have to take off to get to the engine to work on it.

This is why I bought a 1996 F-150 4x4 300ci inline 6 manual transmission for my project - retirement - haul stuff - run to Lowes - truck. Probably going to put my "nice" 2018 Ram 1500 up for sale and make my 2013 Rubicon my daily driver in retirement.

The marvel of govt regulation at work.