$400 in 1984 adjusted for inflation currently is about $1200….I remember back in 1984 when I was paying $400 a month, and I felt that I was way overextended. Now that the new standard has been set, banks don’t think twice about granting loans with enormous car payments. There’s no way I could afford a car payment that’s higher than my mortgage payment.
$1,300+ monthly payment????!!!!!!
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Telsa (or any EV) is a bit different because your fuel cost turns into battery depreciation cost and indirectly the sales price of the new car.
In theory if you buy it right you will somehow find free charging at work or near free charging, and that gas saving will help you offset the cost so you can afford to pay for that big battery you will depreciate over 15 years.
Now if you buy the wrong car because of the wrong math nobody can help you, it is still a "are you feeling lucky" bet. This math would be different depends on what your alternative is (Prius? BMW?)
Gold was $308 in 1984, it is now $2646
Seems like we’re not the only ones noticing…
www.zerohedge.com
The Growing Auto Loan Problem Facing Young Americans | ZeroHedge
ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com
It's only a "problem" because they all chose to make it one. What the hell happened to driving what you can afford? Since when do 2 and 3 decade old drivers have to borrow more to drive a car, then a house cost just 35 years ago?
The fact is they don't. This is nothing more than wants exceeding their means..... On steroids. The green light for them is the guy down the street did it. Or the guy at work, so why not?
Then you no longer are dealing with 2 wrongs that don't make a right. But hundreds of thousands being stupid at the same time. All of this is based on the bigger idiot theory.
In this case, the banks are quickly, and systematically becoming the bigger idiots in this equation. They're supposed to be the voice of financial reason, and shut this nonsense down before it ever gets started.
Instead they're exasperating the whole situation by making these insane, unsecured loans. We all saw what too much borrowed money and paper did to the stock market in 1929. And to the housing market in 2008. The same exact thing is going to happen here. History will simply repeat itself.
Then just watch the prices on all of this overpriced metal drop like a rock.
The fact is they don't. This is nothing more than wants exceeding their means..... On steroids. The green light for them is the guy down the street did it. Or the guy at work, so why not?
Then you no longer are dealing with 2 wrongs that don't make a right. But hundreds of thousands being stupid at the same time. All of this is based on the bigger idiot theory.
In this case, the banks are quickly, and systematically becoming the bigger idiots in this equation. They're supposed to be the voice of financial reason, and shut this nonsense down before it ever gets started.
Instead they're exasperating the whole situation by making these insane, unsecured loans. We all saw what too much borrowed money and paper did to the stock market in 1929. And to the housing market in 2008. The same exact thing is going to happen here. History will simply repeat itself.
Then just watch the prices on all of this overpriced metal drop like a rock.
It fluctuates enough that it’s not really an analogue for inflation, however.
Just a couple years before your data point, it hit $800, which made headlines. So, don’t cherry-pick the data.
Using $800, in the early 80s, as the value gives a much more realistic picture.
The boom and bust cycles are not some random phenomenon, they are by design. The cause of each one is different, but you can bet it’s going to happen.
Gold is $1900 and has been that for years. You need to slow your roll on your spew sometimes.
Yes I am constantly seeing young people whining that there are no jobs that pay “a living wage”. I tell them its plenty for a living wage but not an extravagant living wage which is what they’re really after. The idea of driving a beater car and living in a cheaper area with no Starbucks within sight until finances allow an upgrade simply does not compute.
Lots of old men yelling at clouds here...
Driving what you can afford sounds great, but there are a lot of factors. Used cars aren't exactly cheap these days. I'm fortunate that I can buy cars with cash, and have the ability and the space/tools to work on them. If I lived in an apartment I'd be SOL, and have to take everything to a shop for repair. Living in the rust belt, used cars are also harder to source since they rot out after 10 years. For many, car payments are just a fact of life, because they have no other option, and many new cars have better financing than buying something used (and questionable to many non-car savvy people). Being able to fix modern cars yourself is a big undertaking that requires scan tools, software, expensive tools, space, and time spent researching fixes. Gone are the days where a homeowner tool kit would do most of what you needed.
I work at a University, and many of the students here graduate with mountains of debt, no savings, and need a car so they can get from their apartment to whatever entry level job they will have.
Driving what you can afford sounds great, but there are a lot of factors. Used cars aren't exactly cheap these days. I'm fortunate that I can buy cars with cash, and have the ability and the space/tools to work on them. If I lived in an apartment I'd be SOL, and have to take everything to a shop for repair. Living in the rust belt, used cars are also harder to source since they rot out after 10 years. For many, car payments are just a fact of life, because they have no other option, and many new cars have better financing than buying something used (and questionable to many non-car savvy people). Being able to fix modern cars yourself is a big undertaking that requires scan tools, software, expensive tools, space, and time spent researching fixes. Gone are the days where a homeowner tool kit would do most of what you needed.
I work at a University, and many of the students here graduate with mountains of debt, no savings, and need a car so they can get from their apartment to whatever entry level job they will have.
None of the above is an excuse for going into astronomical debt to drive a car that is stupidly overpriced into 6 figures. As my math showed in an above post, there are thousands of new Camry's out there, that are cheaper than the interest alone that would be paid in the OP's example.
Making excuses for not saving and living within one's means, is arguably worse than this made up ageist nearly racist phrase.
They, and you, and others on this thread, are confusing need and want.
Mountains of debt. Useless degrees. A car when you are still in school, or when you live in a city with public transportation. A $100,000 truck for basic transportation.
All of these are wants.
And giving in to wants, instead of understanding need, leads to epic financial failure for those unable to distinguish between the two.
It’s not old men yelling at clouds, here, it’s old men seeing colossal mistakes being repeated, while their warning goes unheeded.
I'm not making excuses for those who buy beyond what they need. That is just stupid, and their financial problems are their own doing, but saying people should just "buy what they can afford, it's easy" isn't 100% accurate. We understand the difference between a good value in a used car since many of us are car enthusiasts, a majority of the buying public doesn't even know what oil their car takes, or that brake pads and rotors don't cost $2000 to replace. The average purchase price of a new car this year was above the average yearly income in the US.
Have you used public transportation within the last 5 years? Outside of major cities like say NYC it is laughably horrible.
Have you used public transportation within the last 5 years? Outside of major cities like say NYC it is laughably horrible.
Basic car knowledge is free and widely available. Public transit is better than it’s ever been. It still may require a wee bit of walking or waiting but that’s not torturous is it? Dreaming up excuses for everything is 75 percent of the problem.
We agree on much.
My youngest daughter has spent the last five years in New Haven. No car needed, she walks, takes the train, or uses Uber/Lyft, so the First Bank of Dad has declined to support a car. She is frugal, so she hasn’t even asked.
But next year, as she starts medical school, she will need one. A legitimate need.
So, the First Bank of Dad is already underwriting her first car. An 18 year old Volvo XC90 with over 200,000 miles on it.
Not expensive. Nowhere near new. But durable, practical, safe, and most importantly:
well within budget.
I will keep my 2015 F250 PSD running as long as possible. Maybe until I am too old to drive.
The financial situation of the up and coming generation is largely the result of a broken family IMO.
You are a good example of an intact family and the security, help and most important IMO, guidance it can provide to the young adults.
There are plenty of people and corporations that want to capitalize on young adults. Schools and universities are a prime example. Things take a snow ball effect after that IMO. Because once you’re saddled with $100-$150k debt, what’s another $30-$40k on a car?
I gave my kids a copy of The Total Money Makeover and tickets to a live Dave Ramsey event. They are doing quite well and don't have debt beyond their homes. They drive nice vehicles, but not extravagant ones. Perhaps if schools taught more of that and less of indoctrination it would help.
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