I have an idea... Start putting that $1,000 per month in the bank for a year or 2 (or more). Then go buy that depreciating asset with a big down payment or maybe even cash. Basically pay yourself that interest...
12% are paying $1,000+ a month for car loans ...
- Thread starter odie
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A lotta people just pay cash. I say, if you can't pay cash then you can't afford it.
I know a guy that drove a 1984 Chevy Cavalier (sometimes) and a 1998 Nissan Frontier (mostly) until he passed away last year. He also was investing in Mobil stock back when it sold for $8 a share, because he worked for them.
That guy? My dad. He most certainly had enough money to go buy a $100k pickup truck and pay cash for it, but he didn't. Born in 1939, he grew up on the South Side of Chicago, dirt poor growing up, and I think for him, it was far more important to have money in the bank and invested than nice wheels in front of the house. I can only remember him buying three cars in my lifetime: That 84 Cavalier (new), an 86 Ranger (used), and the 98 Frontier (used). The ONLY reason he got the Frontier is because the engine on the Ranger developed some sort of knock.
And every single one of them is/was a stickshift. He didn't like automatics, for some reason.
JHZR2
Staff member
What is surprising is that people are willing to pay that for a depreciating asset when their incomes haven’t increased proportionally.
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I'm very aware of the costs. It's the payments that are ridiculous, no matter how you look at it.
Who are we to judge what people spend their income on. Yes it's a depreciating asset, but you get years of daily enjoyment and utility out of it. It's still a whole better financially then people who spend $20,000 on a wedding that lasts a few hours or a $10,000 vacation that lasts a few weeks. Once it's over, all you have to show for it are some pictures.
It is all relative to what you are "used to." Obviously everyone has a different "standard" on what they deem to be reasonable.
For comparison, I consider $150/hr for a repair shop to be stupid cheap. I'm sure most on here think I am crazy. Why? Because dealers are in the $210-$280/hr range here.
THIS is the key. Spending borrowed money is always much more expensive.
Sounds like my dad born in 1932. Hitler and then the communists chased him out of Europe.
Very hard times changes the way people view money and how they spend it.
I agree to always have a budget even if you could afford something much more expensive (car, house, vacation, etc….).
This next recession and layoffs will have many people wishing they didn’t have a $1000 monthly car payment.
The repair shop here is $100/hr. By way of comparison, labor rates in this area were $45/hour back in 1996 or so.
JHZR2
Staff member
Yeah but that’s all just theft as far as I’m concerned.
This became apparent to me when I know the dealers around are charging some rate, and the auto body shops, the good ones, the ones who will not receive a direct referral rate, are charging a third the price. Same shop, same parts replaced, more delicate finishing work, same AC repair, coding parts, installing and checking safety systems. Same hazmat concerns, more clean air concerns. And their billing rate is far lower.
Of course they don’t have loaners and people in suits, and donuts in the waiting room.
JHZR2
Staff member
And NoVA isn’t exactly cheap in terms of housing or commuting.
It has changed. Body shops have gone up - last estimate I saw was $165/hr for mechanical labor.
Nope, non-exotics. Non-luxury dealers are $200-$220/hr (FCA, Honda, Toyota), Euro's are closer to the high end of that range.
150% of the national average, from the stats I've seen.
That's true. But the problem is when they get to a point in life where they cannot work, either by age or technology shift or by health, they just might regret the way they managed their income.
It is no secret that incomes in Silicon Valley are very high in comparison to most other places. I can tell you there were a ton of drop dead gorgeous German cars in my parking lot, and people were wearing Macys and Nordys clothing. I drove Toyota strippie pickups. Many of those people are at the end of their career. And don't have squat to show for it.
We are looking a new Legacy premium for the wife in January, 24K out the door. Pay cash and its a done deal, not a bad car for the money.
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