12% are paying $1,000+ a month for car loans ...

The Critic said:
I think the number is far higher than that in my area. And many middle to upper middle class area. Then again, the average mortgage + taxes/ins in my area (which is similar to many major metropolitan areas) is probably in the $5-7K/mo range, so $1k/mo for a car payment isn't exactly a big deal when your monthly takehome income is $10-15K/mo.
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I think that is part of the problem today. People not mature enough to live within their means. I grew up in the same kind of area in the Northeast.
Thing is everyone had a mortgage and some 2nd mortgages (aka home equity loan) because they could afford to buy all the toys they had in life. Others who were smart enough not to have a second mortgage had a loan for almost everything they bought because they could afford it.

But they couldn't afford it because they are borrowing money from other people to buy stuff that they dont have the money for.
If a $1k a month car payment isnt a big deal, then why do the same people with that $1k car payment have a mortgage/owe someone money for the house that they bought?

(you do know this is nothing about you, its about our society and our national debt)

You cant afford it if you have to go to someone to borrow money to buy it, this is what todays society has backwards. They think being able to borrow money from someone and pay it back makes it something that is affordable. Its not affordable because they had to borrow money for someone else to buy it because they didnt have the money for it.
 
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Average cost for family transportation seems to be an average yearly salary more or less.
It's always been that way. In '72 the minimum wage was $2.05/hr. At $5 you were doing OK then. Spread it out over 4 yrs. and one could afford a new car then for basic ''needed'' transportation.
Todays ''bubbles'' are not the norm and keeping up with the "Jones" is more common.
Besides most of the new upscale vehicles on the road are leased now anyway to keep monthly costs down and appearances up.
 
repairman54 said:
Average cost for family transportation seems to be an average yearly salary more or less.
It's always been that way. In '72 the minimum wage was $2.05/hr. At $5 you were doing OK then. Spread it out over 4 yrs. and one could afford a new car then for basic ''needed'' transportation.
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While that may be true, you have to remember back then auto loans were for 24 months. With some going out to 36 months. Today we have car loans that run for 72 months on average.

People saved a larger portion of their income back then. It was not uncommon for first time home buyers to put 20% down on a house. (Many banks required it, or they wouldn't even talk to you about a home mortgage).

And back then they wouldn't count the wife's income. Because they figured she would end up pregnant, and become a stay at home mom. (This was before women burned their bras, and went out and "roared" playing Helen Reddy records).

The fact is regardless of how much you "adjust for inflation", today people save little to nothing. If they can't borrow it, they can't buy it. This is why leasing has become so popular. It all but didn't exist in the 60's and 70's, except for corporations who sometimes leased fleet vehicles.

Today many lease because it gets them around a steep down payment that they haven't got, and can't afford to save. All of this is weakening us financially as a nation. Money is power. And today this nation's citizenry possesses less and less of it.
 
So the majority of folks are not paying $1k in car payments? Hopefully the folks paying 1k in car payments didnt buy a honda civic at 120% of book value.
 
alarmguy said:
You cant afford it if you have to go to someone to borrow money to buy it, this is what todays society has backwards. They think being able to borrow money from someone and pay it back makes it something that is affordable. Its not affordable because they had to borrow money for someone else to buy it because they didnt have the money for it.
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Per my earlier post (and within reason, we aren't talking about people buying McMansions they can't afford or an Escalade) housing has jumped the shark in many parts of the world. While the US experienced the housing bubble collapse during the last recession, this was not the case elsewhere. Property values in the GTA and surrounding areas (where I am) didn't go down. They've just continued to go up. The West Coast is even worse, Vancouver and surrounding area prices are utterly insane.

I could sell my place and buy a palace with cash in Nova Scotia or New Brunswick, but I can't make the kind of money I do down there and I've had the same employer for coming up on 20 years and I'm happy with where I am. Other people, like teachers, nurses...etc, there are only so many jobs on the poverty coast, they don't pay as well, and despite lower prices for housing, the cost of living isn't otherwise any lower.

Example:
https://www.realtor.ca/real-estate/24894887/16-bank-street-n-millbrook-village

That's 1,023 square feet for $600K with an hour commute into the GTA. There is no way somebody making ~100-150K/year (what they might make in the GTA) is going to be able to buy that house without a mortgage while also paying rent (which is equally obscene) to save up, gas, utilities, and have a reliable car that they can make the commute with. If they take a job locally, they won't make what they would in the GTA.

Same area, 2,300 square ft for $1,161,000:
https://www.realtor.ca/real-estate/24844587/41-coldbrook-dr-cavan-monaghan-millbrook


This started long before COVID and I think the best we can hope for is that it levels off if we have a recession.
 
OVERKILL said:
Per my earlier post (and within reason, we aren't talking about people buying McMansions they can't afford or an Escalade) housing has jumped the shark in many parts of the world. While the US experienced the housing bubble collapse during the last recession, this was not the case elsewhere. Property values in the GTA and surrounding areas (where I am) didn't go down. They've just continued to go up. The West Coast is even worse, Vancouver and surrounding area prices are utterly insane.

I could sell my place and buy a palace with cash in Nova Scotia or New Brunswick, but I can't make the kind of money I do down there and I've had the same employer for coming up on 20 years and I'm happy with where I am. Other people, like teachers, nurses...etc, there are only so many jobs on the poverty coast, they don't pay as well, and despite lower prices for housing, the cost of living isn't otherwise any lower.

Example:
https://www.realtor.ca/real-estate/24894887/16-bank-street-n-millbrook-village

That's 1,023 square feet for $600K with an hour commute into the GTA. There is no way somebody making ~100-150K/year (what they might make in the GTA) is going to be able to buy that house without a mortgage while also paying rent (which is equally obscene) to save up, gas, utilities, and have a reliable car that they can make the commute with. If they take a job locally, they won't make what they would in the GTA.

Same area, 2,300 square ft for $1,161,000:
https://www.realtor.ca/real-estate/24844587/41-coldbrook-dr-cavan-monaghan-millbrook


This started long before COVID and I think the best we can hope for is that it levels off if we have a recession.
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Things are so bad - that the Yukon Denali is the new Escalade around here 😷
(our former ALL GM dealership has dropped Cadillac) …
In fact - my airport limo’s are now Suburban - moved off Escalade too …
 
OVERKILL said:
Per my earlier post (and within reason, we aren't talking about people buying McMansions they can't afford or an Escalade) housing has jumped the shark in many parts of the world. While the US experienced the housing bubble collapse during the last recession, this was not the case elsewhere. Property values in the GTA and surrounding areas (where I am) didn't go down. They've just continued to go up. The West Coast is even worse, Vancouver and surrounding area prices are utterly insane.

I could sell my place and buy a palace with cash in Nova Scotia or New Brunswick, but I can't make the kind of money I do down there and I've had the same employer for coming up on 20 years and I'm happy with where I am. Other people, like teachers, nurses...etc, there are only so many jobs on the poverty coast, they don't pay as well, and despite lower prices for housing, the cost of living isn't otherwise any lower.

Example:
https://www.realtor.ca/real-estate/24894887/16-bank-street-n-millbrook-village

That's 1,023 square feet for $600K with an hour commute into the GTA. There is no way somebody making ~100-150K/year (what they might make in the GTA) is going to be able to buy that house without a mortgage while also paying rent (which is equally obscene) to save up, gas, utilities, and have a reliable car that they can make the commute with. If they take a job locally, they won't make what they would in the GTA.

Same area, 2,300 square ft for $1,161,000:
https://www.realtor.ca/real-estate/24844587/41-coldbrook-dr-cavan-monaghan-millbrook


This started long before COVID and I think the best we can hope for is that it levels off if we have a recession.
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(Im saying this for fun) much the same on Long Island NY, search Levittown NY, Seaford NY, Farmingdale NY, Massapequa NY, Wantagh NY, Bethpage NY
Levittown is the most inexpensive of the above towns , you can always do a search for those if you want.
Check out the taxes on the smallest of homes, $9000 to $12000 a year.
https://www.realtor.com/realestateandhomes-search/Levittown_NY

Here is an open house today, 1 bath room, $9000 a year in taxes. BTW most Long Island homes in this range are 60 feet x 100 foot lots.
https://www.realtor.com/realestateandhomes-detail/89-Shepherd-Ln_Levittown_NY_11756_M45715-89788
 
alarmguy said:
(Im saying this for fun) much the same on Long Island NY, search Levittown NY, Seaford NY, Farmingdale NY, Massapequa NY, Wantagh NY, Bethpage NY
Levittown is the most inexpensive of the above towns , you can always do a search for those if you want.
Check out the taxes on the smallest of homes, $9000 to $12000 a year.
https://www.realtor.com/realestateandhomes-search/Levittown_NY
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Yup, same situation. So a public school teacher, for example, is certainly not going to be able to afford one of those without a mortgage, per my point.

Things are seriously out of whack. Not sure whether housing will correct in the next recession like they did last time for you guys, but for us, as I noted, that never happened.
 
OVERKILL said:
Yup, same situation. So a public school teacher, for example, is certainly not going to be able to afford one of those without a mortgage, per my point.

Things are seriously out of whack. Not sure whether housing will correct in the next recession like they did last time for you guys, but for us, as I noted, that never happened.
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Yeah, I do agree, I was showing you where I spent 40+ year of my life. I was surprised to see Canada up there as well.
This will give you an idea the the high taxes in my old County of Long Island NY
Yes, last correction of 2008 housing market tanked and stayed that way for a period of time. 2006 was the peak, now the last few years, all over again, prices took off with the low interest rates

Check out the police salaries after 9 years average salary is over $120,000 a year and lets not forget overtime and benefits. Its a vicious cycle.
Scroll down the page, I didnt even know the salary range was right there.
https://www.pdcn.org/148/Recruitment?activeLiveTab=widgets

Average teacher salary is around $75,000 typically will be two income households.
https://mint.intuit.com/salary/teacher/nassau-county-ny


15 years ago I bailed out to South Carolina in a home we had built and actually now have our house in contract. Moving to a smaller home underconstruction down by the coast now that its just my wife and I.
Its an even trade, much larger home where we live to a smaller home where we will be living, same price range, different lifestyle and new home that wont need repairs or updating for 15 years like the last one didnt need either🙃.
 
alarmguy said:
Yeah, I do agree, I was showing you where I spent 40+ year of my life. I was surprised to see Canada up there as well.
This will give you an idea the the high taxes in my old County of Long Island NY

Check out the police salaries after 9 years average salary is over $120,000 a year and lets not forget overtime and benefits. Its a vicious cycle.
Scroll down the page, I didnt even know the salary range was right there.
https://www.pdcn.org/148/Recruitment?activeLiveTab=widgets

Average teacher salary is around $75,000 typically will be two income households.
https://mint.intuit.com/salary/teacher/nassau-county-ny


15 years ago I bailed out to South Carolina in a home we had built and actually now have our house in contract. Moving to a smaller home underconstruction down by the coast now that its just my wife and I.
Its an even trade, much larger home where we live to a smaller home where we will be living, same price range, different lifestyle and new home that wont need repairs or updating for 15 years like the last one didnt need either🙃.
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Yep, so let's say two teachers, $150K before tax, take-home might be $90K? Then rent, insurance, utilities...etc, there's no way they are saving up to buy a $600K house with cash.

Back in the 80's, a pair of teachers might take home 70K, but a house, like the one I grew up in, was $60K.

Things have totally jumped the shark.

Should add that median household income here is $58K and you've seen the house prices :( I think there's some truth to the statement that in many places, my generation will be the last one to broadly own homes.
 
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KrisZ said:
$1k a month is a lot for a vehicle IMO, however I’m not sure if the 12% number is a concern. Seems logical that 12% of the population could afford such a payment since about 15% of households have an income between $100-$150k.

Seems about right IMO. It may not be smart financially long term, but it’s not like banks are giving out $1k monthly car loans to people making $40k a year.
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But probably not. People with serious folding money (ie millionaires) often have modest cars. [If you doubt this comment I suggest you read "The Millionaire Next Door".] And people with big incomes often have leased vehicles for tax purposes. So it's likely that lower income people will have those big payments. In my youth the guys (and they were all 'guys') driving the nicest cars were single and often had sketchy, even seasonal incomes.

Banks and finance companies will loan money to anyone who can make the payments.

But all this is just my opinion. Does anyone have data?
 
Lots of wants and needs here … things we need are up around 20% or so ?
Needs create needs - need a car ? You will soon need tires … Analysts are talking 30% more …

But some wants are really annoying … We once wanted our pool - now the chemicals cost me more than double …
(you have no choice) …
 
JeffKeryk said:
My 2 cents: We need to be teaching personal finance in schools. Give people a fighting chance.
Credit is simply a tool; the tool is not the problem, how and when you use it is what determines the result.
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I've said this for years. You graduate from high school and you know nothing about the financial world. You have no idea how to shop for a home mortgage. Nothing about credit cards and interest rates. Nothing about investing. Nothing about loans in general, along with what to look for and avoid. Nothing about what you need to know in life.

But they'll teach you how to diagram a sentence in English class. Or have to read some useless books for English literature. Or learn French. All of which you'll forget 15 minutes after you learn it.
 
alarmguy said:
(Im saying this for fun) much the same on Long Island NY, search Levittown NY, Seaford NY, Farmingdale NY, Massapequa NY, Wantagh NY, Bethpage NY
Levittown is the most inexpensive of the above towns , you can always do a search for those if you want.
Check out the taxes on the smallest of homes, $9000 to $12000 a year.
https://www.realtor.com/realestateandhomes-search/Levittown_NY

Here is an open house today, 1 bath room, $9000 a year in taxes. BTW most Long Island homes in this range are 60 feet x 100 foot lots.
https://www.realtor.com/realestateandhomes-detail/89-Shepherd-Ln_Levittown_NY_11756_M45715-89788
Click to expand...
I'm in Valley Steam, less than 30 minutes from all of those locations with taxes over $11k/year. I grieve them every year. Prices are coming down a bit, I think the next rate increase is really going to mess things up big time. I guess I'm old $1,000/month for a car payment is insane to me. lol
 
demarpaint said:
I'm in Valley Steam, less than 30 minutes from all of those locations with taxes over $11k/year. I grieve them every year. Prices are coming down a bit, I think the next rate increase is really going to mess things up big time. I guess I'm old $1,000/month for a car payment is insane to me. lol
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Spent 40 years on my life on the South Shore of Nasssu County. Small world and you know what the expenses are.
I was in the Bellmore, Wantagh. Seaford, Massspequa area.
I would not have traded anything in the world growing up there and even my young adult life.
It was great and so was boating on the great South Bay between Jones Inlet and Fire Island Inlet and at times fishing outside of New York Harbor where the Ambrose light/navigation for the huge ships, Which I think I’ve read was now past it’s time and just demolished about a decade ago, I think it was in about 90 feet of water but I can’t remember and also off the New Jersey Highlands.
Back then we used the compass, no GPS and no radio beacon sometimes in boats as small as 18 feet LOL and no land in sight.
I wouldn’t trade those times for anything.
But that was then and now going back two decades, the congestion, urbanization and overall quality of life was not for me and the best decision we made was to move south.

I had a family member with a waterfront home on the bay his taxes were over 18,000 a year plus calculate around $4000 a year in insurance.

Nothing is for everybody though, left behind a lot of lifelong friends going all the way back to elementary school, we still talk sometimes and still miss them at times.

I’m sure you remember the whole Shoreham of nuclear power plant debacle which led at the time to some of the highest electric rates because of building a $5 billion plant and taking it out of commission after low power testing before commercially producing power for the residents.

Oh I got off topic sorry about that. But if you know the area you also know those people in those areas I mention, buy lots of toys and lots of expensive things but I can tell you right now even though their incomes are high the quality of life isn’t any higher and most of those toys I supported by second mortgages and taxes/expenses can suck the life out of some.
 
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