More than 80% of Amercans can't afford a new car

[Shel_B]

Or so the headline in the linked article asserts. I'm not looking for a new car and have no idea what the costs are other than to believe that new cars are very spendy and interest rates for financing are fairly high.

More Than 80 Percent Of Americans Can’t Afford New Cars

Experts say you should earn $100K before buying a new car so you don’t spend more than ten percent of your monthly income on payments

jalopnik.com

Thanks to rising interest rates, dealer markups, and a messed up supply chain, the cost of buying a car is through the roof. But have you ever considered what you might need to earn before signing up for a mammoth loan to finance a new car? Well, according to a new report, it’s actually more than the majority of Americans make right now.

 

[tblt44]

I drive a 2003 and a 2006 because cars are too pricey.
Yes I could buy a new one but choose not to.

 

[Vercingetorix]

Wow, yet people still buy new cars. Amazing.

 

[goingplacesanddoingstuff]

If you have cash, it can still make sense to buy certain vehicles new right now. I’m seeing some used cars listed for higher than new ones. Many people must assume used cars are always less.

 

[joekingcorvette]

People buy new cars in order to save gasoline or fuel and have the peace of mind and a warranty. There are too many shops out there that just want to charge an arm and a leg for repairs. Everyone's situation is different and for many it's a hobby not an economic asset. People just plain love cars and trucks and that's why you work hard to make money to buy things you like. Houses are first but cars are fun,expensive, and a great enjoyment to many people including myself. I can drink water and live in a cave and watch money grow but that's not really that great watching a balance sheet or bank account grow. Most people have a good balance however there are the other's that over spend trying to impress people they don't really like anyway.

 

[twouvakind]

80% of Americans may not be able to afford new but a good number of them will choose new and hump the payments over many, many months.

 

[Cujet]

Civic's locally cost $25-$26K, plus TTT, and dealer fee/prep. $29,300 OTD (local rates)

6.5%, 48 months, and 0 down, that's nearly $700 per month.
Stretch it out to 72 months, 6 years, and it is still $500 per month.

Not including insurance, which here in South Florida is now well into the INSANE range.

 

[incognito_2u]

Overpriced, Market adjusted, interest rates through the roof, also throw in the fact of all the uncertainty in the economy these days and you have the reason why !

 

[joekingcorvette]

Civic's locally cost $25-$26K, plus TTT, and dealer fee/prep. $29,300 OTD (local rates)

6.5%, 48 months, and 0 down, that's nearly $700 per month.
Stretch it out to 72 months, 6 years, and it is still $500 per month.

Not including insurance, which here in South Florida is now well into the INSANE range.

Very true however that is probably the most cost effective car you can buy. Civic's run forever with good maintenance. It's the huge or luxury vehicles that cost over way more than a Civic that people can't afford. If you are smart enough to buy a new Civic it's more than likely you will make the payments.

 

[Chris142]

I can't afford my old cars with gas currantly over $6 a gallon.

 

[supton]

Not sure what to make of this jem:

According to a report from Market Watch, you shouldn’t be spending more than ten percent of your annual income on each monthly car payment.

I mean, I get it, some people aren't living paycheck to paycheck, instead they are just going deeper into the hole each month. But if the "experts" think you shouldn't spend more than 120% of your income each year on your transportation needs... well, I think I'd rather find some different experts.

Ok, that's not the experts, that's the experts at Jalpnik.

 

[AZjeff]

I can't afford my old cars with gas currantly over $6 a gallon.

And Pa friends who were just here visiting texted they bought gas in Ohio for $3.079/gal.

So how many Americans couldn't afford a new car 5, 10, or 20 years ago? BTW that's individual persons not households in the article.

 

[PimTac]

Wow, yet people still buy new cars. Amazing.

Yep by stretching the loan amortization out

 

[Vercingetorix]

Yep by stretching the loan amortization out

So why does anybody care? 80% of Americans can’t but new cars, yet somehow new cars get sold, houses get bought and the economy rolls along. And has been longer than any of us has been alive.

 

[Astro14]

Or so the headline in the linked article asserts. I'm not looking for a new car and have no idea what the costs are other than to believe that new cars are very spendy and interest rates for financing are fairly high.

More Than 80 Percent Of Americans Can’t Afford New Cars

Experts say you should earn $100K before buying a new car so you don’t spend more than ten percent of your monthly income on payments

jalopnik.com

Thanks to rising interest rates, dealer markups, and a messed up supply chain, the cost of buying a car is through the roof. But have you ever considered what you might need to earn before signing up for a mammoth loan to finance a new car? Well, according to a new report, it’s actually more than the majority of Americans make right now.

A somewhat specious headline. It should have read, “80% of Americans should not buy a new car based on FI Ina ial guidelines”

The “80% can’t” is sort of true. They can’t if they want to spend responsibly, but what percentage of Americans spends responsibly?

 

[andrew_j]

I agree on making less than $100k and buying new is financially detrimental as you honestly cannot afford the depreciation.

 

[atikovi]

I agree on making less than $100k and buying new is financially detrimental as you honestly cannot afford the depreciation.

That really depends on the car. A $100,000 S-class that costs $100,000 and will be worth $20,000 in 10 years, or a $20,000 Sentra that will be worth $5,000 in 10 years. Losing $80,000 vs. $15,000.

 

[tblt44]

Car payments of 600+ ridiculous

 

[D60]

Car payments of 600+ ridiculous

Isn't $600/mo pretty low at today's prices?

I've never had a car payment, and having gone so long like that it seems ludicrous to consider it. I'd rather buy a beater and keep it alive .....which has been most of my vehicles come to think of it

 

[tbm5690]

If you have cash, it can still make sense to buy certain vehicles new right now. I’m seeing some used cars listed for higher than new ones. Many people must assume used cars are always less.

They are if you're buying 3+ years older than new. It's the barely used ones that are at times higher than new.