WaPo -- New cars out of reach for many

[Anonymous]

PP’s point about the market needing to adjust is probably right. With interest rates so low even middle class folks were buying fancy cars so that’s what the manufacturers are making as that is what has sold over the past few years. Remember Saturn? They jumped into the market in the late 80s or early 90s to fulfill a need for entry level reliable cars (then got bought by GM and would down as that demand evaporared). Sadly this is a market that does not adjust quickly due to how the parts and assembly plants work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This article depressed me. The big takeaway for me is that car manufacturers are doing away with entry level models. DD is graduating college and will need to purchase a car. She’s been saving for a down payment but she will never be able to afford something new at these prices and interest rates. DH has spent months looking for a safe and reliable used car for her but those prices are insane and forget about financing it.

They're not doing away with entry level models. However, while supply chains remain constrained, and they can only manufacture a certain number, they need to focus on the most profitable ones for now.

Maybe you haven’t paid attention in the last couple of years. They are actually doing away with entry level models.
Ford and GM used to sell small and cheap entry level cars like the Ford Focus or Chevy Cruze. They have been discontinued.
The entry level Ford is now the Ford Escape, an SUV.
Japanese brands will soon follow. The Honda Civic and Toyota Corolla will be discontinued in the US and replaced with their SUV-like versions.
Manufacturers figure that they can take a car, make it slightly bigger and raise the ground clearance, and sell if for $10k more.

Volkswagen Jetta $20k
Hyundai Elantra $20k
Nissan Kicks $20k
Nissan Sentra $19k
Kia Soul $19k
Subaru Impreza $19k
Kia Forte $19k
Hyundai Venue $19k
Kia Rio $16k
Mitsubishi Mirage $16k
Hyundai Accent $16k
Nissan Versa $15k

https://cars.usnews.com/cars-trucks/advice/cheapest-cars-on-the-market?slide=3

When half of that list is from Hyundai/Kia I think you are sort of proving PP's point

[Anonymous]

People who buy new cars are either rich or bad with money. Sometimes both.

[Anonymous]

Anonymous wrote:I didn’t own a car or have anything resembling regular access to one until the age of 23.

I was 46 before I purchased my first and only new car.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This article depressed me. The big takeaway for me is that car manufacturers are doing away with entry level models. DD is graduating college and will need to purchase a car. She’s been saving for a down payment but she will never be able to afford something new at these prices and interest rates. DH has spent months looking for a safe and reliable used car for her but those prices are insane and forget about financing it.

They're not doing away with entry level models. However, while supply chains remain constrained, and they can only manufacture a certain number, they need to focus on the most profitable ones for now.

Maybe you haven’t paid attention in the last couple of years. They are actually doing away with entry level models.
Ford and GM used to sell small and cheap entry level cars like the Ford Focus or Chevy Cruze. They have been discontinued.
The entry level Ford is now the Ford Escape, an SUV.
Japanese brands will soon follow. The Honda Civic and Toyota Corolla will be discontinued in the US and replaced with their SUV-like versions.
Manufacturers figure that they can take a car, make it slightly bigger and raise the ground clearance, and sell if for $10k more.

Volkswagen Jetta $20k
Hyundai Elantra $20k
Nissan Kicks $20k
Nissan Sentra $19k
Kia Soul $19k
Subaru Impreza $19k
Kia Forte $19k
Hyundai Venue $19k
Kia Rio $16k
Mitsubishi Mirage $16k
Hyundai Accent $16k
Nissan Versa $15k

https://cars.usnews.com/cars-trucks/advice/cheapest-cars-on-the-market?slide=3

When half of that list is from Hyundai/Kia I think you are sort of proving PP's point

I think it's totally reasonable that a teenager getting a first car would wind up in a base model Hyundai or Kia (personally I'd go for that Subaru Impreza, that's a great car for 19k!) or an older car.

My first car was a 10 year old Toyota. That is what an 18 year old is supposed to drive. It is only rich kids whose parents buy them cars who get nicer cars than that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This article depressed me. The big takeaway for me is that car manufacturers are doing away with entry level models. DD is graduating college and will need to purchase a car. She’s been saving for a down payment but she will never be able to afford something new at these prices and interest rates. DH has spent months looking for a safe and reliable used car for her but those prices are insane and forget about financing it.

They're not doing away with entry level models. However, while supply chains remain constrained, and they can only manufacture a certain number, they need to focus on the most profitable ones for now.

Maybe you haven’t paid attention in the last couple of years. They are actually doing away with entry level models.
Ford and GM used to sell small and cheap entry level cars like the Ford Focus or Chevy Cruze. They have been discontinued.
The entry level Ford is now the Ford Escape, an SUV.
Japanese brands will soon follow. The Honda Civic and Toyota Corolla will be discontinued in the US and replaced with their SUV-like versions.
Manufacturers figure that they can take a car, make it slightly bigger and raise the ground clearance, and sell if for $10k more.

Volkswagen Jetta $20k
Hyundai Elantra $20k
Nissan Kicks $20k
Nissan Sentra $19k
Kia Soul $19k
Subaru Impreza $19k
Kia Forte $19k
Hyundai Venue $19k
Kia Rio $16k
Mitsubishi Mirage $16k
Hyundai Accent $16k
Nissan Versa $15k

https://cars.usnews.com/cars-trucks/advice/cheapest-cars-on-the-market?slide=3

When half of that list is from Hyundai/Kia I think you are sort of proving PP's point

How is that proving her point? Those are decent, inexpensive cars, and widely available. There's also Mitsubishi, Nissan, and VW, which is the largest automaker in the world.

It's no secret that Detroit's Big Three make their profits in full sized trucks. The F-150 has been the best selling vehicle in the United States for over 40 years. The Silverado and the Ram are 2nd and 3rd behind it, respectively. This is the result of the chicken tax from the 1960s.

But PPs was that there are no inexpensive cars available, and that's demonstrably false.

[Anonymous]

Anonymous wrote:I'm a little aggravated by this article (or at least the headline). Yes, a new car was part of the American "dream" -- but by definition that meant it was always out of reach for many. I remember the first time my parents bought a new car (in the 1970s) and how thrilled they were -- they were almost 50 and had decent jobs. People in the 1960s, and 70s bought used cars and fixed them up or made do. Then everything got exported to cheaper countries, and financing became ridiculously cheap, and all of a sudden you had new cars become the norm for teenagers and 20-somethings. Unfortunately, during that time period, people became really snotty about cars, so now it's considered failing not to have a nice new car. I recall in the 70s, it was not uncommon for someone to have a car up on blocks in their driveway, even in a middle class neighborhood. Now that's the kind of thing that would have you on the HOA list.
I'm 50, so I guess that's old to some people, but I have a recurring pet peeve that people seem to not realize that the consumer opulence of the past several decades was an anomaly and probably due for a course correction.

(And none of this takes away from the fact that the depression of American wages for the working and middle class over the past several decades is an awful thing for our country. But the two are rather connected -- we exported good manufacturing jobs to cheaper countries in order to get cheap consumer goods, but in the process hollowed out our working/middle class.)

I grew up in a blue collar neighborhood in the south with small homes and no one would tolerate cars on blocks in the front yard. We didn't have hoas back then but people knew not to do this. Every family had one car. People were snobs about cars in the 60s. That isn't new. Cadillacs were the big thing. There were no Asian imports and very few European cars around.

Credit was what changed everything. Literally everything. When I was young there were no credit cards and the only thing people financed were their homes. Credit was something akin to gambling and would ruin everyone.

New cars have always been out of reach for many. Since financing became a thing, peoople have always been willing to take on unreasonable debt to have a nicer car than they can afford.

[Anonymous]

Anonymous wrote:I'm a little aggravated by this article (or at least the headline). Yes, a new car was part of the American "dream" -- but by definition that meant it was always out of reach for many. I remember the first time my parents bought a new car (in the 1970s) and how thrilled they were -- they were almost 50 and had decent jobs. People in the 1960s, and 70s bought used cars and fixed them up or made do. Then everything got exported to cheaper countries, and financing became ridiculously cheap, and all of a sudden you had new cars become the norm for teenagers and 20-somethings. Unfortunately, during that time period, people became really snotty about cars, so now it's considered failing not to have a nice new car. I recall in the 70s, it was not uncommon for someone to have a car up on blocks in their driveway, even in a middle class neighborhood. Now that's the kind of thing that would have you on the HOA list.
I'm 50, so I guess that's old to some people, but I have a recurring pet peeve that people seem to not realize that the consumer opulence of the past several decades was an anomaly and probably due for a course correction.

(And none of this takes away from the fact that the depression of American wages for the working and middle class over the past several decades is an awful thing for our country. But the two are rather connected -- we exported good manufacturing jobs to cheaper countries in order to get cheap consumer goods, but in the process hollowed out our working/middle class.)

You're ignoring regional influence. One of my siblings lived in the rust belt for decades and when spouse and I moved to this area my sibling was stunned by the number of new shiny expensive cars here. It looks very different if you drive around different areas of the country. Where my mom lives, you still see mostly American modest cars.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This article depressed me. The big takeaway for me is that car manufacturers are doing away with entry level models. DD is graduating college and will need to purchase a car. She’s been saving for a down payment but she will never be able to afford something new at these prices and interest rates. DH has spent months looking for a safe and reliable used car for her but those prices are insane and forget about financing it.

They're not doing away with entry level models. However, while supply chains remain constrained, and they can only manufacture a certain number, they need to focus on the most profitable ones for now.

Maybe you haven’t paid attention in the last couple of years. They are actually doing away with entry level models.
Ford and GM used to sell small and cheap entry level cars like the Ford Focus or Chevy Cruze. They have been discontinued.
The entry level Ford is now the Ford Escape, an SUV.
Japanese brands will soon follow. The Honda Civic and Toyota Corolla will be discontinued in the US and replaced with their SUV-like versions.
Manufacturers figure that they can take a car, make it slightly bigger and raise the ground clearance, and sell if for $10k more.

Volkswagen Jetta $20k
Hyundai Elantra $20k
Nissan Kicks $20k
Nissan Sentra $19k
Kia Soul $19k
Subaru Impreza $19k
Kia Forte $19k
Hyundai Venue $19k
Kia Rio $16k
Mitsubishi Mirage $16k
Hyundai Accent $16k
Nissan Versa $15k

https://cars.usnews.com/cars-trucks/advice/cheapest-cars-on-the-market?slide=3

When half of that list is from Hyundai/Kia I think you are sort of proving PP's point

How is that proving her point? Those are decent, inexpensive cars, and widely available. There's also Mitsubishi, Nissan, and VW, which is the largest automaker in the world.

It's no secret that Detroit's Big Three make their profits in full sized trucks. The F-150 has been the best selling vehicle in the United States for over 40 years. The Silverado and the Ram are 2nd and 3rd behind it, respectively. This is the result of the chicken tax from the 1960s.

But PPs was that there are no inexpensive cars available, and that's demonstrably false.

+100

[Anonymous]

Anonymous wrote:This article depressed me. The big takeaway for me is that car manufacturers are doing away with entry level models. DD is graduating college and will need to purchase a car. She’s been saving for a down payment but she will never be able to afford something new at these prices and interest rates. DH has spent months looking for a safe and reliable used car for her but those prices are insane and forget about financing it.

This is what infuriates me. I bought a basic new Honda Accord in 2005 for $15,000. Now I can only find one that comes with bells and whistles I neither want nor need for almost double the price.

[Anonymous]

There was a lack of advice in the article. It is recommended that the full price of the car be no more than 35% of your yearly salary. MedianHHI in the US is about $68k. So the amount recommended to spend on a vehicle is about $24k. The average care is twice that amount. Even Dave Ramsey says you should only consider a new car if you have a net worth of 1 million. Depreciation is a luxury expense, so it is better for most people to get a used car.

[Anonymous]

Anonymous wrote:People who buy new cars are either rich or bad with money. Sometimes both.

No---buying a new car and keeping it 10 years is the smart thing to do. If you buy a used car that is only 2-3 years old, you don't know why it's being sold/what is actually wrong with it and might not find out for a few months. I prefer to buy new and just keep it for years.
I'm rich but my vehicle is 12 yo. Love it and would be keeping it but there are a few issues happening (electrical) and the parts to fix simply are not available. Car is no longer "alarmed" because a bad sensor that costs $800 and cannot be located/no clue how long. Similarly, the "handsfree" is no longer working and that part is "$1K" and also no clue when it will be available. So now that we have hit the point where there are many repairs (and no parts), I'm finally looking to ditch the car. But if those hadn't happened, I would be driving it for another 2-3 years.

Before I was rich, I also bought new and simply kept the car for 7-10 years. And then sell it for 30-35% of it's original value.

[Anonymous]

I didn’t really get this article. I understand prices and interest rates have gone up, but they didn’t do a great job of breaking down what portion of households have bought new cars in the past vs now.

[Anonymous]

My parents never bought a new car my whole life, and they were UMC. They just recognized that cars are a waste of money. I bought new but it’s a no fancy car and it’s going on 6 years and 60K miles. Every year I love to think of how much money it’s saving me having cost only $28K new which I paid off in 3 years.

[Anonymous]

Anonymous wrote:People who buy new cars are either rich or bad with money. Sometimes both.

This used to be true, but cars last a lot longer now and these days buying used is not always a better deal.