How do so many young families have $80k SUVs?

[Anonymous]

When one of my coworkers had a baby her parents gifted her a brand new SUV.

I went to private school, so I was accustomed to see this happening (I was on scholarship, no large SUV for me) but my fellow "regular family" coworkers were astounded and jealous.

[Anonymous]

Anonymous wrote:People spend a lot on vehicles. 10-15% of income after taxes is recommended by a lot of financial advice websites. So if you make $300K around here (prob below average for mid 30s professional in lobbying, law, tech, etc) your car payments could be up to $2625 a month.

I personally think that’s INSANE but I’ve come to realize a lot of people in the DC area spend as much as they can afford (eg they’ll go for the max 28% DTI mortgage ratio, max car payment, etc).

$2600 a MONTH on cars??! The auto lobby is insane. We make $500k and drive a Toyota and a Subaru.

[Anonymous]

Anonymous wrote:Family money. Though all think they are self-made.

This. Frustrating for those of us with no family assistance.

[Anonymous]

Anonymous wrote:When one of my coworkers had a baby her parents gifted her a brand new SUV.

I went to private school, so I was accustomed to see this happening (I was on scholarship, no large SUV for me) but my fellow "regular family" coworkers were astounded and jealous.

Your coworker's mistake was admitting that the car was a gift. She easily could have kept that private.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The DCUM real estate subforum discusses plenty of neighborhoods where houses for families with 3 kids cost $1MM-$2MM+. That is a mortgage payment of $5K-$10K+.

The BLS consumer expenditure survey shows that transportation costs about half as much as housing. So two $80,000 vehicles with $1,200-$2,000 monthly payments is not out of line with housing costs.

If you are in the income bracket to have a $2 mil house and you still have a car payment you are doing something wrong.

Agree!

[Anonymous]

Anonymous wrote:When one of my coworkers had a baby her parents gifted her a brand new SUV.

I went to private school, so I was accustomed to see this happening (I was on scholarship, no large SUV for me) but my fellow "regular family" coworkers were astounded and jealous.

Are people really jealous of SUVs though? They're so basic.

[Anonymous]

Anonymous wrote:

Anonymous wrote:When one of my coworkers had a baby her parents gifted her a brand new SUV.

I went to private school, so I was accustomed to see this happening (I was on scholarship, no large SUV for me) but my fellow "regular family" coworkers were astounded and jealous.

Are people really jealous of SUVs though? They're so basic.

And they make driving through upper NW DC intolerable. I will never for the life of me understand why people who live in NW DC want an SUV as their main car. 95% of the time they just make it so nobody can drive down neighborhood two-way streets because the cars parked on both sides are huge and they’re trying to navigate around another SUV going the opposite direction where if y’all just stopped driving your HUGE FREAKING CARS in the god damned city, we might all be happier.

[Anonymous]

Anonymous wrote:If you are in the income bracket to have a $2 mil house and you still have a car payment you are doing something wrong.

I'm in that bracket and took my first car loan ever a few years ago. I negotiated a cash car price during Covid, and when the car finally arrived the dealer offered some manufacturer-sponsored 1% loan. So I took it and set up autopay. My first and only car loan got repaid last December.

Anonymous wrote:I just bought a $90k suv. The lease payment is only $1200, not even close to $2000.

That sounds like a 7-year lease term with a 3% interest rate. Shorter terms and more realistic interest rates will have higher payments.

Anonymous wrote:In my dreams only would a $1MM house at today’s interests equal a $5K monthly payment

That calculation matches my loan. I put 20% down last year with a rate under 6% fixed for 10 years on a 30-year amortization schedule. Interest rates have gone up a bit, but it is still close.

https://www.calculator.net/payment-calculator.html?ctype=fixpay&cloanamount=800%2C000&cloanterm=4&cmonthlypay=5000&cinterestrate=6&printit=0&x=Calculate#result

https://www.calculator.net/payment-calculator.html?ctype=fixpay&cloanamount=800%2C000&cloanterm=4&cmonthlypay=5%2C500&cinterestrate=7&printit=0&x=Calculate#result

[Anonymous]

Finally bought a $75K SUV at the age of 57. To the PP who said you should be able to pay for your cars in cash if you have a $2M house, not necessarily. Our house has appreciated to that value, but we've always had car payments. Our income is mostly monthly salaries and it's easier for us to make monthly payments and use our aggressive monthly savings for retirement and college.

[Anonymous]

Anonymous wrote:

Anonymous wrote:When one of my coworkers had a baby her parents gifted her a brand new SUV.

I went to private school, so I was accustomed to see this happening (I was on scholarship, no large SUV for me) but my fellow "regular family" coworkers were astounded and jealous.

Are people really jealous of SUVs though? They're so basic.

Well, if you don't have the money to buy a new car...I was jealous of the new car, not necessarily the SUV..

[Anonymous]

Anonymous wrote:Finally bought a $75K SUV at the age of 57. To the PP who said you should be able to pay for your cars in cash if you have a $2M house, not necessarily. Our house has appreciated to that value, but we've always had car payments. Our income is mostly monthly salaries and it's easier for us to make monthly payments and use our aggressive monthly savings for retirement and college.

I wrote that. I guess it makes sense numbers-wise to take out a low interest car loan and invest the money.
I’ve just never had a car loan, so it seems odd. Then again, I’ve never had an $80k car.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Family money. Though all think they are self-made.

This. Frustrating for those of us with no family assistance.

Ummm...most people do NOT have "family assistance". And most people do not drive $80K+ vehicles. They drive Toyotas and Hondas and Subarus and Kias

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The DCUM real estate subforum discusses plenty of neighborhoods where houses for families with 3 kids cost $1MM-$2MM+. That is a mortgage payment of $5K-$10K+.

The BLS consumer expenditure survey shows that transportation costs about half as much as housing. So two $80,000 vehicles with $1,200-$2,000 monthly payments is not out of line with housing costs.

If you are in the income bracket to have a $2 mil house and you still have a car payment you are doing something wrong.

Agree!

+1

We paid cash for our first car at age 30 and never looked back (ie never had another loan, unless it was to get a decent rebate, loan for 1-2% and then pay it off the first month). We drive our cars for 8-10+ years and pay cash for whatever we want. Last car was $98K, 1 year in has less than 5K miles on it so it will last for 10+ years easily and then get $30-40K resale.

[Anonymous]

Anonymous wrote:Finally bought a $75K SUV at the age of 57. To the PP who said you should be able to pay for your cars in cash if you have a $2M house, not necessarily. Our house has appreciated to that value, but we've always had car payments. Our income is mostly monthly salaries and it's easier for us to make monthly payments and use our aggressive monthly savings for retirement and college.

If you drive your cars for 7-8+ years, you should be able to afford to pay cash. Take a 3 year loan, then keep saving the car payment for the next 5+ years. That plus the trade in should get you a new car without a loan. You don't need a $75K SUV at age 57 (that's likely got a 3rd row---you no longer require that at that age typically). You could have bought a $40-50K Honda/Toyota and paid cash if you did the above.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Family money. Though all think they are self-made.

This. Frustrating for those of us with no family assistance.

Ummm...most people do NOT have "family assistance". And most people do not drive $80K+ vehicles. They drive Toyotas and Hondas and Subarus and Kias

Subarus aren’t so cheap! Mine was a hair under $50k. The cost of cars has gone up dramatically.