Has anyone else noticed this?

Sudden growth in vehicles in $35k+ pricing
Safety and technology is driving costs way up.
SUV options start at mid $25k and up
Fast depreciation puts everyone in a suckers game. Do you really really have to buy new?

Too many may be falling for the depreciated premium/luxury car value trap without capability to pay for the maintenance.

So if you're going beyond your means or in a lease without capability to maintain it, you're screwed. These loan situations put the car at risk of neglect and further supply the market with questionable cars (hidden maintenance gotchas). A recession of any sort or ripple effect of trade war/chills will hit these behind in payment buyers the hardest.

OLeary (SharkTank guy) said it best... a car is the worst investment you will ever make. It's $$ you're throwing away every month (insurance, depreciation, maintenance). You better enjoy it/use it/love it or get rid of it. No one buys a car to put up with depreciation or maintenance hassles. This is where the Tesla cars are starting to disrupt the market with vehicles capable of hitting 300k and 500k miles, and offer a long term value proposition at cheapest cost per mile. Even a Tesla is way beyond what most can really afford, unless they see the car as a 'forever' car and say never again to the german trifecta of audi/mercedes/bmw tactics of stealing cash out of your wallet to go 5-10k miles on it.

 

Amen. The only exceptions if you really want it and could afford anything out there without breaking a sweat financially (eg car cost is less than 1-2% of income)

 

 

Just throwing in a text from my bro, he's in that crowd where so and so got a Range Rover, he got a Raptor, this other kid got a Tesla 85D. The guy with the Tesla had a '17 Raptor, and now that my brother got one, he said he wants to get rid of the Tesla and go back to a Raptor. He's paying $3400/mo. rent, and has 85k in credit card debt, complaining to my bro.

So I said, get rid of the car, rent a smaller apartment, and start paying back the credit card. Maybe take a while but do it, you're only 30 y.o.

My bro says no, he's buying a house and getting married.

To me it's like wanting to lose weight. Diet, and exercise. Or, eat more.

 

oh my goodness. That's a train wreck happening right before your eyes. The worst is offender is the credit card payments. It soon will grow to a point when no one will help him bail out, due to payments just covering the interest and not really paying down anything on the balance. Your advice is spot on. Time to go cold turkey and frugal mode for a hard 2-3 years. Cord cutting everything else, keeping only the cellphone as luxury item. He's owned by the banks, and you don't want to end up getting owned by the government for wage garnishment too. freedom for the rest of his life after age 35 will be worth it.

 

The part that is always crazy with my brother, is just when you thought you could give initial guidance, there's more to it. Like this guy getting married and buying a house--that's gonna make matters worse.

On the money thing it's really food for thought. I see two things that could make my own situation better--wife goes back to work, and no more house payment. That's not a lot of things, but they are realistic. Some other folks have a lot going on so there are multiple income streams etc. I think debt is like being overweight--it's easy to just keep going, maintaining or adding. It's really hard to eliminate it, seriously. It seems like it's only human to reach a level that is not easy to eliminate, because that requires changes. Nowadays, imho, renting makes a lot of sense, but still one doesn't have to go overboard. Example--a studio might be $1200. Not cheap. Tiny. But maybe a person could do that for a few years, why not?

 

That was mind boggling to read. Guess I could never really fully understand getting that far into debt and not having a plan to change it.

 

Oh he has a plan to change it, all right. It's just not a plan that you or I would approve of. "getting worse" is a change, after all.

 

Regarding the idea of buying new or used, I wanted to mention my daughter's recent experience.

She bought my grandfather's 2009 Mazda6 when he died in 2014. I'd driven that car from Phoenix to LA many times with him and was impressed with it. It seemed a solid, decent car that also got amazing mileage on the highway. Anyway, while she always (at my insistence) changed the oil every 6 months, the interior was looking tired. She got engaged and they planned to sell it and get a newer car, though it meant taking much of their savings.

Instead, they paid a detailer $300 to go over the entire interior and exterior. On top of that, the detailer recommended a $1K Kenwood LCD head unit to replace the conventional CD/radio and they agreed.

I saw the car for the first time since these renovations last week. Unbelievable. Spotless inside with that new-car smell, beautiful exterior, and a handsome perfectly-fitted LCD display that looks like it came from the factory that way. Daughter connects her iPhone and throws it in the glove box, and the touch display then does nav, phone, music, internet, and backup video.

While it's certainly true that the car mechanicals are still 10 years old, I think their maintenance expenses will be modest going forward. And they saved a ton of money.

 

If you don't have to wait, and paying MSRP doesn't bother you, financially or psychologically, then why must one wait? Different strokes for different folks.

 

 

Exactly. Remember the post I made about the time, at my favorite restaurant, I ran into a couple that had just bought a brand-new PT Cruiser? They had paid some 5K over list for it (which was typical of Chrysler dealerships when the PT was first introduced). When I (politely) asked them if they felt it was worth it, they said Yes, they liked the car, wanted one, had the bank account/funds for it, did want to wait, and that was that.