SW17LS

"Afford" is a relative thing. How do you define what someone can "afford"? Is a car payment a larger percentage of someones income than it was before? Maybe. Might someone choose to have a higher car payment and cut back elsewhere in their lives? Sure. People like to say "your car payment should be X% of your income", and people just have different situations.

I certainly remember when 36 months was the "default" loan term. Then 48 months, now its 60 months...72 and even 84 are becoming more common. BUT...cars last longer now than they did...and resale values are better now than they used to be largely because cars last longer and people are less afraid to buy a 5-10 year old car. That takes some of the risk out of a longer loan term.

Gene01

SW13GS - Yes, and I was surprised to learn that lenders were very willing to finance 6-year-old used cars (at excellent rates). This was unheard of in the past.

SW17LS

Oh yeah, getting easier to finance used cars over 100k miles too, which also used to be hard.

warminwisc

I think a problem is an 84 month loan is gonna be at relatively low payments for the depreciation that occurs. Things happen in life and folks end up needing to get out of these loans even if they need a car for 84 months and it can be painful.

There are 75 percent of the folks buying new cars for 30 k plus who would do just fine with a sub 20k$ to 20K car. I am practical, though I bought a 45k touareg(sold it for 5 k loss after 1 1/2 years and 20k driven miles) and drive 20k cars and wife and I make 3 times the average household in America. Then I drive em into the dust. Last LS got at 55k drove to 200k, this one well on its way. My LS no warrantee, my Highlander platinum to 125k miles as once these cars new or used go out of warrantee for the average Joe he has no money to fix em.

Folks spend all sorts of dough on cars and underfund or no fund their retirement.

warminwisc

Oh ya then my taxes as joe upper middle class bail em out. So yes I agree with USA today.

SW17LS

Good for you. I'm glad that works for you, but it doesn't work for everybody. Life's not always about "doing just fine" with something you don't really want. If someone wants to buy an expensive new car and they can afford it, they should go for it. Life is too short to deny yourself things you want and can have IMHO.

Other people's funding of their retirement is their problem and really its none of our business.

Everybody has different priorities in life. Life can end at any moment, that doesn't mean that you shouldn't plan for the future, of course you should, but it also means that you should enjoy the now and not completely sacrifice it for the future that may or may not even exist for you.

If someone derives a lot of enjoyment out of their car, and it costs them more of their available income than YOU might choose to allot to a car...what business is it of yours?

People worry too much about what other people are doing in this country...people complaining because the rich have so much and whatever, people complaining because people choose to spend their money a certain way. Americans need to focus on themselves and living their own lives instead of commenting all the time on how others choose to live theirs.

jayclapp

Sorry, but one shouldn't necessarily ignore the society we live in. I think I may have lived in the best of all times. The economy boomed during most of my work years and I was successful in having most of what I wanted and also have a comfortable retirment with no financial worries. But times have changed and the future does not look very promising for the younger generations. I am concerned about my grandkids future. Good jobs are hard to find, even for those with college degrees. Good paying jobs are even harder to find. World wide trade has caused all countries economies to be intertwined. As jobs are sent to countries with low salaries, the number of jobs in our county decrease.

This movement allows the lesser country to improve their standard of living. Their increase comes as the other county has a decrease in their standards. Then that same scenerio will occur as the other country standard of living increases. This will eventually even out the world so all countries are closer to each other in their standard of living. While that is good for the poorer countries, it comes at the expense of the richer countries. Perhaps that is good for the world as it will lift people out of poverty.

The jobs that companies have moved out of the US are likely to never come back. Good for China and American Corporations, bad for the US people.

The options that people have to live their lives as they please is being reduced and I am concerned about that. We may have raised our kids and allowed them to live a standard of living that they will not be able to sustain on their own in the future.

While this may sound like doom and gloom, I think it is the reality of the future and people should prepare for it.

SW17LS

But again, you're assuming that spending on a car is going to cause people to go off a financial cliff. I would agree that the world economy is not great...but it will survive. People are working and doing well, its not as bad out there as the media would like us to believe. But, you are able to make the decisions you want to make to prepare for what you feel you need to prepare for, and to advise members of your family. My point is, people assume too much and worry too much about what people unrelated to them are doing.

I'm in the real estate business...people are employed, earning good income, have cash to buy homes...everybody is not destitute and everybody is not close to financial ruin.

And, I would venture to say that opinion is very typical of someone at your stage of life looking at younger generations and comparing what they are doing to what you did. You must remember that for those younger generations...this IS the world. They weren't around when you were working and the economy was booming, what they know is now. And even now...its very possible to work hard, have what you want, and plan for the future.

Our generation will make it work, just as your generation did, and that before you, etc.

warminwisc

Others retirement is non of my business I agree, but do not ask me to pony up $ for their plan in life. I have been on unemployment but otherwise never asked for a dime from the government when now days the SS Disability program is like a goal for people.

Sorry to get off topic, SW you have good points but SS, SS Disability and Medicare on on a cliff and we are not even bringing it up or addressing it! I just know from my experience in life with my job in healthcare in my neck of the woods "most people are on a financial cliff already" and agree with USA today. Folks want the next shiney distraction, (from overly marketed auto manufacturers we bailed out to then offshore American jobs, see Detroit) who buy into "what do you need your monthly payment to be versus what can you afford)

So all the countries will even out, all wages will be the same, and the US amnd maybe myself will be sitting with all the debt and be living paycheck to paycheck.

No offense I am done off topic.

SW17LS

This may be your interpretation, but that actually goes against the statistics out there that show on the whole people are keeping cars longer and trading them less. Theres a been a big increase in the volume of used car sales where people are deciding to buy used instead of buying new.

Yes there are serious financial problems in the world, BUT those problems are not caused by regular people buying new cars, whether those purchases are expensive relative to their income or not.

You're always going to have people who do irresponsible things, but people who are raised well want to make smart decisions...and they do. Life isn't about only making smart decisions though, you have to enjoy life too. Buy that car you want, take that vacation, go out for that nice dinner. Don't do those things to the point where it puts you in peril obviously, but people have to decide where that point is for themselves.

toddmorr

quite right, somebody else's retirement is none of my business, but don't complain and whine when social security and medicare get trimmed as surely they must. And should be.

As for me, I'm going to have a very comfortable retirement, precisely because I've been very careful about spending on depreciating assets like a car. Honestly not much of a sacrifice in reality....I mean, really, how deprived are you when buying a cream puff LS thats say 7 years old versus the latest impulse buy off the dealers lot???

SW17LS

It depends on the individual person. I would feel deprived buying a 7 year old LS. I value the latest technology, I like new cars not used cars, etc. I've tried to talk myself into buying a 3 year old car and can't do it. Just because someone buys a new car doesn't make it an "impulse buy off the lot".

So you owe your entire comfortable retirement to not buying new cars? Thats the only reason for it? I find that hard to believe. You strike me as a smart person...I think even if you had bought new cars vs used cars you'd be in similar shape.

toddmorr

yeah..my language was less than precise.
But yes, i do believe my position is due to the ability to spend much less than the average guy on depreciating assets, like cars, vacations, clothing, entertainment, food, etc. Investment returns i suspect have been OK but probably not above average for the last 25 yrs, were i to do a serious analysis of them.

i grant your point though, its not so much a used versus new debate, its probably more an issue of how many $ one invests in transportation. after all, a 30k used LS will probably be more costly over time than a new 15k Corolla, for example.

SW17LS

That works for you, but people aren't wrong for wanting to live differently. To me it's not about getting to the graveyard with the most money. When I want to go out to eat, I do. When I want to take a nice vacation, I do.

Weare indeed way off topic though lol.

Jabberwock

Todd - you sound like my brother from another mother : )


Another poster asked how someone knows when they can't afford something? This always boggles my mind - the answer to affordability is always a simple one - PAYMENTS!
For a depreciating asset (like a car), if you can purchase an asset and pay with cash (that you have earned and saved) then you can afford it. If you cannot purchase and pay with cash then guess what?...you cannot afford it!

Here is how it is done - Work, earn money, save money, then when you have saved enough money, buy a reasonable used car that you can afford with cash you saved. Any other plan is the road to the poor house.

Making payments on depreciating assets like cars, furniture, dinners, vacations, fancy watches, shoes, etc is a losers game and will keep a person working and poor FOREVER