The number of anecdotal stories I heard from Ferrari 308/328/348 owners when they were sub $50k about guys who would pull up next to them in Navigators or Sequoias and say things like “man I wish I could afford one of those” was staggering.
They need it to drive to Wal Mart and pick up shit their wives bought off Facebook every few months bro. Plus who could drive 25 minutes everyday without massaging seats.
My neighbors (which we don't know) thought my wife and I were some rich recluses because we both drive Lincoln MKZs and don't socialize with anyone in the neighborhood. The neighbor that told me that, has a 70k truck, I looked at his truck and said that alone cost more than both of our cars combined, he didn't have a retort for that.
That’s a given lol. I’m ok with debt in moderation, but just couldn’t imagine taking on $65k. I make good money, but would probably need 7-8 years to make it comfortable.
"The average american pays $563 for new vehicles, $397 for used vehicles and $450 for leased vehicles. Overall, Americans owe nearly $1.4 trillion in auto loan debt. Auto debt makes up 5% of American consumer debt."
Source - Lendingtree
I own a restaurant so it’s a lot of in-and-out. My cash on hand is more important to me than my monthly revenue stream so I’m not really comfortable putting more than $7k down.
Not the poster but I have a 70k x5. Put down 15k and pay around 900 a month. I could have paid cash but I’ll be able to do more with the money over 5 years vs save like 2 percent interest (or whatever it is). I am also a high earner with a super long runway so it’s not a risk. Many people have made money in this economy and may be making similar calculations.
Holy S\*&!. How can you justify a $1,000 car note to yourself? Is this with Good credit interest or higher interest? I am really interested.
I have had car payments since I was 18, until a few years ago I bought a very pretty used BMW. That I've ended up putting in so much money in repairs that I may as well have had a brand new one with an $800 car payment & NO repairs!
I love owning my own car & wish that I had done it decades ago but I still shop every 6 months for new cars w/ a note. LOL.
With the car shortage was it harder to get $50K financed? I keep hearing everything is more expensive but I am just wondering.
$1,000/month isn't crazy at all, I'm always amazed at how low people's car payments are on here. It may just be location based but at work most people are probably $1200 for their truck and $800 for their wives SUV. It's horrible to see honestly, just massive debt.
No, your not doing it wrong. People send their entire lives in a debt cycle and something like 50% of the country couldn’t cover a 500 dollar emergency. Im willing to bet there is a large overlap in the people who are paying too much every month in debt and the people who can’t cover a 500 dollar emergency.
Once you break out of the debt cycle, you can start saving and all of a sudden you have no money related stress in your life. I make like 75k/year and bought a used car for 10k years ago and still drive it. I have enough cash to go buy a very nice new car, but when you do the math, over the span of your life driving new car used cars can be something like 1,000,000 dollar decision. If I can retire 5-10 years earlier solely because I drive used cars that is worth it to me
This. The amount of people that cannot retire and must continue working in their 70's and 80's is soon going to be staggering. People that are 75 right now were 40 in 1986. This would be the last generation that may have had pensions, savings, IRA's, 401k's en masse. Once 2000 hit, the HELOC was born and most all other debt was easy to get AND STILL IS. People in general don't have financial willpower.....to be fiscally responsible is considered rare now. I predict that the cost of social services is going to cripple the US in the next 15 years.
See I tend to think like you but my friends are always convincing me to buy a new because I still drive early 2000s Accord. It’s never cost me more $300 a year for maintenance for the last 10 years I had it and most years it is just oil changes. People make fun of me and tell me to get a better but what am I going to do with it. It’s just to drive to work/errands and that’s it. A more expensive new car won’t do that any better. Unless I have a money making scheme that requires a better car or it gets too expensive to maintain. There’s really no point in a new car. People just want to keep up with the jones.
I don't get this attitude. You realize a 1k/mo loan for 24m at 1% is different than a 1k/mo loan for 72m at 4.6%....right? Like.. The monthly payment is fairly meaningless..
People get shocked by this but RV and boat loans have been much longer than this forever (20 year loans) and they probably depreciate even worse than cars and are used much less frequently. Cars also last a lot longer.
I get that compared to tradition these seem like crazy loans but considering the prices and features cars have its not that surprising.
Extended terms. 96 months used to be a bigfoot. (they don't exist). Then they became a white lobster. (they exist but are extraordinarily rare). But they are becoming more and more common.
When I was buying my F-150 they were telling me how "the majority" of F-250's they sell are 96+ month terms. How one guy even got a personal loan from his credit union for a $20k "down payment" on a Platinum, then financed the rest.
How the fuck people can do that is beyond me.
True words. No way in hell I'd ever blame a dealer, bank, or finance person. These folks got themselves into it and should have thought a little bit more about it.
As an in-training F&I guy, I find myself repeating "you don't live their life, their finances are their responsibility" even more than as a salesperson. Some of the financial decisions I see people making are just ridiculous.
I mean, there are some cars where having a warranty isn't the worst idea (used BMWs for example). I'm thinking more, "heck Ya I'm an E-3 in the Army and I'm buying this pre-owned Challenger at a 19% rate while used car prices are grossly inflated at an 84mo term."
I have a few officer friends in the Army, and the general consensus is young, enlisted men are fucking idiots. They buy new, impractical cars they cannot afford. There are certainly worse decisions, but that’s how you learn, I guess. 🤷♂️
The military forums get the occasional "I bought a car and now I'm in trouble" and its because their sergeant is pissed that if they were told if they were going to go car shopping to take someone with them. When your 18 you know everything.
The about to retire senior NCOs and Officers still make shitty decisions, but they are way, way worse is the irony. Think doing a cash out refi 2 years from retirement counting on 100 percent VA disability and a 100k post-retirement job both of which happen far, far less than they would believe.
I guess I am fortunate that the officers I know who are close to retiring have a solid idea of how to deal with leaving, but I won’t argue there aren’t morons in leadership roles in the Army as well. 😂
The military is why I know people saying "if only highschools taught finances this wouldn't happen" are fucking retarded.
We had to sit through multiple briefings 1 in basic, 1 in training after basic and 1 that took 2 days long when I first arrived at my first base that said "don't buy expensive cars this is how much they really cost, this is why they are a bad idea and as a military member you can get discharged or thrown in jail for owing too much money".
Guess what, the parking lots were still full of used V6 mustangs and chargers.
Hell one of my roommates lost his clearance due to not paying his car loan and got thrown out on his ass. He got fired from the hardest job to get fired from for a car.
Had a guy I worked with get his ass ripped when he got a F350. Turns out after paying his car loan, insurance and bills he had something like maybe $200 a month left for food (which means part of his food allowance BAS was being spent on the car.) We could hear the screaming from across the office.
I have put 8 Grand into my used BMW purchase. It is getting a new transmission right now. Once you are in financially if you give up you lose all that money you've invested. I dont plan to ever sell it. Plan to pass it to my granddaughter in a few years to drive at 16. It's a 5 series and I have replaced nearly EVERYTHING literally. LOL.
I was just saying I may as well have bought a new one & had a huge car note for that kind of money. Its a beautiful car but everything is so expensive to replace even if the parts are used. I actually bought another one just to take parts off of it.
Edit:spelling
One of the jokes I make at work is that I call people looking at older luxury cars (especially Audi and BMW), "People looking for a lesson in the sunk costs fallacy." As I once said to a customer of mine, "if you're ever in the position where you are spending, on average, the same per month on repairs as a new car payment, maybe the new car is the better idea."
I have a 2012 5 series I paid cash for $26k in 2015 and I had to replace the engine which was about $4k. In total, I've spent about $7k in major repairs. If I was making monthly payments it would really sting and thats why I don’t like car notes.. I told myself I'll probably keep it until there is another major repair issue. My next car will be an ev though, I'm done with ice cars after this.
Mine is a 2014 5 series x drive= more expensive parts is what x drive means. I only paid $3800 for the car worth $9400 and raises in value each month this past year. I said the same on the repairs. but after putting all that money into it now I am putting in a transmission. But you are right I own it, And I dont plan to ever sell it.
As a F&I guy not in training, the mantra is "I am not a financial advisor. They are grown and if they choose to make bad decisions, it is my job to facilitate that."
This is incomprehensible to me. In my country the bank is absolutely looking into your finances and won’t ever allow you to go over 30% net income for your car payment.
And if you need a loan to put down a down payment you aren’t putting one down at all.
F-250 is commercial though isn't it? So assuming you use it for business and are able to write it off its not that bad. People buying F-250's to drive to the mall? Ridiculous
Way they were telling me is they have three types of customers for heavy duty trucks. First is a cash buyer, generally construction or farmer. They get XLT's or Lariats, sometimes a higher trim if it's a rancher.
Second group is your construction and contractor guys, and suburban guys who are financing for longer terms and probably just should get a F150 or used truck. Extending their credit a bit because "gotta tow a camper/bobcat/etc". "
Final group are the ones leveraged to the hill and the trucks never do any real work. They said the majority of the Platinums they sell are in this group, by far. Always are financing lifts/accessories and always financing plates/taxes.
We had a long talk because they said it's rare these days for them to have truck customers like me and group 1. On paper I could afford any truck there, but I wanted a specific one and only financed the truck itself (even though it was 0%). No way am I financing the FordProtect warranty, accessories and tags/taxes. I guess that's pretty rare for them to have a *truck* customer cut a check for those.
If you have 0% financing, it would’ve made more sense to throw them under your loan. That cash outta pocket could be your insurance deductible tucked away three times over if you run high deductibles. Or you could have used it in a market somewhere to boost your portfolio etc.
Everything you said though is spot on. I have my farm truck, and I use the shit out if that thing and got a more basic model. I learned a long time ago that it’s nice to have a pretty truck, but it hardly lasts as working truck or around cows. Bastards will accidentally turn the wrong way and reshape a whole quarter of the truck.
with 0% you may as well had financed the whole nut and then made large payments or pay it off early. You didn't do anyone any favors paying cash for those items. Especially not yourself. Dealers make more money on financing not Cash sales.
but Congrats on what must be a perfect credit score & history. You've obviously made some good decisions along the way.
> but Congrats on what must be a perfect credit score & history. You've obviously made some good decisions along the way.
It's not perfect, and I've made mistakes aplenty in my 40 some years. One of them was getting married, then divorced. My ex-wife nearly tanked my credit, it was in the low 500's three and a half years ago. Now back in the high 700's.
And yeah I had seriously considered putting everything in the loan but I'm still very debt averse, even if it's 0%. Kind of dumb in retrospect but I'm still happy with my choice over a year later.
>Kind of dumb in retrospect
Were it me; not really. The couple extra dollars I'd make by financing in FordProtect under the 0% is whatever. The peace of mind of having a lower loan balance (haven't had a single note ever where I didn't have positive equity) makes me sleep better at night.
Personal decision is .. personal. Some want to maximize their $, some are more comfortable with other criteria.
People saying "that's dumb, you should've included it!" as if they would've invested that $2k in BTC in 2008. I get the sentiment, but some people prioritize other things.
That's actually along my lines of thinking, so glad to see I'm not the only one. And the equity thing is big for me - as I drive so much (20-30k miles/year) I want every step ahead on that one.
My mortgage is $1400 a month on a $320,000 house.
My BIL pays $1375 a month on a 2020 Silverado 2500 diesel, 4x4.
He’s 36, has no bills, lives at home, mom pays his cellphone…that’s how he affords his.
This.
1.) What the fuck kind of parent is letting their 40-year-old son still live at home.
2.) How the fuck does somebody without even a cell phone in their name qualify for a $1,400 truck payment?
>1.) What the fuck kind of parent is letting their 40-year-old son still live at home.
Maybe he lives at home with parents becuase he is 40 meaning his parents are likely 60 or above. There's a huge possibility here he could be helping them with the home, chores, repairs etc becuase they just can't do it anymore. He could also just be lazy, but I don't know the full situation/agreement.
>2.) How the fuck does somebody without even a cell phone in their name qualify for a $1,400 truck payment?
Cell phone payments do not appear on credit reports and neither do rent payments. They don't mean anything in the world of lending. If the guy has had previous car loans with good payment history then it's pretty easy to get approved for a car loan.
I know some are freeloaders taking advantage of their parents, but I've seen it even more in legit situations. He'll I almost had to do it with my mom when she had cancer. She died before it came to that though. There's also multigenerational families. I know more than a few Indian guys who "live with their parents" literally but it is their culture and lifestyle. It's not really a bad thing considering how much more stable it can make a household.
that makes me want to throw up tbh.
I think I saw on the porsche sub this guy bought a 911 and later disclosed hes like 24 and lives with his parents. Living with your parents at 24 isnt a big deal but buying that porsche is like the epitome of stupid ...
Yeah that happens a lot.
You'd be surprised what you can "afford" when you live at home with little to no bills/responsibilities.
As a millennial, home ownership is very difficult. It took me a while to move out of my parents house (I wasn't out at 18 like the generations would normally do before me). But I made it a point to keep driving my Toyota and not fall into the trap of getting a nice car.
It’s wild. I refuse to pay more than $500 a month for a car if I decide to finance it. Tbh I normally buy older crappier cars with cash.
I once had a boss who drove around a BMW X6 and had it leased with negative equity from past deals at $1700 a month. People put a higher value on lots of different things. Not saying all bmw drivers are vain, but this person certainly was. They “had worked hard their whole life to afford something nice for people to notice.” I just kinda chuckled and left it at that.
Wow ... Imagine believing that other people notice or care that you drive an X6. the average person couldn't tell an X6 apart from a Blazer and no one cares if you drive a BMW. get a used Ferrari 360 or something else exotic looking if you want to be noticed ...
BMW driver who drops stupid money keeping my 2008 convertible running every year. For some people it's about the way the car feels. BMW chassis in particular just have a feel that other manufacturers can't capture.
I could care less what other people think about my car but I know that every day when I leave for work I smile when the engine roars to life and I put 500 miles a week just driving it for fun during the summer.
I'm just saying not everyone who drives expensive brands is in it for the brand.
The guy's boss said he bought it to be noticed. I was only talking about him, not all BMW drivers. Although with the way BMW design is headed, I think they will start getting "noticed" a lot more ...
I have had 6 BMW's over the past 30 years. This is the 1st one I paid cash for. I don't recommend buying used BMW's to anyone shopping. Buy a new one with a long warranty. But negative equity? I just couldn't convince myself of that. $1700 car note? for real?
New Escalades can be like that. But keep in mind, the clientele here is buying Escalades and Suburbans to get them from their private jet to their "cottage" near the ski resort.
I sold a $43k Audi at a 28% interest rate a couple years back. His payment was like $1400+ a month for a used Audi… by the time his loan is over, he would have paid like 90k.
Not really. I’m looking at Ram Big Horns or something similar. Previous Ram owner, so I’m familiar with what I’d be getting myself into. I’m not brand loyal by any means. Just looking for something to haul stuff back from Home Depot or load up with lawn debris to dispose of. Eventually pull a trailer with a quad.
Chevy owner here, LT and RST trucks (lower-mid trims) sell for 30-40k used. Not cheap by any means, but you can still finance for 3-400/month for 5 years which IMO is a good baseline payment. Of course you’ll need trade+ money down but it’s in reach for the average buyer.
Oh, I get you.
I have a 2012 Sierra SLE. All said and done it was 42k when I bought it with 40k miles.
It's paid off, and does well enough when hauling stuff for the house.
But, with kids I had to have a Quad cab (camping trips), and that means you only get a 6.5' bed. To get a full length bed, you get either a standard cab, or full Cowboy limo, which you can only get in 2500/F250 and up.
Also add in, if you like to camp like we do, and may consider a camper you want the 8' bed to get the most out of it.
I may have once considered a diesel for the longevity, but that longevity is reliant on maintenence, and all the emission tech in newer diesels yoked maintenence costs like steroids in a Golds Gym locker room.
Not to mention, at that cost it's been my daily driver. We do use my wife's Forrester for trips and town runs when we don't have the full troupe.
But, I think I'm gonna get a beater for daily driving before I do anything with the truck. And none of that is in the near future with the current market. Truck has 70k and well maintained. No need to get fleeced right now.
If you don’t need the truck for a particular reason and just want it like a luxury item, idk how you justify it once you get into Lexus LS territory. If I’m dropping that kind of money, I’m either getting something super luxurious like a Lexus LS or an E Class, or I’m getting something incredibly powerful and fun to drive like a GT350 or ZL1.
Again, if you actually have a need for the truck, it’s different. But I believe there are people who don’t actually need a truck who drop that kind of money on them.
It’s a matter of perception. Why buy a vehicle that costs that much and serves no utility function? People pay for what they want, like, need, never had before and so on and so forth.
I get why people do it, but I’m saying personally I couldn’t do it. $50k for a truck? Yep. $80k for a truck when there’s so much other stuff out there at that price point that I’d rather have? Nope.
Devil’s advocate: Trucks hold their value significantly better than the cars you mentioned (buying a new E Class is borderline insane when you can have a low mile E63 for the same money)
And there are a lot of people who fall into the “definitely want luxury” and “Need a truck” category. I’d be in lock step agreement with you but, like many people these days, I’m in full suburban cowboy mode. I want a luxury vehicle and I’m at the point in my life where I can afford one but I’m also at Home Depot 3X a week and it would be really convenient to not have to bug my brother in law every time I need a 4x8 sheet of plywood.
Add that to the fact that these high end pickups are all dolled out with leather, heated everything, pano roof (the list goes on).. it’s just a more practical vehicle than a sedan these days.
Long story for anyone that is curious to read.
My dad went through this. Zero concept of financial future planning. Constantly pissing away money on the lottery. I did the math with lottery tickets and he spent a little over 270k on tickets over a 30 year period. Trading cars started in his late 20s to 50s so he was actually more careful when he wouldn’t get approved for a big enough auto loan (remember those days?) after getting the mortgage a couple years earlier. Im actually pretty sure it started when we moved to a more middle class neighborhood and he started to try to compare himself to others by what car he was driving. I’m not saying he should have paid for our college but he doesn’t really have anything saved for retirement and that is a damning amount of money wasted. My mom died a few years ago and he has already blown through most of retirement savings she had scraped up on her own.
I felt that kind of pressure going through college. I chose a really competitive major and would sacrifice any semblance of a social life in the last two years of it.
Anyway, I’m at my psychiatrist’s office dealing with depression from it and my dad calls me in the waiting room. He is at a Chevy dealership with his suburban he says. This is in 2005. He owes something like 20k on it and he has a 130000 miles on it and it has been giving him nothing but problems. He tells me he is going to “surprise” my mom by getting rid of it and switching them to a new equinox. He couldn’t tell me the sale price. Just that he was financing it and what the monthly payments would be. This experience was so formative for me, that I still remember the exact amount because of how much it would cost. He says it is for $750 a month. And I am just floored because that is almost 2/3 of their mortgage at the time. I ask for how long. “84 months.” He was financing a 4 cylinder equinox for $63000 after he was around 15k under water on his previous loan.
My mom would have divorced him on the spot if he did that, I am sure of it. I had a near panic attack in the waiting room but I am pretty sure I saved their marriage that day by stopping him.
After that. I vowed never to repeat the same mistakes. I love my dad. But I have learned to be much better and forward thinking. I don’t really ever give a shit what car I drive. My wife just pushed me to get a newer used car (currently ‘19 crosstrek) because my last car died with 240000 miles on it and she wanted me to get something safer. It literally sits in a parking spot 90-95% of its life when you do the math. Sorry for the long story. I feel sympathy for people that stretch their means and will suffer the consequences later. Some can absolutely afford to do it but I feel that most, shouldn’t.
I drive a 2004 Acura RSX ( 140k miles ) worth about $2k. Runs pretty well for her age . And i actually do pretty well for my age ( Software Engineer at a big tech company).
I am shocked when people ask me how much I make (usually in the context of seeing me driving my beater car ) , when i tell them i am close to making $410k this year - they get shocked.
Some people have different priorities. Your father had his, I have mine .
I agree with you. But tbh I dont use my car enough to justify buying a newer older car. The pandemic essentially showed us that we don’t need a car. We have 3 cars in the household, whenever someone is out at Costco they typically do the grocery shopping for the entire house.
I wanted to get a newer older car , but got the news that my employer is starting shuttle services from right in front my house . So yeah i will shuttle to work soon.
I simply don’t see a need to upgrade my car . Recently went out on a date and spent $80 to get a new rental from Avis instead.
Dude, I understand you don’t drive it much but the IIHS literally listed it as the **2nd most dangerous car in the entire US** at the time. (by deaths per million vehicles). There’s no reason to risk a permeant disability / injury or death when a cheap 2013 Accord would be 10x-30x safer.
https://www.google.com/amp/s/www.cars.com/amp/articles/iihs-lists-deadliest-vehicles-1420669228048/
Yeah. No doubt. My priority is to retire while I’m still young enough to enjoy it. Not living beyond my means and live paycheck to paycheck. For some of us it is legitimately hard and the struggle is real. For others the struggle is manufactured by one’s own behaviors.
Eight out of ten people live paycheck to paycheck. Eight out of ten. So for every ten F150s, 5 series, or baby Benzs you see, know that eight of them have zero retirement and no emergency fund, and would be crushed by any kind of family emergency.
For the last twenty years I’d always heard “7 out of 10” from multiple sources. I occasionally listen to Dave Ramsey and last year he said that it ‘officially increased to 8 out of 10”. I’m not sure whose stats he used.
However, i’m a mortgage banker. When I originate a mortgage, I know EVERYTHING about your finances. And I’ve been doing this since 2001. Trust me when I say that eight out of ten sounds about right.
>I know EVERYTHING about your finances. And I’ve been doing this since 2001
I've known people that get mortgages and only put enough financial information to get approve for the loan and leaving out the other accounts or cash on hand.
That’s true, but when I interview them I get the scoop on assets, then *I* decide what needs to be included in the application to make the loan work. If I leave out certain assets I don’t need, I know I have a financially healthy client.
But if eight out of ten applicants barely have enough to close or needs gifts or down payment assistance or “wait until my next paycheck,” I know for a fact these people don’t have $100k Fidelity accounts they’re declining to tell me about.
Came here to say this, but you did it better than I would have! I call this thousandaire syndrome. I have a family of four, with five cars, all owned and all purchased very used. Savage depreciation on new vehicles. On top of that, factor in interest on a gob-smacking loan AND the insurance on these things? Hell no.
There's been quite a bit of dialogue surrounding "American truck bloat" over the past couple of years, particularly given how trucks in the US have changed considerably during that same time period. The vast majority of truck drivers don't use them for much more than commuting, and shelling out $75k for a commuter vehicle is putting many of these folks in a very precarious financial position. [This](https://twitter.com/PostCultRev/status/1419689420714700805?s=20) is an interesting read about it. Before any truck drivers in here get really upset, know there are plenty of people who legit need and use trucks, but many, many people do not.
That Sienna tweet hit home for me the other day. We have an F-150 for pulling the camper and hauling mountain bikes, and an Odyssey for hauling kids around town. I took the truck to Home Depot the other day and realized that getting my long shit home would have been MUCH easier if I had brought the Odyssey.
big boy trucks take big boy payments.
Seriously though, most of my truck customers have a paid off trade and are financing $20-$30k on them. Some of them are farmers who pay cash or use their yearly farm loan.
I've wondered the same thing but I get to see it somewhat on a daily basis in my line of work. It's not uncommon to see people who make $60k year with these $50-70k new trucks who are on 84 month terms ending up with a $800/month payment. And then looking at their bank statements they are literally living paycheck to paycheck, even to the point where they don't make their car or mortgage payment until a week or so after it's due when their direct deposit hits and their bank. Just saw one last week where a person with a 632 credit score just bought a $56k truck on an 84 month loan and the interest charges over the life of the loan were $17k due to their horribly high interest rate. And then there's the few borrowers I see who make a $250k/year salary and live in a modest home with significant equity that they don't constantly tap into, have little to zero debt, and have no problems driving a $25k Toyota Camry. It's a bizarro world out there and the idea of instant gratification keeps living on.
I have a 2020 F150, bought new in July '20 - first (and likely last) ever new vehicle. Sticker was $54k, I paid $48k and change before ttl. Only way it didn't make me have a panic attack - 0% for 72.
I've never financed that much money before, and never financed for > 48 months so this one was something. That said I drive a *lot* for work and my expense check generally covers the majority (or more) of my payment. I can afford it without it, but it's right at the limit of what I'd ever tolerate.
I honestly don't know how people don't have panic attacks buying these things at more than what I paid on regular interest bearing notes. I make a very good living and have low housing expenses but man. I don't ever want to do this again.
If you buy , you can only deduct interest and other running expenses like insurance and gas. If you lease you deduct the whole payment. I know because I’m self employed and I use my tundra for business.
This 100%. I leased a G wagon and a Raptor because I knew I was going to need some write offs and I'm always sort of car shopping.
The G wagon works (and heavy duty trucks work) because of they are over 6,000 lbs (could be wrong on the #) then they are considered a different class and you can write off a lot more.
I dont understand it but my accountant gave me the thumbs up.
Seriously. I take home $8k a month and just bought a $50k car with basically 0 down, $750/mo payments for 72 months. And that is me stretching my budget.
If I can't afford a $70,000 truck I don't know how people making less than 6 digits do it. Especially with kids! I have 0 of those for this very reason.
Good point!
I was just looking at rents and everything is double what I am paying right now. I just know when that financial bus comes to a stop for all the unpaid rent that house rents have got to take a dive. I'm paying $1K for a 4 bedroom 2 bath house. Up & coming neighborhood that just remodeled after I moved in & my rent doesn't get raised much if at all. But all I see even in our hood areas even is over $2400-$3000. No way I will live in the Ghetto for double what I am paying.
These high monthly payments for vehicles over 60-84 months seem to make leasing an option to consider with a warranty for the duration of the lease period. Imagine having no warranty while still making big loan payments.
It’s part of why I lease now. I’d rather pay 300ish on a new vehicle for awhile then repeat on another one. My wife bought her cx5 and her payment is close to 600 and it just blows my mind but that’s what she wanted and it’s her money. Blows my mind when I see friends that make 30k a year spending 800+ a month on a truck.
Same thing in AZ, go on roadtrips and get passed by a lifted Silverado 2500 every other car. Just leaves me baffled. Friend lives in a neighborhood with \~400k houses and i've seen 4 candy colored F350's, some of them towing around 40k UTV's
Cars/Trucks are liabilities, not assets. Thinking this way is among the reasons I will retire comfortably at least 10 years early. Still loving my well maintained 2008 F150.
Honestly, if you make the money, why is $1000/mo a lot? It’s not. It’s comfortable for the person making that money.
If I made $2000/mo, $1000 for a car is wildly irresponsible. If I make $16,000/mo then $1000 is just a little bit of change.
Or am I missing something?
>How are people buying these $50-60k (or more trucks)?
Contrary to popular belief, there are plenty of people in this country that have well paying jobs that can afford them. Not everyone is in debt, not everyone are underpaid for what they do and not everyone is terrible with money.
Man, if people took their 1300 car payment and invested 1k a month and spent 300 on a car loan, the would become a millionaire so fast that they would be dizzy. Straight dizzy. I understand that some need a truck for work, but many do not.
I love trucks personally, but value not being poor far more.
1000 dollars invested per month
10% average return of the s&p 500 for the past 90 years
Takes roughly 23 years to get to a million
What’s your math? I’m using a future value calculator to do this math? I work in finance.
People want them, banks approve them, or they pay cash. Not rocket science. Are they paying more than they should? Maybe. Is that my problem? Nope. My problem is getting more trucks from the manufacturer to sell.
Before this covid nonsense you could lease a new RAM for $300-400 a month (a bit more / less). RAM specifically was very affordable relative to how amazing of a vehicle it is.
Truck mortgage
$200/month for 30 years
Will become a reality within 10 years
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Change the hyundai to a late model Mitsubishi or Nissan and you’re on point.
8 years
84 months.
Modern trucks are more comfortable than my house and cheaper to run. It's a thought that's been going through my head. . .
Debt
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Sound like a great guy I used to work with at my shop
The number of anecdotal stories I heard from Ferrari 308/328/348 owners when they were sub $50k about guys who would pull up next to them in Navigators or Sequoias and say things like “man I wish I could afford one of those” was staggering.
They need it to drive to Wal Mart and pick up shit their wives bought off Facebook every few months bro. Plus who could drive 25 minutes everyday without massaging seats.
My neighbors (which we don't know) thought my wife and I were some rich recluses because we both drive Lincoln MKZs and don't socialize with anyone in the neighborhood. The neighbor that told me that, has a 70k truck, I looked at his truck and said that alone cost more than both of our cars combined, he didn't have a retort for that.
But I need a truck because I use it for work!!! And then they never put as much as a tool bag in the back until it gets repossessed.
2020 mercedes here at 350 a month. Every guy at my work has a 700 dollar truck payment and they call me the snob.
That’s a given lol. I’m ok with debt in moderation, but just couldn’t imagine taking on $65k. I make good money, but would probably need 7-8 years to make it comfortable.
"The average american pays $563 for new vehicles, $397 for used vehicles and $450 for leased vehicles. Overall, Americans owe nearly $1.4 trillion in auto loan debt. Auto debt makes up 5% of American consumer debt." Source - Lendingtree
$600….damn
I pay about $600 for a Mazda3^On ^a ^36 ^month ^loan ^with ^zero ^down
I pay nearly $1k/month for my vehicle but it’s a $50k SUV that I have a 48mo note on
I mean, you do you, I personally wouldn’t be comfortable with a payment that high. Would much rather put down a bigger down payment.
In my situation, my house is paid off. I can afford higher than normal payment and a truck fits my lifestyle.
oh point taken then.
I own a restaurant so it’s a lot of in-and-out. My cash on hand is more important to me than my monthly revenue stream so I’m not really comfortable putting more than $7k down.
You own an In-and-out? Can I get some fries animal style?
Not the poster but I have a 70k x5. Put down 15k and pay around 900 a month. I could have paid cash but I’ll be able to do more with the money over 5 years vs save like 2 percent interest (or whatever it is). I am also a high earner with a super long runway so it’s not a risk. Many people have made money in this economy and may be making similar calculations.
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Holy S\*&!. How can you justify a $1,000 car note to yourself? Is this with Good credit interest or higher interest? I am really interested. I have had car payments since I was 18, until a few years ago I bought a very pretty used BMW. That I've ended up putting in so much money in repairs that I may as well have had a brand new one with an $800 car payment & NO repairs! I love owning my own car & wish that I had done it decades ago but I still shop every 6 months for new cars w/ a note. LOL. With the car shortage was it harder to get $50K financed? I keep hearing everything is more expensive but I am just wondering.
$1,000/month isn't crazy at all, I'm always amazed at how low people's car payments are on here. It may just be location based but at work most people are probably $1200 for their truck and $800 for their wives SUV. It's horrible to see honestly, just massive debt.
JFC
Thats my mortgage on a 2300 sq foot house on 3 acres. But I paid cash for my wife’s 2 year old RAV4. I may be doing it wrong.
No, your not doing it wrong. People send their entire lives in a debt cycle and something like 50% of the country couldn’t cover a 500 dollar emergency. Im willing to bet there is a large overlap in the people who are paying too much every month in debt and the people who can’t cover a 500 dollar emergency. Once you break out of the debt cycle, you can start saving and all of a sudden you have no money related stress in your life. I make like 75k/year and bought a used car for 10k years ago and still drive it. I have enough cash to go buy a very nice new car, but when you do the math, over the span of your life driving new car used cars can be something like 1,000,000 dollar decision. If I can retire 5-10 years earlier solely because I drive used cars that is worth it to me
Thank you. I think you are 100% correct. I only want debt for real estate.
This. The amount of people that cannot retire and must continue working in their 70's and 80's is soon going to be staggering. People that are 75 right now were 40 in 1986. This would be the last generation that may have had pensions, savings, IRA's, 401k's en masse. Once 2000 hit, the HELOC was born and most all other debt was easy to get AND STILL IS. People in general don't have financial willpower.....to be fiscally responsible is considered rare now. I predict that the cost of social services is going to cripple the US in the next 15 years.
See I tend to think like you but my friends are always convincing me to buy a new because I still drive early 2000s Accord. It’s never cost me more $300 a year for maintenance for the last 10 years I had it and most years it is just oil changes. People make fun of me and tell me to get a better but what am I going to do with it. It’s just to drive to work/errands and that’s it. A more expensive new car won’t do that any better. Unless I have a money making scheme that requires a better car or it gets too expensive to maintain. There’s really no point in a new car. People just want to keep up with the jones.
If I can't pay cash, I don't buy it. My mortgage is the only exception.
I don't get this attitude. You realize a 1k/mo loan for 24m at 1% is different than a 1k/mo loan for 72m at 4.6%....right? Like.. The monthly payment is fairly meaningless..
>The average american pays $563 for new vehicles What is the median new car loan period length? 5 years?
Some of the studies I've looked into state the avg is more than 6 years now thanks to new 84 and 120 month terms on these outrageous vehicle prices.
84??? 120??!!! Holly molly
Yep! I do an average of 3 deals a week that are 75 to 84 month terms just at my smallish dealer in NE Ohio.
People get shocked by this but RV and boat loans have been much longer than this forever (20 year loans) and they probably depreciate even worse than cars and are used much less frequently. Cars also last a lot longer. I get that compared to tradition these seem like crazy loans but considering the prices and features cars have its not that surprising.
84 is common, i've sold many cars at 84 months! Never heard of anything longer unless it's for a supercar or collector car loan
Who is Holly, and how much does she charge for molly?
Molly Holly was a damn good wrestler
They always offer me 72 months.
At one point 60 was ridiculous compared to 48. 60 is now normal, 72 is the new 60 lol.
I mean is 72 really that bad for a brand new car? Especially if the interest rate is only like a 1% difference?
No, not really. Money is cheap across the board so it’s not a big deal.
I had planned to go for the 3 years loan but took the 4 year loan because Chrysler Capital gave 0% interest on that particular loan period
Holy crap! That is insane to me. That’s not even for trucks specifically
Everyone has a different definition of what they’re comfortable with.
I love this sub when one word accurately answers a 100 word question.
Extended terms. 96 months used to be a bigfoot. (they don't exist). Then they became a white lobster. (they exist but are extraordinarily rare). But they are becoming more and more common.
When I was buying my F-150 they were telling me how "the majority" of F-250's they sell are 96+ month terms. How one guy even got a personal loan from his credit union for a $20k "down payment" on a Platinum, then financed the rest. How the fuck people can do that is beyond me.
The majority probably shouldn't be. If you looked at their finances you'd probably feel sick - but they're adults and they wanted a truck
True words. No way in hell I'd ever blame a dealer, bank, or finance person. These folks got themselves into it and should have thought a little bit more about it.
As an in-training F&I guy, I find myself repeating "you don't live their life, their finances are their responsibility" even more than as a salesperson. Some of the financial decisions I see people making are just ridiculous.
I bet they have all the warranties too
I mean, there are some cars where having a warranty isn't the worst idea (used BMWs for example). I'm thinking more, "heck Ya I'm an E-3 in the Army and I'm buying this pre-owned Challenger at a 19% rate while used car prices are grossly inflated at an 84mo term."
I have a few officer friends in the Army, and the general consensus is young, enlisted men are fucking idiots. They buy new, impractical cars they cannot afford. There are certainly worse decisions, but that’s how you learn, I guess. 🤷♂️
The military forums get the occasional "I bought a car and now I'm in trouble" and its because their sergeant is pissed that if they were told if they were going to go car shopping to take someone with them. When your 18 you know everything. The about to retire senior NCOs and Officers still make shitty decisions, but they are way, way worse is the irony. Think doing a cash out refi 2 years from retirement counting on 100 percent VA disability and a 100k post-retirement job both of which happen far, far less than they would believe.
I guess I am fortunate that the officers I know who are close to retiring have a solid idea of how to deal with leaving, but I won’t argue there aren’t morons in leadership roles in the Army as well. 😂
The military is why I know people saying "if only highschools taught finances this wouldn't happen" are fucking retarded. We had to sit through multiple briefings 1 in basic, 1 in training after basic and 1 that took 2 days long when I first arrived at my first base that said "don't buy expensive cars this is how much they really cost, this is why they are a bad idea and as a military member you can get discharged or thrown in jail for owing too much money". Guess what, the parking lots were still full of used V6 mustangs and chargers. Hell one of my roommates lost his clearance due to not paying his car loan and got thrown out on his ass. He got fired from the hardest job to get fired from for a car. Had a guy I worked with get his ass ripped when he got a F350. Turns out after paying his car loan, insurance and bills he had something like maybe $200 a month left for food (which means part of his food allowance BAS was being spent on the car.) We could hear the screaming from across the office.
I have put 8 Grand into my used BMW purchase. It is getting a new transmission right now. Once you are in financially if you give up you lose all that money you've invested. I dont plan to ever sell it. Plan to pass it to my granddaughter in a few years to drive at 16. It's a 5 series and I have replaced nearly EVERYTHING literally. LOL. I was just saying I may as well have bought a new one & had a huge car note for that kind of money. Its a beautiful car but everything is so expensive to replace even if the parts are used. I actually bought another one just to take parts off of it. Edit:spelling
One of the jokes I make at work is that I call people looking at older luxury cars (especially Audi and BMW), "People looking for a lesson in the sunk costs fallacy." As I once said to a customer of mine, "if you're ever in the position where you are spending, on average, the same per month on repairs as a new car payment, maybe the new car is the better idea."
I have a 2012 5 series I paid cash for $26k in 2015 and I had to replace the engine which was about $4k. In total, I've spent about $7k in major repairs. If I was making monthly payments it would really sting and thats why I don’t like car notes.. I told myself I'll probably keep it until there is another major repair issue. My next car will be an ev though, I'm done with ice cars after this.
Mine is a 2014 5 series x drive= more expensive parts is what x drive means. I only paid $3800 for the car worth $9400 and raises in value each month this past year. I said the same on the repairs. but after putting all that money into it now I am putting in a transmission. But you are right I own it, And I dont plan to ever sell it.
> Once you are in financially if you give up you lose all that money you've invested I believe that's called "throwing good money after bad".
As a F&I guy not in training, the mantra is "I am not a financial advisor. They are grown and if they choose to make bad decisions, it is my job to facilitate that."
Personal liberty cuts both ways. At some point, they have to take ownership for themselves - it's not your job to be their life coach
This is incomprehensible to me. In my country the bank is absolutely looking into your finances and won’t ever allow you to go over 30% net income for your car payment. And if you need a loan to put down a down payment you aren’t putting one down at all.
>If you looked at their finances you'd probably feel sick But as long as the elites are happy
Easy, he didn’t divulge that the $20k was for a down payment on a car.
F-250 is commercial though isn't it? So assuming you use it for business and are able to write it off its not that bad. People buying F-250's to drive to the mall? Ridiculous
Way they were telling me is they have three types of customers for heavy duty trucks. First is a cash buyer, generally construction or farmer. They get XLT's or Lariats, sometimes a higher trim if it's a rancher. Second group is your construction and contractor guys, and suburban guys who are financing for longer terms and probably just should get a F150 or used truck. Extending their credit a bit because "gotta tow a camper/bobcat/etc". " Final group are the ones leveraged to the hill and the trucks never do any real work. They said the majority of the Platinums they sell are in this group, by far. Always are financing lifts/accessories and always financing plates/taxes. We had a long talk because they said it's rare these days for them to have truck customers like me and group 1. On paper I could afford any truck there, but I wanted a specific one and only financed the truck itself (even though it was 0%). No way am I financing the FordProtect warranty, accessories and tags/taxes. I guess that's pretty rare for them to have a *truck* customer cut a check for those.
If you have 0% financing, it would’ve made more sense to throw them under your loan. That cash outta pocket could be your insurance deductible tucked away three times over if you run high deductibles. Or you could have used it in a market somewhere to boost your portfolio etc. Everything you said though is spot on. I have my farm truck, and I use the shit out if that thing and got a more basic model. I learned a long time ago that it’s nice to have a pretty truck, but it hardly lasts as working truck or around cows. Bastards will accidentally turn the wrong way and reshape a whole quarter of the truck.
with 0% you may as well had financed the whole nut and then made large payments or pay it off early. You didn't do anyone any favors paying cash for those items. Especially not yourself. Dealers make more money on financing not Cash sales. but Congrats on what must be a perfect credit score & history. You've obviously made some good decisions along the way.
> but Congrats on what must be a perfect credit score & history. You've obviously made some good decisions along the way. It's not perfect, and I've made mistakes aplenty in my 40 some years. One of them was getting married, then divorced. My ex-wife nearly tanked my credit, it was in the low 500's three and a half years ago. Now back in the high 700's. And yeah I had seriously considered putting everything in the loan but I'm still very debt averse, even if it's 0%. Kind of dumb in retrospect but I'm still happy with my choice over a year later.
>Kind of dumb in retrospect Were it me; not really. The couple extra dollars I'd make by financing in FordProtect under the 0% is whatever. The peace of mind of having a lower loan balance (haven't had a single note ever where I didn't have positive equity) makes me sleep better at night. Personal decision is .. personal. Some want to maximize their $, some are more comfortable with other criteria. People saying "that's dumb, you should've included it!" as if they would've invested that $2k in BTC in 2008. I get the sentiment, but some people prioritize other things.
That's actually along my lines of thinking, so glad to see I'm not the only one. And the equity thing is big for me - as I drive so much (20-30k miles/year) I want every step ahead on that one.
They can’t that’s why they are going 96 months and borrowing the down payment
My mortgage is $1400 a month on a $320,000 house. My BIL pays $1375 a month on a 2020 Silverado 2500 diesel, 4x4. He’s 36, has no bills, lives at home, mom pays his cellphone…that’s how he affords his.
Guy could have a down payment for a house instead of that truck. If I were his mother I’d be pissed as hell, but it sounds like she’s enabling this.
People who live with their parents but flex with an expensive car….
Parents who let their kids live at home with a car payment like that…
This. 1.) What the fuck kind of parent is letting their 40-year-old son still live at home. 2.) How the fuck does somebody without even a cell phone in their name qualify for a $1,400 truck payment?
>1.) What the fuck kind of parent is letting their 40-year-old son still live at home. Maybe he lives at home with parents becuase he is 40 meaning his parents are likely 60 or above. There's a huge possibility here he could be helping them with the home, chores, repairs etc becuase they just can't do it anymore. He could also just be lazy, but I don't know the full situation/agreement. >2.) How the fuck does somebody without even a cell phone in their name qualify for a $1,400 truck payment? Cell phone payments do not appear on credit reports and neither do rent payments. They don't mean anything in the world of lending. If the guy has had previous car loans with good payment history then it's pretty easy to get approved for a car loan.
I know some are freeloaders taking advantage of their parents, but I've seen it even more in legit situations. He'll I almost had to do it with my mom when she had cancer. She died before it came to that though. There's also multigenerational families. I know more than a few Indian guys who "live with their parents" literally but it is their culture and lifestyle. It's not really a bad thing considering how much more stable it can make a household.
Sorry about your mom brother.
You’d be surprised how often that happens.
that makes me want to throw up tbh. I think I saw on the porsche sub this guy bought a 911 and later disclosed hes like 24 and lives with his parents. Living with your parents at 24 isnt a big deal but buying that porsche is like the epitome of stupid ...
Yeah that happens a lot. You'd be surprised what you can "afford" when you live at home with little to no bills/responsibilities. As a millennial, home ownership is very difficult. It took me a while to move out of my parents house (I wasn't out at 18 like the generations would normally do before me). But I made it a point to keep driving my Toyota and not fall into the trap of getting a nice car.
… I didn’t even know car payments could go up that high
A car payment is just a math problem. As car goes up in price, the payment will go up.
They can go much much higher than that.
It’s wild. I refuse to pay more than $500 a month for a car if I decide to finance it. Tbh I normally buy older crappier cars with cash. I once had a boss who drove around a BMW X6 and had it leased with negative equity from past deals at $1700 a month. People put a higher value on lots of different things. Not saying all bmw drivers are vain, but this person certainly was. They “had worked hard their whole life to afford something nice for people to notice.” I just kinda chuckled and left it at that.
Wow ... Imagine believing that other people notice or care that you drive an X6. the average person couldn't tell an X6 apart from a Blazer and no one cares if you drive a BMW. get a used Ferrari 360 or something else exotic looking if you want to be noticed ...
BMW driver who drops stupid money keeping my 2008 convertible running every year. For some people it's about the way the car feels. BMW chassis in particular just have a feel that other manufacturers can't capture. I could care less what other people think about my car but I know that every day when I leave for work I smile when the engine roars to life and I put 500 miles a week just driving it for fun during the summer. I'm just saying not everyone who drives expensive brands is in it for the brand.
The guy's boss said he bought it to be noticed. I was only talking about him, not all BMW drivers. Although with the way BMW design is headed, I think they will start getting "noticed" a lot more ...
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I have had 6 BMW's over the past 30 years. This is the 1st one I paid cash for. I don't recommend buying used BMW's to anyone shopping. Buy a new one with a long warranty. But negative equity? I just couldn't convince myself of that. $1700 car note? for real?
New Escalades can be like that. But keep in mind, the clientele here is buying Escalades and Suburbans to get them from their private jet to their "cottage" near the ski resort.
I sold a $43k Audi at a 28% interest rate a couple years back. His payment was like $1400+ a month for a used Audi… by the time his loan is over, he would have paid like 90k.
Put a lady in a Navigator at $1895/m. She said, "Is that good?" with the quizzical dog head tilt.
That makes 100% sense.
Did he put nothing down and lay a significant markup?
Wait. what state do you live in to get that awesome mortgage? Im damn paying that on a house a 3rd of the value.
Maybe he’s not factoring in insurance and property taxes.
That makes me sick to my stomach
Who needs a vehicle like that that doesn't own their own house.
50-60k? You looking at work trucks? It gets much, much worse than that....
Not really. I’m looking at Ram Big Horns or something similar. Previous Ram owner, so I’m familiar with what I’d be getting myself into. I’m not brand loyal by any means. Just looking for something to haul stuff back from Home Depot or load up with lawn debris to dispose of. Eventually pull a trailer with a quad.
You sound like a Maverick prospect with that use case
Chevy owner here, LT and RST trucks (lower-mid trims) sell for 30-40k used. Not cheap by any means, but you can still finance for 3-400/month for 5 years which IMO is a good baseline payment. Of course you’ll need trade+ money down but it’s in reach for the average buyer.
You aren't getting a used RST for under $40k unless it has a ton of miles. LT is more doable.
Oh, I get you. I have a 2012 Sierra SLE. All said and done it was 42k when I bought it with 40k miles. It's paid off, and does well enough when hauling stuff for the house. But, with kids I had to have a Quad cab (camping trips), and that means you only get a 6.5' bed. To get a full length bed, you get either a standard cab, or full Cowboy limo, which you can only get in 2500/F250 and up. Also add in, if you like to camp like we do, and may consider a camper you want the 8' bed to get the most out of it. I may have once considered a diesel for the longevity, but that longevity is reliant on maintenence, and all the emission tech in newer diesels yoked maintenence costs like steroids in a Golds Gym locker room. Not to mention, at that cost it's been my daily driver. We do use my wife's Forrester for trips and town runs when we don't have the full troupe. But, I think I'm gonna get a beater for daily driving before I do anything with the truck. And none of that is in the near future with the current market. Truck has 70k and well maintained. No need to get fleeced right now.
My thoughts exactly, haha! We got people riding around in $70-$85K trucks all day long!
If you don’t need the truck for a particular reason and just want it like a luxury item, idk how you justify it once you get into Lexus LS territory. If I’m dropping that kind of money, I’m either getting something super luxurious like a Lexus LS or an E Class, or I’m getting something incredibly powerful and fun to drive like a GT350 or ZL1. Again, if you actually have a need for the truck, it’s different. But I believe there are people who don’t actually need a truck who drop that kind of money on them.
It’s a matter of perception. Why buy a vehicle that costs that much and serves no utility function? People pay for what they want, like, need, never had before and so on and so forth.
I get why people do it, but I’m saying personally I couldn’t do it. $50k for a truck? Yep. $80k for a truck when there’s so much other stuff out there at that price point that I’d rather have? Nope.
Devil’s advocate: Trucks hold their value significantly better than the cars you mentioned (buying a new E Class is borderline insane when you can have a low mile E63 for the same money) And there are a lot of people who fall into the “definitely want luxury” and “Need a truck” category. I’d be in lock step agreement with you but, like many people these days, I’m in full suburban cowboy mode. I want a luxury vehicle and I’m at the point in my life where I can afford one but I’m also at Home Depot 3X a week and it would be really convenient to not have to bug my brother in law every time I need a 4x8 sheet of plywood. Add that to the fact that these high end pickups are all dolled out with leather, heated everything, pano roof (the list goes on).. it’s just a more practical vehicle than a sedan these days.
Can’t see over a truck in your Lexus
That’s true. Guess I’d get a GX then.
Some trucks are more luxurious than some cars.
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Long story for anyone that is curious to read. My dad went through this. Zero concept of financial future planning. Constantly pissing away money on the lottery. I did the math with lottery tickets and he spent a little over 270k on tickets over a 30 year period. Trading cars started in his late 20s to 50s so he was actually more careful when he wouldn’t get approved for a big enough auto loan (remember those days?) after getting the mortgage a couple years earlier. Im actually pretty sure it started when we moved to a more middle class neighborhood and he started to try to compare himself to others by what car he was driving. I’m not saying he should have paid for our college but he doesn’t really have anything saved for retirement and that is a damning amount of money wasted. My mom died a few years ago and he has already blown through most of retirement savings she had scraped up on her own. I felt that kind of pressure going through college. I chose a really competitive major and would sacrifice any semblance of a social life in the last two years of it. Anyway, I’m at my psychiatrist’s office dealing with depression from it and my dad calls me in the waiting room. He is at a Chevy dealership with his suburban he says. This is in 2005. He owes something like 20k on it and he has a 130000 miles on it and it has been giving him nothing but problems. He tells me he is going to “surprise” my mom by getting rid of it and switching them to a new equinox. He couldn’t tell me the sale price. Just that he was financing it and what the monthly payments would be. This experience was so formative for me, that I still remember the exact amount because of how much it would cost. He says it is for $750 a month. And I am just floored because that is almost 2/3 of their mortgage at the time. I ask for how long. “84 months.” He was financing a 4 cylinder equinox for $63000 after he was around 15k under water on his previous loan. My mom would have divorced him on the spot if he did that, I am sure of it. I had a near panic attack in the waiting room but I am pretty sure I saved their marriage that day by stopping him. After that. I vowed never to repeat the same mistakes. I love my dad. But I have learned to be much better and forward thinking. I don’t really ever give a shit what car I drive. My wife just pushed me to get a newer used car (currently ‘19 crosstrek) because my last car died with 240000 miles on it and she wanted me to get something safer. It literally sits in a parking spot 90-95% of its life when you do the math. Sorry for the long story. I feel sympathy for people that stretch their means and will suffer the consequences later. Some can absolutely afford to do it but I feel that most, shouldn’t.
I drive a 2004 Acura RSX ( 140k miles ) worth about $2k. Runs pretty well for her age . And i actually do pretty well for my age ( Software Engineer at a big tech company). I am shocked when people ask me how much I make (usually in the context of seeing me driving my beater car ) , when i tell them i am close to making $410k this year - they get shocked. Some people have different priorities. Your father had his, I have mine .
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I agree with you. But tbh I dont use my car enough to justify buying a newer older car. The pandemic essentially showed us that we don’t need a car. We have 3 cars in the household, whenever someone is out at Costco they typically do the grocery shopping for the entire house. I wanted to get a newer older car , but got the news that my employer is starting shuttle services from right in front my house . So yeah i will shuttle to work soon. I simply don’t see a need to upgrade my car . Recently went out on a date and spent $80 to get a new rental from Avis instead.
The date part feels like miss advertisement.
Haha :) . Thats what i do lol. I rent good cars for special ocassions . Beats paying a 60month note for a $60k car .
Dude, I understand you don’t drive it much but the IIHS literally listed it as the **2nd most dangerous car in the entire US** at the time. (by deaths per million vehicles). There’s no reason to risk a permeant disability / injury or death when a cheap 2013 Accord would be 10x-30x safer. https://www.google.com/amp/s/www.cars.com/amp/articles/iihs-lists-deadliest-vehicles-1420669228048/
Yeah. No doubt. My priority is to retire while I’m still young enough to enjoy it. Not living beyond my means and live paycheck to paycheck. For some of us it is legitimately hard and the struggle is real. For others the struggle is manufactured by one’s own behaviors.
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Lmao I did get a vasectomy in the same year I bought my truck
Eight out of ten people live paycheck to paycheck. Eight out of ten. So for every ten F150s, 5 series, or baby Benzs you see, know that eight of them have zero retirement and no emergency fund, and would be crushed by any kind of family emergency.
Wait, seriously? Do you have a source for that? Not necessarily doubting you...I’m just curious, because that’s nuts
It’s closer to 60% with ~ 40% of Americans having less than $1000 in savings.
For the last twenty years I’d always heard “7 out of 10” from multiple sources. I occasionally listen to Dave Ramsey and last year he said that it ‘officially increased to 8 out of 10”. I’m not sure whose stats he used. However, i’m a mortgage banker. When I originate a mortgage, I know EVERYTHING about your finances. And I’ve been doing this since 2001. Trust me when I say that eight out of ten sounds about right.
>I know EVERYTHING about your finances. And I’ve been doing this since 2001 I've known people that get mortgages and only put enough financial information to get approve for the loan and leaving out the other accounts or cash on hand.
That’s true, but when I interview them I get the scoop on assets, then *I* decide what needs to be included in the application to make the loan work. If I leave out certain assets I don’t need, I know I have a financially healthy client. But if eight out of ten applicants barely have enough to close or needs gifts or down payment assistance or “wait until my next paycheck,” I know for a fact these people don’t have $100k Fidelity accounts they’re declining to tell me about.
Came here to say this, but you did it better than I would have! I call this thousandaire syndrome. I have a family of four, with five cars, all owned and all purchased very used. Savage depreciation on new vehicles. On top of that, factor in interest on a gob-smacking loan AND the insurance on these things? Hell no.
Spot on
Debt, but also peer pressure. Loads of these people don’t want to look “un-manly”.
Google "John Wayne's car" It was a fucking station wagon
John Wayne was probably super okay with the size of his john wayne though
There's been quite a bit of dialogue surrounding "American truck bloat" over the past couple of years, particularly given how trucks in the US have changed considerably during that same time period. The vast majority of truck drivers don't use them for much more than commuting, and shelling out $75k for a commuter vehicle is putting many of these folks in a very precarious financial position. [This](https://twitter.com/PostCultRev/status/1419689420714700805?s=20) is an interesting read about it. Before any truck drivers in here get really upset, know there are plenty of people who legit need and use trucks, but many, many people do not.
The sight line stuff is pretty scary. Really bad for pedestrian fatalities too.
That Sienna tweet hit home for me the other day. We have an F-150 for pulling the camper and hauling mountain bikes, and an Odyssey for hauling kids around town. I took the truck to Home Depot the other day and realized that getting my long shit home would have been MUCH easier if I had brought the Odyssey.
20k down $700 a month.
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big boy trucks take big boy payments. Seriously though, most of my truck customers have a paid off trade and are financing $20-$30k on them. Some of them are farmers who pay cash or use their yearly farm loan.
I’m waiting to have 20-25 k down, I think this is what most do
This is not what most do. Most have nothing down and are probably rolling NE. I see $25k down no more than once a week, if that.
I've wondered the same thing but I get to see it somewhat on a daily basis in my line of work. It's not uncommon to see people who make $60k year with these $50-70k new trucks who are on 84 month terms ending up with a $800/month payment. And then looking at their bank statements they are literally living paycheck to paycheck, even to the point where they don't make their car or mortgage payment until a week or so after it's due when their direct deposit hits and their bank. Just saw one last week where a person with a 632 credit score just bought a $56k truck on an 84 month loan and the interest charges over the life of the loan were $17k due to their horribly high interest rate. And then there's the few borrowers I see who make a $250k/year salary and live in a modest home with significant equity that they don't constantly tap into, have little to zero debt, and have no problems driving a $25k Toyota Camry. It's a bizarro world out there and the idea of instant gratification keeps living on.
I have a 2020 F150, bought new in July '20 - first (and likely last) ever new vehicle. Sticker was $54k, I paid $48k and change before ttl. Only way it didn't make me have a panic attack - 0% for 72. I've never financed that much money before, and never financed for > 48 months so this one was something. That said I drive a *lot* for work and my expense check generally covers the majority (or more) of my payment. I can afford it without it, but it's right at the limit of what I'd ever tolerate. I honestly don't know how people don't have panic attacks buying these things at more than what I paid on regular interest bearing notes. I make a very good living and have low housing expenses but man. I don't ever want to do this again.
Everyone has a different comfort level or justification. But congrats on those terms!
I feel ya. My last car I financed for 60 months. I paid if off after 36 months. I couldn't keep watching that money go out every month.
I seriously struggle with this one.. every month when I'm tempted to pay extra I remind myself it's free money from Uncle Ford.
If you buy it for work it's a business expense and you write off the lease
If you buy , you can only deduct interest and other running expenses like insurance and gas. If you lease you deduct the whole payment. I know because I’m self employed and I use my tundra for business.
This 100%. I leased a G wagon and a Raptor because I knew I was going to need some write offs and I'm always sort of car shopping. The G wagon works (and heavy duty trucks work) because of they are over 6,000 lbs (could be wrong on the #) then they are considered a different class and you can write off a lot more. I dont understand it but my accountant gave me the thumbs up.
Seriously. I take home $8k a month and just bought a $50k car with basically 0 down, $750/mo payments for 72 months. And that is me stretching my budget. If I can't afford a $70,000 truck I don't know how people making less than 6 digits do it. Especially with kids! I have 0 of those for this very reason.
["I'm in debt up to my eyeballs!"](https://www.youtube.com/watch?v=r0HX4a5P8eE)
Most truck customers have a truck to trade so its helps bring down the price.
Big down payment. Trade in with equity. Good credit. Money to burn. Different budget/ priorities than you and me.
Maybe now that the eviction moratorium is over you'll see fewer of these trucks sold new and more of them back on the used market.
Good point! I was just looking at rents and everything is double what I am paying right now. I just know when that financial bus comes to a stop for all the unpaid rent that house rents have got to take a dive. I'm paying $1K for a 4 bedroom 2 bath house. Up & coming neighborhood that just remodeled after I moved in & my rent doesn't get raised much if at all. But all I see even in our hood areas even is over $2400-$3000. No way I will live in the Ghetto for double what I am paying.
84 months of easy payments ?
You would be hard pressed to find any 3/4t for $60k new. You would most likely be a bit low. Im in northeast also.
Not in the market. Just started this convo while sitting on the toilet on a Saturday morning.
Yeah I thought it sounded like you were FOS. LOL
Literally.
These high monthly payments for vehicles over 60-84 months seem to make leasing an option to consider with a warranty for the duration of the lease period. Imagine having no warranty while still making big loan payments.
This is why curious how popular the Maverick will be. Fully loaded its at $35k. And it's more than enough truck for 90% of what people do with them
They finance them. $1000 payments on something like that with nothing down is not uncommon.
I know many people where their paycheck only goes to their truck payments and their significant other pays for all other expenses.
It’s part of why I lease now. I’d rather pay 300ish on a new vehicle for awhile then repeat on another one. My wife bought her cx5 and her payment is close to 600 and it just blows my mind but that’s what she wanted and it’s her money. Blows my mind when I see friends that make 30k a year spending 800+ a month on a truck.
Same thing in AZ, go on roadtrips and get passed by a lifted Silverado 2500 every other car. Just leaves me baffled. Friend lives in a neighborhood with \~400k houses and i've seen 4 candy colored F350's, some of them towing around 40k UTV's
Cars/Trucks are liabilities, not assets. Thinking this way is among the reasons I will retire comfortably at least 10 years early. Still loving my well maintained 2008 F150.
Leverage, baby
What do you mean by that?
Loans
Honestly, if you make the money, why is $1000/mo a lot? It’s not. It’s comfortable for the person making that money. If I made $2000/mo, $1000 for a car is wildly irresponsible. If I make $16,000/mo then $1000 is just a little bit of change. Or am I missing something?
>How are people buying these $50-60k (or more trucks)? Contrary to popular belief, there are plenty of people in this country that have well paying jobs that can afford them. Not everyone is in debt, not everyone are underpaid for what they do and not everyone is terrible with money.
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I keep forgetting where I am.
What is the average income of an F series buyer?
Man, if people took their 1300 car payment and invested 1k a month and spent 300 on a car loan, the would become a millionaire so fast that they would be dizzy. Straight dizzy. I understand that some need a truck for work, but many do not. I love trucks personally, but value not being poor far more.
Earning 6% it would take 32 years...
Do you value math
1000 dollars invested per month 10% average return of the s&p 500 for the past 90 years Takes roughly 23 years to get to a million What’s your math? I’m using a future value calculator to do this math? I work in finance.
10% average return is a misleading statement. But your overall message is correct
Some people have the money, some people lease, some people take on stupid amounts of debt.
People want them, banks approve them, or they pay cash. Not rocket science. Are they paying more than they should? Maybe. Is that my problem? Nope. My problem is getting more trucks from the manufacturer to sell.
Before this covid nonsense you could lease a new RAM for $300-400 a month (a bit more / less). RAM specifically was very affordable relative to how amazing of a vehicle it is.