8 ms·

Serious question, and I'm not a Tesla hater either: Why does anyone spend $35,000 - $50,000 on a car? It just feels like a number that is at least 5x too high.

• joezydeco 8y ago
  If nobody buys $35,000 cars, where does the supply of reliable 10-year-old $5000 cars come from?
  • Majestic121 8y ago
    That's a different question than the parent (albeit a related one). If there's no one to buy 35k cars, there won't be a steady flow of 5k cars indeed, but I don't think people buy 35k cars because they're nice people trying to provide 5k cars to other people after a while
    • joezydeco 8y ago
      Of course they don't. But you can't declare dependence on an ecosystem, simultaneously declare that the ecosystem is stupid, then have people take you seriously.
      • travisjungroth 8y ago
        You absolutely can. If everyone in a neighborhood tossed dollar bills on the street cause they didn't like carrying anything smaller than a five, it would make sense to both make a living picking them up and say "why the hell are they doing this?".
        • chillacy 8y ago
          The funny thing is if you put forth such a good argument that it changed everyone’s perceptions of the value of old cars then market forces would drive that price up, possibly invalidating the argument in the first place. So... shhh, keep it a secret!
  • kurtisc 8y ago
    How selfless.
    • ansible 8y ago
      The people buying $35K USD cars aren't likely thinking about selflessness, true. But the question remains, if everyone who bought new cars kept them for 20 years and drove them a lot, what would the used car market look like?
      • athenot 8y ago
        The example of the Subaru Outback comes to mind: these are relatively harder to find used because most owners hang on to them.
      • kurtisc 8y ago
        Similar the rental market, I'd guess. Mostly done by those who couldn't afford to buy new but at a greater long-term cost. I've seen people commenting that the money you save on buying new just goes on repairs instead: I don't agree. There's a fashion and entertainment value to driving something that works just as well as a new car but is newer, so the market gets pushed down.
      • shakestheclown 8y ago
        ~30% of cars are leased, so those would still be available
  • antisthenes 8y ago
    If nobody buys $35,000 cars, then people are buying $25,000 cars and you have instead a steady supply of reliable 10-year-old $3500 cars. If the aggregate demand goes down for all the cars, prices should also go down across the spectrum (to varying degrees, but still)
  • petre 8y ago
    The car manufacturers will just adjust and build some cheap car like Renault did with the Dacia brand.
    • joezydeco 8y ago
      That's still a $12,000-$22,000 car. Nobody can build one for $5,000 like anoncoward111 wants or needs, and it probably will be nowhere as reliable as a 10-year old Honda.
• samfisher83 8y ago
  Because someone wants a nice car. You are spending a couple hours a day in your car so if it small, cramped, slow, vibrates a lot why would you subject your self to that especially if you have disposable income.
  • kevin_thibedeau 8y ago
    > You are spending a couple hours a day in your car Most people don't have 1 hour commutes.
    • ansible 8y ago
      Maybe not most, but a lot of people do.
    • ghaff 8y ago
      Many do though. And the average in the US is almost 30 minutes. So change it to an hour per day (and people also drive outside of their commute).
• jakevn 8y ago
  It's not about whether or not people _should_, it's just that our debt-driven society encourages it. Almost everyone these days seems to get a loan so that they can buy a vehicle they don't have the money for. This is one socially acceptable way to burn a huge chunk of your money.
• AllegedAlec 8y ago
  I'm not a fan of electric cars, but I could see myself putting down such a sum of money for an old Mustang if I had the spending money. For people who spend such a sum of money, it's less about having a transport and it's more about hobbying with it.
• wbrasky 8y ago
  I am equally baffled by people's love of throwing money at cars. When I needed a "new" car two years ago, I asked my mechanic what sort of car they would want from a reliability/value standpoint. I was told Subarus or Toyotas not later than about 2007 were very nice. I spent 3 months watching used listings and wound up with a very low mileage 2006 Rav4 (for ~$10k) and it has been wonderful.
  • crysin 8y ago
    You're baffled by people spending money on things that make them happy? Not everyone buys a car just for transporting them from point A to point B.
  • dsfyu404ed 8y ago
    >I spent 3 months watching used listings and wound up with a very low mileage 2006 Rav4 (for ~$10k) and it has been wonderful. People think used Toyotas are made of gold. You could almost have a different Tahoe (in equivalent condition) for each day of the week at that price point.
    • jki275 8y ago
      Toyotas are the lowest maintenance used car you can buy. I've owned many and now only buy Toyota. When I can buy a 9 year old luxury model for less than 10k and drive it for another 200k+ miles putting minimal maintenance into it, that's saving me a ton of money and gives me a comfortable car to drive for my three hours a day commuting. Tahoes? Yeah. You're going to put a significant amount of maintenance into an over 100k Tahoe. They're nice vehicles but the maintenance costs are more than I want to pay.
      • dsfyu404ed 8y ago
        The price difference between a Tahoe and 4Runner or Ranger and Tacoma could probably put a new drive-train in the latter. Buying a Toyota (truck/suv, the used prices for the cars are reasonable) is still paying for maintenance, you're just paying up front instead of over time.
• supergeek133 8y ago
  "Want" vs "Need" problem mostly. There might be comfort features in a more expensive car someone wants, also, new cars come with warranties. Or even certified used tend to be more recent cars with warranties. Car repair can be one of the more expensive unexpected expenses. Not to mention depending on your commute and job detrimental to your life. Do you live in an expensive area? Seems likes spending most of your income on food and rent at that income level is high.
• snarf21 8y ago
  For the same reason people spend $1200 on a new phone to replace the $800 phone they bought a year ago.
• madeuptempacct 8y ago
  "Why does anyone spend $35,000 - $50,000 on a car? It just feels like a number that is at least 5x too high." If someone makes $250,000+ a year, it's not unreasonable. "My 2005 Ford Focus sedan was $3,000 and should last me about 3 years before I need to make a decision about major repairs, so that's less than $100 a month in ammortized costs." That's completely unrealistic. You have some sort of competitive advantage (REALLY know someone trustworthy), or you are delusional. $3000 cars are generally very high mileage, unreliable, in poor condition, etc. Timing belts, suspension components, drive belts, starters, ac compressors, minor electronics, etc tend to start going on these cars. "Are there really hundreds of thousands of people who are making $5,000+ a month necessary to justify the purchase of such an expensive vehicle? I'm not far from that number and most of my money still goes to food and rent." I believe a car should be 3 months income at most. So no, I can't justify anything past a $10,000 car. What I can say for sure is that unless you are a decent mechanic with tools or have GOOD friends / relatives that are, you shouldn't walk around espousing 3k cars. They just cost way too much in time.
  • deleted 8y ago
    [deleted]
  • ams6110 8y ago
    Not at all. You can buy a good, reliable, well maintained car for $3,000. Mileage is less important than maintenance history. The Focus is a particularly good choice IMO. They are reliable, pleasant to drive, and Ford made gazillions of them so you can get them repaired anywhere and parts are cheap. You can also buy a basket case for $3,000, so you do need to have a bit of an idea of what to look for (or what to avoid).
    • paulddraper 8y ago
      Please link to this good, reliable, well-maintained car for $3k or under, because (without a family/buddy deal) it does not exist.
      • bfuller 8y ago
• BitterSweets 8y ago
  Why buy a MacBook Pro for $2k+ when you can get by with a ChromeBook for $150?
  • matwood 8y ago
    I tend to spend 8+ hours/day in front of my computer. I spend 30 minutes to an hour in my car each day, and I would prefer zero. That is why.
    • 0xffff2 8y ago
      And some people spend 8+ hours/day driving and 30 minutes to an hour in front of their computer each day, and would prefer zero.
  • steelframe 8y ago
    I have both a MacBook Pro and a Chromebook (Samsung Pro). The Chromebook has quickly become my go-to computer, and I never feel like I'm just "getting by" on it. I also replaced a LEAF with a Tesla. Ever since doing that, my girlfriend has been asking to go back to the LEAF, because it got the job done just fine and wasn't complicated.
  • weavie 8y ago
    Replace ChromeBook with second hand Thinkpad and you have a very valid question (in my opinion).
• phikai 8y ago
  Outward appearance, vanity, they actually have the free cash, ignorance. There's a bunch of reasons people buy expensive cars... most of which don't make sense other than that's what they choose to spend their money on vs. whatever you've chosen to spend your money on. It's also an entirely incomplete picture on their financial situation. Maybe they have a paid for living situation so this is their only liability, maybe they don't have any money in their savings account, maybe they don't have a retirement account. And with Tesla it's probably even more complicated because there are some "feel good" motives to buying an electric car that may outweigh any sane financial decision.
• deleted 8y ago
  [deleted]
• Gitnumb 8y ago
  I spent more than that on a car stereo. It's all relative and what you would consider "value", your financial health, and priorities.
• kurtisc 8y ago
  Some don't look at the sticker cost as how much it will cost to them, but the cost of a few years of financing it (on good rates) + the money they lose to depreciation before they trade it in for a new car.
• flatline 8y ago
  Two incomes of 100k+/year - outside of CA, NYC, DC - you can buy two 35k cars, save for retirement, afford a mortgage, and have plenty left over.
• FigBug 8y ago
  Well, somebody has to buy new cars or there wouldn't be used cars. If most of your money is going to food and rent you must live in a very expensive location.
• smt88 8y ago
  The short answers are: cars can be resold, so you're only paying for interest, taxes, depreciation, maintenance, repairs, insurance, and gas. After working with vehicle data for 6 years, I can guarantee that someone who buys a 1-year-old Prius is actually paying less per month than you are for your 2005 Focus. People who buy brand new cars are obviously paying a huge "drive it off the lot" tax in the form of depreciation, but they know that and think it's worth it. Some people are afraid to buy used, some like to drive a new car. It's just another example of "it's expensive to be poor". If you can buy a better car, you end up paying less over the course of your owning it. Of course, that idea breaks down if you buy something unreliable AND expensive. It also becomes fuzzier with luxury cars, since they're expensive to repair. But a used, super-reliable car that holds value well, like a Prius or a Camry, is generally going to have the lowest total cost of ownership out of the whole spectrum of car options.
  • appleiigs 8y ago
    To add to your "cars can be resold" comment: my friend drives Masaratis. He always has an eye out on used inventory and snags the under-priced ones. Continuously flips them for same price he bought it for after driving for awhile (6 mo to 2 years). Many sellers are the very rich folk constantly buying new cars or who's work have been re-assigned to a different country.
    • smt88 8y ago
      To add onto this, I bought a Corolla in high school, drove it for 2 years, and sold it for more than I paid for it.
• ghaff 8y ago
  The most I'll spend is at the low end of that range. I've driven fancy German cars and understand the attraction but not enough to shell out the money. I like getting a vehicle with the features I want and the room to haul all my various sports gear. I've bought used vehicles but, generally speaking, I like being able to buy a car with the features I want and basically not having to materially think about maintenance for a very long time. I can't say that I've found the used cars I have purchased to be particular deals in the long run. Car maintenance is one thing I'm willing to pay just not to deal with as much as possible. I do think a lot of people spend more on cars than they can/should. I could spend less myself but on an annual basis I'm pretty frugal and haven't had a car payment for many years.
• billylindeman 8y ago
  Sounds like you're a fiscally responsible person. Keep in mind most people are not, and our economy is built on top of easy credit / debt.
  • rootusrootus 8y ago
    It is far from a sure bet that a 15-year-old $3K Ford is the fiscally responsible choice. It's kind of the reverse of the problem of people spending too much on cars -- someone getting focused on the absurdly low price and not factoring in what it will actually end up costing them over time.
    • dsfyu404ed 8y ago
      The difference in up front cost between an '04 S10 and an '08 Tacoma will put a whole new drive-train in that S10, twice.
      • rootusrootus 8y ago
        As far as used car values go, the Tacoma is significant outlier. Drivetrains don't usually fail, anyway, it's all the little bits around the edge that nickle and dime you to death.
• jartelt 8y ago
  A lot of new cars these days start out at $20-25k. I imagine a lot of people are interested in the $35k Model 3 because it will have lower ownership costs than a gasoline car, is more fun to drive, and is neat. When you take that into account, the difference between a $25k gasoline sedan and $35k Model 3 is not THAT big. I used to do the whole used car thing, but at this point in my life I spend more to feel safer and to be more comfortable. I still have never spent more than $25k on a car, but I definitely want to drive something that I am confident will not break down.
• rootusrootus 8y ago
  There are as many reasons as there are people, I don't know if you could really generalize an answer. I spent $40K on my current car because I'm an enthusiast and it puts a smile on my face every time I drive it that a 15 year old Focus definitely would not. To each their own. And in the grand scheme of things, the monthly payment (on a 1.9% loan) is about 3% of my income. As long as I meet my goals for savings, I don't really feel guilty about spending some money on stuff I enjoy.
  • chosenbreed 8y ago
    > As long as I meet my goals for savings, I don't really feel guilty about spending some money on stuff I enjoy. Good approach...you gotta live a little :-)
• b1r6 8y ago
  Yeah I'm too frugal to spend like that on a car. At some point I'll buy a used Model 3...once it costs 30% of that. For now I love my 40mpg and low maintenance and insurance costs of a 10 year old hybrid Civic. But you have to think about all the people who buy cars for other reasons...supposed signaling, the impression it gives others, devout brand loyalty, good old consumerism... There's just so many reasons that are "misguided" from a financial perspective, but logical from the personal perspective.
• zeptomu 8y ago
  It is true that at the moment a conventional (non-electric) vehicle is cheaper. However some people do want to own a car that has a lower negative impact on the environment and are willing to pay more money for that (which is a good thing).
  • kitsunesoba 8y ago
    This is a factor for me. I’ve never owned a car and if I can help it, want to avoid ever buying an ICE or partially-ICE vehicle. There’s a tiny used EV market, but it’s mostly filled with early entrant models that make serious compromises, making buying from it somewhat impractical. So I’m now considering buying a model 3 in the next 1-2 years. If I can’t make it work financially, I’ll just make do without a car until that changes.
• ansible 8y ago
  I recently bought a new car that was less than that, but still in the $20s. I had previously been driving old cars, which was OK, but I had never bought a new car before, so it was nice from that perspective. It also had some features that I wanted and do appreciate. Like Bluetooth, USB audio storage, and various safety features. Excellent fuel economy too. I plan on keeping it 15 years and/or 200K miles, or more, so the amortized cost isn't bad. Given my age, it is likely the only and last new car I'll ever purchase, because I'm sure the driving landscape will be substantially different than it is today.
• coding123 8y ago
  I'm guessing you're not married?
  • anoncoward111 8y ago
    Not married nope, girlfriend drives a way more expensive car than I do but we usually do road trips on my beater because we don't want to hurt the nice car haha
    • shakestheclown 8y ago
      I've switched to renting cars for large mile trips. Unlimited mileage rentals are so cheap it's worth it to avoid wear and tear even on my older car or my girlfriend's nicer vehicle--and removes the risk of my old car breaking down in an inconvenient place. Last rental was an SUV for $65/week that I put hundreds of miles on. Some of the rentals I have put 1k+ miles on for <$100.
      • mlevental 8y ago
        how the heck did you get $65/week? is that without insurance coverage for the rental?
        • shakestheclown 8y ago
          Yeah, no insurance. I use primary coverage through a premium credit card, which covers damage/theft, towing, and loss-of-use charges. There was a status upgrade involved and an online coupon code.
• simonebrunozzi 8y ago
  It's a good question. Three things: 1) Your TCO (Total Cost of Ownership) for a cheap used car can't be $100/month. If you look at Kelley Blue Book or similar websites, they'll tell you that even super cheap cars like that 2005 Ford Focus will still cost you $300-400/month, all included. 2) I almost died in a car accident two years ago, and a result, I value car security way more than before, which means I wouldn't mind paying $35,000 for a very safe car (assuming I'll be able to afford it). 3) Salaries and wealth are not evenly distributed. Something that looks expensive to you, doesn't for someone else.
  • jakevn 8y ago
    My TCO for my 2003 Toyota Sequoia has been $70 a month. I paid $8,000 for it 3 years ago and have paid $500 in maintenance (standard scheduled maintenance plus $60 in repairs). I pay $23 dollars a month for liability insurance. Depreciation has been approximately $1,200 (at worst). I'm not so sure I'd own anything but a larger (safety) Toyota (reliability) that old, but just wanted to provide some anecdata.
  • Marsymars 8y ago
    > Your TCO (Total Cost of Ownership) for a cheap used car can't be $100/month. If you look at Kelley Blue Book or similar websites, they'll tell you that even super cheap cars like that 2005 Ford Focus will still cost you $300-400/month, all included. My personal econobox, which I've had for a bit over five years, has so far run around 0.17 cents per km, or $155/month, with around 12,000 km/yr. Fixed costs (insurance, registration) add about $75/m.
    • jjoonathan 8y ago
      So you either won the car maintenance lottery or DIY'd it and disingenuously priced that at nothing. Good for you -- but not good for planning purposes.
      • Marsymars 8y ago
        No, neither of those? My per-km costs have been about 30% maintenance, which is pretty reasonable for a $10k econobox between 60k-120k km. I DIY the easy stuff like oil changes or tire rotations, but that bill includes several major maintenance items where I paid dealership labour rates. (shock/strut replacement, broken filler flapper, brake job, water pump replacement) To be clear, the $155/m is for marginal costs, total marginal+fixed is $155+$75= $230/m.
• matwood 8y ago
  Some people like cars. If that's their thing, then cool. I dislike driving and everything having to do with it, so I have typically go your route within reason. Buy a used brand that is known for reliability.
• InTheArena 8y ago
  There are both sociological and economic reasons for it. On the sociological - new cars can be a status symbol - especially in the Luxury markets. Interestingly enough - the European luxury car market is roughly twice that of the United States, despite per-capita earnings being lower then the United States. Are you German and driving a beat up Honda Civic? Not a good look. Tesla is benefiting from this - the cars are highly viral, and aligned with affluence, political persuasions, environmental outlook, sports car enthusiasm, etc. It's turning Americans more willing to buy a luxury car, if it's a Tesla. Then social network comes into effect. If one of your friends buys a Tesla, you are very very likely to as well. This is basically the only marketing program that Tesla Does (Referral codes from friends). (BTW, I say all of this as someone who finally pulled a trigger on a "Lemur" Model 3 earlier this week). There is also the practical - when you buy a used car between 3k and 6k, you are basically on the long tail maintenance wise. It's a good bet that the reliability of the car, and the efficiency of the car are both dramatically less then then a new car. I also enjoy snappy acceleration and a car with a low center of gravity. You get into a Model 3, and Internal Combustion Cars just feel like a horrible piece of legacy technology. Could I get away with a old Ford Fiesta or a beat up Civic? Yep - and this is replacing a 15 year old Honda CRV... but I bought that Honda CR-V new, and I have gotten every bit of value from it - and I'm passing it on to family.
  • saiya-jin 8y ago
    Ah, the good old fool's logic of trying to impress people you don't actually care about. How stupid this can be... Can you actually be impressed by somebody's car? I can't for more than 1-2 minutes even if we talk about porsche/ferrari. Lasting positive impression can't be bought, no matter how much cash you throw at it. Reliability of an old car can be an issue, but if you find a good mechanic, he will go over junky car, fix and replace what is needed, and on top of 3-5k you spend maybe another 3-5k at most. Even better is to have an used car be shopped around up by such a mechanic, but that often requires a friendship on some level. Voila, reliable car for 6-10k, you just need to get a check once a year (shouldn't be costly if initial one was done properly). I have 15-yer old BMW 3-series, amazing car. Won't change it till it dies/crashes/gets stolen. Fiancee bought before old Toyota Corrola combi for 5k - amazing workhorse. Driving experience is crap compared to BMW, but it just keeps working, consumes nothing (diesel 2l engine). New one costs easily 4x more, for very little added value. Unless your pay directly depends on you being reliably on time someplace, or you commute over longer distances in some higher white collar job, this is enough.
• esotericn 8y ago
  Most people are not financially responsible. (Not limited to cars; see the fact that even well earning individuals in the UK, US, etc, could only weather a few months without work because they scale up lifestyle to match). That, and that many people actually have money. London alone has over 400,000 millionaires by NW, one years' interest on that pays for a Tesla.
  • eafkuor 8y ago
    > Most people are not financially responsible. This is basically the real answer. > London alone has over 400,000 millionaires by NW But that's mostly because of house prices no? Those don't pay interest?
    • esotericn 8y ago
      It's still endgame. If you own your home outright you're done. Add another 100-200k or so and you're (baseline) retired in a country with healthcare, etc. After that, do whatever you want with your money, it's fun coupons.
• michaelcampbell 8y ago
  People value different things differently. > Are there really hundreds of thousands of people who are making $5,000+ a month necessary to justify the purchase of such an expensive vehicle? Look around; do you see said cars? There you go.
• vbezhenar 8y ago
  Why would you buy modern PC, if you can buy used Pentium 4 with 2GB RAM and setup some swap for probably $50 or something like that? Some people like fast shiny things and have money to pay for it.
• moduspwnens14 8y ago
  My prior car was new and I later decided that the added expense of a new car did not justify it. My plan was to get a few-years old "A to B" used car (like a Corolla or something) when it started needing work. But I did change my mind and get a Model 3. * Autopilot is quite nice. I'd compare the experience to driving a car with cruise control as compared to one that doesn't have it. It's not the end of the world, but if you have a car with cruise control, it's tough to imagine intentionally buying your next one without it barring financial difficulties. * Not having to fill up at gas stations is nice. There's a little more planning involved for trips, but for normal day-to-day, it's waking up every day to a full tank. * Upcoming software updates. The initial Model 3s didn't have summon or the dashcam feature, both of which have been added over the air, and more of which will be added sooner. * I think the auto industry in general has become stagnant and "safe" in terms of innovation, and I want to support a disruptive entity that will force the others to re-think the ways they're doing business. * It's got an API, which already has third party tools for an Apple Watch app, detailed analytics, etc. * They're taking a risk with the interior of the car, with the lack of gauge cluster and spartan design. To me this looks like what happened when the software industry switched from "as many UI buttons and features as possible" in the '90s to the simplified, "overall user experience" focus we see in modern software. And I want to support that. * There's some "feel-good" factor to damaging the environment less, and supporting the market that will allow for society to join in. I agree with you in that I can't imagine spending $63k on a non-Tesla. The differences between a basic used car and a new Mercedes or something just don't justify it. But I do feel differently about the Tesla.
  • Marsymars 8y ago
    > * They're taking a risk with the interior of the car, with the lack of gauge cluster and spartan design. To me this looks like what happened when the software industry switched from "as many UI buttons and features as possible" in the '90s to the simplified, "overall user experience" focus we see in modern software. And I want to support that. I guess this is fine if you live in California, but a car that I can't operate while wearing heavy mittens is literally unusable to me for nearly half the year.
    • 8y ago
• cowmoo728 8y ago
  1. A lot of new cars are leased (30% of new car volume) 2. A lot of new cars are purchased with auto loans (44% of Americans are paying an auto loan) 3. The average new car loan amount is going up by a lot (reocrd high of $31,000 now) 4. A lot of people are defaulting (5.8% are > 60 days late, higher than the financial crisis years) PDF warning https://static.ed.edmunds-media.com/unversioned/img/industry-center/analysis/2017-lease-report-july.pdf https://static.ed.edmunds-media.com/unversioned/img/industry... Consumers Skip More High-Rate Auto Payments Than During Crisis https://www.bloomberg.com/news/articles/2018-05-14/consumers-skip-more-high-rate-auto-payments-than-during-crisis https://www.bloomberg.com/news/articles/2018-05-14/consumers... So to answer your question seriously, people take out auto loans and lease expensive cars because they like buying expensive things, even if they can't really afford it.
• pow_pp_-1_v 8y ago
  Well, a couple of weeks back, I bought a car. I would have bought if 35K Model 3, if one was available. Why? Because I didn't want to burn gas when there might be other options available; because I wanted to do my part in keeping an electric vehicle company alive; because I wanted to be less of an asshole to the future generations that have to live with the consequences of things we do now. Yes, I know most of electricity is still generated from fossil fuel sources. But baby steps. Btw, I ended buying a Honda Insight.
• isoskeles 8y ago
  I am not a car fanatic like these people, but I think I get it. Some people just love cars, like how some people love gaming rigs or skiing. They love the things so much they’re willing to go into debt. Part of the phenomenon may be branding too. Cars are used as a status symbol. It’s not necessarily used to broadcast that you’re a “better” person than others, but maybe that you have “good taste” and “can afford it” (think something like expensive designer handbags but more functional). And some people are just dopes who spend money or go into debt with thinking about it. They’re financially illiterate. These are people who make emotional purchases and feel very excited and happy about their new car, who gripe about their debt two months later when reality sinks in. I feel bad for them.
• corpMaverick 8y ago
  To me the sweet spot is a $8k car (Toyota Corolla) with 6 years of usage and keep it for at least 4 more years.
• Iv 8y ago
  If you buy a new car and resell it after 3 years, you can end up spending the same amount as you would do with a used car. You always run the risk of a bad accident ruining your investment but that's also what insurances are for. With a used car you run a higher risk of having unforeseen failures much earlier than you would want. All in all I am still buying second hand cars but the investment into new cars is not what it seems at first.
• ljf 8y ago
  Really not sure (I've always driven 'bangers' that are at least 11 years old) - but shocks me to see friends buying new cars. That said a number seem to be: * Company cars * Bought as part of 'own company' * Leased * Hired * Hire/purchase Then a lower number: * Bought with autofinance * Bought with a bank loan * Bought on a CC Very few (if any) are bought in cash. I remember my father (who has never been a rich man) buying his car in cash, (£10,000 in 1996) with the plan that this would last him. It did for 13 years. I was shocked when my brother bought a new van recently - but at less than £200 a month, it worked out less than buying a banger and having to fix it - he needed a van for his job, so can't afford to have a day or days without a working vehicle. I think that is what it comes down to for most people who do buy new. 'Perception' of vehicle less likely to breakdown.
• parasubvert 8y ago
  It’s relative to whatever else you want to spend your money on. I spent $90k on my recent car because I love cars, and this was a relative deal (it was worth $110k) with decent resale value. I have friends that have spent $140k on their Tesla model X, or $190k on their Porsche 911 Turbo. That seems too high for me. Shrug. Everyone is different in their priorities. Most of these are leases where they’re paying maybe $5k a month. When you make $300-400k a year or more with current low rates it’s not terrible.
  • vroomvroombaby 8y ago
    > Most of these are leases where they’re paying maybe $5k a month a fully optioned 911 turbo S lease is about $2900/month. most high end 911's lease around $2000/month. most high end bmw's and mercedes sedans (M, AMG, etc.) lease around $1500/month. these leases are usually tax deductible for business owners and consultants (1099, K1, etc). and you're right, the problem with HN is some people just have no idea how much money people in technology are really making. these lease payments are a drop in the bucket compared to personal earnings or, more to the point, a successful small business' revenue.
• Damogran6 8y ago
  Because they can, and because they want to. If a $50,000 car is 200X your income, that's one thing...if it/s 1/20 your income, it makes the [emotional] decision much easier to rationalize. Further, that $50k is being more and more hidden in things like low-mileage leases, so it doesn't FEEL like that...it only feels like $400 a month and you get a new car in 3 years...but nothing to show for it after the fact.
• Cthulhu_ 8y ago
  I wouldn't spend that kind of money unless I had fuck you money in the bank, knowing full well they depreciate half their value after the first year (although as an aside: I don't know if that's the case with Tesla cars, less moving complicated parts so less wear and tear. Apple computers and phones depreciate notably less quickly than their competitors, too). However, I work for a company that offers a lease budget, meaning I am actually able to drive a $35K car at a small bump in taxes (that is, a percentage of the value of the car is added to my annual income and taxed as income tax accordingly. I get free fuel from work though otoh so it's a good deal). Especially in Europe and / or my segment of work, lease cars are a huge market - tens of thousands of cars - and Tesla will make a HUGE impact on that once they become available over here. Europe and my country are much more suitable for electric cars too, in that distances are generally much lower.
• phkahler 8y ago
  >> A used car from a fairly reputable source can be had... EVERY used car was once a new car. How many times do you think a car gets sold? Perhaps 3 or 4 including the original new sale? If so then 25 percent of car sales are new car sales. Another thing to consider is the resale price of a car. With an old used car you may think you'll drive it until it's used up and junk it, while the previous owners kept it until it was "used up" in the sense that they sell it and get some money for it. Sure new cars are generally over prices, but TCO is still an important consideration.
• cptskippy 8y ago
  We bought a Model 3 last week because we wanted to support a car company that was all-in on EVs and sustainable technology. We feel climate change will be the defining event of our generation and we want to support technologies and companies that seek to reduce our carbon footprint and combat climate change. Most auto companies like GM and Ford are producing EVs to meet regulations that they're actively trying to get rid of. Others like VW are only doing it as part of legal settlements. Supporting them financially would be potentially to our benefit and not the planet as given the opportunity they'd dump EVs and go right back to the ICE. The remainder aren't investing in technology, they're just licensing it from the big 3. We needed a larger sedan and considered hybrids like the Accord or Camry but older models only have efficiencies comparable to small sedans like the Corolla where as the 2019 models see much higher gains. Additionally the hybrid models are a premium approaching the $40k range. With the full Federal Tax credit, the Model 3 we bought will cost around $44,000. This is the first new car either of us has bought and while it's a non trivial cost, it's something we can easily afford.
• paulie_a 8y ago
  I've found uber and potentially renting a car is more cost efficient to owning a car and paying parking. I drive so little my car was collecting dust. I still have insurance to drive but that is half of what it used to be. Plus I hate driving in congested traffic.
• derekp7 8y ago
  I used to be a used car person, then after I got my first new car I became a new car person. When I get a new car, it is still a new car to me even after 10 - 15 years. My previous new vehicle cost just over 20K, and lasted about 15 years. When I bought used cars, in the 2-5K range, they would last about 3 years before I felt I needed to trade them in, and I'd be constantly working on them. A new car gives me a break for about 8 years or more before I really have to work on them (other than regular maintenance). And that is really nice knowing that I can get in the car in the morning, and have a really high rate of confidence that I'll get to work and get home. The other thing, having a car from day 1 means that I know how it was maintained. The biggest item is having it garage kept, keeps the morning dew off it and therefore have fewer problems with internal components (and rusting) over time.
• csomar 8y ago
  Why would anyone rent a downtown apartment with heating, air-conditioning and a Jacuzzi? Might as well live in the jungle. The answer is simple. People are different. Some prioritize travel. Some prioritize Home-ownership; and some require a nice car. You are neither a genius nor frugal. Different people will have different priorities.
• paddy_m 8y ago
  I paid $5000 for a 2001 GMC 2500 with a lift gate and 56k miles. There are some dents and surface rust, but the truck is generally solid. Crank windows and only one working speaker. I call it my luxury vehicle because I have the luxury of not worrying about it. I will be supplementing this with a 10+ year old hatchback for better gas mileage and less wear on the truck. I'm expecting to pay around $5k for that too.
  • anoncoward111 8y ago
    Nice find!! My 98 VW cabrio lost electric power to all 4 windows so I am jealous of anyone with manual windows, feels like luxury to me :)
• marssaxman 8y ago
  I've always wondered this, too. The most expensive car I ever bought cost $14K. It was really nice while I had it, but the loan and insurance payments added up to more than $500/month. With a car old enough I can pay for it outright, insurance only costs about $90/month, and even budgeting for $1000-$2000 in repair work every year I'm coming out significantly ahead. Buying a new car seems like such an unreasonably expensive luxury that I am genuinely surprised there are enough people wealthy enough to keep the industry going.
  • anoncoward111 8y ago
    Completely agree my friend! After taxes, insurance, principal balance on the car, and routine maintenance, my beater as described above is running me at $175 a month. I know so many people who have a car that's costing them over $600 a month all in. That really confuses me, because that's just about the price of a bedroom in our area. It is entirely feasible to live on $1000 to $1500 a month here as a single person and bank the difference in salary without feeling like you are truly being frugal!
• GhostVII 8y ago
  Most people aren't trying to minimize their transportation costs though, in the same way that people aren't trying to minimize their housing costs when buying a house. People get the nicest car, and biggest house, that they can afford. If you have a long commute, I think it makes sense to get a pretty nice car, considering how much time you spend in it, and how annoying it is to have your car break down or need repairs at random times.
• leetcrew 8y ago
  it seems that people who buy cars fall into two groups. the first group views a car as an appliance, and will generally buy the cheapest one that will get them where they need to go and haul their stuff around. you tend to see these people driving crossovers. the second group actually enjoys driving, and will seek to get the nicest car that fits in their budget. the minimum viable car and the nicest car you can afford can be very different in cost.
  • anoncoward111 8y ago
    The way I drive my beater car, I can assure you it's a ton of fun, but also probably a ton of danger for myself and maybe others :p