6 ms·

I think one of the issues is that the average price of cars has risen so much. I was watching some financial podcast/guru person who had noted that the average

by vondur 8y ago

I think one of the issues is that the average price of cars has risen so much. I was watching some financial podcast/guru person who had noted that the average car payment is now $550/month with a 69 month term for the loan.

SilasX 8y ago
That sounds less like an impact of higher MSRP and more an impact of the median buyer biting off more than they can chew, incurring higher interest/financing costs.
- vondur 8y ago
  That's also a likely issue too. I live in not the best neighborhood, and I've noticed that there are a lot more higher end cars then I'd expect for this area.
dragontamer 8y ago
> I think one of the issues is that the average price of cars has risen so much. IMO, what explains the higher price is because reliability is so much better than 20 years ago. 100k miles is so cake that no one brags about reaching 100k miles anymore. In fact, most people today are bragging about "oil-change + tire maintenance only for 100k miles". Its completely reasonable to buy a car with 100k miles on it, and hope for it to last another 100k miles on top of it (or ~7 years or so, depending on driving habits). In effect, a 5-year old car today is approximately worth the same a brand-new car from the 90s. You're gonna get +100k miles off of it and not have to worry too much about maintenance issues.
- semi-extrinsic 8y ago
  Is it a US thing that this is a recent development? If you bought a used BMW or Volvo in the 90s with 150k km on it, you would definitely have a reasonable expectation that it would last another 7-8 years. The people I've known with extreme mileage have been like 400k or 500k km.
  - dragontamer 8y ago
    I'm going to bet its a US thing. Apparently, a lot of people didn't know how oil-changes worked and never changed their oil (and other such horror stories). With service schedules, free warranties, and checkups... that's probably not a problem anymore in the USA. So it could be a change in culture that is allowing people to drive further these days. A lot of cars these days come with 3-years of free service at the dealership, allowing for oil changes (and other maintenance items) to be checked on regularly. I dunno how it works in other countries, but my understanding is that it wasn't always like this in the USA. So buying used cars with bad maintenance problems was more common back in the 90s. In contrast, you can often get the service history of the used cars you buy today (if you're buying certified used, for example). ------- So I don't really know why cars are lasting much longer these days. But I definitely know that back in the day, 100k miles was a thing worth bragging about.
    - tssva 8y ago
      My awareness in this subject only goes back to the mid-70s so maybe your comment references a time before then but I can definitively say that since then there has not been a time when people in the US didn't know how oil changes worked. In fact back then car owners probably had more awareness of how oil changes worked since tasks such as oil changes, spark plug replacement, tune ups, brake drum/pad replacement were much more commonly done by the car owner than they are today.
      - dragontamer 8y ago
        I'm much younger than you :-) I've mostly heard horror stories from my dad about how some of his neighbors didn't know how to take care of their cars. > In fact back then car owners probably had more awareness of how oil changes worked since tasks such as oil changes, spark plug replacement, tune ups, brake drum/pad replacement were much more commonly done by the car owner than they are today. On that point, I think I can agree, at least based on the stories I've heard of that time. But the question is: what about all the car owners who didn't know how to do those things? The car owners who weren't in the know? It wasn't like today where you could easily look this stuff up, you had to have been brought up correctly in the correct car culture to know those sorts of facts. Only when cars broke down, they would come around to the "car guy" in the neighborhood to ask for help. And that's when you hear the crazy stories about how many people didn't know how to handle their cars.
- giobox 8y ago
  I’m not sure this is it at all, personally. From what I’ve observed, it seems like the focus on leasing has driven average selling prices up. In recent years the car industry seems to have loved using leases to up-sell customers to vehicles they otherwise couldn’t afford on other purchase methods. Dealers appear to encourage this too, I’ve frequently had the “look at the model you could be driving if you leased instead” etc while trying to get a good deal on a purchase method that results in owning the car. Increasingly many manufacturers apparently don’t really care about the final on the road price staying as low as possible all that much within reason; it’s more about how expensive a car can we push on people at lease rates their wallet will stretch to. The “you can drive this for just $xxx a month!” is the conversation the dealer typically focuses on, probably to obfuscate the true cost as much as anything else. This admittedly applies more to say luxury European brands, where many model lines have (adjusting for inflation) gotten more luxurious and expensive as the focus has primarily shifted to leasing in many markets. There’s similar issues with the truck market as well, and America still buys lots of these every year.
bredren 8y ago
This is amazing to me. So much money to sit in traffic.
- FullyFunctional 8y ago
  Exactly this. I spend upwards of two hours in traffic every day so it makes sense for me allocate a lot of capital in that direction (as opposed to say, a vacation home I might visit a week a year).
  - bredren 8y ago
    This is sad.
lutorm 8y ago
The average price of cars might have risen, but have the average price of a given car segment (size, trim level) really risen? I have the feeling that people are just buying bigger (unnecessarily bigger) cars, and the high trim levels are also very expensive compared to what they offer. Here in HI, the best selling vehicle is the Toyota Tacoma, selling for just over $30k. That is inconceivable to me.

by vondur 8y ago

SilasX 8y ago

That sounds less like an impact of higher MSRP and more an impact of the median buyer biting off more than they can chew, incurring higher interest/financing costs.

vondur 8y ago
That's also a likely issue too. I live in not the best neighborhood, and I've noticed that there are a lot more higher end cars then I'd expect for this area.

dragontamer 8y ago

> I think one of the issues is that the average price of cars has risen so much. IMO, what explains the higher price is because reliability is so much better than 20 years ago. 100k miles is so cake that no one brags about reaching 100k miles anymore. In fact, most people today are bragging about "oil-change + tire maintenance only for 100k miles". Its completely reasonable to buy a car with 100k miles on it, and hope for it to last another 100k miles on top of it (or ~7 years or so, depending on driving habits). In effect, a 5-year old car today is approximately worth the same a brand-new car from the 90s. You're gonna get +100k miles off of it and not have to worry too much about maintenance issues.

semi-extrinsic 8y ago
Is it a US thing that this is a recent development? If you bought a used BMW or Volvo in the 90s with 150k km on it, you would definitely have a reasonable expectation that it would last another 7-8 years. The people I've known with extreme mileage have been like 400k or 500k km.
- dragontamer 8y ago
  I'm going to bet its a US thing. Apparently, a lot of people didn't know how oil-changes worked and never changed their oil (and other such horror stories). With service schedules, free warranties, and checkups... that's probably not a problem anymore in the USA. So it could be a change in culture that is allowing people to drive further these days. A lot of cars these days come with 3-years of free service at the dealership, allowing for oil changes (and other maintenance items) to be checked on regularly. I dunno how it works in other countries, but my understanding is that it wasn't always like this in the USA. So buying used cars with bad maintenance problems was more common back in the 90s. In contrast, you can often get the service history of the used cars you buy today (if you're buying certified used, for example). ------- So I don't really know why cars are lasting much longer these days. But I definitely know that back in the day, 100k miles was a thing worth bragging about.
  - tssva 8y ago
    My awareness in this subject only goes back to the mid-70s so maybe your comment references a time before then but I can definitively say that since then there has not been a time when people in the US didn't know how oil changes worked. In fact back then car owners probably had more awareness of how oil changes worked since tasks such as oil changes, spark plug replacement, tune ups, brake drum/pad replacement were much more commonly done by the car owner than they are today.
    - dragontamer 8y ago
      I'm much younger than you :-) I've mostly heard horror stories from my dad about how some of his neighbors didn't know how to take care of their cars. > In fact back then car owners probably had more awareness of how oil changes worked since tasks such as oil changes, spark plug replacement, tune ups, brake drum/pad replacement were much more commonly done by the car owner than they are today. On that point, I think I can agree, at least based on the stories I've heard of that time. But the question is: what about all the car owners who didn't know how to do those things? The car owners who weren't in the know? It wasn't like today where you could easily look this stuff up, you had to have been brought up correctly in the correct car culture to know those sorts of facts. Only when cars broke down, they would come around to the "car guy" in the neighborhood to ask for help. And that's when you hear the crazy stories about how many people didn't know how to handle their cars.
giobox 8y ago
I’m not sure this is it at all, personally. From what I’ve observed, it seems like the focus on leasing has driven average selling prices up. In recent years the car industry seems to have loved using leases to up-sell customers to vehicles they otherwise couldn’t afford on other purchase methods. Dealers appear to encourage this too, I’ve frequently had the “look at the model you could be driving if you leased instead” etc while trying to get a good deal on a purchase method that results in owning the car. Increasingly many manufacturers apparently don’t really care about the final on the road price staying as low as possible all that much within reason; it’s more about how expensive a car can we push on people at lease rates their wallet will stretch to. The “you can drive this for just $xxx a month!” is the conversation the dealer typically focuses on, probably to obfuscate the true cost as much as anything else. This admittedly applies more to say luxury European brands, where many model lines have (adjusting for inflation) gotten more luxurious and expensive as the focus has primarily shifted to leasing in many markets. There’s similar issues with the truck market as well, and America still buys lots of these every year.

bredren 8y ago

This is amazing to me. So much money to sit in traffic.

FullyFunctional 8y ago
Exactly this. I spend upwards of two hours in traffic every day so it makes sense for me allocate a lot of capital in that direction (as opposed to say, a vacation home I might visit a week a year).
- bredren 8y ago
  This is sad.

lutorm 8y ago

The average price of cars might have risen, but have the average price of a given car segment (size, trim level) really risen? I have the feeling that people are just buying bigger (unnecessarily bigger) cars, and the high trim levels are also very expensive compared to what they offer. Here in HI, the best selling vehicle is the Toyota Tacoma, selling for just over $30k. That is inconceivable to me.