5 ms·

Even when times are good, cars are what largely keep Americans poor. Back when I lived in LA, I literally had a car salesman try to tell me I should be okay wi

Even when times are good, cars are what largely keep Americans poor. Back when I lived in LA, I literally had a car salesman try to tell me I should be okay with an outrageous interest rate, because everyone can just refinance later. There is an intense amount of pressure to not only own a car, but to buy a nice car so you can show off. For one, you're not going to attract quality people like that, and two the moment things go bad you'll lose that car. I was able to reduce my monthly expenses by about 20% just by going car free, and I refuse to ever own a car again. Owning a car is just this giant liability, but of course I'm rather limited in where I can live because of that. Much of America is just broken, there's no way to fix poverty as cars will keep you poor. You have a tiny handful of cities which both have decent public transit and are moderately affordable. One of these cities starts with a C.

throwaway0a5e 5y ago
There's pressure to over-spend on everything. HN will justify it for some classes of products and complain about it for others. The one guy who moves heaven and earth to live in a "good neighborhood" that's normally a tad much for his income would get accolades around here. The guy who lives in a trailer park but and expends the same effort to drive a nice car gets derided. I don't see the big difference between them. They're both just going "all in" in different aspects of their lives.
- 999900000999 5y ago
  Try selling a house 10 years after you buy it. Then sell a car 10 years after you buy it. One goes up in value, often greatly, the other is nearly worthless.
  - throwaway0a5e 5y ago
    >One goes up in value, often greatly, the other is nearly worthless. The Toyota fanboys would take issue with that statement ;) Personally owning and maintaining my own metal box on wheels saves me ~2hr per day over the publicly owned metal box on wheels. Even in Europe that would be worth it for just about any white collar professional. Not everything has to be a good investment. I drive junk but I understand why some people would rather sit in a really, really nice car for their commute. The way I see it transportation is just the cost of having a job. "Base" transportation has zero residual value. You can't sell a worn out shitbox for anything. You also can't sell a city bus or rail car at all. If you throw more money on top of the "base" A to B car in order to have something nice then you might get some value back but it's fundamentally a luxury expense. For my use case and for many people, the "base" car offers so much utility improvement over anything else that it's a) a no brainier b) basically pays for itself vs attaining equivalent standard of living without it.
  - iancmceachern 5y ago
    They're usually tied together. Quite often it's the car that allows the person to buy a home and commute to and from work to this home. The car is very much a tool. It it frees up time (which can be traded for money), or otherwise opens up opportunities (like to live in a suburb and commute to work rather than taking public transportation which may be nonexistent or otherwise time inefficient) then it's an investment as well - it just returns its value not in money or intrinsic value of the car but in saved time, effort, and doors opened. Not everything should be viewed as a financial instrument only. Say a musician buys a trumpet, and 20 years later that trumpet has depreciated. The argument could be made that if he bought a house instead of a trumpet it would have been a much better investment. But how would he have played the trumpet his whole life then?
  - gruez 5y ago
    >One goes up in value, often greatly, the other is nearly worthless. Technically the house goes down in value as well. The one that goes up in value is the land, not the house.
deleted 5y ago
[deleted]
maxsilver 5y ago
> cars are what largely keep Americans poor. Which is weird, because (until last year anyway, when used car pricing went crazy) cars were by-far the cheapest major expense an average American has. Most Americans drive, in large part because the car is free money -- the drastic housing savings and occupational/educational/commercial opportunities more than make up for the small amount of cash it costs to own and operate one. Just on rent savings alone, my car pays me to drive it. (The car costs me about $400/month in full TCO, but that car easily saves me $800/month or more just on rent alone, not to mention trips or kids school runs or visiting friends or shopping or so on). And that's not even factoring in that people's time has value, and any alternative form of transit easily double-to-triples the amount of time a given trip takes. > I was able to reduce my monthly expenses by about 20% just by going car free, and I refuse to ever own a car again. That sounds nice, and maybe it's just the midwest in me, but I've never seen a person who can actually save money by not-owning a car. Many people claim as such, but then you dig a little and find out they were already wealthy to begin with, which is the only way they were able to get away with it. (e.g., "you should totally sell your ~$20k car, and with the money you save, you could totally move your family into a $600k-more-expensive half-the-size downtown condo and go car-free. You can just pay a small $50/trip for an Uber whenever you really need that car" -- like, it sounds nice, but the math here doesn't check out at all).
- fomine3 5y ago
  From what I see on here, I feel car insurance is crazy expensive in the US. I don't know why, maybe same reason as lack of public healthcare?
- gr1zzlybe4r 5y ago
  Check out the numbers in Chicago - neighborhoods like Avondale, Rogers Park, Uptown, etc. The tradeoff is definitely worth it.
- HWR_14 5y ago
  I mean, the math totally checks out if you can afford the real estate investment. And I mean that both in terms of assets and willingness/desire to take on the risk associated with real estate in [area]. Well, it checks out depending on the assumed return of the real estate vs. other investments.
pengaru 5y ago
Taking loans to finance a lifestyle well beyond your means is orthogonal to car ownership. Used cars in the US are cheap, and outside the rust belt are also perfectly fine. I've owned something like a dozen used cars in my life, most cost very little to own and operate, some even made profit when I sold them after fixing something obvious like a rotten ground connection. Through those years I learned how to repair and maintain the things which are marketable in-demand skills ensuring I'll never be unable to earn money - quite the opposite of keeping me poor. Don't blame cars for stupid people making stupid choices.
- Rebelgecko 5y ago
  From what I've seen, used cars haven't been as close to a good value in the US over the last 2 years. It takes a lot of years of depreciation to get a price significantly better than a new car, and if you drop $10k on a ten year old Honda Civic you'll miss out on a decade of fuel efficiency improvements, safety features, etc.
  - pengaru 5y ago
    > you'll miss out on a decade of fuel efficiency improvements, safety features, etc. So... those who can't afford the ideal miss out on things? [obvious]
    - Rebelgecko 5y ago
      I think it's another instance of the Sam Vimes Theory of Economic Injustice. Someone who can't afford a new car saves 30% by buying a decade old one. Except that old car is less efficient so they're buying 5-10% more for gas than if they had a new car. If you need a loan, interest rates are higher for used cars. The tires are crappy so they're spending $500 to replace them. The car has 100,000 miles on it so parts are worn down. Maybe you get really unlucky, and get in an accident that would've been prevented by a blind spot monitor or a backup camera. Maybe you get in an accident that would've happened regardless, but the older car doesn't prevent injuries that a newer model would've protected you from.
HWR_14 5y ago
Some people overspend a lot on cars. Some people don't. I know a lot of people who drove 10+ year old Toyotas until they decided they wanted an electric car. Or who still drive 10+ year old Toyotas. Interestingly, some bought the car new and had a "drive it into the ground" mentality. Others bought them used. In both cases, their TCO for their cars averaged out to be quite low. Even the people who bought new EVs seemed to get fairly good deals on interest rates. If you were getting high interest rates, you were probably trying to buy far too much car for yourself.

throwaway0a5e 5y ago

There's pressure to over-spend on everything. HN will justify it for some classes of products and complain about it for others. The one guy who moves heaven and earth to live in a "good neighborhood" that's normally a tad much for his income would get accolades around here. The guy who lives in a trailer park but and expends the same effort to drive a nice car gets derided. I don't see the big difference between them. They're both just going "all in" in different aspects of their lives.

999900000999 5y ago
Try selling a house 10 years after you buy it. Then sell a car 10 years after you buy it. One goes up in value, often greatly, the other is nearly worthless.
- throwaway0a5e 5y ago
  >One goes up in value, often greatly, the other is nearly worthless. The Toyota fanboys would take issue with that statement ;) Personally owning and maintaining my own metal box on wheels saves me ~2hr per day over the publicly owned metal box on wheels. Even in Europe that would be worth it for just about any white collar professional. Not everything has to be a good investment. I drive junk but I understand why some people would rather sit in a really, really nice car for their commute. The way I see it transportation is just the cost of having a job. "Base" transportation has zero residual value. You can't sell a worn out shitbox for anything. You also can't sell a city bus or rail car at all. If you throw more money on top of the "base" A to B car in order to have something nice then you might get some value back but it's fundamentally a luxury expense. For my use case and for many people, the "base" car offers so much utility improvement over anything else that it's a) a no brainier b) basically pays for itself vs attaining equivalent standard of living without it.
- iancmceachern 5y ago
  They're usually tied together. Quite often it's the car that allows the person to buy a home and commute to and from work to this home. The car is very much a tool. It it frees up time (which can be traded for money), or otherwise opens up opportunities (like to live in a suburb and commute to work rather than taking public transportation which may be nonexistent or otherwise time inefficient) then it's an investment as well - it just returns its value not in money or intrinsic value of the car but in saved time, effort, and doors opened. Not everything should be viewed as a financial instrument only. Say a musician buys a trumpet, and 20 years later that trumpet has depreciated. The argument could be made that if he bought a house instead of a trumpet it would have been a much better investment. But how would he have played the trumpet his whole life then?
- gruez 5y ago
  >One goes up in value, often greatly, the other is nearly worthless. Technically the house goes down in value as well. The one that goes up in value is the land, not the house.

deleted 5y ago

[deleted]

maxsilver 5y ago

> cars are what largely keep Americans poor. Which is weird, because (until last year anyway, when used car pricing went crazy) cars were by-far the cheapest major expense an average American has. Most Americans drive, in large part because the car is free money -- the drastic housing savings and occupational/educational/commercial opportunities more than make up for the small amount of cash it costs to own and operate one. Just on rent savings alone, my car pays me to drive it. (The car costs me about $400/month in full TCO, but that car easily saves me $800/month or more just on rent alone, not to mention trips or kids school runs or visiting friends or shopping or so on). And that's not even factoring in that people's time has value, and any alternative form of transit easily double-to-triples the amount of time a given trip takes. > I was able to reduce my monthly expenses by about 20% just by going car free, and I refuse to ever own a car again. That sounds nice, and maybe it's just the midwest in me, but I've never seen a person who can actually save money by not-owning a car. Many people claim as such, but then you dig a little and find out they were already wealthy to begin with, which is the only way they were able to get away with it. (e.g., "you should totally sell your ~$20k car, and with the money you save, you could totally move your family into a $600k-more-expensive half-the-size downtown condo and go car-free. You can just pay a small $50/trip for an Uber whenever you really need that car" -- like, it sounds nice, but the math here doesn't check out at all).

fomine3 5y ago
From what I see on here, I feel car insurance is crazy expensive in the US. I don't know why, maybe same reason as lack of public healthcare?
gr1zzlybe4r 5y ago
Check out the numbers in Chicago - neighborhoods like Avondale, Rogers Park, Uptown, etc. The tradeoff is definitely worth it.
HWR_14 5y ago
I mean, the math totally checks out if you can afford the real estate investment. And I mean that both in terms of assets and willingness/desire to take on the risk associated with real estate in [area]. Well, it checks out depending on the assumed return of the real estate vs. other investments.

pengaru 5y ago

Taking loans to finance a lifestyle well beyond your means is orthogonal to car ownership. Used cars in the US are cheap, and outside the rust belt are also perfectly fine. I've owned something like a dozen used cars in my life, most cost very little to own and operate, some even made profit when I sold them after fixing something obvious like a rotten ground connection. Through those years I learned how to repair and maintain the things which are marketable in-demand skills ensuring I'll never be unable to earn money - quite the opposite of keeping me poor. Don't blame cars for stupid people making stupid choices.

Rebelgecko 5y ago
From what I've seen, used cars haven't been as close to a good value in the US over the last 2 years. It takes a lot of years of depreciation to get a price significantly better than a new car, and if you drop $10k on a ten year old Honda Civic you'll miss out on a decade of fuel efficiency improvements, safety features, etc.
- pengaru 5y ago
  > you'll miss out on a decade of fuel efficiency improvements, safety features, etc. So... those who can't afford the ideal miss out on things? [obvious]
  - Rebelgecko 5y ago
    I think it's another instance of the Sam Vimes Theory of Economic Injustice. Someone who can't afford a new car saves 30% by buying a decade old one. Except that old car is less efficient so they're buying 5-10% more for gas than if they had a new car. If you need a loan, interest rates are higher for used cars. The tires are crappy so they're spending $500 to replace them. The car has 100,000 miles on it so parts are worn down. Maybe you get really unlucky, and get in an accident that would've been prevented by a blind spot monitor or a backup camera. Maybe you get in an accident that would've happened regardless, but the older car doesn't prevent injuries that a newer model would've protected you from.

HWR_14 5y ago

Some people overspend a lot on cars. Some people don't. I know a lot of people who drove 10+ year old Toyotas until they decided they wanted an electric car. Or who still drive 10+ year old Toyotas. Interestingly, some bought the car new and had a "drive it into the ground" mentality. Others bought them used. In both cases, their TCO for their cars averaged out to be quite low. Even the people who bought new EVs seemed to get fairly good deals on interest rates. If you were getting high interest rates, you were probably trying to buy far too much car for yourself.