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The average price of a new car in the US in December of 2021 was $47k https://www.caranddriver.com/news/a38748092/new-car-average-sale-prices-47100/ https://ww

by chiph 4y ago

The average price of a new car in the US in December of 2021 was $47k https://www.caranddriver.com/news/a38748092/new-car-average-sale-prices-47100/ https://www.caranddriver.com/news/a38748092/new-car-average-... It's an astounding number. In order to afford an "average" car you're going to have to put down $20k (cash + trade-in) and/or get a 7 year loan (ouch).

reducesuffering 4y ago
I knew the average sales price in the US would be pointed out. It's still ridiculous because you have most of these people financing these cars with 5-7 years loans but also the whole "half of Americans don't have $1k in their bank account". Spending $40k when the median personal US income is $36k/yr means this car is not actually "for the masses" making a financially prudent decision. For the 50% masses of Americans making $36k/yr or less, the people's car should actually be a used reliable economy car getting 30+ mpg (Prius, Civic, Kia, etc.)
- CHY872 4y ago
  GP qualifies this as a price of _new_ cars. In the US, ~1/4 of car sales every year are new cars. New cars are primarily bought by comparatively wealthier people or fleet sales. Less well off people might occasionally buy newer cars, but it’s more common to buy them second hand after 5-10 years of careful ownership. The $40k truck has historically depreciated by around 40% during that 5 year period, by which point it’s worth about $24k. Better examples may be worth more, worse examples less (although perhaps a poorer buy). Large examples of this come through age - in the US, the median new car buyer is in their 50s, whereas the median American is in their 30s. Put simply, yes, the average new car is unaffordable for the average American, but how much of a problem is that? Out of buyers in the market for a new car, this is clearly close to the affordable side of the range, no matter how ridiculous that might sound.

by chiph 4y ago

reducesuffering 4y ago

I knew the average sales price in the US would be pointed out. It's still ridiculous because you have most of these people financing these cars with 5-7 years loans but also the whole "half of Americans don't have $1k in their bank account". Spending $40k when the median personal US income is $36k/yr means this car is not actually "for the masses" making a financially prudent decision. For the 50% masses of Americans making $36k/yr or less, the people's car should actually be a used reliable economy car getting 30+ mpg (Prius, Civic, Kia, etc.)

CHY872 4y ago
GP qualifies this as a price of _new_ cars. In the US, ~1/4 of car sales every year are new cars. New cars are primarily bought by comparatively wealthier people or fleet sales. Less well off people might occasionally buy newer cars, but it’s more common to buy them second hand after 5-10 years of careful ownership. The $40k truck has historically depreciated by around 40% during that 5 year period, by which point it’s worth about $24k. Better examples may be worth more, worse examples less (although perhaps a poorer buy). Large examples of this come through age - in the US, the median new car buyer is in their 50s, whereas the median American is in their 30s. Put simply, yes, the average new car is unaffordable for the average American, but how much of a problem is that? Out of buyers in the market for a new car, this is clearly close to the affordable side of the range, no matter how ridiculous that might sound.