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As a "Generation X" near the Boomer boundary, I just can't stop being shocked by "average car is $47k". When I was a teen, my parents did rental investing, owne

As a "Generation X" near the Boomer boundary, I just can't stop being shocked by "average car is $47k". When I was a teen, my parents did rental investing, owned about a dozen properties, and had never paid more than $30k for a property. I'm a well-compensated tech worker, and have no shame in driving my 2004 Volvo that I bought used 16 years ago. Had a second car for a while. A 2005 Camry that I bought for $5000 in 2017. Sold it last year for $5000. Advice to younger generation: forego that shiny toy and invest your hard-earned money.

saltcured 4y ago
I don't disagree that young folks can harm their finances by spending gratuitously on cars. But, I see it differently as far as long-term trends. I'm actually surprised at how stable new car prices have been, while the quality and capabilities have been expanded. Let's consider two benchmarks, because these are ones I've thought about before. I'll consider a two decade period from late 1990s to late 2010s, so also ignoring the recent pandemic market distortions. One is a practical economy car, e.g. Toyota. The other is an entry-level, all-wheel-drive luxury/sports sedan, e.g. Audi. A 1997 Corolla at $14k compared to a 2017 Corolla at $18k (28% increase). A 1997 A4 at $28k compared to a 2017 A4 at $38k (35% increase). But, this ignores that the newer cars were up-classed and almost competed with their larger sibling models from twenty years before. The 2017 Corolla and A4 were nearly as big and well equipped as the 1997 Camry and A6, respectively. To try to stay at more similar size, power, and features, consider a lower model class for the later time period. A 1997 Corolla at $14k compared to a 2017 Yaris at $16k (14% increase). A 1997 A4 at $28k compared to a 2017 A3 at $32k (14% increase). During the same time period, other living expenses like housing, health insurance, and energy pretty much doubled for me in California. The median US household income also grew from $37k to $60k (62% increase) in this same time frame. So, I see the new car market as having significantly "beat inflation" in a practical sense.
pixl97 4y ago
As someone from the same timeframe you're missing a number of things that have happened. Safety/pollution laws have made small cheap cars non-existent. You cannot buy anything like those 2004/2005 cars on the market today, the cheapest featureless models have mostly disappeared. Seemingly while building the digital world that we both live in, you are missing the ramifications of the monster you created. Before the digital days I bought and sold a number of underpriced items effectively doing difficult in person arbitrage. If I wa willing to find things like cars cheap, I could make money buying them and selling them to/at dealers for more. You and I have effectively destroyed that market. Sellers of those items now can effectively make far more by understanding how much their car is worth and selling it direct to market. And, in the cases where the seller is underpriced, digital buyers monitoring the market quickly and efficiently buy up these underpriced items. This is true true for almost any investment item, there is really far more money than good investments these days which leads a huge portion of investment to be pure luck.
zeku 4y ago
Most would love to, but the rent is too high and they need a car to be able to get to their job so they can tread water. Owning a primary home as a means of "lazy wealth generation" is only accessible to people with family money or career titles like "Software Engineer" and even then the homes are much lower standard than before for older people working the same job.
- intrasight 4y ago
  Everything you said just further supports my statement of "save your money". Buy a cheap used car (but cheap over 5+ years, so get a reliable one). Rent a cheap apartment (mine is $1100/mo and is very nice).
  - pixl97 4y ago
    Boomers: We need young people to save their money, they are investing unwisely. [Zoomers stop spending money] economy collapses, boomers investments go negative Boomer: No, not like that! And, yea, I know you're Gen-X from your other post, but you're talking like a Boomer at this point.
- 1234letshaveatw 4y ago
  And all the while companies are advertising like crazy to try and hire more heavy equipment operators (starting north of 100K). There are plenty of other jobs out there besides "dog walker" and "software engineer"
jjav 4y ago
> As a "Generation X" near the Boomer boundary, I just can't stop being shocked by "average car is $47k". I don't doubt the average new car price could be 47K, but averages are pushed up by the very expensive ones. And today there are a lots of cars at the very high end over 100K which skews the average. Regular cars (entry-level Honda/Toyota/Mazda/etc) haven't gone up much, probably about tracking inflation (would be nice to see a graph for e.g. an entry level Mazda 3 (323) MSRP vs. inflation over the years).

saltcured 4y ago

I don't disagree that young folks can harm their finances by spending gratuitously on cars. But, I see it differently as far as long-term trends. I'm actually surprised at how stable new car prices have been, while the quality and capabilities have been expanded. Let's consider two benchmarks, because these are ones I've thought about before. I'll consider a two decade period from late 1990s to late 2010s, so also ignoring the recent pandemic market distortions. One is a practical economy car, e.g. Toyota. The other is an entry-level, all-wheel-drive luxury/sports sedan, e.g. Audi. A 1997 Corolla at $14k compared to a 2017 Corolla at $18k (28% increase). A 1997 A4 at $28k compared to a 2017 A4 at $38k (35% increase). But, this ignores that the newer cars were up-classed and almost competed with their larger sibling models from twenty years before. The 2017 Corolla and A4 were nearly as big and well equipped as the 1997 Camry and A6, respectively. To try to stay at more similar size, power, and features, consider a lower model class for the later time period. A 1997 Corolla at $14k compared to a 2017 Yaris at $16k (14% increase). A 1997 A4 at $28k compared to a 2017 A3 at $32k (14% increase). During the same time period, other living expenses like housing, health insurance, and energy pretty much doubled for me in California. The median US household income also grew from $37k to $60k (62% increase) in this same time frame. So, I see the new car market as having significantly "beat inflation" in a practical sense.

pixl97 4y ago

As someone from the same timeframe you're missing a number of things that have happened. Safety/pollution laws have made small cheap cars non-existent. You cannot buy anything like those 2004/2005 cars on the market today, the cheapest featureless models have mostly disappeared. Seemingly while building the digital world that we both live in, you are missing the ramifications of the monster you created. Before the digital days I bought and sold a number of underpriced items effectively doing difficult in person arbitrage. If I wa willing to find things like cars cheap, I could make money buying them and selling them to/at dealers for more. You and I have effectively destroyed that market. Sellers of those items now can effectively make far more by understanding how much their car is worth and selling it direct to market. And, in the cases where the seller is underpriced, digital buyers monitoring the market quickly and efficiently buy up these underpriced items. This is true true for almost any investment item, there is really far more money than good investments these days which leads a huge portion of investment to be pure luck.

zeku 4y ago

Most would love to, but the rent is too high and they need a car to be able to get to their job so they can tread water. Owning a primary home as a means of "lazy wealth generation" is only accessible to people with family money or career titles like "Software Engineer" and even then the homes are much lower standard than before for older people working the same job.

intrasight 4y ago
Everything you said just further supports my statement of "save your money". Buy a cheap used car (but cheap over 5+ years, so get a reliable one). Rent a cheap apartment (mine is $1100/mo and is very nice).
- pixl97 4y ago
  Boomers: We need young people to save their money, they are investing unwisely. [Zoomers stop spending money] economy collapses, boomers investments go negative Boomer: No, not like that! And, yea, I know you're Gen-X from your other post, but you're talking like a Boomer at this point.
1234letshaveatw 4y ago
And all the while companies are advertising like crazy to try and hire more heavy equipment operators (starting north of 100K). There are plenty of other jobs out there besides "dog walker" and "software engineer"

jjav 4y ago

> As a "Generation X" near the Boomer boundary, I just can't stop being shocked by "average car is $47k". I don't doubt the average new car price could be 47K, but averages are pushed up by the very expensive ones. And today there are a lots of cars at the very high end over 100K which skews the average. Regular cars (entry-level Honda/Toyota/Mazda/etc) haven't gone up much, probably about tracking inflation (would be nice to see a graph for e.g. an entry level Mazda 3 (323) MSRP vs. inflation over the years).