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This is just based on what I personally observe while I drive around. But, I can't help thinking we are in a similar situation to the 2007-2008 housing bubble b

This is just based on what I personally observe while I drive around. But, I can't help thinking we are in a similar situation to the 2007-2008 housing bubble burst. I see a ton of people driving around in cars that have me asking, "How can they afford that?" The number of people driving exotic and luxury cars is higher than I've ever observed before.

belltaco 3y ago
It's borne by stats. https://i2.wp.com/financialsamurai.com/wp-content/uploads/2022/11/IMG_8477.jpg https://i2.wp.com/financialsamurai.com/wp-content/uploads/20...
- jeffbee 3y ago
  Averages are quite useless for this purpose.
- gottorf 3y ago
  It's more accurate to compare the average monthly car payment over time, not the total price of the car. The majority of people don't buy the total price, they buy the monthly payment (whether out of innumeracy or a desire to have a better car than they can really afford). I wasn't able to quickly find data, but I would imagine the rise in the average monthly payment is more in line with the rise in the CPI.
  - darrylb42 3y ago
    Last time I was shopping for a car ~4 years ago. Most prices were written on the windshield as weekly payments, over an unknown period. Getting the actual price required stopping and reading the small window sticker.
tomcar288 3y ago
and for the most part it's all those insanely expensive pickup trucks. you'd be surprised what people are willing to pay just for a crappy pickup truck (like 50k, 60k, 70k all the way up to 100k or more).
- alangibson 3y ago
  I grew up thinking of trucks as cheap and functional. I did a spit take while watching a Youtube video running down current truck prices. Does anyone know what is driving this? There's got to be more at work than inflation to produce a 90K pickup truck.
  - gottorf 3y ago
    > Does anyone know what is driving this? Mostly supply and demand, but it is true that pickups these days are a ton nicer than the cheap and functional single cab, 8 foot bed, rear wheel drive, roll-up windows trucks of yore. And to be fair, $90k is on the extreme high end of the market currently. I could drive down to my local Ford dealer right now and for $90k, a F-150 Raptor could be mine. It has 450 horsepower and 510 lb-ft of torque, goes 0-60 in less than five and a half seconds, and can carry five grown adults in scrumptious comfort, as well as having a somewhat usable bed for cargo. No one can deny that it's a nice product, though whether it's worth $90k depends on the individual. I certainly wouldn't pay that kind of money. Most F-150s available on the lot right now are in the $40k range, which is still way more than what I would like to pay, but it's comparable to many other vehicles. That same money would get you a nicely optioned midsize SUV, a sporty car like a Mustang, or an EV on the cheaper side.
  - theluketaylor 3y ago
    There are a few different things all combining to create 100K+ trucks 1) Many people just like driving a truck as their vehicle. Many of those people are wealthy enough to drive 100k+ vehicles. They like a truck, they just want one with a fancy interior. 2) High value trucks are extremely profitable for OEMs. The margins are huge since the engineering and tooling is amortized across a ton of lower cost and fleet trucks, so there is big incentive to have the best luxury truck as it's a license to print money 3) Tax incentives for 6000+lb vehicles that were intended for truly commercial vehicles. Didn't envision Escalades and luxury trucks being used by regular people and not for hauling goods. 4) Buying vehicles based on monthly cost rather than total. 7-8 year loans keep the monthly cost on huge value trucks pretty reasonable
  - bigtex88 3y ago
SamuelAdams 3y ago
Car loans now go out to 72-84 months. People do not care about the total cost of the vehicle, they care about being able to afford monthly payments. A 50k vehicle with 10k down at 3% interest for 84 months is $538 a month. At 8% interest it is $623 a month. So even with high interest rates, people afford these vehicles by dragging out the loan term to 5-7 years.
- frumper 3y ago
  https://www.lendingtree.com/auto/car-balloon-payment/ https://www.lendingtree.com/auto/car-balloon-payment/ Lots of fun creative loans now. I’m not shopping for a car, have excellent credit and I see auto loan ads offering 12-14% interest. The balloon payment ones are just crazy though.
- deleted 3y ago
  [deleted]
hnburnsy 3y ago
https://carbuzz.com/features/new-cars-are-not-too-expensive-youre-just-not-being-paid-enough https://carbuzz.com/features/new-cars-are-not-too-expensive-... >Even expensive sports cars like the BMW M3 and Porsche 911 kept up with inflation. A 2003 E46 M3 cost $46,545 ($78,729 today), while a new M4 (the two-door version of the M3) is only $74,300. In those 20 years, power went up from 333 to 473 hp. Even the 911 Carrera, which seems expensive at $106,100, is way cheaper than the 996 model at $72,435 ($122,521 today).
- mattw2121 3y ago
  My point was not about whether the price of the cars is the right price. It was more about whether someone making $75K a year should be purchasing a $60K vehicle.
vineyardlabs 3y ago
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belltaco 3y ago

It's borne by stats. https://i2.wp.com/financialsamurai.com/wp-content/uploads/2022/11/IMG_8477.jpg https://i2.wp.com/financialsamurai.com/wp-content/uploads/20...

jeffbee 3y ago
Averages are quite useless for this purpose.
gottorf 3y ago
It's more accurate to compare the average monthly car payment over time, not the total price of the car. The majority of people don't buy the total price, they buy the monthly payment (whether out of innumeracy or a desire to have a better car than they can really afford). I wasn't able to quickly find data, but I would imagine the rise in the average monthly payment is more in line with the rise in the CPI.
- darrylb42 3y ago
  Last time I was shopping for a car ~4 years ago. Most prices were written on the windshield as weekly payments, over an unknown period. Getting the actual price required stopping and reading the small window sticker.

tomcar288 3y ago

and for the most part it's all those insanely expensive pickup trucks. you'd be surprised what people are willing to pay just for a crappy pickup truck (like 50k, 60k, 70k all the way up to 100k or more).

alangibson 3y ago
I grew up thinking of trucks as cheap and functional. I did a spit take while watching a Youtube video running down current truck prices. Does anyone know what is driving this? There's got to be more at work than inflation to produce a 90K pickup truck.
- gottorf 3y ago
  > Does anyone know what is driving this? Mostly supply and demand, but it is true that pickups these days are a ton nicer than the cheap and functional single cab, 8 foot bed, rear wheel drive, roll-up windows trucks of yore. And to be fair, $90k is on the extreme high end of the market currently. I could drive down to my local Ford dealer right now and for $90k, a F-150 Raptor could be mine. It has 450 horsepower and 510 lb-ft of torque, goes 0-60 in less than five and a half seconds, and can carry five grown adults in scrumptious comfort, as well as having a somewhat usable bed for cargo. No one can deny that it's a nice product, though whether it's worth $90k depends on the individual. I certainly wouldn't pay that kind of money. Most F-150s available on the lot right now are in the $40k range, which is still way more than what I would like to pay, but it's comparable to many other vehicles. That same money would get you a nicely optioned midsize SUV, a sporty car like a Mustang, or an EV on the cheaper side.
- theluketaylor 3y ago
  There are a few different things all combining to create 100K+ trucks 1) Many people just like driving a truck as their vehicle. Many of those people are wealthy enough to drive 100k+ vehicles. They like a truck, they just want one with a fancy interior. 2) High value trucks are extremely profitable for OEMs. The margins are huge since the engineering and tooling is amortized across a ton of lower cost and fleet trucks, so there is big incentive to have the best luxury truck as it's a license to print money 3) Tax incentives for 6000+lb vehicles that were intended for truly commercial vehicles. Didn't envision Escalades and luxury trucks being used by regular people and not for hauling goods. 4) Buying vehicles based on monthly cost rather than total. 7-8 year loans keep the monthly cost on huge value trucks pretty reasonable
- bigtex88 3y ago

SamuelAdams 3y ago

Car loans now go out to 72-84 months. People do not care about the total cost of the vehicle, they care about being able to afford monthly payments. A 50k vehicle with 10k down at 3% interest for 84 months is $538 a month. At 8% interest it is $623 a month. So even with high interest rates, people afford these vehicles by dragging out the loan term to 5-7 years.

frumper 3y ago
https://www.lendingtree.com/auto/car-balloon-payment/ https://www.lendingtree.com/auto/car-balloon-payment/ Lots of fun creative loans now. I’m not shopping for a car, have excellent credit and I see auto loan ads offering 12-14% interest. The balloon payment ones are just crazy though.
deleted 3y ago
[deleted]

hnburnsy 3y ago

https://carbuzz.com/features/new-cars-are-not-too-expensive-youre-just-not-being-paid-enough https://carbuzz.com/features/new-cars-are-not-too-expensive-... >Even expensive sports cars like the BMW M3 and Porsche 911 kept up with inflation. A 2003 E46 M3 cost $46,545 ($78,729 today), while a new M4 (the two-door version of the M3) is only $74,300. In those 20 years, power went up from 333 to 473 hp. Even the 911 Carrera, which seems expensive at $106,100, is way cheaper than the 996 model at $72,435 ($122,521 today).

mattw2121 3y ago
My point was not about whether the price of the cars is the right price. It was more about whether someone making $75K a year should be purchasing a $60K vehicle.

vineyardlabs 3y ago

[dead]