3 ms·

> $1k/mo is a new car with no down payment The average monthly payment for a used car is $500/mo, and $700/mo for a new car: * https://www.nerdwallet.com/arti

> $1k/mo is a new car with no down payment The average monthly payment for a used car is $500/mo, and $700/mo for a new car: * https://www.nerdwallet.com/article/loans/auto-loans/average-monthly-car-payment https://www.nerdwallet.com/article/loans/auto-loans/average-... Then add maintenance, insurance, depreciation, fuel. And that's just the stuff that shows up on a spreadsheet (of which depreciation most folks don't really think about).

jonfw 3y ago
You wouldn't consider depreciation a cost in addition to your car payment, depreciation is on your balance sheet and your car payment is on your cash flow. Your balance sheet would factor in only your interest payments and depreciation, the principal on your loan is irrelevant there because it's being realized as equity. The average monthly payment for a used car being $500 does not mean that somebody on a low income has to pay $500 to own a car. I'd imagine that the average price paid for a cup of coffee is around $5, but that doesn't mean that that's what coffe costs. It just means that a lot of people pay way more than neccessary for coffee. Similarly- lots of people drive cars that are bigger, faster, newer, more luxurious, and more capable then necessary. The bare minimum cost to own a vehicle is not $500 a month by any means- my 5000 dollar car has lasted me 6 years now as an example. Even if we consider it is now worth half of it's original value, that comes in at about $70 a month in depreciation. Hardly unaffordable
- bombcar 3y ago
  Most people who do this math are horribly bad at it. Somehow poor people can afford these cars that cost way more than they make.
  - jonfw 3y ago
    I can't imagine that poor folks in expensive cars are doing any math
jjav 3y ago
> The average monthly payment for a used car is $500/mo, and $700/mo for a new car Average isn't a very interesting number here. I know a guy with a $15K/month car payment, I'm sure people like him push the average up. If you're trying to save money, don't go for average. Buy a cheap used car, ideally in cash, and your operating costs will be minimal. The sky is the limit how much you can spend on a car if you wanted to splurge(waste), but you can also a fully functional car for very cheap if you care to save money.

jonfw 3y ago

You wouldn't consider depreciation a cost in addition to your car payment, depreciation is on your balance sheet and your car payment is on your cash flow. Your balance sheet would factor in only your interest payments and depreciation, the principal on your loan is irrelevant there because it's being realized as equity. The average monthly payment for a used car being $500 does not mean that somebody on a low income has to pay $500 to own a car. I'd imagine that the average price paid for a cup of coffee is around $5, but that doesn't mean that that's what coffe costs. It just means that a lot of people pay way more than neccessary for coffee. Similarly- lots of people drive cars that are bigger, faster, newer, more luxurious, and more capable then necessary. The bare minimum cost to own a vehicle is not $500 a month by any means- my 5000 dollar car has lasted me 6 years now as an example. Even if we consider it is now worth half of it's original value, that comes in at about $70 a month in depreciation. Hardly unaffordable

bombcar 3y ago
Most people who do this math are horribly bad at it. Somehow poor people can afford these cars that cost way more than they make.
- jonfw 3y ago
  I can't imagine that poor folks in expensive cars are doing any math

jjav 3y ago

> The average monthly payment for a used car is $500/mo, and $700/mo for a new car Average isn't a very interesting number here. I know a guy with a $15K/month car payment, I'm sure people like him push the average up. If you're trying to save money, don't go for average. Buy a cheap used car, ideally in cash, and your operating costs will be minimal. The sky is the limit how much you can spend on a car if you wanted to splurge(waste), but you can also a fully functional car for very cheap if you care to save money.