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Comment by tdicola | Hacker News Reader

> Normal people do not spend $35-40k on a car. We're still talking about a high-end vehicle.

I don't think you've been car shopping much recently. 'Economy' cars like the Honda Civic, Mazda 3, Toyota Camry, etc. can easily push up against $30k with a few options. For some real sticker shock look at minivans, a Honda Odyssey can easily hit $40k-50k out the door.

With a five year loan or a three year lease and a bit of trade in from a previous car you can easily be driving a $35k car for just a few hundred bucks a month.

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The median household income is around $50k/yr in the U.S. That's household income. To the extent people are spending this much, they're insane for doing so.

I'm having trouble finding a median car sale price -- there are a bunch of articles about the average cost of new cars -- but I doubt most families actually are spending that much on transportation. Once you cut out used cars, those without cars, and those spending significantly less for their Kia or Hyundai or whatever, I think you'll find that very few people spend $40k on a car. That's a luxury purchase.

To the extent people are spending this much, they're insane for doing so.

You have probably already realised this if you've lived on the planet for more than 20ish years, but the majority of people certainly seem to be quite insane.

Well sure :) It likely doesn't help that I'm a cheapskate. As a programmer, I'm probably pretty close to the demo that should want a Model 3, but I drive a 2007 Hyundai hatchback with a manual transmission. So I think everybody's crazy.

I'm in a similar boat, I paid cash for a 2003 Mazda hatch with a manual. When I bought it I did the math, and figured that compared to the lease payment and insurance on a new Mazda I would break even in 10 months. I've been driving it for over two years. :-) Why would I want a new car? Then I'd just have to worry about scratching the paint, or even (heaven forbid) drive it nicely. Ug. However, I will say that a Model 3 is the one new car I might consider.

> I don't think you've been car shopping much recently. 'Economy' cars like the Honda Civic

I think you're a bit out of touch. "Few" options? You can get a very, very high end Honda Civic at $30k+, in my opinion. Considering you can get a base Civic for around $16k-$18k, adding on a "few" options isn't going to almost double the price. You have to add quite a few options to get near that $30k number. Or pick a higher end Civic to start with.

> For some real sticker shock look at minivans, a Honda Odyssey can easily hit $40k-50k out the door.

First those are big vehicles so yes, obviously they're going to cost more. But $40k to $50k is with many options as well. You can get a base Odyssey between $28k to $30k depending on where you shop. Not everyone adds $10k to $20k in option.s In fact I would be shocked if any majority of customer adds on so many options.

Yes, it seems pretty common to spend $35k on a vehicle, and of course people buying $35k sedans are in the Model 3 market, but I don't think that includes even new small economy car buyers.

It would be difficult to spend $30k on a new standard-engine Mazda 3. Mine was $18k brand new. The top standard-engine trim is around $25k. That other $10-17k is another $165-285/month over 5 years at 0% interest, and that is not an insignificant amount of money to many/most people.

If you can't save that much monthly in gas, and all you want is a boring, basic, reliable car, it's not worth it (yet). Tax incentives help, but Tesla is going to hit the 200,000 vehicle limit well before filling even all the Model 3 pre-orders.

You're comparing a Mazda 3, which is an economy car, against an entry-level luxury sedan. This is a bad comparison.

Mazda doesn't even have a car in this segment. You should be comparing it against a BMW 3-series, Audi A4, Acura TL, Mercedes C-series, Lexus GS.

All of those vehicles start in the 30s, and you would be lucky to get out the door with reasonable options under $50K. You could probably get the BMW up to almost $100K when you start considering the M package and various sports options.

> You're comparing a Mazda 3, which is an economy car, against an entry-level luxury sedan. This is a bad comparison.

Indeed, that was my point. The claim that "'economy' cars like the Honda Civic, Mazda 3, Toyota Camry, etc. can easily push up against $30k with a few options" is trying to assert that people buying those kinds of cars are in the Model 3 market. But they really aren't. People buying small luxury sedans like the ones you've mentioned probably are, though.

You're still talking about new cars, rather than what people actually buy. http://www.edmunds.com/honda/civic/for-sale/?src=14597540479... says you can go well under 20k for a Honda Civic if you don't want a new one.

There are no used Tesla 3 cars on the market to compare that against yet.

There is no point in bringing up the price of used cars when talking about the price of a new car and how that positions it in the market. Somebody had to purchase that Civic when it was new, after all.

I don't see why not. There are two prices. The new car is a luxury and almost only thing about "new" is a status symbol. The moment you hand over the money and drive out, it lost a lot of its value - if you want to sell it now, you're going to get the real value back. And that's what the second price is - the real value of the car.

The parent comment was talking specifically about what people pay and not about the price tag at the new car dealer.

The new and used car markets are nearly separate. Few people set out to purchase a car open to both possibilities. If they were comparable then the prices would be more similar. Look at houses for an example of that. New and used houses tend to share the same market, and also tend to have similar prices. If you're looking at a new car and trying to see how it might sell, you want to compare it to other new cars.

At least where I live, most new cars are company leases, and bought by family at the age 1-3 years old. Private leasing and individuals buying new cars is rare.

This means the difference between what the median new-ish car price is when sold to an individual, vs. what the median price is for a new car sold to an individual is massive.

Your numbers are ridiculous.

Honda Civic LX is 18,640, while the high-end "Touring" trim is $26,500.

http://automobiles.honda.com/tools/build-price/trims.aspx?Mo...

Mazda 3 is $17,845 to $25,795.

And these are at MSRP, and lulz to anyone who can't manage to get a car below MSRP. Pushing up against $30k? Are you kidding me?

Maybe a "racing" model, like Ford Focus ST or Subaru WRX (a small, but very powerful engine, costs premium) will get you to $30k. But you can deck-out these starter vehicles and keep costs around $20k easily.

And as others have said: normal people don't buy new cars.

Normal people don't buy new cars.

I agree, I wouldn't ever consider buying new unless it was a company lease.

In highly doubt the Midel 3 is going to be immune from price increases as options are added. Currently we have absolutely no idea what the equation will be so the comparison with cars that start in the low 20s is inappropriate.

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