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Comment by kop316 | Hacker News Reader

Is it really that the middle class can't afford cars, or is it that a lot of folks want to buy a car they really can't afford?

My much higher concern is that the reason people take a seven year auto loan, as it is the default option given to them and see a lower monthly payment. By doing that, one can think they can afford the $40k or $50k car, not realizing that the total cost of ownership (i.e. maintenance, gas bill, etc.) also just rose, and the money they are paying in interest is also much higher now.

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When I was in college, I needed a car to get to work (server at a restaurant), and to school. I spent $1600 on a 10 year old Volvo. For two years I did a fairly brutal commute between home/work/school, and drove for close to 3 hours a day. Wasn't great on gas, but it worked just fine. At some point it failed a state inspection and needed a new exhaust and new brake pads and rotors. Shop wanted around $5k. I shopped around and got a (cat-back) exhaust done for < $300 from a local shop, since it's just not something I could do myself. Bought rotors and pads for < $100, and spent some quality time in a parking lot with YouTube videos and a few wrenches.

Heck, I make substantially more money now, and still have a pretty long 45-minute each way commute, with a lot of traffic. My primary vehicle is a $1600 motorcycle, and I _just_ added a truck as a backup (and to tow a track car). Spent $17k on the truck, it's perfectly fine, even looks good. Most I've ever spent on a vehicle by far, and I assume I'll have it for the next decade, at least. I'm driving it 4 hours out into the middle of the desert later today, and I have no worries about reliability.

Bought the truck and every other vehicle I've ever owned in cash. I think that's the big difference between some others and myself. When I could afford only a few grand cash, that's the kind of car I bought.

Honestly hard to feel too sorry for people that "need" a $30k+ car/truck/suv. I think these articles will always ring hollow for anyone that's been in the same situation and opted for a cheap car. Why on earth would you take out that long of a loan on a car that costs you a full year's salary or more?

That's partly how I feel too. I bought a car out of college and took out a loan for it, and my goal with that car was to be able to pay off the loan AND save up enough money that I could buy my next car in cash. I have achieved that goal, but my original car still runs fine after 10 years, and most people are incredibly surprised when I tell them the age and the mileage. I really feel no need to buy a new car, but I am happy to know I am able to buy a car in cash when the time comes.

The difference between 0% (paying cash) or 0.9% (mfr incentive rate) or %3 (preferred rate) isn't that significant on a sub-$50K vehicle over 5-7 years. When the vehicle goes back to the used car lot, there will be a hit taken and you either absorbed it upfront (by paying cash) or will absorb it at the end (by being upside down on the loan) or some combination so that it balances out. As far as driving your next car for 10+ years, the vehicles being manufactured today are almost designed not to last (because the auto industry fell on hard times a while back and vowed never again).

Yup. My "daily driver" (I work from home) is a 1999 Suburban with a 454. It gets absolutely abysmal fuel economy, but for the < 10k miles per year and only $4500 I paid to purchase it six years ago, the math simply doesn't add up to replace it with a new $60k truck or even a $25k sedan.

And I'm sure getting to hear the 454 is worth something...

> Honestly hard to feel too sorry for people that "need" a $30k+ car/truck/suv.

Your $1600 car was once someone's new car. Without people buying new cars, you wouldn't have used cars to purchase.

Does a server at a restaurant need a new car? That depends on a number of factors including salary and budget. But to say no one needs a new car is bs.

You need someone else to buy a new car so that you can buy a used car.

As the used car market dries up, the price of used cars goes up. This increases the resale value of new cars, which lowers the net cost of buying a new car (because you will get more when you resell it). And the reality is, there's no shortage of used cars in America.

Which is interesting because US automakers pushed planned obsolescence as a way to reduce the used car market to lower the net cost of buying a new car.

That's a relatively new phenomena, quite the opposite was true until about a decade ago.

It started in the 80s.

You were doin' good there until "My primary vehicle is a $1600 motorcycle,". I wont hire anyone who drives a motorcycle --it's something you can get out of your system in your late teens and if you survive you can join the world of responsibility, but as far as grown men riding them around what with the statistics being as they are (not to mention the cost burden to society when they are not fully killed while commuting), it sends a real signal to steer clear.

> 'I wont hire anyone who drives a motorcycle'

> 'it sends a real signal to steer clear.'

I'm sure the feeling is mutual. Or at least I hope that it is.

Vehicles these days are on average more expensive simply because SUVs outpace smaller car options in terms of overall volume sales, and SUVs are on average more expensive. Somehow auto manufacturers have convinced the middle class of this ridiculous notion that they can't transport their children safely in anything other than an SUV. So the middle class tend to buy more expensive vehicles they can't afford as easily because of marketing propaganda. The irony is, as more of these nuisance-sized SUVs flood the roads, the less safe everyone in smaller cars become, and road wear increases exponentially, leading to higher fuel taxes, etc... lather, rinse, repeat.

People (mostly) aren't buying Chevy Suburbans. They are (mostly) buying crossovers. Crossovers are basically the station wagons of the 21st century. If you want two rows, a hatchback and usable trunk space your options are crossover (technically an SUV, even if it's just a lifted wagon) or spending tons of money for a proper wagon made by either the Germans or Swedes. The reason the OEMs won't build wagons en-mass seems to be emissions classifications.

To haul their crumb-snatchers, yes. But this also doesn't explain why people are choosing to misappropriate farm vehicles (pickup trucks) as single passenger daily commuters.

People buy trucks because they like them. It's the same as any luxury item. I like guitars for example, don't need them, don't need any more, but I bought one recently. Because I liked it.

The question isn't why do people choose to buy luxury items but why debt is so easily accessible for the purchase. That's much more troubling.

The question is why isn’t illegal to externalize on my and my kids life by burning gas as if it had no consequence beside being an asinine financial move.

In reality, cars are safer now then they have ever been. Allowing people to buy pickup trucks isn’t some dastardly move made out of excess and negligence. Anyone who needs a pickup truck has there own reasons, and as long as the vehicle has passed the legally required safety measures, why not just let people have the freedom to do what they want?

IMO vehicles of a certain size should have to follow specific rules (in densely populated areas). I live where is snows; and when it does, there are lots of 2-way streets that are large enough for 2 reasonably sized vehicles, but not if one of them is a huge truck / suburban. Last night I had to back out of a road because some lady in an Escalade was driving down the center and refused to squeeze right to allow traffic to flow as intended. It also bothers me that you cannot see over these automobiles on the highway. Many times I've been traveling in the left lane on the highway with a big truck in front of me (that's going slow, but I assume it's because of the person in front of them). I move left even more to try and peek around them to discover that there is no one in front of them, they're just oblivious / refusing to yield. If you want to drive something huge, that's okay with me, but keep it in the right lane and off of small streets like all the shipping trucks.

Gasoline is taxed in most places. How do you know gas taxes don't internalize the costs?

Because most places don’t have a carbon tax on gasoline emissions.

I don't see what the label has to do with it. Isn't it the total amount that matters? If the externalities of a gallon of gas are $X, and the total taxes are > $X, then the purchaser is paying for them. How do you know one or more of the taxes doesn't identify as a carbon tax?

I guess you could assume that the current taxes are precisely applied to externalities other than CO2, but given the large differences in taxation due to jurisdiction, I don't see how they could broadly match up. And requirements for them to do so surely aren't strict or universal.

Because the actual harm done from emitting via gasoline usage is not dealt with under the current tax regime. I’d argue that any tax that exists does not encapsulate the cost of removing those emissions from the atmosphere. Considering it costs somewhere between 90 and 400/ ton (possibly more) to remove co2 from the atmosphere, I don’t see how the current tax regimes are quite enough but more importantly the economic harm that’s being done is not being addressed with those tax dollars.

In theory, you could tax gasoline to the level of true removal cost, but unless a market exists to actually remove the carbon it’s moot since the mechanism to clear the damage can’t exist without a functional market on carbon.

Thus, when you burn gasoline you are externalizing. As a result I cannot understand the desire to needlessly do this just so you can drive a superduty to your office job.

It's seriously like using a spoon as a knife. Do people not care about handling any more? Weight distribution? Cornering? Braking? Acceleration? Top speed? Gas mileage?

Trucks are for towing / hauling loads. If you're not towing or hauling a load then you're doing it wrong.

Rent a truck for 30$ the two days a year that you need it. You can put your sweatshirt and your backpack in the trunk of a correctly purposed vehicle for the other 363 days. I think you'll enjoy having an automobile that performs well.

> The reason the OEMs won't build wagons en-mass seems to be emissions classifications.

This. I can respect the intent of CAFE, but at this point it’s providing a ceiling, not a floor. We should accept that CAFE got us over the oil crisis hump and that it’s not the right law for us now.

Agree, but we're going to disagree on the solution. For example, I'm ready as a citizen voter activist to demand a combustion ban phase out schedule.

https://en.wikipedia.org/wiki/Phase-out_of_fossil_fuel_vehic... (Jurisdictions with planned fossil-fuel vehicle bans)

You could probably just let the states decide. CA and some east coast states will immediately do just what you're suggesting and/or as the technology becomes better and more mature more states will do the same or it will just organically happen because EVs are likely to reach a point where they're are the obvious choice for a larger and larger share of users and you won't need to ban anything.

This is true, and the most likely outcome considering federal gridlock. The boondocks will be the last to come along, and its going to be relatively straightforward to get enough states in a coalition to force automakers towards EVs.

https://www.commondreams.org/news/2018/05/01/states-represen... (States Representing 44% of US Population Sue Trump's EPA for Blocking Auto Emissions Standards)

THe OECD has the numbers on GDP per hours worked: https://www.oecd-ilibrary.org/economics/gdp-per-hour-worked/...

Worker productivity in the US has risen while wages have remained flat and expenses for healthcare and education have gone up. People really can't afford their cars any longer.

Besides, if you have a 90-minute megacommute a nice car is no longer a luxury, it's a necessity.

> if you have a 90-minute megacommute a nice car is no longer a luxury, it's a necessity.

I used to commute 90 minutes on the bus and rail on a daily basis. I assure you, even at 90 minutes, a nice car is _still_ absolutely just a luxury. A dependable car may be required, but not a fancy one.

If you have a long commute you probably want a fuel-efficient car, which is usually going to be a small (and inexpensive) car.

My impression also is that many of the most dependable cars are inexpensive. I've been so amazed at the reliability of the Honda Fit (it required no major repairs until it got totaled around 120k; my main beefs were with the hatchback which needed to be oiled quite often, and the tire pressure sensors that seemed to fail around once a year or so) I was amazed enough that I bought another one (with a three year payment)

I haven't encountered anything in the last 20 years by Honda or Toyota that wasn't dependable, regardless of price point. Specifically on tire pressure sensors, I never had an issue with my 02 Acura CL (owned 2006-2016), and have not yet had issues with my 09 Pilot (owned 2016-present).

When you are driving 90 minutes in the early morning on busy roads, when everyone around you is just as sleep-deprived as you, you'd like to minimize distractions, so you can pay attention to the road. You really want a good suspension and a silent engine. (I agree about the fuel efficiency, but that's not the whole story.)

Small cars vary just as large cars vary.

I like Hondas, I like the Chevy Sonic, I like the Nissan Altima. I think the Nissan Sentra has dangerously little purchase on the road, and can't stand the drivability of either the Toyota Corolla (almost crazy optimization of gas car for high m.p.g.) or the Camry.

I think the roar of the engine and the sounds outside are an important sensory channel in driving, so "super quiet" doesn't matter for me.

In fairness, a 90-minute public-transit commute would likely be an hour by car.

I'd still rather take the bus and train than drive.

After two mornings of standing in near-freezing drizzle waiting for a bus that I hope I can get a seat on, I don't agree. The reasons I take the bus are that my commute is actually faster (yay Exclusive Bus Lane!) and a lot cheaper ($13.60/day, which wouldn't even cover the toll for me to drive).

It's only a small fraction of the USA where a 90-minute commute by bus and rail is even possible.

Even when I lived in a smaller city where the route would have allowed for such a thing, it isn't necessarily an option, because bus service often starts too late in the morning. Or there's my parents' house - they live in a moderate-size American city of about 250,000 inhabitants, but the nearest bus stop is half a mile away, along a road that lacks sidewalks. That walk would have barely been possible, let alone reasonable, many days of the year.

And yeah, all of that does imply that modern urban planning may be something of an own goal in the proverbial class war, but, nonetheless, that's the situation.

I’m currently commuting by bus. My 45 minute drive is now a 2 hour commute across 2 buses and a rail.

There is no shortage of cheap vehicles in the US. People buy expensive cars because they want them, not because they need them.

As posted in another comment: https://www.motortrend.com/news/top-10-cheapest-new-cars/

If you have a mega-commute, you should be buying the cheapest efficient, reliable car possible. You do not need a $30k+ car; you need a car that gets good gas mileage. Buy a Honda Fit and you'll get configurable storage and fun handling as a free bonus. Worst case scenario, you buy a ~$20k Corolla/Civic/Mazda 3. (The horror!)

EDIT: OK I just looked at the 2020 Honda Fit. Don't buy that. It's just too ugly.

I was absolutely blown away by the 2020 Corolla LE we had as a rental for two weeks in the US this Christmas/New Years. The adaptive cruise control was better at braking at just the right time and amount in suburban highway traffic than I was, and the gas mileage when I left it to its own devices was 40-45 mpg. The trunk fit two large suitcases, two roll-aboards and various groceries and backpacks.

When our 2008 Fiesta ceases to be economical to keep using, it’s at the top of our list for a replacement, especially as it’s available in Germany as a station wagon with enough towing capacity for my husband’s glider. Impressive little car.

90 minutes is a megacommute? I need to move.

> if you have a 90-minute megacommute a nice car is no longer a luxury, it's a necessity.

What's wrong with a 90 minute commute in an old Corolla?

I've noticed that car commercials in the US never show the price of the vehicle anymore. They just show a low monthly payment amount. Often, it is a lease payment which is even worse because you're renting the vehicle at a very high effective interest rate that doesn't need to be disclosed because you're not technically borrowing money. US regulations don't currently require disclosure of interest rates and fees on vehicle leases.

> anymore

Not really a new thing. Ads and dealers have played the "low low monthly payment with zero down" (or whatever) forever.

How can there be an explicit interest rate if there is no loan? You’re borrowing the car, not the money.

The effective interest rate is the difference in the actual depreciation of the vehicle and what your buy out price is at the end of the lease. The dealer has the ability to set the price at the end so they can manipulate how much over true depreciation you're spending.

You can do the math and convert it as a loan equivalent. If you get a loan for a car, you're paying the value of the vehicle + an extra fee for the convenience of not having the full amount upfront to purchase it. When you lease a car, you're doing the exact same thing. The only difference is that the car company is not legally obligated to disclose your effective interest rate. You can calculate it yourself here:

https://www.calculator.net/lease-calculator.html?ctype=fixpa...

A $20,000 car leased over three years for $400 a month that depreciates to $10,000 at the end of the term has an effective interest rate of 9.539%

It's even worse in the Detroit area. Pretty much every domestic automaker (and Nissan, I think) show payment amounts with employee discounts.

>Is it really that the middle class can't afford cars, or is it that a lot of folks want to buy a car they really can't afford?

If you have to spend more than 100% of your total yearly income on an item that rapidly depreciates in value then yes it's not affordable.

Right, but you 100% _do not_ need to spend that much on a car.

Correct but many people do it's quite common. Most ordinary vehicles these days tend to be around $30,000. That's a bit more than the total yearly take home pay for someone in my region making minimum wage. Even used at half that is a large amount of money to spend on a vehicle.

People scoff at multi millionaires spending hundreds of thousands or a million dollars for a sports car. But that's a small amount of their total net worth or even their yearly salary.

Cars are so expensive to own too. I don't think people realize how much it costs to operate a vehicle let alone but it. The AAA says it costs about $7,000 per year in expenses; gas, maintenance, insurance, depreciation.

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