Cars are so expensive that buyers need seven-year loans | Hacker News Reader

Cars are so expensive that buyers need seven-year loans

bloomberg.com

34 pointsMrResearcher52 comments

My experience is that the base price for a car hasn't increased as much as all the mandatory dealer add-ons they force on you. I'm currently trying to buy a new car and the dealer refuses to sell me one without a Pulse brake light, paint protection, ceramic glaze, wheel & tire protection, floor mats, and prepaid maintenance, and I must trade in my current vehicle. Other dealers in the area all do the same thing. I walked out the door and they never called me back so I suppose this strategy works for them. Dealers have gone from adding zero value to adding negative value, and thanks to their lobbying it is impossible to buy a car without them.

Car dealers are a scourge on Americans and a hidden tax imposed via poor legislation. They employ thousands and are generally very wealthy so regrettably they have become an embedded political entity.

I don't know what the answer to them is other than to remove the anti-DTC laws but that seems unlikely.

In a small town I used to live in, the car dealerships essentially financed the entire town. Their sales taxes paid roughly 80% of the town budget. The dealers could have murdered people in broad daylight and the sheriff would have handcuffed the corpse.

Even TFA points out that this is nothing new, as I was thinking "we bought a new car 20 years ago, and 84 month loans were an option". It was an option that few took, but it was there. Now, apparently, 21% of new car loans are 84 months.

While we're on the subject, here's one for you: if you buy an RV, you can get a 20 year loan. We technically have one at the moment (it'll be paid off after having held the loan for a few months). You think cars depreciate fast? Go buy an RV. I can't imagine carrying a 20 year loan on something that will be nearly impossible to sell before the loan is paid off.

Marine loans for boats also appear to carry 10-20 year terms. Value being subjective and all, if you find the juice tasty enough then it must be worth the squeeze.

Car loans have a bit more of an inherent predatory bent since most Americans need a car to get by. That's not to say we all need a car which costs so much that an 84 month term becomes worth considering...

Boats here cost the same as a car and more, but because they are used far less and have a high resale value (Minnesota has a lot of lakes and a culture centered around water and boating) it might make sense.

I bought a 20yo pontoon for $10K and I could sell it tomorrow for $5K more than I paid for it two years ago.

I cannot do that with a car. No way; no how.

Do RVs have a deprecation cliff since you cannot take old RVs to many campsites?

I just looked that up and apparently there are 10 or 15 year rules enforced by some but not all parks. If the RV is older than 10 or 15 years it will be barred from entry.

Apparently the rule is to deter people who do not maintain their clunker of an RV which might break down, leak various fluids or catch fire. The given advice is to keep your rig in good shape and call the RV park and explain the situation. They may request pictures as proof e.g. a well maintained conversion of an old city bus would be fine if your pictures show as much. Some parks might inspect on arrival.

It seems like that would zap a lot of value. Just going through the uncertainty if your RV makes the grade after a certain time.

New dream policy for California: no more 20+ year old RVs street parked in touristy places. They'll end up taking over entire streets around mission bay (a large park in San Diego)

That's an extremely charitable take. Have you ever considered parks just don't want someone who can't afford a new RV?

There are some countries that don’t allow old cars on the road.

Have dealt with this. I own a 2007 RV. Maintain it well enough that it isn't an eyesore, but I'm not going to waste my life on upkeep. I have never been turned away from an RV park in the last ~6 years that I've owned it, even when staying at "must be 10 years old or newer" camp sites.

Like you said, it's more used as a policy to turn away. People who the park doesn't think fits their vibe.

Isn't the 20 year RV loan for folks who make them their permanent residence? I think they would view it analogous to paying rent for an apartment instead of paying on a depreciating asset.

20 year loan on something that depreciates that terrible is predatory.

Cars last longer now, so this may not be as bad as it sounds. The real issue is whether people are ending up underwater on their vehicles - that is, are loan lengths increasing faster than depreciation curves are flattening.

The powertrain warranty is usually 5 years or 60K miles. Bumper-to-bumper warranty is around 3 years, I think. I would be OK with the loan for as long as powertrain is covered, at the very least. The modern day turbo engines have exceptionally low reliability, it will blow while you still owe quite a bit for the car.

I'll add a disclaimer here that I don't buy new cars or trucks, so this doesn't really apply to me anyways.

My family's limited experience with powertrain warranties is that they don't mean anything. The manufacturer put a junk engine in my Dad's truck at the factory. When they replaced it, they replaced it with a junk engine. When confronted with this, the dealer claimed it was not reasonable for a replacement engine to run without issues. Neither made it 30,000 miles.

Do they really? I've seen plenty of surveys that say American consumers are _keeping_ their passenger cars for longer and longer periods (12.8 years in 2025 https://www.spglobal.com/automotive-insights/en/blogs/2025/0...)

But is there any study that says the components or designs are needing less repairs or are getting cheaper to maintain over that 12.8 year period as opposed to, say, an econobox sedan from 2005?

Is a modern family car with GDI, CVT, plastic oil pan, infotainment system, and litany of safety sensors going to last as long without bankrupting its owner as an equivalent product from a comparable market segment 20 years ago?

I was just speaking off the cuff, mostly based on anecdata and facts like the survey you linked to. I am not sure about the truth, and you make a good point that simple repairs have gotten more expensive.

> Cars last longer now

Honda from 2005 could last 10 years in Quebec and Honda from 2015 could last 10 years. I don't have huge stats, but it seems that cars are about as reliable today as they were 20 years ago. I didn't notice them to be more reliable.

particularly honda hybrids are simpler and more reliable than ice versions, so probably will last longer.

How is it possible that a hybrid, which contains an ICE, is simpler than just an ICE?

honda hybrids don't have transmission, ICE generates power which feeds electrical motor, which is much simpler and reliable tech, and because battery buffers power, ICE works in much more low stress mode too, it doesn't need to produce power peaks to accelerate.

Makes sense to me. I remembered hybrids degrading to a regular transmission when the battery was low. Sounds like if the battery were drained the ICE goes straight into electricity generation?

The real news is Harley Davidson motorcycles are so expensive people are getting 8 year loans at over 10% APR - and that's with good credit! Prices today are insane!

Given the current state of many car companies (Nissan, Stellantis, Mitsubishi) a 7-year loan may be a bit over-optimistic about the future of the car and the manufacturer

Meanwhile, China is making EVs in the $5~$10K (USD) range like Lingbox, BAIC’s Arcfox, etc...

In 2020 I bought a "disposable" Renault Kangoo to schlepp things around and go on road trips. It broke beyond repair last week and I started looking for a replacement.

Even a 3 year old Dacia Dokker - basically the same exact car with newer trim - is pushing €15k. A new Kangoo is around €30k. That's a lot for an economy car that does nothing significantly better than the 2007 version.

Since I only drive 1-3 times per month, I decided to stop owning a car. The cost of ownership is just way too high.

A lot of people have too much car for their needs. Big Child Car Seat is definitely driving some of the growth of vehicles, as is quite reasonably priced gas, but I feel most people could go smaller/used and afford what they actually NEED vs WANT.

From my friend's search "three child car seats in the back" were rather exhausting experience.

96 and 120 are the next places, where you can roll your loan balance as part of your trade-in

One important reason is that the US is imposing significant tariffs (25%) on Chinese-made automobiles. You can buy a very nice car just south of the border in Mexico starting at MXN$300,000 ($20,000 USD).

https://archive.today/zZXZq

So expensive.. or so profitable that the payments need to be lowered to look palatable over 7+ years.

TIL the average consumer makes horrendous financial decisions. God forbid you buy used!

I wonder if we shift to a more ebike infrastructure in the future.

Sadly, that would reduce GDP by lowering spending. Can't happen.

I'm slightly joking, but only slightly.

I've built my own ebikes since I was a teen in the 2000s. I love them, and wish more people would use them to get around day to day. There has been such a lackluster or hostile adoption by "the powers that be" of them, I just can't see it actually making a difference in American transportation though.

At least we aren't the UK though. They have been so hostile to ebikes and escooters for a couple decades now I couldn't imagine bothering if I lived there.

You will own nothing and be happy basically.

Eh cars are one of the few areas that haven't been crushed by inflation unless you buy some stupid giant SUV. Honda civic costs less than it did in the 90s/00s (adjusted for inflation). Tons of affordable sedans out there, people just like getting giant $50k+ cars, I have no clue why.

In Poland I bought new Toyota Corolla fpr 127k pln after promotions (that was 2021).

Three years later I sold the car for 142k.

Adjusting car value, a 3years decrease, it should cost around 70k. But it doubled in price.

So at least here inflation on new / few years used cars is around 100%.

Its a terrible moment to buy used cars. You are way better off buyin a new car for 150-200k. Coz promos you get will drop its price by almost 30%.

> Honda civic costs less than it did in the 90s/00s (adjusted for inflation)

Adjusted to inflation Honda Civic costs slightly more today in Canada than it costed on 2015. I'm not sure that the median salaries grew at the same rate.

Hard to understand why people are downvoting the parent. That may be a right wing dogwhistle, but also the entire corporate industry seems to be trying real hard to turn life on planet earth into a subscription.

Motorcycles are a great option for those who live in suitable climate and don't have to text and play Candy Crush while they're driving. You can complement with a cheap car for when you need four wheels, instead of going into years of debt for a decent vehicle.

I don't trust other drivers enough to be riding a motorcycle..

Motorcycles only seem cheap. Factor in a proper set of gear, like helmet, jacket, pants, and gloves, and you're up another $1k. Also note that maintenance intervals are more frequent. Consumables, such as tires, will be more expensive in the long run.

Why choose that over a used car for $5k? It's not cheaper, nor is it more practical. But I'll agree, on the nice days, it's definitely more enjoyable.

Are you comparing a brand new motorcycle with a 5k used car? You can get a used motorcycle and second hand gear. No matter how you slice and dice it, motorcycle is cheaper.

It is, even brand new one.

I can find several middleweight tourers / adv bikes between £12k-£25k new. And that's middle/top shelf. I can even get something new under £8k if I don't need the most modern electronics and 650cc is enough.

Comparing that to the car? LOL, 5 year used car like, say, Hyundai Ioniq is £15k+

And every other bit of the maintenance is more expensive in the car. Literally every single one. Also taxes and insurance.

Gear? Yeah, boots once every 10-15 years, gloves/jacket/trousers/helmet every 5 years,

Still cheaper.

Where, in the US, are you going to find a quality used car for $5,000? Please provide links.

Right because if you can't afford one cheap vehicle you can clearly afford two of them.

Nobody is financing a cheap used car for 8 years.

You sure about that? I've seen some insane terms on used car loans.

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