I think "purchase" is a strong word. Most vehicles are being financed for 7-8 years and traded in for the next shiny object without ever paying anything off.
I wonder what percentages banks are allowing people to finance over the sale price of the car? This is a huge bubble and is in no way sustainable. Cars just aren’t worth what people are paying for them.
Well as high as prices are that makes sense. Our last kid just graduated college, and Mama said she would wait until that happened, before getting a new car. We thought she was going to get a Tesla, for car pool lane availability on her commute. Well after driving one, she decided they are no fun. She likes sportier cars, wants to hear the engine, etc. She ended up buying a C43 AMG, with a nice interior and other goodies. The payment is approximately $1300 for 5 years, I think a lease is around half that, so you can make an extremely good argument for leasing. However, we tend to drive more than 12k miles a year out here, plus if she likes it, and it doesn't have typical German electrical issues, we will keep it for more than four years. Now instead of putting a kid through college, we are paying to put a car through college. Our first house payment in California was less. I know, "get off my lawn".
In our case, we could have financed the entire transaction, including the sales tax. They didn't offer 120% financing or anything crazy like that.
The mere thought of a $1300 a month car payment makes me slightly queasy. I don't car if the car has a automated masturbation device that will pleasure me while I drive if the dealer even mentioned a $1300 car payment that would be the end of that.
I don't disagree, I would have loved something less expensive, but she has wanted a nice car forever and makes good money now. A new Tesla, would have been much more, but we didn't get that far, the used ones we were looking at were more money versus her car new. My most expensive new car I've purchased prior to this, was a new M3 when they first came out again in 1993 and it was $38K plus tax. EDIT...just remembered I bought a used Viper in 99 and I think that was around 50.
Yes, it is more than any other house payment I've had in my life, except my current house. I bet your RV payment was over 20 years though.
We do some 84 month loans, but I'd say 60 and 72 are still the norm. I don't think there's a bubble of any kind. Economy is as strong as its ever been, consumer confidence is high, stock market is high. Folks are doing fine with their auto loans. Y'all make it always sound so doom and gloom, but everyone's situation is different.
Who is buying all these $50-60-70k+ vehicles? It seems like EVERYTHING worth driving is over $40k. A 60 month loan on a $40k vehicle is $700/mo. On a new $60k SUV that jumps to over $1000/mo. That's nuts.
Still, I make decent money and while I could buy something like that, it would be the ONLY thing I could buy, ever. I make almost double the median income in my area and I wouldn't dream of spending 70k on a truck or 500k on a house. Yet I see them rolling around EVERYWHERE.
A friend of mine was telling me about his woman client who would not drive ANYTHING but a BMW. Of course she didn't get to drive them much because it seemed they were in the shop for warranty repairs. Anyway...he secretly replaced her Bimmer with a loaded Kia sedan blacking out the badging inside & out. Guess it took her a few weeks to warm up to it... eventually she fell in love with it to the point she wont drive anything else!
Me either but I have a wife that just had to have a McMansion. I was perfectly happy with the 2600 sq ft. I built. I pointed out to her while we were paying off the last 145k on this one that her other house would have been paid off for more than a decade and she'd have another large chunk of money in the bank. Of course we are typical guys and point out the $1300 a month car payment we would never make whle having previously spent about 2k a month racing for wooden trophies and bragging rights. We are idiots.
I hear ya! Truth be told, I just bought a 2007 Mazda 3 iTouring for my son; $4300. Original owner and receipts for EVERYTHING. I love that little car. I'd be happy driving it. I don't really care what I drive. I'd rather spend the money on bikes and woodworking tools. No matter what my income is, I just can't justify spending $50-60K for a vehicle that has 4 wheels.