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Author Topic: Are new cars increasingly getting out of reach for most Americans and Canadians to buy.. Back to Topics
contiki

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Ontario

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Message Posted: Feb 28, 2013 10:04:16 AM

Are new cars increasingly getting out of reach for most Americans and Canadians to buy..According to the 2013 Car Affordability Study by Interest.com
The study looked at a variety of household expenses, such as food and housing, and when it comes to purchasing a new vehicle, it considered more than just the basic purchase price, down payment and monthly note, factoring in such essentials as taxes and insurance.

Bottom line? A buyer in the capital can purchase a car with a sticker price of $31,940, slightly more than the new vehicle average for the 2013 model year and about what it would cost for a mid-range Ford Fusion sedan or a stripped-down BMW X1 crossover. The buyer in Tampa? They’ll just barely cover the cost of a basic Kia Rio, with $14,516 to spend.

Link

Do you agree with this report.......

Tell me what you think..........

[Edited by: contiki at 2/28/2013 10:09:13 AM EST]
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contiki
Champion Author Ontario

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Message Posted: Apr 25, 2013 6:25:56 AM

Who would want a 8 years loan on vehicle purchase....

By the time it is paid off you would be looking for another vehicle.....
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calypso93
Champion Author Scranton

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Message Posted: Apr 24, 2013 7:25:20 AM

Reminds me of the old "El Monte Slim" routine. $99 down, and $99 a month, for 99 years.
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contiki
Champion Author Ontario

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Message Posted: Apr 24, 2013 6:40:43 AM

traffic cop, you make a good point with your comment......
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traffic cop
Champion Author Boston

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Message Posted: Apr 23, 2013 2:28:55 PM

8 Year car loan? Sounds like "Tell St. Peter, I can't go--I owe my soul to the Company Store."

The more you finance, the more you pay. Simple as that. But so many people are not knowledgeable in personal finance/economics, and are seduced by the salesman's pitch, "I can put you into this car for only 'XYZ' dollars a month!" And they think they can afford it.

Hence, mnrick041's statement, "If someone walks into one of our stores wanting to buy a car and they have halfway decent credit and anything to trade in we can put them in a car. After that they just have to make the payments."

People leave with the happy & proud sense of new-car ownership, oblivious to how the financing game now owns them. That's how the housing bubble got out of hand. And now the college debt mess!
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contiki
Champion Author Ontario

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Message Posted: Apr 23, 2013 6:49:23 AM

Titantic1985 I can see you are very excited by your purchase and I would be to if I were you....

So glad that you found this great deal.......

Titantic1985, your fleet is complete...LOL...

I am happy for you Titantic1985......

Enjoy your rides.................
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Titanic1985
Champion Author South Carolina

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Message Posted: Apr 21, 2013 3:05:05 PM

Hi contiki,

I know you have knowledge of my two auto purchases in the past two weeks (remember your comment asking if I were starting a fleet?). The point here is that for me on disability new cars are "out of reach". My latest purchases were out of necessity, but if you do your homework and spend time, there are very good deals with used vehicles, many of which have the remainder of the factory warranty and sometimes an additional "bumper-to-bumper" dealer warranty. My purchase of a 2010 Ranger is an example of this. It was a one owner, Southern truck (Florida) with 46,100 miles. There isn't a scratch or dent on it and came with a factory towing package and bed liner. The cost was $14,300.00. It is a 2.3L with a 5-speed automatic and four brand new tires. A new Chevrolet Colorado base model is $26,000. Wow!

One key to making any purchase a good value is to be content with what you have selected, take good care of it and keep it forever. Again, if you do your homework, this is possible. Yes, I did pay cash for the Ford Ranger, so no monthly payments. Also, this was an Internet listing, 118 miles from my home at a small Ford dealer in a SC town I never heard of.

Take care :-). MGY

To further your Topic, contiki, I spoke with a Mazda sales manager and he told me that they usually buy 15 vehicles at auction. He says they are fortunate to find five now. Their used lot is almost empty.
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contiki
Champion Author Ontario

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Message Posted: Apr 21, 2013 7:35:09 AM

calypso93 says " Wow. Eight year car loan? Does the buyer keep it that long, or trade it in before the loan is paid off and suffer some more loss? "

calypso93, you make a valid point with your comment...........

Eight years car loan, your vehicle could be on it's last legs by the time you have it paid off or as calypso93 says, you might not even own it after eight years........

Not very encouraging to buy a new vehicle these days..........
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calypso93
Champion Author Scranton

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Message Posted: Apr 20, 2013 6:49:00 AM

Wow. Eight year car loan? Does the buyer keep it that long, or trade it in before the loan is paid off and suffer some more loss?
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gvan
Champion Author Chicago

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Message Posted: Apr 19, 2013 11:39:03 AM

"It's not just cars. Gone to a grocery store lately?"

Exactly my thoughts. We could start a survey on almost anything possible and most people would say it is too expensive. (how about starting with healthcare, insurance, taxes, housing, etc.)
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OilerFan
Champion Author Tulsa

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Message Posted: Apr 19, 2013 9:07:10 AM

It's not just cars. Gone to a grocery store lately?
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going up
Champion Author St. Louis

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Message Posted: Apr 19, 2013 8:48:36 AM

New car prices are expensive. I always buy a good low mileage USED car.
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contiki
Champion Author Ontario

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Message Posted: Apr 19, 2013 7:10:55 AM

Car loans stretch out to 8 years, costing buyers more.....

Six- and seven-year loans are becoming an increasingly popular choice — and some lenders will even stretch out those payments eight years. These long-term loans allow buyers buy the vehicle they want with the monthly payments they can afford. But it also means they will pay more overall.

The average new car loan in the fourth quarter of 2012 was 65 months, according to Experian Information Solutions. That's a new record.

“It’s gotten ridiculous,” said Anthony Giorgianni, associate finance editor for Consumer Reports Money Adviser. “With a long-term loan you pay more interest because you’re paying off the loan over a longer period of time. And longer-term loans tend to have higher interest rates.”

Car loans stretch out to 8 years, costing buyers more.....
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Hemond
Champion Author Providence

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Message Posted: Apr 18, 2013 11:45:59 PM

::::The consumers are probably spending way more than they should to get these higher priced cars with financing up to eight years.:::


The dealer where I bought my new car is out of state, about 50 miles from here. He sent a runner to deliver my new car and expedite my registration. I rode with him to the DMV. He said he has a current car payment of $599/month.

I nearly choked on hearing that. Such a figure blows my mind. Plus this was a retired guy supplementing his income as a runner. Runners make minimum wage. (My Dad worked as a runner after he retired too). What on earth is a retiree doing with a car payment like that? Which seemingly forces him to work while collecting Soc. Security?

I can almost see a car payment of $299 or so,(almost) but $599? huh? Thats nuts. You can't afford that car if you are paying $599/month. Not if living on SS plus working minimum wage.

[Edited by: Hemond at 4/18/2013 11:48:06 PM EST]
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gvan
Champion Author Chicago

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Message Posted: Apr 18, 2013 10:51:55 AM

Sure, car prices are high but people are still buying them at a record pace not seen since 2007. The consumers are probably spending way more than they should to get these higher priced cars with financing up to eight years.
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diesel8888
Champion Author Salt Lake City

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Message Posted: Apr 17, 2013 11:52:19 PM

Yes, I agree with this. car prices are outrageous!
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contiki
Champion Author Ontario

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Message Posted: Apr 17, 2013 7:19:38 AM

We Americans are consumed with making payments to buy stuff. Whatever happened to staying out of debt?

Canadians are no better at staying out of debt either and we also make payments on stuff......

Americans are no different then Canadians for buying things on payments....
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Hemond
Champion Author Providence

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Message Posted: Apr 16, 2013 8:57:28 AM

QUOTE :::::If someone walks into one of our stores wanting to buy a car and they have halfway decent credit and anything to trade in we can put them in a car. After that they just have to make the payments.:::


What I learned with my recent car purchase was the whole process is geared toward the 'monthly payment'.

First words out of the salesman's mouth was 'how are you financing this?' He was prepped to offer a monthly figure. AS a cash buyer, I was only interested in the bottom line, not payments.

Then they move me into the aftermarket warranty dept. They work up a figure for a used car warranty. They quote it on a monthly basis. (My purchase still has 4years/70K miles on the factory warranty btw)

HOw a cash purchaser winds up with a monthly payment on a warranty still puzzles me. If I was interested in it, I'd buy it outright, but they want you to make payments.

Then I call up my insurance guy. He quoted me a slightly higher figure (I was expecting doom here - as its a sports sedan). The agent insists on quoting the rate on a monthly basis. I did the mental gymnastics of turning it into a yearly figure to compare.

We Americans are consumed with making payments to buy stuff. Whatever happened to staying out of debt?
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contiki
Champion Author Ontario

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Message Posted: Apr 16, 2013 7:16:41 AM

Great posting Hemond.......I think you are on to something......

Great way to shop for a vehicle and to see what is available.......
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Hemond
Champion Author Providence

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Message Posted: Apr 15, 2013 7:10:45 PM

QUOTE :::Casually shopping for a year? That's "no trouble?" Sounds like a pain in the butt to me. Most people aren't in a position that they can casually shop for a year for a car.:::


Car shopping is fun, hardly a pain. I love cars and love trying out all the new models. In any case, I was in love with a certain make/model/submodel, of a somewhat rare car. There were always a few available but not exactly with the features or mileage or condition I wanted.

I do most of my shopping online. On ebay, and on dealer webs. I casually shop indefinitely. Even after buying this car, I will continue to shop. People are most definitely in a position to car shop. If they have time to post on GB then they have time to peruse, Edmonds, ebay, Autotrader, and all the rest. You can shop at 3AM in your boxers.

This is the internet era after all, car shopping is fully automated. I have half a dozen automatic searches running nationwide. When an interesting candidate pops up, I check it out. Keeping my eye on a half dozen vintage cars, waiting for a nice one to be offered.

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EagleEye16
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Message Posted: Apr 15, 2013 4:22:54 PM

I guess it depends on what you're buying. Some models are totally out of reach of the average person.
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gvan
Champion Author Chicago

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Message Posted: Apr 15, 2013 9:40:27 AM

"I had no trouble finding a nice used car. I have been window shopping casually on ebay and locally for maybe a year."

Casually shopping for a year? That's "no trouble?" Sounds like a pain in the butt to me. Most people aren't in a position that they can casually shop for a year for a car.
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Hemond
Champion Author Providence

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Message Posted: Apr 15, 2013 7:01:35 AM

I had no trouble finding a nice used car. I have been window shopping casually on ebay and locally for maybe a year. I had 3 or 4 models on my candidate list. There are plenty of choice cars out there. I didn't pull the trigger earlier simply out of laziness.

I got a somewhat unusual model, not a lot of them out there. Yet on the day I bought there were 3 on the used car dealers lot, 1 on ebay, and the one I bought.

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DanFMA
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Message Posted: Apr 15, 2013 6:27:27 AM

Yes.
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mnrick041
Champion Author Twin Cities

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Message Posted: Apr 15, 2013 6:12:31 AM

" A good used low milage car is the way to go. Their out there...just have to look."

It is getting harder to find those. Where I work a good percentage of the cars we get in are sent to our auction because they either have problems or they are too high mileage for us to try to recondition and put back out on our lots.

In many cases if there are the right incentives in place at the time you can get into a new car for the same or sometimes less than what it would cost you for a low mileage used one of the same make/model/trim level plus you get the new car benefits.

If someone walks into one of our stores wanting to buy a car and they have halfway decent credit and anything to trade in we can put them in a car. After that they just have to make the payments.

[Edited by: mnrick041 at 4/15/2013 6:14:28 AM EST]
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scoobynuts
Champion Author Toronto

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Message Posted: Apr 15, 2013 6:02:11 AM

A good used low milage car is the way to go. Their out there...just have to look.
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jscdig
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Message Posted: Apr 14, 2013 5:32:38 PM

It would be nice if we could pick and choose the options we want instead of being forced to buy expensive "package" deals. I really wanted a back up camera, but to get that, I had to get the expensive radio with Sync. I wanted heated seats, but I had to get leather and then I had to buy another package as well because the leather didn't come as a sole option. I'm sure prices would be a few thousand less if we weren't forced to buy all the useless stuff we don't really need. Of course, manufacturers don't want to go back to the basics because that would cut into their profit margins.
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OilerFan
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Message Posted: Apr 14, 2013 10:44:08 AM

The cost is not worth it anymore. I'd rather look at buying a low mileage used car instead.
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Hemond
Champion Author Providence

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Message Posted: Apr 14, 2013 9:53:49 AM

:::: People hock their soles to purchase a vehicle :::


Agree, there are some shocking amounts people are paying for cars. At least I've heard some horryifying numbers. Like $599/month.

I just bought a nice late model used car. A 2010. I paid $13.9K and it originally went for $28K. Thats over 50% depreciation. Thats over $14k just thrown away. Makes me sick to think about it.
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MertieMan
Champion Author Lexington

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Message Posted: Apr 14, 2013 7:45:46 AM

They have been out of reach for years now in reality. People hock their soles to purchase a vehicle anymore and like houses they sometimes wind up losing them. Leasing for instance is a losing proposition for the onset.
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contiki
Champion Author Ontario

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Message Posted: Apr 14, 2013 7:08:11 AM

I agree with the report and it seems that many of the posters agree with the report also........
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calypso93
Champion Author Scranton

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Message Posted: Apr 13, 2013 7:30:25 AM

Can't be getting out of reach. Look how many are being bought.
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Hemond
Champion Author Providence

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Message Posted: Apr 13, 2013 7:29:05 AM

Just bought a used Japanese sport sedan. A 2010 model. Paid less than half of original price. Car originally sold for $28K, I paid $13.9 used. 50% depreciation for a beautiful low miles car.

I can comfortably afford to pay that without going into debt. But not $28K.


Its likely most customers are able to comfortably pay about $15K. $22K to $25K is a stretch. $30K for a car and up is the Obama evil 1% territory.
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jessjames
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Message Posted: Apr 13, 2013 7:12:20 AM

yes
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ReddevilNO
Champion Author New Orleans

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Message Posted: Apr 13, 2013 6:40:06 AM

I think they are for sure, and I'm one of them!!!!! It's got to be used for me...
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gvan
Champion Author Chicago

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Message Posted: Apr 12, 2013 11:08:15 AM

"Get small vehicles moving or automakers will suffer over the long run...."

Car sales were down in March and light truck/SUV sales were up! However, I notice a trend where many manufacturers are coming out with compact SUV's.....smaller than the Escape, CR-V and RAV4.
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L98
Sophomore Author Ontario

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Message Posted: Apr 11, 2013 10:35:10 AM

definitely getting more difficult
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scoobynuts
Champion Author Toronto

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Message Posted: Apr 11, 2013 10:33:15 AM

Can't afford to buy new...If you look around there are lots of good used vehicles out there at affordable prices
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contiki
Champion Author Ontario

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Message Posted: Apr 3, 2013 7:11:14 AM

Sales might be up but automakers have seen the writing on the wall....

Get small vehicles moving or automakers will suffer over the long run....
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gvan
Champion Author Chicago

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Message Posted: Apr 2, 2013 12:52:25 PM

Apparently not.....April 2, 2013

March looks to have turned out to be one of the biggest months for auto sales in nearly six years.

The industry sold almost 1.5 million vehicles in March, about 5% more than the same month a year earlier and likely the most since the 1.6 million sold in May 2007, according to automotive information company Edmunds.com.
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contiki
Champion Author Ontario

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Message Posted: Mar 30, 2013 8:17:49 AM

scoobynuts says "I'll never buy new...just to expensive "

I am starting to agree that used might be the way to go for many people these days if automakers keep putting their prices higher each year.........
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scoobynuts
Champion Author Toronto

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Message Posted: Mar 29, 2013 7:14:37 AM

I'll never buy new...just to expensive
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contiki
Champion Author Ontario

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Message Posted: Mar 28, 2013 12:27:31 PM

FuelPump say "New cars have never been especially easy to afford, ever! "

Hemond says " Disagree,

My first job while in high school was at a jewelry factory. Most people working there were earning slightly above minimum wage. Most of them also had new cars. The clerks, secretaries, blue collar workers. They could afford car loans with a maximum of 3 year terms.

There was no such thing as a 5,6,7 or 8 year car loan.

The reason we now have car loans of 84 months is an old style 36 month loan is impossible to pay."

Hemond make a good point with his comment, one that is hard to argue with it either....

[Edited by: contiki at 3/28/2013 12:29:27 PM EST]
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FuelPump
Champion Author Los Angeles

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Message Posted: Mar 28, 2013 11:38:27 AM

New cars have never been especially easy to afford, ever!
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Titanic1985
Champion Author South Carolina

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Message Posted: Mar 28, 2013 11:11:30 AM

Good Morning contiki,

You said, "I wonder if automakers are thinking about this and if many automakers are into building smaller automobiles because they know that many can't afford the bigger size automobiles anymore.......". Yes, this is quite true, but there is another reason, perhaps a bit off topic.

Selling more fuel efficient smaller vehicles allows the manufacturers to sell the larger SUVs and Trucks and still meet the US Government's CAFE (Corporate Average Fuel Economy). As an added bonus, the last figure I read regarding pickup truck profitability is 17%. This is so important to them they will virtually eliminate most profit of a small vehicle to obtain that goal. My 2012 Chevrolet Sonic Hatchback had a $615.00 dealer profit margin built in and was reduced that to $15.00. They of course will make up the difference with the sale of the new above mentioned vehicles as well as my trade which, by the way, was given $1,000.00 over book value. Dealers are in short supply of used vehicles due to what you posted.

To further validate your Topic and those responses given by other GBs, some auto dealers are moving their used car lots away from the new vehicle lots in order not to dissuade new vehicle buyers.

This is another good topic with many different answers :-). MGY
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contiki
Champion Author Ontario

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Message Posted: Mar 28, 2013 7:34:46 AM

scoobynuts says "I like to buy second hand as a new car will depreciate the moment it been taken off the lot.I try to buy something used a year or to old with low mileage. I believe you can save & still get a warranty if u want. "

scoobynuts, I think many posters are probably thinking the same as you are.

I wonder if automakers are thinking about this and if many automakers are into building smaller automobiles because they know that many can't afford the bigger size automobiles anymore.......
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ReddevilNO
Champion Author New Orleans

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Message Posted: Mar 28, 2013 6:41:49 AM

Pretty Much. They are really getting too high to reach the prices for the average folks. Yep!!!
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MertieMan
Champion Author Lexington

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Message Posted: Mar 28, 2013 5:17:07 AM

Most people have gone to leasing for the upper priced vehicles.
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scoobynuts
Champion Author Toronto

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Message Posted: Mar 27, 2013 10:38:21 PM

I like to buy second hand as a new car will depreciate the moment it been taken off the lot.I try to buy something used a year or to old with low mileage. I believe you can save & still get a warranty if u want. Much easier searching for a car now new or used with the internet.Research of a certain used vehicle you might be interested in is much easier now than it was a few years back. Can view them from home and if your interestd go for a test drive.
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mnrick041
Champion Author Twin Cities

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Message Posted: Mar 27, 2013 9:06:42 AM

It depends on your down payment and what kind of interest rate you qualify for. It also depends on your income and what your other basic expenses are.

I lease. I do not have children and I try to keep my expenses under control. I also go for average cars.
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OilerFan
Champion Author Tulsa

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Message Posted: Mar 27, 2013 8:36:42 AM

My next vehicle will probably be a used one.
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