mazdeuce - Seth said:Are you guys talking smack about Accords? Open your latest GRM and tell me Accords are lame? Come on!
I never called Accords lame. They are very good at what they do. Hell, my wife drives one. But I would never characterize an Accord as a "panty dropper."
The idea that a car payment is "stable and predictable" is exactly why I don't have one. I dont believe anything in life is stable, predictable or 100% controlled. By taking on a steady payment I'm just setting myself up for disappointment when things don't go as planned. I've lost cars to mechanical failure, taken days off work to fix a broken water pump in a parking lot in January, and bummed a ride to the parts store so I could get to work the next day. E36 M3 happens, there's always a way through it.
I guess I'm wired weirdly, I have by far the oldest and cheapest cars in my neighborhood. Even my wife's "new" vehicle was under 7k. I don't understand why people wrap themselves in debt over and over. My wife and I both have good credit scores and we're offered great financing for a new Ford but I couldn't justify it in my head. The only debt we carry is our home loan. Even the finance guy at the dealership was amazed by that.
In reply to dropstep :
Just because they're F+I people doesn't mean they're particularly good with money. One of the young (like, early 20s) finance guys here at work just took on a 30k+ note on a brand new truck (40k truck - 9k for his old car). No idea what his interest rate is, but that's at least 500 a month for a gas guzzler I highly doubt he'll ever take off road.
I didn't see it in the article, does it define "middle-class?"
The income spread on "middle-class" is HUGE. https://finance.yahoo.com/news/much-middle-class-families-earn-100000915.html
Oklahoma, according to that page the spread is "2-person family middle-class income range: $38,451.97 to $114,782"
In reply to z31maniac :
This is why defining the middle class is difficult, and I've never seen an agreed upon definition or metric for it. Income probably isn't a great way to do it because it doesn't account for people with large net worth and little earned income like retirees, etc. I could have an investment account or rental properties or family business worth millions and only show a minimal earned income.
Net worth might be a better option, and I think the option posted earlier about middle class people being the ones with negative net worth is interesting, even if it might not be accurate.
Still others will suggest that middle class is defined more by ideals or outlook than any financial numbers. If you have enough to look down on others, while looking enviously "up" at a different group, then perhaps you're in the middle.
Its a very nebulous thing, so many don't even try to define it.
z31maniac said:On the way home at lunch today I heard an ad for a Kia dealer here in the OKC area.
"If you take home at least $350/wk, we can get you into a new Kia!"
Crazytown.
There's a Philly area Mitsubishi dealer who advertises a "credit amnesty" program: if you net $350 per week, they will guarantee you $30,000 in credit. I shudder to think about the interest rate.
1988RedT2 said:mazdeuce - Seth said:Are you guys talking smack about Accords? Open your latest GRM and tell me Accords are lame? Come on!
I never called Accords lame. They are very good at what they do. Hell, my wife drives one. But I would never characterize an Accord as a "panty dropper."
You hope not, anyway. 
GameboyRMH said:
Duke, you're right that (mostly, with an exemption I'll get to) these people shouldn't be spending all this money on new cars, but the article isn't wrong in its basic premise that new cars are becoming too expensive for today's middle class.
Except that it IS wrong. The new cars that the middle class chooses to buy are getting too expensive. But you can buy a solid, decent new car for under $20,000 and nothing about that requires a 6+ year loan to cover at any anything above a poverty level income. It's just when you decide you NEED and DESERVE a near-luxury SUV at $36,000 instead of a reliable and comfortable sedan at $18,000, then trouble begins.
In reply to wae :
That's right Wae. The non adjusted median income for the end of '92 was $30,625
ShawnG said:Perspective:
That Model T Ford was priced so that the average single income family could afford it on a year's salary. The Ford cost around $500 and a year's salary was considered to be around $500
A basic, entry level sedan is now around $25k new (I'm spitballing, I haven't priced new cars in years) and I believe the average yearly salary is better than that now.
Seems like cars are actually more affordable now.
At "peak T", a model T was under $300. That was in 1925 or so. Adjusted for inflation, that'd be about 5 grand today.
volvoclearinghouse said:ShawnG said:Perspective:
That Model T Ford was priced so that the average single income family could afford it on a year's salary. The Ford cost around $500 and a year's salary was considered to be around $500
A basic, entry level sedan is now around $25k new (I'm spitballing, I haven't priced new cars in years) and I believe the average yearly salary is better than that now.
Seems like cars are actually more affordable now.
At "peak T", a model T was under $300. That was in 1925 or so. Adjusted for inflation, that'd be about 5 grand today.
It should also be noted that cities were still laid out to where you didn't NEED a car, so Ts were not mandatory to just live your life. But, the kind of personal mobility that having your own car could offer was revolutionary
.
There are many major cities where if you can't drive, you're SOL.
In the US, 8 out of 10 families live paycheck to paycheck and have no savings. Median household income in the US is north of $50k per year. That is about $2600 per month take home after taxes and insurance A $500 dollar per month car payment really doesn’t fit too well in that budget after food, taxes, utilities, and rent or mortgage.
Control the controllable and stop worrying about what CEOs make. If you think a politician or a union will fix your problems then you are sorely mistaken. They just want a cut of what you already make.
Back to the car thing... For contrast, my wife and I are both professionals and have never bought a new car. Our fleet ranges between 9 and 21 years old. My wife’s car is due for upgrade in the coming year. It will be 10 years old next year and roll over 180k miles. Interestingly, it is an Accord. We bought it as a 2 year old used car with less than 20k miles for about half what the guy in the article spent.
Dave Ramsey for the win!
In reply to tester :
My grandfather bought a house, raised five children, and was able to retire and support his wife for three decades after he died thanks to the UAW's efforts.
I'm in a line of work where unionization makes little sense, but the best period of American prosperity was when unions were strongest and taxes were highest. OTOH, this was also when the most good was being done with these power tools.
Power tools are devices which either make your life really, really good, or they cut your arm off and you bleed to death, and the difference is in how carefully you use them..
My Accord jab was in jest and I know all the responses were too.
But. To a pair of horny 20 year olds this has to be some indicator of our ability to provide or be upwardly mobile.
And if we're poo-pooing the idea of an attractive/expensive former COTY as not being enough to sway the libido of our yutes then we've just underlined the culture many of us on here are decrying. That we're overspending for little more than status.
What would sway the opposite sex.? Randomly I can look at any new Audi and if the driver isn't middle aged the pax is usually very attractive.
I noticed it a lot in the UK especially with hot-hatches which are basically E36 M3-boxes underneath. Always an attractive girlfriend.
Oh yeah. My baseline is not the rental Versa. 
It's the 96/97 200SXs and the 84 S10 I own. Those get nothin'. 
So an Accord is an upgrade.
I know better. Leasing an Audi A3/4 sedan or maybe a Giulia would be the gold digger standard. 
Duke said:GameboyRMH said:
Duke, you're right that (mostly, with an exemption I'll get to) these people shouldn't be spending all this money on new cars, but the article isn't wrong in its basic premise that new cars are becoming too expensive for today's middle class.Except that it IS wrong. The new cars that the middle class chooses to buy are getting too expensive. But you can buy a solid, decent new car for under $20,000 and nothing about that requires a 6+ year loan to cover at any anything above a poverty level income. It's just when you decide you NEED and DESERVE a near-luxury SUV at $36,000 instead of a reliable and comfortable sedan at $18,000, then trouble begins.
From the original article: "The median-income U.S. household with a four-year loan, 20% down and a payment under 10% of gross income—a standard budget—could afford a car worth $18,390, excluding taxes, according to an analysis by personal-finance website Bankrate.com."
So a median income household, with responsible financial habits, can responsibly afford a maximum of $18k for a new vehicle (Assuming the rest of their finances/ monthly budget are equally responsible).In other words, you have to be in the 50th percentile or better, and do everything else right financially to reasonably afford the most basic of new vehicles. There are a bunch of people between poverty level and the median household income.
Its already been mentioned that defining the middle class is almost entirely subjective, but I'd have to say that having a median household income should probably put a person squarely into the middle of the middle class. The median is the 50th percentile. It can't get any more in the middle. What that means for this discussion, is that there's a decent chunk of the middle class below the median household income, and they can't responsibly afford an $18k vehicle.
tester said:If you think a politician or a union will fix your problems then you are sorely mistaken. They just want a cut of what you already make.
Workers! The capitalist is your friend! Don't organize, just do more austerity!
I have to disagree with personal-finance website Bankrate.com on that one. If I need a loan, I can't afford it.
STM317 said:In reply to z31maniac :
This is why defining the middle class is difficult, and I've never seen an agreed upon definition or metric for it. Income probably isn't a great way to do it because it doesn't account for people with large net worth and little earned income like retirees, etc. I could have an investment account or rental properties or family business worth millions and only show a minimal earned income.
Net worth might be a better option, and I think the option posted earlier about middle class people being the ones with negative net worth is interesting, even if it might not be accurate.
Still others will suggest that middle class is defined more by ideals or outlook than any financial numbers. If you have enough to look down on others, while looking enviously "up" at a different group, then perhaps you're in the middle.
Its a very nebulous thing, so many don't even try to define it.
The joke "I'm not broke, I'm even" has a large kernel of truth. I never bought a house or had kids because I could never afford the luxury of being in debt. You need to have an appreciable amount of wealth to be able to afford those kind of obligations. Living paycheck to 2 days before paycheck isn't there yet.
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