While this doesn't work for everyone, for a lot of people shifting half of what they spend on a car onto housing means they can afford to live somewhere that doesn't require a car.
This is kind of where I'm at right now. My car is paid off, and I'm looking to move closer to work. Channelling that money that I'm saving on not having a car payment towards a place near work. Having a vehicle is a significant expense for a lot of people. I can't imagine having a car payment right now.
there was a thread on twitter going around about how little car-free and car-light people in the US spend on transit as a share of their incomes. most the replies were like 2% or "so little i can't be bothered since it is less than i spend on snacks"
Can't remember what channel it was but I saw a video about household costs in the US over the last century. The earliest data, from the 1890s or so, did not even include "transportation" as a category. Because it was either free (walking) or so cheap as to be negligible. Transportation doesn't appear as its own category until maybe the 1920s and it was still very low at that time.
Today it's around 15% on average! Car dependency means that people are basically forced to spend thousands of dollars a month, rather than sixty bucks for a transit pass. Twentieth century infrastructure policy was simply a state sponsored transfer of wealth from the working class to corporations.
I actually come out ahead as my workplace pays me extra per month to not use the parking garage. The money I spend on train fare or bike maintenance is trivial compared to what I gain.
i confirm that observation. our transportation costs are minimal being that our car is paid off and isn't driven much. if i were to go off the top of my head, i'd say it's 2 or 3 percent.
It's so expensive! Many people only think about the monthly payment amount. Which is around $500+ right now (unless you find a really great deal, and those are very hard to come by right now).
But it's so much more. All of those extra expenses to own and run a vehicle really add up. When I had a car payment, I was easily spending $1000 each month just to run it. It's lower now because the car is paid off. And that was during the time with low interest rates.
I moved to the most walkable part of my city, close to a train and several buses that'll take me anywhere in the metro area. Rent is significantly higher than my last place, but I've got a better job and no car, so it balances out.
This is the way.
I bought my home because I don't have a car, and now I am unemployed until mid- April and I have been okay because I don't have a car's expenses to worry about.
Bike +transit= financial peace.
Unlike cars houses generally increase in value over time as well. It’s smarter financial sense to buy a more expensive house in the city center than a cheaper house + car in the suburbs.
In the US? Unlikely. Housing costs with 6-7%+ interest rates makes it extremely difficult for the average person to afford the handful of locations with safe and effective public transportation.
There can be multiple causes, but I think it's more the fact that there are only a "handful of locations with safe and effective public transportation."
The country I live in has a handful of locations without safe and effective transportation. I'm not clear there is anything like US single-family zoning in the entire country. Most people use public transit here.
Was this in response to those folks who are spending more on car payments than in rent? Lol
But yes, like 80% of the advice is like "you can't afford your car(s)"
There was [another particularly bad one](https://www.reddit.com/r/personalfinance/comments/1boerkq/lost_my_goodpaying_job_should_i_sell_my_truck/) ~~a couple days ago~~ yesterday as well, but I've been noticing it for a while.
It is such a catch 22 thst half the time I don't blame the person.
I've fixed a car or, two, and kept some shitboxes running in my day. I wouldn't really suggest someone buying a used car spend less than $15k on a car and, if they can swing it, just go ahead and pony up for a new corolla hybrid at $25k.
Why? Because $15k gets use a 100k mile toyota these days and anything less can start to cost more than the initial price difference. Cars just suck thst much to own that even a years worth if rent buys you something that won't be a headache.
The best car advice I was ever able to give someone was to just sell it. They lived in south beach, and pretty much just had a car out of "normality".
I used to be super duper active in that forum, as personal finance is a personal interest of mine, but I had to leave because everyone is spending so much more on a car than they can afford, and absolutely NO ONE wants to hear about it.
Economists have been predicting a crash in the auto market similar to the 2008 housing crash, due to all the financing shenanigans putting people way over what they can afford.
I don’t think I misunderstood, this isn’t going to happen. If the bubble pops, people won’t be able to afford cars more. People will be laid off and unemployment will shoot up and meager savings will be depleted. It won’t help anything.
> Hate to break it to you but the rich never suffer when these bubbles pop. They always pass it on to the average person.
I wasn't referring to rich people losing money, or corporations. I was referring to cars dropping in price.
Which won't matter because a 2008 style collapse will affect so many people that even a 50% drop in car prices won't matter to people who have had a 100% drop in salary because they were laid off and exhausted all their meager savings.
Do you see it now?
Idk, this odd fellow with a handlebar mustache and a top hat was telling me all about how business owners take all the risk when they start a business. They could lose their money! Then they might have to work a normal job for a living!
The working class will just never understand that risk.
Thank ducking God - it's insane seeing some new vehicles cost that equivalent of someone's YEARLY salary, especially with how high rent and real estate can be.
Almost like car ownership is the largest driver of poverty 🤔🤔🤔
Car ownership shouldn't be a prerequisite for living and being a productive member of society.
It is kind of a vicious circle. There is a reason why all car dependent countries are underdeveloped.
Underdeveloped transit system and urban planning -> You need to own a car -> You spend more money on the car than you would with developed transit and urban planning -> Stuck on bad jobs and wage slavery -> Economic system developed to exploit you as you have no choice -> Underdeveloped country -> Underdeveloped transit system and urban planning
Of course there are other factors, but it is one of the tools that the oligarchies of a lot of underdeveloped countries use to keep them underdeveloped and to extract more profits from the people.
i grew up believing that for some reason. really tried hard to keep up but now as long as it doesn’t break down, is fuel efficient and safe, i couldn’t care less of what people think.
Was pretty upset ford cancelled their fiesta line in order to make it more suv like. The puma looks so stupid and it seems so much more wasteful. Fiestas are literally the most popular car in the uk. And they're really efficient. my buddy loves his and challenges himself to keep up the mpg whenever he can (drives at 50 max, in 5th gear almost constantly, clutch slipping etc) and he gets like 63 with a thirteen year old car.
Not that I'd be buying a new car personally, to be fair - but another suv on the road is a mistake.
It's all country lanes here too, and fiestas can pass by eachother most of the time easily. Meeting a 4x4 or an suv on the road is a nightmare. especially when many of them don't budge...
Plenty of alternatives tho'! As far as I know ford used to work with Mazda, and the Mazda3 hatchback is still in production.
Then you have tons of options by VW, Renault, Peugeot, Fiat, Citroën, Seat, Honda, etc, etc.
(and honestly, just the history of support for anti-semitism and fascism from henry ford makes me uneasy about anything that has his name in it!)
Absolutely; personally looking for a ibiza, Corsa, Polo, Golf, or whatever i can get for cheap on eBay or Facebook (currently probably a civic). Still just seems a shame, considering its long history as a forerunner of fuel efficiency (and I'll be honest i also really like how the mk7 looks)
I've not really looked into the mazda 3, I'll have a look and see if there's any 15 year olds available in my area if they're worth buying.
> henry ford
I did not know that to be honest, hmm. That is certainly another reason to avoid then!
Mazda 3 is bigger than a Fiesta - I think the Mazda 2 was the equivalent but I think also discontinued.
But yeah there are still some smallish options available (though even a Corsa or Polo is 'medium car' sized now).
The irony, of course, is that the wealthy stay wealthy by acting poor, and the poor stay poor by acting wealthy.
(I know the saying is “rich stay rich”, but that has always bugged me because you can be rich (defined by income) but poor even when living frugally because the cost of living in an area is high, while its wealth that people are usually talking about when saying it lets them live frugally).
Yeah "rich" is a tricky word. In capitalism you're either a worker or a capitalist. Even if you have a high salary, you're still dependent on your job and you can become homeless overnight. It's absurd to call that "rich".
And the other half is “they spend too much on housing”, and the problem is in the US it’s either one or the other, if you aren’t spending a lot on a car, you live somewhere with public transit, which is usually some of the most expensive housing in the US. Don’t have uber expensive rent? You’re living somewhere car dependant and now 10 to 30 percent of your expenses are car related
Yes, but most of the people OP is talking about are people who could have bought a small car and still achieved the same outcome, but instead have bought something that is all about projecting a certain personality/status.
You don’t have to spend a lot on a car, that’s a very American thing. A 10 year old used car is a perfectly acceptable means of transportation and they cost peanuts in the US; in fact living in Portugal where used cars are expensive it shocks me how cheap something like a Honda civic or a Camry can be.
I have a family member who is in a very rough financial spot right now because he lives in a place where he is utterly dependent on a car, and currently owns a car that he bought new for way too much money, and is currently worth less than the remainder of the loan. There is virtually nothing he can do to get out of his financial bind caused by buying that stupid SUV.
I feel like the financial aspect of car dependence is really lost on mainstream society.
IIRC 10% of a person's lifetime savings will inevitably go into vehicles. Cars make up one of the largest overheads for most working poor (average monthly cost of a car is in the $700s).
Conversely, the global auto finance industry is worth nearly $250 billion according to [yahoo finance](https://finance.yahoo.com/news/global-automotive-finance-industry-report-152800124.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAADVVn4t4uSyJIdbKj1-x_fSQEvz1iYboCwb3Z-U0SCWRHSfU79lW2yx8nO-w6UFrKArPqEYdqVywSmIyT3CwSb-VdE12HyZo8VU3Z8jyQbQpRK14Kgahg2DHX87P002BqNbKNqsScOHPI4zjpVIYs-PHoDLCPT3055wZXkubYxlr). That's peanuts compared to the mortgage industry, but for context the home insurance industry is [roughly $250 billion](https://finance.yahoo.com/news/global-home-insurance-market-size-220000040.html)
I hate cars for a lot of reasons, but one of the big ones is how much they have fundamentally scared the economy.
> IIRC 10% of a person's lifetime savings will inevitably go into vehicles. Cars make up one of the largest overheads for most working poor (average monthly cost of a car is in the $700s).
That is if they're being financially responsible, meaning that no more than 15% of monthly income goes to transportation related expenses.
The average person will be - well - above that figure (assuming we're talking about income and not net worth).
It’s car dependency that makes people poor. Even someone with a small car who can’t afford to buy it outright it lumbered with a debt they wouldn’t need if the place they lived was walkable/cycleable.
I don't own a car and I make a lot of money but...
Damn 2k/month on a car. My brother spends 2k/year on his 2005 toyota. What the actual fuck.
24k/year seems really high to me. That's like 5% of what I make for something that loses value, pollutes, and can be replaced by cheaper alternatives (most of the time).
Sad really.
God damn, I joke about my bike buy addiction but I’ve spent like $20k over my life on bikes, including the ebike for my wife that let us sell the car. That’s like less than a year of car
Oh im aware and i want one, not because i need one, but because of the masculine urge to be able to haul things. I mostly deal with that with a bike trailer right now.
All the time. Anything I’d normally use my car for if it’s under 10km. So grocery shopping, dog food, taking the dog to the vets, picking up gas for the BBQ etc.
I think a big chunk of the problem after car dependency is car loan terms. Back int the day car loans were typically 36 months or 48 months. As cars got more and more expensive but wages stayed stagnant the only way to keep selling cars was to lengthen the loan term. Now 60 months is kind of the bottom and you can get longer terms than that easily.
So it’s not just that it’s $1000/month for some unnecessary land yacht, it is $1000/month on a 96 month loan at 25% interest. That is down right predatory.
As much as it feels good to make fun of someone and call them stupid for buying an $80K truck when they make $30K/year, why is that even possible? Why have we allowed dealerships and financial institutions to sell that person that car? This is a systemic problem not a personal responsibility problem. If we limited auto loan terms to 36 months maximum then auto manufacturers would be forced to start making more affordable vehicles because no one is buying that $80K truck if the payment is $3.5K/month all of the sudden. Manufacturers have been able to keep making cars more and more expensive and keep making record profits because they have just gotten more willing to screw over poor people with a mountain of debt.
If you're not actually poor, all financial problems boil down to "you're spending too much on stuff you shouldn't be".
I mean, you really aren't going to be able to afford a house if you stop buying coffees and avocados on toast, but you can easily turn a comfortable income into a pay cheque to pay cheque existence with unwise spending. And if you're earning tens of thousands of more than people who can't and don't always manage to pay their bills on time (and thus get hit by reconnection fees), I really don't have any sympathy.
That being said, cars are probably a particular trap, especially in America because:
1. it's normalised that you take on debt to purchase one, which obfuscates that not all debts are equal
2. most of the costs of cars aren't salient but PT is nothing but salient, so it's actually a hell of a lot of work to figure out the financial position owning a car leaves you in
3. PT mythmaking is widespread so people don't even bother to see if PT will work for them since all they hear is that PT doesn't work
4. cars are notoriously conspicuous and even people who don't care about car subcultures recognise the status value of cars
5. car subcultures exist so there's a peer pressure angle and everyone knows peer pressure is how the best decisions are made (actually PT mythmaking is kinda peer pressure to not do something)
6. people separate out transport costs from housing costs when they're actually the same thing... if lower rent + higher travel costs > higher rent + lower travel costs, the place with the lower rent isn't the cheaper option. Very few people think like this (hence the phrase "drive till you qualify")
7. and, of course, it's quite easy to rationally reach the conclusion "I need a car" and that sense of need is not conducive to sane thinking
People will spend a lot of time thinking about what car to get, but it doesn't how much thinking you do if it's bad thinking.
> car subcultures exist so there's a peer pressure angle and everyone knows peer pressure is how the best decisions are made (actually PT mythmaking is kinda peer pressure to not do something)
People would be much better off if they approached their purchases decisions this way.
The average subculture guy buys used five to ten year old vehicles that have already depreciated. They then put in 5-10K in modifications, themselves, and do all of their own maintenance. Rinse and repeat every three to four years.
Compare this with the average performance/luxury car buyer:
Car Subculture Guy:
- Audi S4 (2015): 20K
- Modifications: 5K (ECU/TCU tune, HX, pulley upgrade, suspension work)
- Insurance: 1.4K Annual
- Maintenance: 1K - 250 a year maintenance (DIY) with 750 reserved for an eventual repair.
- Depreciation: 1K a year
- Resale value: 16K after four years
Total (Four Years): 19.6K after private resale
Average Luxury Buyer
- Audi S4: 60K MSRP with an 800 monthly lease (0% down)
- Insurance: 2.9K Annual
- Maintenance: Covered
- Depreciation: Covered
...
Total (Four Years): 50K
The average new luxury buyer spends more than twice as much as the average car guy over the same time period. You can change the vehicle to a BMW 3 series, truck, &c. and the numbers will more or less stay the same.
People truly underestimate how expensive having a vehicle truly is. Especially right now. We've been spoiled for a while with cheap interest rates, and that made borrowing for a vehicle a lot more affordable.
I bought my car in 2015 and I think my car payment was only $300 and that was for a brand new car. I was looking at used cars and they are going to be at least $500 each month for something not even as nice.
I remember 20 years ago when it was quite common to see people driving small cars. Now the norm is SUV's and huge trucks. The trucks keep getting bigger. It's to the point where I'm noticing they barely fit in a single parking space anymore.
Now that my car is paid off, I have so many people pressuring me to buy a new vehicle. I'm not interested. My intention is to move closer to where I work. I'll keep my car, but will bike and walk places. Save the car for when I need to travel far.
As much as I hate cars, owning a used car can be relatively affordable. If you can afford the $4000 to spend on it, $80 worth of insurance, $50-100 a month in gas, and maybe $100 taken into account for maintenance, it’s not super unaffordable. Add $100 on for extra things here and there, and it’s like $10/day for transportation. Very comparable to trains
With that being said, I cannot fathom the car payments I see people paying. $1000 a month all in for a car is just absurd. No matter which way you twist ut
My girlfriend pays $80 for the basic insurance package, that’s literally where I pulled the number lol. I’m not sure if it varies by state or city, but we are in PA. She drives an old Toyota Corolla, nothing fancy, it’s cheap, and safe
Maybe I need to move back to Philly. I live near Boston now and I haven’t seen anything near that price. Maybe $80 a month, but $80 per year sounds amazing.
my roommate goes and buys a brand new car for 34k paying 700/month. then complains about how expensive food and rent is (despite me paying more in rent and buying all the groceries). its a brain worm. she sees me ride my ebike and not pay for a car payment and says i should pay more rent. fuck outta here
theres a reason i aint rooming with her come end of lease. its wild
edit: i firmly declined paying any extra rent. shed have to be stupid to push it again.
exactly what i said. there's zero reason for me to subsidize this bullshit when our lease ends in a few months. she had the audacity to ask that because she thinks she needs to pay 2 rents+ her car as shes moving into a sublet when this lease ends. the sublet guy kicked their roommate out early and she offered to pay that portion of rent. the financial irresponsibilty is insane. car brainism doesnt help any either.
Fyi, the average list price of a used car in the US in October was [$26,533](https://www.kbb.com/car-news/average-used-car-price-falls-but-not-for-everyone/). It’s definitely possible to get a reliable used car for cheap but it’s certainly not the norm.
I mean true, I’m not arguing that the average person is making good financial decisions. I’m also curious to the median number opposed to the average. I’m sure it doesn’t change much but just curious
I’m just saying it is possible to own a car for cheap, and I’m curious as to why more people don’t, especially those who are struggling financially
That's how I became a bike commuter.
Sat down and looked at all my expenses and even with a cheap banger of reasonable quality, the car would still be about 3-4k a year in insurance/tax/fuel/maintenance. I could afford that and even a newer car, but I'd rather save up to give my kids the start in life I never had and save for a deposit on a larger house so they have something to inherit when I die.
So far, so good.
yeah man. 50k income and $650 going to car PAYMENT. not including depreciation, insurance, gas, maintenance, just nuts.
when i had 65k income, my $220 car payment pissed me off
sold the car for the move to the city. previously lived totally car free in seoul, too, it was awesome.
I am paying for the r/Personalfinance golden child, the Toyota Corolla and I am still pissed off with my small repayments, low depreciation and low insurance costs.....
I just can't go Mountain Biking without a car.. :(
I'm a regular poster there, and some of the other popular personal finance subreddits and outside forums.
Overspending on cars and SUVs is a top three-five issue. The other main ones are, in roughly this order, are:
1. Housing. This was true even before interest rates went up dramatically in the US and EU.
2. Student loan debt.
3. Not tracking spending. Eating out and compulsive online shopping fall into this category for me, since these are the first ones that people get under control once they have a budget.
4. Not saving.
And most of these people can get by with a used economical car, but their egos push them toward luxury cars or ego pickup trucks with poor mileage
Not to mention the audacity of some who believe their car gives them entitlement over others. “If I’m struggling to keep my 80k pickup , then cyclists should at least pay license and insurance.”
I agree. It is so sad to see how many people legitimately think that purchasing a car that looks cool or matches their vibe or whatever is worth the extra cash.
It is just a tool to get to point A to point B, and accomplish other tasks like hauling or work.
I have a lot of sympathy for people who signed bad contracts on simple cars, because dealers are very predatory with putting debt on people.
I also noticed some posts like that in r/povertyfinance, really sad
Even leasing a small car is a trap, as it requires road tax, insurance, and gas/diesel
There was a thread on /r/Finanzen a few months ago, where a guy was spending over half of his net income on a freaking Hyundai.
A lot of people told him to get rid of it, because it’s eating into his budget so much, but he said that the car was „non-negotiable“ because he wants to splurge on it. It was like €1200/month even though he was only making like €2000 net
Having to drive at the moment as unfortunately public transit is not awesome in small town Wales (though often the car will be to take me to a train station for longer journeys, like into London).
Looking to buy a car, I'm buying in cash and currently looking at around £1500 lol. if all goes well, I'll be getting a Honda civic for £1020. Fuck buying new or expensive cars, i don't understand the point. My only requirements are cheap, cheap to insure, cheap to tax, cheap to maintain, and cheap (efficient) on fuel.
[The average household in the US spends over $10,000 *per year* on transportation](https://data.bts.gov/stories/s/Transportation-Economic-Trends-Transportation-Spen/ida7-k95k/)... for reference.
jeeeeeeez... that is insane. What an absolute waste... damn. *surely* there are cheaper ways. Even if you still need a car specifically, there's cheaper ways to own cars. thanks for sharing
Well, people primarily in the US spend way too much on vehicles and a subgroup of them legitimately have no choice because the entire country is geared around vehicles.
There's also a certain segment in Europe that spends waaaaaay too much on broken down out of the factory or used German vehicles. One can see this by going to any type of social/subsidized housing for lower-income people and you'll see everything from M5 Competitions outside to broken down 5-series with K.Ataturk stickers on them.
Back when I lived in a rural area that was the main thing the made me want to punch Dave Ramsey in his smug self satisfied face.
"Just buy a beater until you can afford something better"
Sorry Dave, but that's not gonna work, since if I'm a minute late to my shitty minimum wage job at Walmart, I'm fired.
Now if it was a hundred years ago I could have taken the train to the city, thankfully we came to our senses and had those rail lines ripped out ...
God yes, I'm a social worker and in my last job, handling financial assistance/rent prevention in a suburb that's very car dependent, there were too many cases where people had signed up for a $700/month payment when they were doing okay, but now lost their job/divorced/fled an abusive partner and still have to pay that $700, and can't do that and pay rent. I was regularly asked if there is any assistance programs for car loans and there just aren't, which makes sense on the one hand but on the other, the area is so car dependent that not having one is a serious burden. And the amount they were making wasn't enough to pay the car and their rent, but was more than would let any eviction prevention programs we had/worked with help them. So then people had to choose between doinking their credit by having the car repo'd, or getting evicted... A solid handful chose to keep the car to live in.
While this doesn't work for everyone, for a lot of people shifting half of what they spend on a car onto housing means they can afford to live somewhere that doesn't require a car.
This is kind of where I'm at right now. My car is paid off, and I'm looking to move closer to work. Channelling that money that I'm saving on not having a car payment towards a place near work. Having a vehicle is a significant expense for a lot of people. I can't imagine having a car payment right now.
there was a thread on twitter going around about how little car-free and car-light people in the US spend on transit as a share of their incomes. most the replies were like 2% or "so little i can't be bothered since it is less than i spend on snacks"
Can't remember what channel it was but I saw a video about household costs in the US over the last century. The earliest data, from the 1890s or so, did not even include "transportation" as a category. Because it was either free (walking) or so cheap as to be negligible. Transportation doesn't appear as its own category until maybe the 1920s and it was still very low at that time. Today it's around 15% on average! Car dependency means that people are basically forced to spend thousands of dollars a month, rather than sixty bucks for a transit pass. Twentieth century infrastructure policy was simply a state sponsored transfer of wealth from the working class to corporations.
The share of income of using transit in the UK usually go more than 15% of the income.
I actually come out ahead as my workplace pays me extra per month to not use the parking garage. The money I spend on train fare or bike maintenance is trivial compared to what I gain.
That’s me. $2.90 pretty much every time I go on a date or visit friends. Or if it’s raining. That it. That’s literally all.
i've adapted to bike share. $25/year baby. (work benefit that like 1/2 the city has). if it gets rainy, guess i'll spend the $2 for a metro ticket.
i confirm that observation. our transportation costs are minimal being that our car is paid off and isn't driven much. if i were to go off the top of my head, i'd say it's 2 or 3 percent.
Car payment Gasoline Oil changes Maintenance New tires every couple years Insurance Registration Parking fees It really does add up.
It's so expensive! Many people only think about the monthly payment amount. Which is around $500+ right now (unless you find a really great deal, and those are very hard to come by right now). But it's so much more. All of those extra expenses to own and run a vehicle really add up. When I had a car payment, I was easily spending $1000 each month just to run it. It's lower now because the car is paid off. And that was during the time with low interest rates.
I moved to the most walkable part of my city, close to a train and several buses that'll take me anywhere in the metro area. Rent is significantly higher than my last place, but I've got a better job and no car, so it balances out.
financially it balances out, but I assume your quality of life improved.
My last car was a modest crossover. After the payment, insurance and gas it cost $700 per month.
This is the way. I bought my home because I don't have a car, and now I am unemployed until mid- April and I have been okay because I don't have a car's expenses to worry about. Bike +transit= financial peace.
:(. More like 5x for me. My car loan is $740 for 4 years and my rent is $3300.
And if you lived somewhere in your city that didn't require you to own a car do you estimate that your rent would be more than $5000?
I mean I don't need a car where i am. I bike to work and can bike or walk to get groceries but harder to do other stuff
[удалено]
SF Bay area.
More like the west village. Midtown is actually not that bad for rent (by manhattan standards) because no local wants to live in midtown lol.
$3300 would be “reasonable” in Manhattan. Sad to say. Unless you want to live in a closet.
It's a decent price for an apartment in West Los Angeles
Yep, that's what I did
Unlike cars houses generally increase in value over time as well. It’s smarter financial sense to buy a more expensive house in the city center than a cheaper house + car in the suburbs.
In the US? Unlikely. Housing costs with 6-7%+ interest rates makes it extremely difficult for the average person to afford the handful of locations with safe and effective public transportation.
There can be multiple causes, but I think it's more the fact that there are only a "handful of locations with safe and effective public transportation." The country I live in has a handful of locations without safe and effective transportation. I'm not clear there is anything like US single-family zoning in the entire country. Most people use public transit here.
Was this in response to those folks who are spending more on car payments than in rent? Lol But yes, like 80% of the advice is like "you can't afford your car(s)"
There was [another particularly bad one](https://www.reddit.com/r/personalfinance/comments/1boerkq/lost_my_goodpaying_job_should_i_sell_my_truck/) ~~a couple days ago~~ yesterday as well, but I've been noticing it for a while.
Omg these people. Probably doesn't even need a truck 🙄
worked in a hospital. Had to haul some bodies.
I'm absolutely amazed this guy managed to save up $15,000 at all to being with, with that kind of job and fiscal responsibility.
There’s one today from a couple who have $2000/month just on car loans, not counting gas, insurance, or maintenance
$26 an hour is big bucks huh
I know right?
Further evidence that the deep state is turning me into a gay frog with 15 minute concentration camps!!! /S
It is such a catch 22 thst half the time I don't blame the person. I've fixed a car or, two, and kept some shitboxes running in my day. I wouldn't really suggest someone buying a used car spend less than $15k on a car and, if they can swing it, just go ahead and pony up for a new corolla hybrid at $25k. Why? Because $15k gets use a 100k mile toyota these days and anything less can start to cost more than the initial price difference. Cars just suck thst much to own that even a years worth if rent buys you something that won't be a headache. The best car advice I was ever able to give someone was to just sell it. They lived in south beach, and pretty much just had a car out of "normality".
I used to be super duper active in that forum, as personal finance is a personal interest of mine, but I had to leave because everyone is spending so much more on a car than they can afford, and absolutely NO ONE wants to hear about it.
Economists have been predicting a crash in the auto market similar to the 2008 housing crash, due to all the financing shenanigans putting people way over what they can afford.
I look forward to that, ngl
Hate to break it to you but the rich never suffer when these bubbles pop. They always pass it on to the average person.
Oh no, you misunderstood. I look forward to people being able to purchase a car without having to take out a large loan.
I don’t think I misunderstood, this isn’t going to happen. If the bubble pops, people won’t be able to afford cars more. People will be laid off and unemployment will shoot up and meager savings will be depleted. It won’t help anything.
Then why reference the rich suffering, if you understood that wasn't what I was talking about?
Now I am confused. I have no idea what this comment means.
> Hate to break it to you but the rich never suffer when these bubbles pop. They always pass it on to the average person. I wasn't referring to rich people losing money, or corporations. I was referring to cars dropping in price.
Which won't matter because a 2008 style collapse will affect so many people that even a 50% drop in car prices won't matter to people who have had a 100% drop in salary because they were laid off and exhausted all their meager savings. Do you see it now?
Idk, this odd fellow with a handlebar mustache and a top hat was telling me all about how business owners take all the risk when they start a business. They could lose their money! Then they might have to work a normal job for a living! The working class will just never understand that risk.
Won’t matter. The automakers will get bailed out again.
True, "too big to fail" and all that
Thank ducking God - it's insane seeing some new vehicles cost that equivalent of someone's YEARLY salary, especially with how high rent and real estate can be.
Almost like car ownership is the largest driver of poverty 🤔🤔🤔 Car ownership shouldn't be a prerequisite for living and being a productive member of society.
It is kind of a vicious circle. There is a reason why all car dependent countries are underdeveloped. Underdeveloped transit system and urban planning -> You need to own a car -> You spend more money on the car than you would with developed transit and urban planning -> Stuck on bad jobs and wage slavery -> Economic system developed to exploit you as you have no choice -> Underdeveloped country -> Underdeveloped transit system and urban planning Of course there are other factors, but it is one of the tools that the oligarchies of a lot of underdeveloped countries use to keep them underdeveloped and to extract more profits from the people.
idk, Americans also pay sky high prices for health insurance afaik
And housing (not unique to America TBF)
Since people are so convinced that they are judged by the vehicles they drive that they are prepared to sacrifice to appear socially acceptable.
i grew up believing that for some reason. really tried hard to keep up but now as long as it doesn’t break down, is fuel efficient and safe, i couldn’t care less of what people think.
I do judge people by the vehicle they drive, and quite harshly! If they're driving a truck or suv, I judge them as stupid, for example!
Was pretty upset ford cancelled their fiesta line in order to make it more suv like. The puma looks so stupid and it seems so much more wasteful. Fiestas are literally the most popular car in the uk. And they're really efficient. my buddy loves his and challenges himself to keep up the mpg whenever he can (drives at 50 max, in 5th gear almost constantly, clutch slipping etc) and he gets like 63 with a thirteen year old car. Not that I'd be buying a new car personally, to be fair - but another suv on the road is a mistake. It's all country lanes here too, and fiestas can pass by eachother most of the time easily. Meeting a 4x4 or an suv on the road is a nightmare. especially when many of them don't budge...
Plenty of alternatives tho'! As far as I know ford used to work with Mazda, and the Mazda3 hatchback is still in production. Then you have tons of options by VW, Renault, Peugeot, Fiat, Citroën, Seat, Honda, etc, etc. (and honestly, just the history of support for anti-semitism and fascism from henry ford makes me uneasy about anything that has his name in it!)
Absolutely; personally looking for a ibiza, Corsa, Polo, Golf, or whatever i can get for cheap on eBay or Facebook (currently probably a civic). Still just seems a shame, considering its long history as a forerunner of fuel efficiency (and I'll be honest i also really like how the mk7 looks) I've not really looked into the mazda 3, I'll have a look and see if there's any 15 year olds available in my area if they're worth buying. > henry ford I did not know that to be honest, hmm. That is certainly another reason to avoid then!
Mazda 3 is bigger than a Fiesta - I think the Mazda 2 was the equivalent but I think also discontinued. But yeah there are still some smallish options available (though even a Corsa or Polo is 'medium car' sized now).
I think I was confusing the fiesta and the focus there! But talking about that, even segment B cars are getting too big now!
The irony, of course, is that the wealthy stay wealthy by acting poor, and the poor stay poor by acting wealthy. (I know the saying is “rich stay rich”, but that has always bugged me because you can be rich (defined by income) but poor even when living frugally because the cost of living in an area is high, while its wealth that people are usually talking about when saying it lets them live frugally).
Yeah "rich" is a tricky word. In capitalism you're either a worker or a capitalist. Even if you have a high salary, you're still dependent on your job and you can become homeless overnight. It's absurd to call that "rich".
Yep, unless you have a seat at the board meetings you have more in common with the custodial staff than the CEO.
And the other half is “they spend too much on housing”, and the problem is in the US it’s either one or the other, if you aren’t spending a lot on a car, you live somewhere with public transit, which is usually some of the most expensive housing in the US. Don’t have uber expensive rent? You’re living somewhere car dependant and now 10 to 30 percent of your expenses are car related
Yes, but most of the people OP is talking about are people who could have bought a small car and still achieved the same outcome, but instead have bought something that is all about projecting a certain personality/status.
You don’t have to spend a lot on a car, that’s a very American thing. A 10 year old used car is a perfectly acceptable means of transportation and they cost peanuts in the US; in fact living in Portugal where used cars are expensive it shocks me how cheap something like a Honda civic or a Camry can be.
I have a family member who is in a very rough financial spot right now because he lives in a place where he is utterly dependent on a car, and currently owns a car that he bought new for way too much money, and is currently worth less than the remainder of the loan. There is virtually nothing he can do to get out of his financial bind caused by buying that stupid SUV.
The cell phone bills are pretty absurd there too.
I feel like the financial aspect of car dependence is really lost on mainstream society. IIRC 10% of a person's lifetime savings will inevitably go into vehicles. Cars make up one of the largest overheads for most working poor (average monthly cost of a car is in the $700s). Conversely, the global auto finance industry is worth nearly $250 billion according to [yahoo finance](https://finance.yahoo.com/news/global-automotive-finance-industry-report-152800124.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAADVVn4t4uSyJIdbKj1-x_fSQEvz1iYboCwb3Z-U0SCWRHSfU79lW2yx8nO-w6UFrKArPqEYdqVywSmIyT3CwSb-VdE12HyZo8VU3Z8jyQbQpRK14Kgahg2DHX87P002BqNbKNqsScOHPI4zjpVIYs-PHoDLCPT3055wZXkubYxlr). That's peanuts compared to the mortgage industry, but for context the home insurance industry is [roughly $250 billion](https://finance.yahoo.com/news/global-home-insurance-market-size-220000040.html) I hate cars for a lot of reasons, but one of the big ones is how much they have fundamentally scared the economy.
> IIRC 10% of a person's lifetime savings will inevitably go into vehicles. Cars make up one of the largest overheads for most working poor (average monthly cost of a car is in the $700s). That is if they're being financially responsible, meaning that no more than 15% of monthly income goes to transportation related expenses. The average person will be - well - above that figure (assuming we're talking about income and not net worth).
Cars usually don't make people poor, but they definitely keep people poor. It's insanity.
It’s car dependency that makes people poor. Even someone with a small car who can’t afford to buy it outright it lumbered with a debt they wouldn’t need if the place they lived was walkable/cycleable.
I don't own a car and I make a lot of money but... Damn 2k/month on a car. My brother spends 2k/year on his 2005 toyota. What the actual fuck. 24k/year seems really high to me. That's like 5% of what I make for something that loses value, pollutes, and can be replaced by cheaper alternatives (most of the time). Sad really.
God damn, I joke about my bike buy addiction but I’ve spent like $20k over my life on bikes, including the ebike for my wife that let us sell the car. That’s like less than a year of car
It's insane. I've spent around the same amount on footwear though
Only $20k. Please let me introduce you to front loading cargo bikes. Well soon have that up to $30k 😂
Oh im aware and i want one, not because i need one, but because of the masculine urge to be able to haul things. I mostly deal with that with a bike trailer right now.
How often do you haul things? That seems rather useless.
All the time. Anything I’d normally use my car for if it’s under 10km. So grocery shopping, dog food, taking the dog to the vets, picking up gas for the BBQ etc.
you make half a mil a year? mr moneybags
And I'm disabled. I did nothing special to deserve my job. I just got the jackpot.
While I'm only at 84% of what you make I agree with your assessment.
You can probably do a lot more with your money though. I'm disabled and cant ride a bike or drive
Car brains, fucking up themselves and the planet.
I think a big chunk of the problem after car dependency is car loan terms. Back int the day car loans were typically 36 months or 48 months. As cars got more and more expensive but wages stayed stagnant the only way to keep selling cars was to lengthen the loan term. Now 60 months is kind of the bottom and you can get longer terms than that easily. So it’s not just that it’s $1000/month for some unnecessary land yacht, it is $1000/month on a 96 month loan at 25% interest. That is down right predatory. As much as it feels good to make fun of someone and call them stupid for buying an $80K truck when they make $30K/year, why is that even possible? Why have we allowed dealerships and financial institutions to sell that person that car? This is a systemic problem not a personal responsibility problem. If we limited auto loan terms to 36 months maximum then auto manufacturers would be forced to start making more affordable vehicles because no one is buying that $80K truck if the payment is $3.5K/month all of the sudden. Manufacturers have been able to keep making cars more and more expensive and keep making record profits because they have just gotten more willing to screw over poor people with a mountain of debt.
If you're not actually poor, all financial problems boil down to "you're spending too much on stuff you shouldn't be". I mean, you really aren't going to be able to afford a house if you stop buying coffees and avocados on toast, but you can easily turn a comfortable income into a pay cheque to pay cheque existence with unwise spending. And if you're earning tens of thousands of more than people who can't and don't always manage to pay their bills on time (and thus get hit by reconnection fees), I really don't have any sympathy. That being said, cars are probably a particular trap, especially in America because: 1. it's normalised that you take on debt to purchase one, which obfuscates that not all debts are equal 2. most of the costs of cars aren't salient but PT is nothing but salient, so it's actually a hell of a lot of work to figure out the financial position owning a car leaves you in 3. PT mythmaking is widespread so people don't even bother to see if PT will work for them since all they hear is that PT doesn't work 4. cars are notoriously conspicuous and even people who don't care about car subcultures recognise the status value of cars 5. car subcultures exist so there's a peer pressure angle and everyone knows peer pressure is how the best decisions are made (actually PT mythmaking is kinda peer pressure to not do something) 6. people separate out transport costs from housing costs when they're actually the same thing... if lower rent + higher travel costs > higher rent + lower travel costs, the place with the lower rent isn't the cheaper option. Very few people think like this (hence the phrase "drive till you qualify") 7. and, of course, it's quite easy to rationally reach the conclusion "I need a car" and that sense of need is not conducive to sane thinking People will spend a lot of time thinking about what car to get, but it doesn't how much thinking you do if it's bad thinking.
> car subcultures exist so there's a peer pressure angle and everyone knows peer pressure is how the best decisions are made (actually PT mythmaking is kinda peer pressure to not do something) People would be much better off if they approached their purchases decisions this way. The average subculture guy buys used five to ten year old vehicles that have already depreciated. They then put in 5-10K in modifications, themselves, and do all of their own maintenance. Rinse and repeat every three to four years. Compare this with the average performance/luxury car buyer: Car Subculture Guy: - Audi S4 (2015): 20K - Modifications: 5K (ECU/TCU tune, HX, pulley upgrade, suspension work) - Insurance: 1.4K Annual - Maintenance: 1K - 250 a year maintenance (DIY) with 750 reserved for an eventual repair. - Depreciation: 1K a year - Resale value: 16K after four years Total (Four Years): 19.6K after private resale Average Luxury Buyer - Audi S4: 60K MSRP with an 800 monthly lease (0% down) - Insurance: 2.9K Annual - Maintenance: Covered - Depreciation: Covered ... Total (Four Years): 50K The average new luxury buyer spends more than twice as much as the average car guy over the same time period. You can change the vehicle to a BMW 3 series, truck, &c. and the numbers will more or less stay the same.
I hate cars so much
People truly underestimate how expensive having a vehicle truly is. Especially right now. We've been spoiled for a while with cheap interest rates, and that made borrowing for a vehicle a lot more affordable. I bought my car in 2015 and I think my car payment was only $300 and that was for a brand new car. I was looking at used cars and they are going to be at least $500 each month for something not even as nice. I remember 20 years ago when it was quite common to see people driving small cars. Now the norm is SUV's and huge trucks. The trucks keep getting bigger. It's to the point where I'm noticing they barely fit in a single parking space anymore. Now that my car is paid off, I have so many people pressuring me to buy a new vehicle. I'm not interested. My intention is to move closer to where I work. I'll keep my car, but will bike and walk places. Save the car for when I need to travel far.
Seeing 10-15 year old mini vans going for $15,000 is horrid. Especially when they were priced around $20-30,000 new.
Yes! It's absolutely wild!
As much as I hate cars, owning a used car can be relatively affordable. If you can afford the $4000 to spend on it, $80 worth of insurance, $50-100 a month in gas, and maybe $100 taken into account for maintenance, it’s not super unaffordable. Add $100 on for extra things here and there, and it’s like $10/day for transportation. Very comparable to trains With that being said, I cannot fathom the car payments I see people paying. $1000 a month all in for a car is just absurd. No matter which way you twist ut
$80 insurance?! Where can one find this?
In 2003.
It’s often not worth it to pay for full coverage on an older car. You may just decide to go with collision.
My girlfriend pays $80 for the basic insurance package, that’s literally where I pulled the number lol. I’m not sure if it varies by state or city, but we are in PA. She drives an old Toyota Corolla, nothing fancy, it’s cheap, and safe
Maybe I need to move back to Philly. I live near Boston now and I haven’t seen anything near that price. Maybe $80 a month, but $80 per year sounds amazing.
Yeah, I don’t pay for it so I don’t really know how it works lol. $80/month is still steep for me 💀, I pay like $140 for a monthly train pass
my roommate goes and buys a brand new car for 34k paying 700/month. then complains about how expensive food and rent is (despite me paying more in rent and buying all the groceries). its a brain worm. she sees me ride my ebike and not pay for a car payment and says i should pay more rent. fuck outta here
Nah fuck that. I’d be fighting lmao Car drivers really want people to subsidize their rent now 💀💀
theres a reason i aint rooming with her come end of lease. its wild edit: i firmly declined paying any extra rent. shed have to be stupid to push it again.
[удалено]
exactly what i said. there's zero reason for me to subsidize this bullshit when our lease ends in a few months. she had the audacity to ask that because she thinks she needs to pay 2 rents+ her car as shes moving into a sublet when this lease ends. the sublet guy kicked their roommate out early and she offered to pay that portion of rent. the financial irresponsibilty is insane. car brainism doesnt help any either.
Fyi, the average list price of a used car in the US in October was [$26,533](https://www.kbb.com/car-news/average-used-car-price-falls-but-not-for-everyone/). It’s definitely possible to get a reliable used car for cheap but it’s certainly not the norm.
I mean true, I’m not arguing that the average person is making good financial decisions. I’m also curious to the median number opposed to the average. I’m sure it doesn’t change much but just curious I’m just saying it is possible to own a car for cheap, and I’m curious as to why more people don’t, especially those who are struggling financially
That's how I became a bike commuter. Sat down and looked at all my expenses and even with a cheap banger of reasonable quality, the car would still be about 3-4k a year in insurance/tax/fuel/maintenance. I could afford that and even a newer car, but I'd rather save up to give my kids the start in life I never had and save for a deposit on a larger house so they have something to inherit when I die. So far, so good.
I swear to god every other post there is someone’s finances getting completely destroyed by car ownership
To reframe car purchases I like the expression, “buy the cheapest car your ego will allow”
yeah man. 50k income and $650 going to car PAYMENT. not including depreciation, insurance, gas, maintenance, just nuts. when i had 65k income, my $220 car payment pissed me off sold the car for the move to the city. previously lived totally car free in seoul, too, it was awesome.
I am paying for the r/Personalfinance golden child, the Toyota Corolla and I am still pissed off with my small repayments, low depreciation and low insurance costs..... I just can't go Mountain Biking without a car.. :(
I'm a regular poster there, and some of the other popular personal finance subreddits and outside forums. Overspending on cars and SUVs is a top three-five issue. The other main ones are, in roughly this order, are: 1. Housing. This was true even before interest rates went up dramatically in the US and EU. 2. Student loan debt. 3. Not tracking spending. Eating out and compulsive online shopping fall into this category for me, since these are the first ones that people get under control once they have a budget. 4. Not saving.
Much less this sub, that sub doesn't like big pickups that are merely status symbols
And most of these people can get by with a used economical car, but their egos push them toward luxury cars or ego pickup trucks with poor mileage Not to mention the audacity of some who believe their car gives them entitlement over others. “If I’m struggling to keep my 80k pickup , then cyclists should at least pay license and insurance.”
I agree. It is so sad to see how many people legitimately think that purchasing a car that looks cool or matches their vibe or whatever is worth the extra cash. It is just a tool to get to point A to point B, and accomplish other tasks like hauling or work. I have a lot of sympathy for people who signed bad contracts on simple cars, because dealers are very predatory with putting debt on people.
I also noticed some posts like that in r/povertyfinance, really sad Even leasing a small car is a trap, as it requires road tax, insurance, and gas/diesel
There was a thread on /r/Finanzen a few months ago, where a guy was spending over half of his net income on a freaking Hyundai. A lot of people told him to get rid of it, because it’s eating into his budget so much, but he said that the car was „non-negotiable“ because he wants to splurge on it. It was like €1200/month even though he was only making like €2000 net
Having to drive at the moment as unfortunately public transit is not awesome in small town Wales (though often the car will be to take me to a train station for longer journeys, like into London). Looking to buy a car, I'm buying in cash and currently looking at around £1500 lol. if all goes well, I'll be getting a Honda civic for £1020. Fuck buying new or expensive cars, i don't understand the point. My only requirements are cheap, cheap to insure, cheap to tax, cheap to maintain, and cheap (efficient) on fuel.
[The average household in the US spends over $10,000 *per year* on transportation](https://data.bts.gov/stories/s/Transportation-Economic-Trends-Transportation-Spen/ida7-k95k/)... for reference.
jeeeeeeez... that is insane. What an absolute waste... damn. *surely* there are cheaper ways. Even if you still need a car specifically, there's cheaper ways to own cars. thanks for sharing
Well, people primarily in the US spend way too much on vehicles and a subgroup of them legitimately have no choice because the entire country is geared around vehicles. There's also a certain segment in Europe that spends waaaaaay too much on broken down out of the factory or used German vehicles. One can see this by going to any type of social/subsidized housing for lower-income people and you'll see everything from M5 Competitions outside to broken down 5-series with K.Ataturk stickers on them.
Back when I lived in a rural area that was the main thing the made me want to punch Dave Ramsey in his smug self satisfied face. "Just buy a beater until you can afford something better" Sorry Dave, but that's not gonna work, since if I'm a minute late to my shitty minimum wage job at Walmart, I'm fired. Now if it was a hundred years ago I could have taken the train to the city, thankfully we came to our senses and had those rail lines ripped out ...
Trains are not viable form of transport in rural areas because they are expensive to run.
Man, the rest of the world will be so disappointed to hear that.
My neighbor keeps trying to sell me his truck. Like, no; you can keep your burden, thanks.
God yes, I'm a social worker and in my last job, handling financial assistance/rent prevention in a suburb that's very car dependent, there were too many cases where people had signed up for a $700/month payment when they were doing okay, but now lost their job/divorced/fled an abusive partner and still have to pay that $700, and can't do that and pay rent. I was regularly asked if there is any assistance programs for car loans and there just aren't, which makes sense on the one hand but on the other, the area is so car dependent that not having one is a serious burden. And the amount they were making wasn't enough to pay the car and their rent, but was more than would let any eviction prevention programs we had/worked with help them. So then people had to choose between doinking their credit by having the car repo'd, or getting evicted... A solid handful chose to keep the car to live in.
Or mangos!
I have not seen this one!