Interesting article. One more reason we need this site, to get better deals.
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It might be an unpopular opinion but I think that the American middle class (myself included) has gotten too accustomed to cheap money over the years and developed a sense of entitlement when it comes to new cars. For a large portion of what people would refer to as “The American Dream” for the middle class, a good quality used car was part of that equation. The big issue is the lack of quality used cars on the market at affordable prices. That’s been the case for over a decade now and the fact that most people aren’t turning in their leases right now is throwing fuel onto that fire.
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I don’t know, I feel as if this is an argument against democratizing spending power. The easier it is for people to be able to acquire new goods, the more capitalism will grow.
I honestly feel as if the capitalist American dream is being squandered so that only a few would feel elite. America, the dream, is truly dying.
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I’m all for that but for whatever reason it just always seems to lead to boom and bust cycles where the middle class ends up feeling it the most. Another problem is that people keep signing up to pay these ridiculous prices so it’s not going to get better any time soon.
Read the are article this morning and what struck me was the quote
“Ramirez, 33, and his wife Angelica Castro-Calle really want a new, small SUV with a little space for camping and paddleboarding gear. But despite good jobs in finance and business contracting, the couple’s monthly loan payment would run around $700 for the $35,000 models they are looking at, before dealer markups.”
There shouldn’t be a markup on a compact SUV. If they are willing to pay that I’d bet the rest of the deal looks pretty gnarly.
Almost everything about the 1950s is based on rose tinted glasses/an illusion. We had 1/3 the number of cars per capita, so two cars in every drive way was not the norm. Yes, new cars, adjusted for inflation, were a bit cheaper and normally only financed for 36 months. But the short loans were partly because the cars didn’t last long/were basically worthless after five years.
Ford sells affordable cars in Europe. VW sells an assortment of cheaper cars in Europe. We don’t want them so they don’t sell them here. VW would sell the Polo here if we wanted it, Ford would still be selling the Fiesta if we wanted it.
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Sir the base model crv lx/rouge s is made for you and your budget. Maybe a subaru too. I can already see these two walking into a showroom asking for leather/roof and all the bells and whistles then getting shocked when the msrp is 35 or 40k
RESPONDING TO THE ARTICLE NOT THE POSTER!
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I don’t know of any “small” SUVs outside of luxury makes where the MSRP would hit $35K (I do not consider a RAV4 or CR-V to be “small”).
It’s not really clear what the couple and/or the author consider “small.”
Yes, and depending on one’s own SES and background, the 1950s were not a good time and are not looked upon fondly.
But even the article references the illusion (for some reason, the cut-and-pate function isn’t working, and I’m too lazy to re-write it here).
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I’m assuming they mean compact SUVs like CR-V and RAV-4. Not actually small at all but are labeled compact by EPA.
What does their job have to do with how much a loan on $35k is?
Yay journalism!
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and then WHAM repo 5 months later.
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I mean when you can’t afford these new cars as a bank teller and business secretary, it’s time to riot 
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In Minecraft, and Mostly Peacefully.
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Kind of like houses. Buying a house in this market feels like an American nightmare.
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Ohmigod, off topic but…
I live in an HOA. One person (who recently retired from her state-job, so she has amazing retirement benefits) consistently complains LOUDLY whenever the dues are raised and says things like, “You must all be rich that you don’t have to worry about this!” Normally, I would be sympathetic to this, but in her case I am not b/c…
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She frequently brags about how she “grew up” in the bldg (didn’t know there were seniority rules in an HOA?). The condo, AFAIK, is still held under her mother’s name. That means that, thanks to Prop. 13, she pays relatively little in property taxes.
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B/c of her state employment, I think she pulls in $80K/yr for retirement.
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When she was earning $80K/yr while working, her cars were (and this is vaguely on-topic)
- A Quattroporte and then
- A Ghibli and then
- A Mercedes C300 convertible
I’ve been so tempted at meetings to say, “Hello??? It’s your own fault that you freq drive cars w/ an MSRP that exceed your post-tax annual income. Don’t complain about the HOA dues when you drive a car costing close to six figures. Maybe you should just drive a cheaper car.”
- She spoke at length during one HOA meeting about how much she enjoyed using bidets while visiting Turkey. B*tch, did you seriously just tell us all how much you enjoy hosing out your privates? Did you think anyone needed/wanted to hear that?
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Just wait. We saved for a 20% down payment for a detached SFH in SoCal for 5 years and bought when the market cooled. We could have saved another $100k if we waited another year, but we didn’t have a crystal ball. But we did save $300k by not buying during the bubble. We also always had used cars, and I worked on them myself. But when our second kid was born, I didn’t have time to work on 2 Jeeps (TJ and KJ), do yard work, maintain the pool, and do baby things.I had to give up one of them, so we sold the Jeeps and started leasing. This forum has been a Godsend. A huge thank you to all the hackrs and brokers for all the great advice and help.
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This is public info. You can look it up.
I’ve done a little work with CalPERS. Maybe the most confusing pension system I have ever looked at. All I got out of it is you want to be a cop or firefighter if you are a public employee in California.
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This is based on datasets, but I’m a little confused here, is the 48K number after taxes or msrp?
If the latter, Is everyone just buying platinum grade F350 duallys these days as their first small CUV?
Looking at Toyota, most of the volume models dont really get close to the 48k number. I think the same can be generalized for other volume marques. The only thing I can think of is someone deciding a Rav4P is worth the ADM.
I do think, that prices are realistically increasing with limited added value and high borrowing costs. Plus with that front end increase, a 10% discount with a 10% increase in MSRP really doesnt mean much.
The best selling car in America is the F-150. The average transaction price in Q1 2023 on an F-150 was $65,727.
I would guess the Ram 1500 and Sierra/Silverado sold basically similar prices in Q1 2023. Together those full size trucks are the first, second, third and sixth best selling vehicles in America (Silverado is 3 and Sierra 6).
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The car in the driveway or garage concept (the proverbial middle class dream aside from home ownership) predated the 1950’s by at least 20 years. Herbert Hoover, with many of his policies leading to and exacerbating the Great Depression, ran the 1928 Republican presidential campaign slogan of “A chicken in every pot and a car in every garage” into the ground.
https://catalog.archives.gov/id/187095
New car ownership as a reality for most middle class Americans was not happening until the mid to late 1930’s, and then came to a grinding halt from 1941-1945 (due to ramping up of all materiel/commodities for the war effort) and then took off in the late 1940s.
What is being seen here is the virtual elimination of the “middle class” as it was widely known as the prior “middle 50%” is drifting towards the status of the bottom 25% and top 25% respectively.
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I would argue the middle class of the 1950s wasn’t so middle class by today’s standards. At least when considering vehicles. Even by 1960, almost 80% of American households had 0 or 1 vehicle. And this at a time when there were way fewer single adult households. Personally, my grandparents moved to upstate NY for work and my grandmother was stuck at home for years until they could afford a second vehicle. Also things like less than 10% of kids going to college in the 1950s.
Now their was certainly much much less social stratification in the 1950s since the top tax bracket was above 90% for the whole decade.
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