Observing something in real life that's been mentioned in the news...

[Dominus]

I remember reading the news about this time last year that there is a new phenomenon where more and more American adults have car payment exceeding their own rent. I thought to myself that's kinda... stupid.

Bloomberg - Are you a robot?

A Gen Zer and millennial whose monthly car payments exceed their housing costs say it's 'stressful' but that they need a car

A record share of Americans are taking out car loans with monthly bills of $1,000 or more. It's like renting a second apartment.

www.businessinsider.com

Then recently, I found out that some of my tenants are paying more each month for their cars than rent. For example, I have a young couple who live in a 1 bedroom apartment. Their rent is $700 + utilities. I just found out they each got a car payment of about $850 . Le me be clear. Both of them have the new used cars and they each pay around that much for the car.

I thought that was a fluke. Then recently I found out another couple whose rent is also $700 got 2 car payments above $800 each. Then I found out another tenant whose rent is $800 has a $900 car payment. Any day now, someone is going to tell me to hold his beer...

About half of my tenants are gen z. And apparently, this is becoming a normal thing. To have their car payments exceed their rent.

I hate sounding like an old man (I'm an older millennial), but back in my day a $300 car payment was pushing it.

It's one thing to read about something in the news. It's quite another to actually see that same thing in real life. Good god!

 

[rareboy]

What do people expect when no one is making a really cheap car any more?

The more electronic shit that gets poured into vehicles and the slavish dedication to yearly model changes means that vehicles are increasingly unaffordable...yet, in most of North America, indispensable now.

And of course, the real money isn't in the vehicle...it is in the financing.

When you build in the financing for the vehicle...it makes no real monetary sense at all.

 

[NotHardUp1]

This is by no means a new phenomenon.

Over 50 years ago, there was already a familiar trope for people living in squalid shotgun houses but making payments on Cadillacs.

The misplaced priority (and often gullibility) of young couples and poor people choosing to buy (lease) a prestige car or truck as a status symbol is decades old.

Living above one's means is a symptom of the advertizing era, in which esteem and respect are equated with ostentatious displays. Cheap, affordable, marginally reliable, second-hand vehicles were always affordable to the working class. Only in the recently tightened used car market has that option been narrowed as microchips slowed and cartels bought up used cars and began scalping for them.

America is quite the greedy country. There are consequences to doing greedy things.

But, we don't have to drive cars we can't afford. That's simply a choice.

President Carter introduced the need to carpool. He was mocked and derided for it. Went against the self-image the nation had of privilege and wealth. Families with multiple cars would be agog at having to be better planners, better stewards of the environment. We choose convenience and caprise over the planet. Reap the whirlwind.

 

[fredroy]

Thanks to the Feds they can't build a cheap car anymore. Let's start with seat belts. You got them even if you didn't want them. It goes on from there. 5 MPH bumpers. Mileage standards. Air bags. Side impact beams. Electronic ignition and then fuel injection to increase MPG.

Electric window mechs now weigh less than crank window mechs. Electric probably costs less especially if all cars have it.... all levels of say, a Ford Freestyle van, from base to loaded like a Cadillac with leather and extra soundproofing., they all have the same wiring harness in the doors, just different trim on the interior. Body wiring is the same across trim levels, too.
This has been going on for a while. My bought new '85 Chevy Cavalier did not have a radio. It had an antenna. It had the wiring for the speakers. That was handy when I installed a radio, I didn't have to take the interior apart to runs wiring. Trunk release? There was a hole for the button in the glove box. The button was $15 or so and the solenoid that attached to the trunk latch was about $25. All of the wiring was there. I had fun, too.

They can't build something like the Beetle or an Omni/Horizon/Rabbit for sale in the US for all of the rules. No one can build a cheap lightweight car and meet safety and emission and MPG standards.

On the plus side, cars are much better than they use to be. Tires, too.

 

[metta]

I remember reading the news about this time last year that there is a new phenomenon where more and more American adults have car payment exceeding their own rent. I thought to myself that's kinda... stupid.

Bloomberg - Are you a robot?

A Gen Zer and millennial whose monthly car payments exceed their housing costs say it's 'stressful' but that they need a car

A record share of Americans are taking out car loans with monthly bills of $1,000 or more. It's like renting a second apartment.

www.businessinsider.com

Then recently, I found out that some of my tenants are paying more each month for their cars than rent. For example, I have a young couple who live in a 1 bedroom apartment. Their rent is $700 + utilities. I just found out they each got a car payment of about $850 . Le me be clear. Both of them have the new used cars and they each pay around that much for the car.

I thought that was a fluke. Then recently I found out another couple whose rent is also $700 got 2 car payments above $800 each. Then I found out another tenant whose rent is $800 has a $900 car payment. Any day now, someone is going to tell me to hold his beer...

About half of my tenants are gen z. And apparently, this is becoming a normal thing. To have their car payments exceed their rent.

I hate sounding like an old man (I'm an older millennial), but back in my day a $300 car payment was pushing it.

It's one thing to read about something in the news. It's quite another to actually see that same thing in real life. Good god!

In my area, you would be lucky to find a room for rent for $850. A small studio starts at $1600. I usually lease my cars. And my last lease payment from a 2019 car was $140-150/mo. I ended up paying off the lease because I have so few miles on the car. It is 4 years old now, and I just got 15k miles on it. Cars are so expensive now that it made more sense to pay it off rather than get a new one. People can still lease a brand new honda civic for $250-300/month with a down payment of around $4k. But having a fancy car has never been important to me. If I were those renters, I would get cheaper cars and put the money in savings towards buying a home. But my parents taught me to never rent.

 

[Dargelos]

There was a dirt cheap car, the Tata Nano, made for the Indian market. Cheap it really was, equivalent to two thousand UK pounds. For that you got four small wheels, a tiny two cylinder engine and not much more. Sales were poor. What killed it was not that it was a primative, slow, clown car that sometimes caught fire. Snobbery killed the Nano. If your friends had a ten year old Hyundai, they would laugh when you bought a new Nano. They thought of a car as a status symbol but this one had a negative status value.




The Citroen Ami is another dirt cheap ride. An electric car for 6000 euros. Wow that is a giveaway. But the downside is that this bijou two seater only gets up to 28 miles per hour. So there is a limited market. The Ami is a hit with alcoholics though, because you can still drive it in France after you lose your driving licence as it is not classed as a real car.

ugly? moi?
So cheap cars are possible but nobody wants a cheap car, they want an expensive car at a cheap car price.

 

[fredroy]

I'd drive that Nano. The "what the hell is that?" comments would be fun. The later version that had a working hatch and a/c. Got to have a/c in central Texas. I'm cool with shifting. Top speed, meh, I can take the "back way" to the big town, it's just 15 minutes more to stay off of the freeway. Great gas mileage, too.

In the meantime, I'm quite happy with my Nissan Frontier Pro4x.

 

[NotHardUp1]

A very real problem with the Nano is relativity.

It is so small to be on the same highways as large sedans, SUVs, and trucks, that it isn't safe enough in competition in a crash. Even if your cab is surrounded by a steel cage, the car is small enough to be bounced away like a basketball, or crushed in extreme cases. Just not worth it.

 

[fredroy]

A very real problem with the Nano is relativity.

It is so small to be on the same highways as large sedans, SUVs, and trucks, that it isn't safe enough in competition in a crash. Even if your cab is surrounded by a steel cage, the car is small enough to be bounced away like a basketball, or crushed in extreme cases. Just not worth it.

Yes. Agreed. I can go to the next town on US281 to Walmart and The Big HEB. Folks run it at 70+ mph. Or I can take the back way. It's kind of curvy and I like to look at the cows and buffalo and such.... all of 15 minutes more putting along at 30 to 35 mph and zero traffic.

 

[peeonme]

Back in 1972 I drove this:

It cost me $1200. and that was a bout $1.00 per pound. Now I drive a Ford F-150 and my lease payment is $296. per month. I would be courious as to what kind of car costs $800. per month.

 

[fredroy]

That's a sweet Honda!

 

[peeonme]

That's a sweet Honda!

It was fun!

 

[gsdx]

Let's start with seat belts. You got them even if you didn't want them.

Is wearing a seat belt not mandatory? Or is it simply not enforced?

 

[Kahaih]

To a lot of people, a nice ride is the same as a nice suit or nice shoes.

Fewer people will see them coming and going from a crappy apartment than will see them out and about going to restaurants and doing their shopping. They want to arrive looking nice.

To them, spending their money on lavish digs is like waisting a lot of cash on expensive underwear that very few people will ever see. They're not homebodies.

 

[fredroy]

Is wearing a seat belt not mandatory? Or is it simply not enforced?

The Feds required cars to have belts in '68 or so. Enforcing wearing belts is up to the states. That started in the mid-80s.

 

[gsdx]

^ Thanks. Wearing seat belts in Canada is mandatory, even for visitors, and it is strictly enforced. The penalties for not wearing them are quite severe. Moreover, if passengers in a car are caught not wearing a belt, the driver is held responsible. 'Pull-over' campaigns are also legal up here.

 

[rareboy]

It is also worth pointing out that car payment amortization can be determined by the buyer in many cases to suit their own budget and requirements. Paying down a car in 3 years versus 5 can have a substantial impact.

We usually take 0% financing and write the vehicle down as a business expense over 3 to 4 years versus paying cash at the front end.
As I have mentioned, the next one is likely to be used instead of new because I have no desire to be paying 65+K for a new Honda Pilot.

 

[pornoboy]

There was a dirt cheap car, the Tata Nano, made for the Indian market. Cheap it really was, equivalent to two thousand UK pounds. For that you got four small wheels, a tiny two cylinder engine and not much more. Sales were poor. What killed it was not that it was a primative, slow, clown car that sometimes caught fire. Snobbery killed the Nano. If your friends had a ten year old Hyundai, they would laugh when you bought a new Nano. They thought of a car as a status symbol but this one had a negative status value.


View attachment 2240489

The Citroen Ami is another dirt cheap ride. An electric car for 6000 euros. Wow that is a giveaway. But the downside is that this bijou two seater only gets up to 28 miles per hour. So there is a limited market. The Ami is a hit with alcoholics though, because you can still drive it in France after you lose your driving licence as it is not classed as a real car.
View attachment 2240642
ugly? moi?
So cheap cars are possible but nobody wants a cheap car, they want an expensive car at a cheap car price.

I wouldn`t call these cars... they are just vehicles...

​

 

[fabulouslyghetto]

The working class gets these "living beyond your means" speeches every 4 seconds. When are these greedy predatory businesses and financial exploitation schemes (AKA financing/leasing) going to have fingers wagged at them? I worked for a credit company once writing contracts for people financing furniture. As an honest person I got i trouble for teling them the truth about how much they're actually paying with our program which ends up being about a 200% mark-up. If they asked for numbers I gave them numbers. I guess I just don't have that "let me bleed them dry" gene. *shrug*

And we not even gonna mention inflation battling stagnant wages for the last century? The difference between the poor being reckless consumers and CEOs being reckless spenders is when the CEO tanks a company their failure is rewarded with a multi-million dollar payout.

Classism is classism is classism.

 

[rareboy]

I grew up in a household back in the 60's where 'Household Finance' was the predatory lender of choice.

When my Dad didn't get paid by people who had him do carpentry work...and wouldn't take them to court for payment... and my parents were trying to pay off the debts against having built a house...there was HFC...ready to 'consolidate' bills into one monthly payment extended over another 10 year period.

We sure as hell never lived beyond our means when it came to cars and other purchases, but I always resented my mother smoking and my father drinking in the pub with his buds....for all the things that we did without.

So from the outset of my own adulthood, I have been frugal and have only contracted constructive debt.

Cars for me are not that. When I see other roll up for meetings in their leased Mercs and Beamers and all the guys in their small penis vehicles....while ours has been dented by others in parking lots and we don't even bother to get body work done...I know that we owe nothing on it, but treat it like a baby with preventive maintenance to get as many years as possible.

There was a period where we turned our vehicle over every year...but once we found the one we loved...like our first Honda...we were determined to drive it until it was done and done.