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The $25k car is going extinct?

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Re: The $25k car is going extinct?

#111
post #76

welp, guess my corolla needs to last until I die. I spent about $9k usd (in australia though) on it second hand pre covid and I'm just gobsmacked at the prices of vehciles now even years post covid. I make good coin and I just can't see how non-"enthusiasts" can justify spending so much money on their vehicle. there are houses in my suburb with 3-4 of these expensive, new model cars out front.

Cars are the worst spending many, perhaps most people make. It's remarkable in Australia how many people are borrowing and paying much more for them as well. Driving a Corolla, Mazda 2, Kia Rio or something can save so much money. These days these are remarkably good cars too.

One downside in the US of driving a small car now is considerably more lethal in a crash with larger vehicles.

I drive a Mazda 3 and sometimes it feels like a bicycle compared to some of the enormous SUV and overdone trucks.

Re: The $25k car is going extinct?

#112

Earlier quoted context omitted.

We drive an F250, and live in San Francisco. We hardly put any miles on it (maybe 15k a year). To get around locally we ride our bikes mostly here in the city. We do use it for our small business (essential) and also to to a large RV trailer which we use to live in 2-4 months a year visiting loved ones and just decompressing. The things people don't usually talk about is the total cost of ownership. One can buy a new…

You don't have to justify your personal situation to me. If you feel like buying a 80k truck, that's cool. The issue with America is the vast majority of truck buyers really can't afford an 80k truck. This isn't the best source, but it says here the average truck buyer is only making 82k or so. https://www.myautoconcepts.com/blogdetails?id=4049 From experience talking to friends and sales people plenty of folks with…

> Let's say their was a hypothetical car loan limit of 1/4th of your annual income. A lot of people would find out really fast they don't need a massive truck.

So much this. Similar "unbounded" pressure on student loans / tuition. It keeps going up because students are able to get loans.

Comparing the average income around here to MSRP of vehicles I see around here and it's clear that a lot of people are driving around in something that approximates a second mortgage!

Re: The $25k car is going extinct?

#113

Earlier quoted context omitted.

I grew up around a bunch of middle class conservatives in the Southern USA and almost all of them were into debt on house, car, often even taking loans to pay for kids private school. And you'd never know until the family divorced and their lifestyle drastically decreases. Dave Ramsey has to be relatively new because debt was extremely extremely common among conservatives in the US (no idea about liberals didn't live…

Houses are debt, but are generally and appreciating asset Cars are a depreciating asset. It usually does not make sense to go into debt to get one

Cars are a necessity in pretty much most of the country. Even in areas with good public transit, people who are most likely to go into debt to buy a car are also more likely to live further away from public transit and commute for work. Outside of New York, I can’t think of another city where living without a car is really an option.

Re: The $25k car is going extinct?

#114

in 2021 my beloved Honda Fit got totaled. I bought it new in 09 and only had 80K miles on it. They don't sell new ones in North America any more. So I bought a Kia Rio. They don't make those any more. I don't really like it but with the current chaos in the economy I'm not trading it in any time soon. I was in the UK for the first time last month and was struck by how many hatchbacks and sedans they have that we don'…

The dwindling of small hatchbacks in the US is so disappointing it’s difficult to put into words. They were the perfect little suburb grocery grabbers, and now you can’t buy them without overpaying for a used one. The next best thing is a sedan that’s longer and harder to maneuver and park despite having markedly worse cargo space and utility, and to get a hatch (not just a liftback) you’re forced into crossovers/SUVs which carry a chunky price premium.

What I wouldn’t do to bring the Fit and Yaris hatch back to the US market.

Re: The $25k car is going extinct?

#115
post #38

One fact not mentioned in the article - Americans now owe $1.64 trillion in auto loans, and cars make up 9% of all consumer debt in the country. In fact we now owe more on cars than student loans. The average loan term is rising - almost 6 years now. 60-day delinquency on auto loans is at 6.6%, the highest ever recorded, and is as high as 9% in some states. So while car prices keep going up, people also keep going de…

> problem is unchecked consumerism

Problem is if the US consumer had the “moral awakening” you propose (and to be clear you are claiming that basically we are in this situation due to the weak moral character of the average American) then coincidentally our entire economy would begin to crumble. It’s not just car loans, our entire economy works because of debt, and has for at least the last 20 years. The idea that nearly every one benefits financially from this behavior and yet we see this behavior at scale solely and coincidentally because of a sudden mass moral failing is a bit hard to believe.

Re: The $25k car is going extinct?

#116
IIRC, at one point Ford priced the Model T (which ultimately became the Ford Taurus decades later) to be at or near the US individual average annual income and maintained this price structure throughout.

With last year's lowest (by state) average annual income being Mississippi at $45k, there is little reason for any car manufacturer to produce a $25k MSRP vehicle.

Re: The $25k car is going extinct?

#117
post #70

They don't mention the amount of mandatory additions to the car from government regulations. Obviously not the only factor but it's certainly a factor. Cars now have 6 to 8 airbags, backup cameras, more high strength steel, automatic breaking systems etc etc. I love the safety that those all bring, but it's not free.

> automatic breaking systems

Literal planned obsolescence!

Re: The $25k car is going extinct?

#118

https://www.slate.auto/ With rebates a 20,000 truck. Who knows what it will cost when it actually comes out. But I love the concept.

it’s a shame that they’re spending so much of their capital on manufacturer side customizability. An electric vehicle is a firmware update away from being a stick welder already; make the truck one way and ship it with a pair of jumper cables, a box of 6011, and a pallet of tube steel.

Outside of having what amounts to a couple of shells and removable seats that can be mounted to the box (and a removable rear panel from the cab to join them to create a single 'interior' when using them), the majority of their BTO options are really basic module swaps where most of the complexity comes from managing inventory of the various SKUs than anything else.

As somebody with a '99 Ford Ranger, the Slate is incredibly appealing as nearly every other manufacturer has completely abandoned the compact pickup market; although it has the same issue that the Ford Maverick and Honda Ridgeline do, it's a unibody design. If they actually launch I may end up getting one if they release some BTO options to slot a double-din mount and door-mounted speakers in to handle runs to the hardware store and towing lighter loads on paved roads, but I really wish somebody would do a compact frame-on-body pickup again for those of us that drive poorly maintained dirt roads in forested/mountainous terrain where some body damage (and thus, the cheaper repair costs associated with body-on-frame designs are nice to have) is always lurking around the corner.

[Seriously, I understand the difficulties of batteries and such with EV's and that's likely part of why the Slate is designed this way. But, for people like me who actually need a pickup to do pickup things, not haul groceries, it's frustrating when you're accustomed to being able to replace a side-panel on the box for less than your insurance deductible if something falls on it. And that's without even bringing up the obvious disadvantages when it comes to towing and payload capacity.]

Re: The $25k car is going extinct?

#119
post #74

Nobody else has said it so I guess I will. The reason the US car industry does not want a $25k car is that the financing opportunities are crap for a car of this low cost. In the same way that airlines exist to offer you a miles based credit card, the US car dealerships survive by offering you a loan for the car. Or perhaps, a car to go with your structured finance opportunity.

Could this be stated as perverse incentives as a result of attempts to differentiate from cookie-cutter-identical competitors?

Whereby the profit shifts from the product itself to the differentiating value-add.

Re: The $25k car is going extinct?

#120

Earlier quoted context omitted.

I grew up around a bunch of middle class conservatives in the Southern USA and almost all of them were into debt on house, car, often even taking loans to pay for kids private school. And you'd never know until the family divorced and their lifestyle drastically decreases. Dave Ramsey has to be relatively new because debt was extremely extremely common among conservatives in the US (no idea about liberals didn't live…

Houses are debt, but are generally and appreciating asset Cars are a depreciating asset. It usually does not make sense to go into debt to get one

Houses are a depreciating asset. They require constant maintenance expenses just to hold their value. It's the land under the house that's the appreciating asset.
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