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The $25k car is going extinct?

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Re: The $25k car is going extinct?

#261

Post by puzzlingcaptcha »

You can still buy a new subcompact car (like a Renault Clio or Skoda Fabia) in Europe for under 20k EUR.

The more interesting question is why these cars disappeared in the US. And while many of the factors discussed here are true for both EU and US (inflation, interest rates, manufacturer profit margins etc) I am surprised no one mentioned the 'SUV loophole' of US regulations that effectively boosted the SUVs (off-road vehicles are classified as non-passenger automobiles with everything that entails, notably much less stringent emission standards) and made the small cars unprofitable to make in comparison.

Re: The $25k car is going extinct?

#262

Post by disgruntledphd2 »

unmole wrote: post #229
ml_basics wrote: post #179

Earlier quoted context omitted.

It's a europeanism. In both French and German (and probably other EU languages) the word for "subsidy" is something like "subvention" so native speakers of these language often reach for an unnatural word in English. Btw other examples include "actually" which is used to mean "currently", and "eventually" which is used to mean "maybe". Personally I'm torn whether to consider this incorrect use of the language as it i…

> the word for "subsidy" is something like "subvention" so native speakers of these language often reach for an unnatural word in English. A Google search for subvention turns up government publications from UK, India and South Africa.

Yeah it's a real word but it's not commonly used by native speakers.

Re: The $25k car is going extinct?

#263

Post by jameshush »

vel0city wrote: post #171
BLKNSLVR wrote: post #133

Earlier quoted context omitted.

My reptilian-brain logic prevents me from even considering getting a loan for car. Houses increase in value, therefore it makes a certain amount of sense to get a loan / mortgage for the purchase of a house (but mainly because no-one - in the world in which I live - can afford to buy one cash). Cars decrease in value, very quickly. Getting a loan for a car is throwing more money away than buying a car in the first pl…

Lots of loan rates out there for I could pay off my car tomorrow. But I'll have more money in the end keeping that cash in the bank. Why would I pay it off early?

Your logic works out fine if you don't mind a dash of risk (e.g. from a job loss). But when I ran the numbers from my perspective it didn't seem worth it. (I might be doing my math wrong).

Let's say I get a car that costs $30k, I put $10k down, and I take a loan out using the numbers above rounded up just for napkin math (1% APR, 4% savings account).

After one year:

```

$30,000 x 0.04 = $1,200 from savings account interest

$1,200 x 0.33 = $396 in TAXES from the interest (assuming you earn over $145k/year in California)

$30,000 x 0.01 = $300 in loan interest

Total earned = $1,200 - $396 - $300 = $696

```

Don't get me wrong, $696 isn't _nothing_ but I personally would rather have the feeling of not owing people money then an extra $696 at the end of the year. Add in depreciation from getting a new car and it's almost a wash.

Re: The $25k car is going extinct?

#264

Post by lmm »

qznc wrote: post #231
BLKNSLVR wrote: post #133

Earlier quoted context omitted.

My reptilian-brain logic prevents me from even considering getting a loan for car. Houses increase in value, therefore it makes a certain amount of sense to get a loan / mortgage for the purchase of a house (but mainly because no-one - in the world in which I live - can afford to buy one cash). Cars decrease in value, very quickly. Getting a loan for a car is throwing more money away than buying a car in the first pl…

Houses do not increase in value. Land property does (usually). Houses decrease.

> Houses do not increase in value.

They do, by a lot, if they're in desirable cities. Probably what's really increasing in value is the grandfathered permission to have built a house, but there's no way to separate that from the house.

Re: The $25k car is going extinct?

#265

Post by philwelch »

baby_souffle wrote: post #104
msgodel wrote: post #29

Earlier quoted context omitted.

>having a monthly car payment in perpetuity is considered acceptable. I think that really depends on what part of America. At least where I grew up around a bunch of middle class conservatives listening to eg Dave Ramsey (who has other problems IMO) most people think of you as reckless/irresponsible for doing that sort of thing.

> I think that really depends on what part of America. And the age of the cohort... Millennials (1980 to '95-ish) have had student loans since as far back as they can remember. What's _another_ never-ending monthly payment?

My wife and I are millennials and we paid off our student loans within a couple years once I started my career. I don’t even remember if it was before or after we got married and we’ve been married for over a decade now. Maybe we’re fortunate but I can’t imagine still having a monthly student loan payment.

Of course I also absolutely hated being in debt and having a monthly payment to begin with so I made it a priority to solve that problem asap. Likewise, I have always paid cash for every car I’ve bought. My only never-ending monthly payment is my mortgage and the alternative to that is paying rent which I like even less.

Fundamentally it’s a mindset thing. I also don’t buy taxi rides for my Chipotle orders.

Re: The $25k car is going extinct?

#266

Post by jcmeyrignac »

snovymgodym wrote: post #7

It's pretty simple (in the US, can't speak for elsewhere). There are 2 big factors at play: 1. Margins. Manufacturers make huge margins on expensive vehicles and very slim margins on cheap vehicles. The numbers differ, but I think even in the lead up to the 2008 crisis automakers had to sell 5-10 "econobox" cars to make the profit they made on one luxury car, SUV, or truck. 2. Normalization of debt. For many American…

In Europe, the average age for buying a new car is 50. This means that most of the cars sold are second-hand. Most people think that the car is a luxury and prefer to focus on their home first, then their family, and after that, their car.

Re: The $25k car is going extinct?

#267

Post by defrost »

rpcope1 wrote: post #258
defrost wrote: post #55

Earlier quoted context omitted.

I'm in an agricultural area, have been in and around agriculture and mining for many decades, I can't see anyone buying a cybertruck for any practical reason. I've seen the offroad performance videos, the cybertruck isn't anything to write home about wrt to either ground clearance or scrabble factor (broken road hill climbing, etc). Other cheaper vehicles perform as well or better. The tray area is a nightmare, three…

An intelligent flatbed setup (what I think the Australians call "trays") is usually way better than a regular bed (barring maybe aerodynamics). A good Bradford or Circle D flatbed (as examples) can take way, way more punishment than a regular bed, and it's real easy to bring a forklift up and load pallets on the side, add boxes or tie downs, etc. One major reason you don't see a lot of them in the states is that many…

One of our favourite bits of kit is a twin axle trailer my father built back in the 1970s.

It's got slaved brakes (electrical now, once hydraulic), Hayman-Reese family anti sway bars, uprights and rings on the tow arms to hold gas bottles and spare tyres, and a flat bed.

The smart setup there is removable side and back walls to convert between flat tray and shallow box with sides, and a removable hood with three gull wing doors (so that the tray is a lockable and weather proof space (useful for camping). It's easy to change configuration between the three states.

Our prefered vehicle of choice is a four door family sedan with boot, the trailer can be added for those odd two tonne loads of manure, gravel, straw, sand, etc that get carted about.

Everything else starts getting into dedicated task vehicles - tractors, harveters, chase trucks, etc. The last thing we acquired was an ex military twelve tonne truck with shoulder high tyres on it and enough clearance for pre schoolers to walk under .. it can climb hills, waddle across gullies, and carry 5 tonne of water for fire control (the reason for purchase and fitting).

Re: The $25k car is going extinct?

#268

Post by silisili »

arwhatever wrote: post #88
paxys wrote: 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…

Occasionally see pizza delivery signs atop super duty trucks where I live.

In the rural midwest, it's extremely common to see dumpy trailers with one or two 75k new super duties parked outside.

I don't get it at all, and thought "well, maybe they didn't have a choice and needed it for work?" before realizing any old used truck would probably work as well(if not better).

I have to say it's a status symbol, a weird one at that. I'm more in awe of rat rods and fixed up old trucks than brand new ones, YMMV I guess.

Re: The $25k car is going extinct?

#269

Post by mlyle »

dingaling wrote: post #240
slg wrote: post #199

I don't know why inflation is dismissed so quickly. The article lists the industry average price increase as 29.2% and the inflation value I got out of the US Bureau of Labor Statistics calculator[1] was 26.2%. So sure, "this isn’t just a case of inflation affecting the entire vehicle market" [emphasis mine], but it is mostly that. [1] - https://www.bls.gov/data/inflation_calculator.htm

Retail inflation is based on the prices of goods, including new cars. So it's pointless to compare car prices to inflation because they are part of the basis of the measure. Hence why they track closely.

Saying you can't compare car prices to inflation because cars are in the CPI... We're really doing this?

New cars make up about 4% of the CPI, and used cars around 3%, so together they’re only a small part of the inflation basket. If new car prices doubled tomorrow and nothing else changed, headline inflation would rise by about 4%, but car prices would have increased 92% relative to inflation.

Inflation measures the decline in the value of money over time. If car prices rise significantly more or less than that decline can explain, that’s meaningful. If they don't... that's not.

Re: The $25k car is going extinct?

#270

Post by raesene9 »

tonyedgecombe wrote: post #248
jccalhoun wrote: post #95

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 UK is heading down the same path, the best selling car used to be the Ford Fiesta but it has been discontinued now. VW have dropped the Up. Skoda aren't replacing the current Fabia. The general trend is towards bigger SUV's. The second hand market isn't great because we stopped making cars during Covid so there is a dearth of four/five year old models. The only light at the end of the tunnel is EV's are now compa…

There's a load of really good deals on EVs at the moment from what I've seen, I'm guessing cars coming off corporate lease.

From https://www.cinch.co.uk/used-cars/electric-fuel-type?fromYea... there seems to be quite a lot of 2022+ EVs available for ~£10k with relatively low mileages.

So if you've got space for a home charger, those could be pretty good deals.

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