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The $25k car is going extinct?

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Re: The $25k car is going extinct?

#321

Post by huntertwo »

puzzlingcaptcha wrote: post #261

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-ro…

You mean 23k usd? Corolla is 22k msrp i.e under 20k euro. Nissan versa is 20k msrp. Then account for the fact that Americans have higher income than Europeans.

Re: The $25k car is going extinct?

#322

Post by lm28469 »

raxxorraxor wrote: post #279

Car manufacturers that cannot build affordable cars are going extinct. 12000$ for a new electric car in China. That is the real competition. I don't care about the prestige of owning a car, it is a utility for me that will never be worth 60000$. You can pay me 500000$ yearly and I would reconsider.

> 12000$ for a new electric car in China. That is the real competition.

And then people cry when their entire industry is moved overseas...

Re: The $25k car is going extinct?

#323

Post by mdavid626 »

In 2004 my parents bought a brand new Skoda Fabia with 40kW engine (around 50hp). The car was pretty basic (no AC, no display etc.) and small, but it served our family of 4 for long time (still does!). The cost was 12.000 Euros. Nowadays the same car starts at 20.000 Euros.

Re: The $25k car is going extinct?

#324

Post by tshaddox »

socalgal2 wrote: post #260
aorloff wrote: 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.

unless there's illegal collusion, someone will see a market opporunity and step in to fill it. That said, a quick search for new cars under $25k: Chevrolet Trax $20.5k, Nissan Versa $17.2k, Hyundai Venue $20.5k, Kia Soul $20.5k, and Nissan Kicks $22k. Other options include the Toyota Corolla $22.3k, Hyundai Elantra $22.1k, and Volkswagen Jetta $22.5k I think maybe the article is BS?

> unless there's illegal collusion

Illegal collusion is not the only thing that can prevent a competitive market. Large barriers to entry and imperfect information are two other textbook examples.

Re: The $25k car is going extinct?

#325

Post by tshaddox »

namdnay wrote: post #288
dyauspitr wrote: post #233

Earlier quoted context omitted.

It depends. It doesn’t make sense to not get a car you can afford for 0% interest. I could have outright paid for my current vehicle but over the 3 years at 0% interest I earn 6% to make a few thousand over the lifetime of the loan.

> It doesn’t make sense to not get a car you can afford for 0% interest. The loan might be 0% interest, but you're still using that loan to pay way too much money for a depreciating asset.

I assume the comment you quoted means “a car you could afford to pay cash for, but will instead invent the total cost while making payments on the 0% interest loan.”

Re: The $25k car is going extinct?

#326

Post by climb_stealth »

philwelch wrote: post #265
baby_souffle wrote: post #104

Earlier quoted context omitted.

> 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 priori…

I have a very similar mindset, but, man, mortgages hurt. At least when paying rent the money goes towards a real person. With a mortgage such a big chunk of the payment is the interest that just goes to this faceless entity that is the bank.

How does it not bother you? :)

Re: The $25k car is going extinct?

#327

Post by raxxorraxor »

lm28469 wrote: post #322
raxxorraxor wrote: post #279

Car manufacturers that cannot build affordable cars are going extinct. 12000$ for a new electric car in China. That is the real competition. I don't care about the prestige of owning a car, it is a utility for me that will never be worth 60000$. You can pay me 500000$ yearly and I would reconsider.

> 12000$ for a new electric car in China. That is the real competition. And then people cry when their entire industry is moved overseas...

I get that they dump loans and the government allows for subsidies. But on the other hand car manufacturers already outsourced everything they could to other countries for larger profit margins anyway.

They act no different than companies like Apple or Google. So at least as a customer I need to profit from that too, I have no interest of paying large margins for nothing.

Why should only companies profit from cheap labor?

Re: The $25k car is going extinct?

#328

Post by A_D_E_P_T »

whatevaa wrote: post #316
puzzlingcaptcha wrote: post #261

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-ro…

They are disappearing in europe too. Emissions and other required by law equipment costs just as much on cheap car as it does on expensive one. At some point, cheap cars stop beinf cheap, just a bit cheaper but with way worse quality, so they stop making sense.

It's true that affordable European models are disappearing. The average mid-range offering from, say, Volkswagen, has become quite surprisingly expensive.

But this is why Chinese cars are taking over in Europe. Half the new cars I see are from Geely, BYD, Chery, etc. These average about 20,000-25,000 EUR new.

My own opinion, having looked into the matter a bit, is that you'd have to be insane to buy a Volkswagen or BMW at 2-3x the price. If I were in the market for a new car, I wouldn't consider anything but a Chinese car.

Re: The $25k car is going extinct?

#329

Post by tshaddox »

BLKNSLVR wrote: post #133
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…

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…

The cash is fungible, so for a fixed amount of money and interest rate it really doesn’t matter if the thing you’re buying depreciates or not (assuming you’re buying both things anyway).

Re: The $25k car is going extinct?

#330

Post by presentation »

puzzlingcaptcha wrote: post #261

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-ro…

Or get a new simple Kei car in Japan for $9500

https://autoc-one.jp/daihatsu/move/newmodel-5030993/

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