Car affordability in 2022 and beyond

So much of the US economy is changing so fast and so many checks and balances have been wiped out in our country to an extreme; nearly deprogrammed of basic concerns of fairness and equity. That might not end well. There's a reason the world's most powerful countries don't neglect these duties!

And living without a car isn't so bad if you don't have to travel so far. Back in '92 in my early 20's I started a journey of being without a car for 9 years. But I lived in downtown Santa Cruz, California and all my gardening jobs were a wheel barrow walk or bike trailer ride away.

And also to your point, cars are the new houses these days. Not just literally but also investment wise. I'm about ready to fix up and sell a low mileage Gen2 Prius I got for $4K last year. Thought it'd be a good investment at the time. Had no idea it'd be heading towards a 5 figure number.

What's more, true to my PriusCamper handle back in the early 90's before I quit my job and sold my car I ran a VW & Toyota Campervan conversion shop. So I have professional experience doing camper van conversions and remember what I said about real estate?

Have a look at you tube and see how much customised motor homes sell for? It's not a stretch to say a skilled worker with a decent shop could upgrade/convert an existing truck and trailer camper combo into something that sells for more than $80K. Hit me up if you want to invest in PriusCamper!

 

Would agree with the original post. We kept our last cars 16 years - 2004 Sienna and 12 years 2008 Prius.
We wanted to get every last bit of value out of them and avoid a new car purchase for as long as possible.

When we finally had to purchase replacement vehicles, went with the lowest priced, highest quality vehicle we could find Irregardless of the manufacturer. I had always bought Toyotas for the last 25 years but they had priced themselves out of our market. A new Sienna would have cost almost double what it had cost us in 2003. I hope we are now set for another 15 years.

Fortunately, we bought our vehicles in May 2019 and December of 2019 before prices escalated.

I also learned a lesson about keeping a 16 year old vehicle and 12 year old vehicle. At that age and with the number of miles we had put on these workhorses it was becoming a little scary from a dependability issue and I was pushing the limits of having dependable transportation because of the mileage and use these vehicles had seen. They were very well maintained but at their age things just start to happen on vehicles, rust on the undercarriage thanks to bine road coatings in the winter was certainly beginning to take its affect.

We did end up with a PHEV because the Dealer was tired of it sitting on his lot and gave us a very good deal. What a difference a year or two makes- now there are mark ups on these type vehicles if you can find one.
An electric vehicle would be a pipedream for our family - just not practical or within our budgets reach.

As you age and have a family, the thrill and challenge of driving an older less dependable vehicle quickly and completely vanishes.

 

i can remember when camry's started around 16k. doesn't seem that long ago. if the gig economy continues, there are going to be a lot of sorry sailors

 

are all these new bells and whistles required? they scare me, as an old geezer.

i thought we were headed for car share

 

It's all that electronic high tech profit generating "crap" that the corporate world, the lending institutions, the insurance companies and repair shops tout to raise their profit.

It hard to find, for example, a base model Ford Maverick pick-up for under $2k. Most all available, if any are either in the $30-50k range.

 

our daughter picked up a subie impreza 2019 for under 20k. i wonder what they're going for now?

higher interest rates may bring prices down, but won't help those who can't pay cash.

 

Yet we both type our opinions on our computers instead of opening the door and yelling, “You kids get off my yard!”

Ok, so we do mumble while driving alone.

After driving with Autopilot, it has become expected versus my initial skepticism. But it improved over three years and dozens of upgrades.

Bob Wilson

 

The cure for high car prices is high car prices....
If more people followed the 20/4/10 rule then car makers and financial institutions would either adapt or be replaced.
Another old rule is that you should not spend more than about a third of your yearly income on a car. So, if you make $100,000, you shouldn't spend more than $35,000 on a car.
The average new car price is now well North of $40,000 (LGB!!) and I'm just guessing here, but the the average US worker "might" not be making $100,000 a year.

SO.
Housing Bubble 2.0.
This is a self-licking lollipop.
Entire financial and manufacturing institutions are BUILT on the notion that suckers will continue to defy gravity when buying new cars.
Eventually humans will learn a lesson in the manner that humans USUALLY learn lessons:
Painfully.

People will be buying a lot fewer new cars, and driving the ones that they DO buy a lot less owing to high energy costs (LGB!)
New car makers and financial houses will ADJUST or they will be replaced by NEW New car makers and financial houses.

Perhaps?
We will think about not bailing them out next time.

 

Yeah, you will have a hard time finding any car/truck under $2k. LOL

I have owned/leased 15 cars in the past ~40 years. Except for the Sienna and 4 Prius (Gen3 and 3 PP), all cars purchased were used. Only new cars we drove were leased vehicles. We have set our budget for purchasing a car at $20K for the last 10+ years since I bought my first hybrid, HCH. Some are purchased below this, while some ended up costing more, but the range has been $15K to $25K for a purchase. The HCH was 3 years old used and it cost ~$15K back in 2011. The 2015 Gen3 purchased new was $24K. Then 2017 PP at $20K, 2020 PP at $18K, 2021 PP at $24K. Also, 5 year old used Pathfinder with an original MSRP of $45K was purchased at $18K. The average new car cost today is over $47K. That is just ridiculous.

Average New Car Price Tops $47,000 - Kelley Blue Book

I would like to stick to this $20K cost to purchase a car, but for our next car which is very likely to be a BEV, that is a very hard number to pull. Currently, Nissan Leaf base S trim (155miles range) with a full tax credit is the only BEV that can get close to that number for a new BEV. Yep, although it is not a BEV, the Ford Maverick base model at around $20K is a choice vehicle to replace our Pathfinder SUV. But I can't find any...

 

These are good reasons to keep you current cars and other vehicles in good repair.

Over maintaining is worth the investment and will pay off in multiple benefits over time.

 

I always use the Honda Accord as the benchmark for increasing automobile costs because it has been around a long time and is a perennial best seller.

In 1990, a Honda Accord base model cost $15k. In 2022, a Honda Accord base model costs $26.5k. $15k adjusted for inflation is $33.5k. That means, a base model Honda Accord costs less today than it did 32 years ago. And in 1990, that meant a standard transmission with manual wind up windows. Today, you get a back up camera and side air bags.

So, no. I don't think cars cost more today. If anything they cost less. Remember when 9.9% APR was great in the 90's? Now we're buying vehicles all the way down 1.9%, and a few at 0%.

The average vehicle purchased in 1990 is $15k. The average vehicle purchased in 2022 is $47k. Cars are not getting more expensive. People are choosing to buy more expensive vehicles. If you want to blame car manufacturers, well, I don't exactly see Nissan Kick, Toyota CHR , or Honda HRV setting sales records even though they are CUVs. I'm not saying car manufacturers are not to blame with their targeted advertisements towards higher end vehicles and longer 7 year financing terms. They certainly do this and more.

What I'm saying if you think 20/4/10 may not work for someone making lower income, allow me to say, a 2022 Mitsubishi Mirage MSRP is $15k. That means one must make about $45k? a year to meet 20/4/10. My guess is, few will choose that option.

 

if you can show me the math on inflation, i will agree. i assume we're talking salaries and wages, with other necessary expenses accounted for as well?

 

Been there and done that, but after trying to extend the life of a car for longer than 10 years on several cars in the past, I came to a conclusion that minimal (or no maintenance) is more cost-effective in our region. It does not matter how expensive the car was when it was new, and it really doesn't matter how well it has been maintained, our cars driven during winter seasons will only last 15 years top. Starting at around 8 years old, the rust-related repairs will increase. In most cases, it is nicer, easier, safer, and in some cases cheaper to switch cars earlier.

 

A factor in price is how a particular manufacturer packages the vehicle also.

Here is a real-life example. Buying a new car for a family with a new driver we wanted a complete safety suite of features - Blind Spot Monitoring, Rear Cross Traffic Alert, Smart Cruise Control, Pedestrian and Accident Avoidance Stopping, Lane Keep Assist etc.

Searching for new vehicles we found some Manufactures include all these features in their basic safety suites and you don't have to buy super special packages to get the features. Other Manufactures if they did offer these features, you would have to buy their Super Duper XLE Limited version of the vehicles with leather seats, sunroofs and who knows what else at an exorbitant price.

Kudos to the Manufacturers who are including a complete safety suite of features in even their most basic vehicles bringing this technology into the reach of all their car buyers.

 

Not my math. I just typed in 1990 and $15000. I believe the calculator uses actual inflation rates from the CPI. Inflation Calculator | Find US Dollar's Value from 1913-2022

 

I'd agree with you that one in the salt belt pays a premium for living threre. Here in Upstate South Carolina, my 10 year old Prius v has less rust on the chassis than one season in your area, Sal.

 

As one who learned to drive with a totally manual car, a lot of those so called "safety devices" are very distracting and try to outguess you. I've been alarmingly surprised with the blind spots revealed in the simple rear camera and can't realy trust it.

I instinctively look for approaching cars from the rear before opening the driver side door. I don't need a nagging electronically generated voice to remind me,