Car affordability in 2022 and beyond

Well, I thank you for your applause. But the point of my comment was not to boost my ego but wanted to convey how expensive the cost of a college education became in this country over the last 50 years or so. And without loans I made and my kids made, it would have been impossible to send them through colleges.

Now, as far as the investment value of higher education is concerned, I am totally against sending kids to a college especially a liberal art college for future financial returns. There are far better ways to train someone for better earnings in a job market. And most liberal art colleges I know fail miserably in training and preparing students for the job market in the real world.

 

I really stuck to very cheap cars until quite recently. I also went for a longish period without a car. In a completely-misguided attempt to return this threat to topic (something I myself will counter immediately after this), I'll go through the cars I've had.

First car, when I was 17, in 1989. A ten-year-old Peugeot 305. It cost £750 (about US$1200 at the time, I'd guess). I bought it with money I'd saved up working in a supermarket. I sold it a year later, when I went to university, for the same price.

Then a long gap.

Next, in 2001, a 14-year-old Daewoo Racer, for HK$3000 (about US$450). This died, embarrassingly. I dropped the front wheels down a storm drain culvert at the top of Tai Mo Shan, Hong Kong's biggest mountain. Some picnicking Christian teenagers lifted the car out for my, but I discovered later that I'd burst the fuel tank. It wasn't worth fixing, so I scrapped it.

Next, in 2002, a 15-year-old Saab 9000, for HK$1000 (about US$150). I bought it because a friend had won a ticket to HK in a Cathay Pacific competition, and this was cheaper than a taxi to the airport and back. It lasted about 9 months before the piston rings went. Again, not worth fixing, so I scrapped it.

Then, in 2003, a 10-year-old Saab 9000, for HK$10,000 (about US$1500). It was lovely, and lasted a couple of years, before bursting into flames on a major road.

So those three cars were hilariously cheap - not even close to my "two months' salary" rule. In fact, the second one wasn't even close to half a day's salary.

After that, in 2004, a 15-year-old W124 Mercedes 300CE, for HK$20,000 (about US$3000). I bought this in my wife's name, because of a weird Australian rule that allowed Australian expats to ship a car home every year or two. We drove it for a year, because we had to under those rules, and then shipped it to Australia and sold it for a big profit.

Then, in 2005, we did the same with a 10-year-old Mercedes CL600, for HK$50,000 (about US$6500). It had done 50,000km since it was bought new for HK$2.2 million. Ooooh, that was a lovely car. And we sold it in Australia for a gimassive profit.

So those two cars were bought specifically to make money.

Then a big gap while we lived in Shanghai, and then we used my mother-in-law's old Golf when we first moved to Australia.

And then, in 2010, a 2008 Prius. Which is why I'm here. That was A$16,000 (about US$10,000), at an auction. It was an ex-government car, and it cost less than half what it would have cost new. It was extraordinarily reliable: it cost almost nothing to maintain.

Then in 2014, a 2010 Mercedes C220, for A$28,000 (about US$18,000). I think that was a mistake: it depreciated badly. Still well within my limits for what I was prepared to spend, though.

And then in 2018, my first nearly-new car, a ten-month-old BMW X3, for A$55,000 (about US$38,000). It was owned by BMW, and had been a courtesy car during the Takata crisis. It had only done 3,000km, but it was A$30,000 cheaper than a new one, because the new G03 BMW X3 had come out in the interim, and mine is the old F25. It was a bargain, and I still have it now.

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So it's certainly possible. You just buy really cheap cars.

Someone posted while I was asleep - I can't find it now - about the high cost of maintenance for a cheap car. But there's the option, as was the case with my first three HK cars, to buy something that's so cheap that it's essentially disposable. If an expensive repair comes up, you just buy another car instead.

 

Yes, there are certainly times when that is the exception to the rule, when it can make financial sense to borrow to buy a car. At the moment, here, if you work for a big company you can get tax breaks if you get financing for an EV, so that would make sense too.

 

No, it really isn't. I think this is where you're very much missing the point.

The World Economic Forum's Social Mobility Index ranks the US 27th out of the 82 countries on which it has data, behind most major European economies, as well as wealthy parts of East Asia and Oceania. Have a look at the list at https://en.wikipedia.org/wiki/Global_Social_Mobility_Index.

Your socio-economic system is designed very specifically to limit access to "The American Dream". For example, your education funding model is designed specifically to ensure that the poor do not generally have access to the best education. Rich people get a good education, and fall into good jobs. Their rich kids get a good education, and fall into good jobs. Rich people have access to decent healthcare, and to health insurance; the poor do not and this holds them back. There are many more factors; these are two of the most obvious. It's how your system is designed, and with good reason: it's designed by people who don't want the wealth to be shared.

There is great opportunity and wealth for individuals who work and apply themselves where the system isn't working against them. That's why you see much higher social mobility in Europe and Australia than you do in the US. The US is not a land of great opportunity and wealth for people who don't start out privileged.

And yes, I know you can give me a million anecdotes about people who pulled themselves up by their bootstraps and started with nothing and now they're driving a Cadillac. But for every million anecdotes you give me about upward social mobility in the US, I can give you 100 million about people stuck in poverty traps. And that's before we get on to the fact that your career story - which even then was an exception to the rule - happened a long time ago, when social mobility in the US was better than it is now.

And that's fine. It's the society you want to live in. But don't buy in to the lie. Just be honest and say you don't want the poor to have the opportunity to outperform you at work and to take a share of your wealth.

No, it has the weakest social safety net of any developed country.

Again, that's fine if that's the society you want to live in. But don't buy in to the lie. Honestly, this is like the Mother Teresa thing we discussed the other week: you're buying into propaganda that entrenches and extends poverty and inequality, but which you use to justify your positions.

 

I agree about some colleges not equipping the kids adequately for careers - parenting and helping the kids through picking mentors or coaches can hopefully overcome this failing. Colleges should do a better job of this. It is a fine line between letting a kid follow their dreams and helping them prepare for their future life.

One class our youngest child had to take while in high school made them pick their ideal career path and then build a life budget based on the salary for that chosen path. It helped our child pick their now selected college major and minor field of study. It showed them that economics does play a part in the lifestyle you might desire and the type of career path you may want to choose.

It was an unlikely course for an activity like this - homemaking class - but that teacher did those students who took that class a wonderful favor,

 

That is actually me being gentle....

Unfortunately, that was the first one.

I had a search for more historical data, and there isn't much, but there's a good article at https://en.wikipedia.org/wiki/Socioeconomic_mobility_in_the_United_States, which cites Aaronson, Daniel; Mazumder, Bhashkar (Winter 2008). "Intergenerational economic mobility in the United States, 1940 to 2000". The Journal of Human Resources. The Board of Regents of the University of Wisconsin–Milwaukee, which says economic mobility in the U.S. increased from 1950 to 1980, but has declined sharply since 1980.

Yes, I think that article backs up that feeling.

Same for me. I grew up comfortably-off, and was able to go to a private secondary school (where we go from 11 to 16 or 18) - the cheapest one in Britain, but a private school nonetheless - which in turn got me into a very good and very famous university. And my upbringing, with confident, well-educated parents, gave me the confidence to recognise that, famous as it was, it was the wrong university for my subject, and to shift to another one. And I've been very lucky that, because of the way the world developed, I've been able to use my degree every day in my career.

Even though, these days, the UK offers marginally better social and economic mobility than the US, I know, absolutely, that I would not be in the position I'm in now if I hadn't had those privileges growing up.

Yes, same for me. I haven't travelled quite as extensively as you have for work, but still, I've been able to see a lot. It is remarkable, though, how much people genuinely do not want to know about other countries: they'd rather live with what they're spoon-fed, because that makes them more comfortable.

 

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Oh, yes. I am not one of them sheeple.

 

Didn't quite understand the point of the article. To me, it just sounds like a millennials' and Gen Zers' blaming game.

Yeah, I fall into the very last age group of boomers, but I disagree with the notion that "the need for more stuff was caused by boomers' relentless starving of the economy." Blaming a single demographic of age group for all the problems of shortage of workers, homes, and energy is nonsense. Everyone chips in this great "Capitalism"... Good or Bad.

 

I agree with Salamander_King, but this is not a popular view in a society and world that believes they are all a victim of their circumstances and have no personal role and responsibility for their situations in life.

Que the socialist and the antagonist for their outrage and rebuttal.

 

I think you are kind of saying - Life is what you make of it.

I do believe that - even though I have had to eat more than a few self-made crap sandwiches in life due to poor decisions, bad luck, bad circumstances etc.- I take responsibility for that and make the best of it- learn from it and move on in a positive way.

 

Man! you make it sound like every boomer is successful in contributing to the great economic expansions of the era. That makes me feel like I am a total failure. I worked my entire life in non-profit sectors, which some here think is non-competitive, easy, stress-free, volunteer work, but really aren't. Heck, my kids both in Gen X and millennial cohorts are also all in different non-profit sectors. I was never interested in any of the "classic" opportunities you missed out on. My kids are also not that interested in any of the "new" opportunities you mentioned, I don't think.

 

Oh, I see. If you call them "opportunities", then yes, I have experienced some pieces of them. Although, I may not call my first car I paid cash for it was a "safe" automobile.

I do agree with you that teaching the life lessons I learned to the next generation is probably not very useful. But that is the same for every generation gap to some extent. I still remember my father telling me his story "when I was a kid, I had to walk to school in 10 feet of snow" Yep, regardless of the amount of snow we get, I never had to walk to school.

 

Oh, those crying "no one wants to work" are truly thinking of the Boomers that retired, and not listless young people.

Blaming is going in both directions.

What percentage of past Congresses were made up of Millennials? Who literally holds most of the capital? Economic shifts happening in a short period of time is rare. Even ones that appear to do so were the result of policies and actions taking place over years and decades.

Participating in the system doesn't mean having any influence over it. Implying that is blame shifting.

What of instead of Boomer we used old people, those that should retire, the powers that be, etc.