I’ve only ever bought one brand-new car in my life: an F56 Mini Cooper S, to replace our R56 after all the mechanical problems it had (“It’ll be different this time,” I convinced myself, like someone getting back together with a terrible ex who swears they’ve changed.) We also made that decision because we found some heavily discounted base models that our local dealer was happy to be rid of for about $25,000, which I thought was a very solid deal for a BMW-built baby hot hatch.
That was about seven years ago. Today, it feels unfathomable to score that kind of deal on almost any new car, no matter which one you want. New cars are priced out for all but the wealthiest American buyers. And how long can that last?
Our collective pricing grievances lead the morning roundup today, along with an update on Vietnam’s VinFast, more shakeups at Volkswagen’s software division and China’s automakers are about to conquer another market. Hop into the car you’re holding together with duct tape and prayer because replacing it would cost $48,000, and let’s get moving.
The Widening New Car Affordability Gap
At this point, we’re not telling you anything you don’t already know: The new cars are too damn expensive. A few weeks ago, one of Toyota’s top U.S. bosses predicted the average new ride would soon be around $50,000; it’s already pretty close at about $48,000 in March, according to Kelley Blue Book. The average new car payment is around $730 now.
But more mainstream news outlets like The Washington Post are starting to hit back at automakers over this too, and even the car dealers are starting to express frustration about their growing inability to move some of this metal:
Manufacturers determine which cars get sent to dealerships, and typically won’t send new inventory until the current stock gets sold. In Maryland, where Andrea White has expensive cars sitting on her lot, she said she’s “just suffering through it.”
“We have some final edition Dodge Challengers for $80 or $90K,” White said. “We don’t even want another one.”
Dealers say manufacturers are lifting prices beyond what customers will go for, in some cases leaving dealers stuck with models they can’t sell. Earlier this spring, White had 76 new vehicles on the lot of her Annapolis, Md., car dealership. At the time, she had no takers on the $88,000 Jeep Wagoneer. The $115,000 Grand Wagoneer? Not budging. Many of her cars cost between $50,000 and $60,000.
“I’ve got a few that are so expensive, I would do anything to get them off the lot,” White said. “I’m just giving people prices so that we would just break even. That’s how desperate I am to dump this expensive stuff, because it’s hurting us.”
That’s because what we’re seeing is a total shift toward the top of the market — the wealthiest American buyers — leaving basically anyone else to either find a decent used car (which has become incredibly difficult and also expensive) or to over-extend their budgets to the point where delinquencies and repossessions are skyrocketing.
Only three cars in America are now priced below $20,000: the Kia Rio, the Mitsubishi Mirage and the Nissan Versa. That’s kind of shameful. Check out these trends, also from the Post:
Even as inflation is easing and global chip supply shortages are beginning to resolve, more Americans are being priced out of the nation’s new car market, industry and government data suggests. Spending on new cars by the lowest 20 percent of earners dropped to its lowest level in 11 years. Meanwhile, spending on new cars by the top 20 percent reached its highest level on record, going back to 1984, according to the most recent data from the 2021 Consumer Expenditure Survey, not adjusted for inflation.
We know why this is happening: chip shortages, labor shortages, rising interest rates, bigger tastes for bigger cars, the need to shore up cash to transition to electric vehicles, and outright greed on the part of the car companies [Editor’s Note: One could also just call it smart business. Maximizing profit is any American company’s goal. -DT] just who run on margins and are raking in record profits. Meanwhile, the rest of us are left to figure out if a bus pass is a better investment these days.
But what I wonder is, where does it end? Does it ever?
If the dealers can’t actually sell these comically overpriced cars—and the $100,000+ Grand Wagoneer is a great anecdote here—when do the automakers back off on pricing? Of course, that would mean fewer profits and shareholder returns, so I suppose it’s completely out of the question.
China Aims To Conquer Australia Next
Here’s one answer to this problem, and you might even call it a market-based solution: new players show up to take the place of the overpriced brands. And in many places, those cars are coming from China. That’s already happening more and more across Europe.
Add Australia to that list now, too. And not even with EVs—not yet, anyway, but soon enough. Here’s Bloomberg on the rise of Chinese cars Down Under:
Never mind the auto industry’s relentless push toward electrification, Chery Automobile Co. is the latest Chinese carmaker trying to win over Australians with gasoline-powered SUVs pitched at the lower end of the market.
Chery’s mid-size Omoda 5 is selling across Australia for as little as A$32,000 ($22,000) for the base model. A colleague and I drove a high-end version around Sydney for four days. It’s stuffed with extras you’d normally find in luxury cars — think heated steering wheel and exterior puddle lights — and costs not much more than A$35,000.
Australia’s best-selling car, Ford Motor Co.’s Ranger pickup, can go for more than double that price.
Wuhu-based Chery joins Chinese rivals Great Wall Motor Co. and SAIC Motor Corp. — owner of the MG brand — in pouring relatively affordable cars into an Australian market that’s been slow to turn to electric vehicles. Chery was China’s second-biggest car exporter worldwide last year.
And yes, Australia has the same problems I listed above that we do. Interest rates are high, the market already loves trucks and SUVs and prices are through the roof. So Aussie buyers are turning to this new crop of Chinese brands—which are now apparently pretty good—such that sales of vehicles from China have increased 69% in Australia this year. Nice.
Australia’s market is now 8% EV (a little higher than America’s) and you know these Chinese brands have big plans for global electric domination. So are they any good?
How did the Omoda 5 stack up in the flesh? The car’s technology, at least in the better-equipped EX model, appears to punch above its weight. There’s a powered passenger seat and tailgate, heated front seats and an electric sunroof.
Most startling of all, a 360-degree camera system can beam onto the driver’s display a semi-translucent image of the vehicle, as if you were looking at it from outside. The trick reminded me a little of James Bond’s much-ridiculed “invisible” Aston Martin in the 2002 movie, Die Another Day.
I’m very curious about the quality and reliability of these cars, but even if they aren’t great, Hyundai and Toyota’s early efforts abroad weren’t always spectacular, either. The point is, they’re priced to compete and take over quickly in Australia.
Chinese-made cars face a steep 28% tariff in America and I don’t see that changing anytime soon; it’s part of why Volvo and Polestar are pushing for more U.S. production. But if it ever does, expect a seismic shift. You know they want in on this market.
So Does VinFast, But It’s Been A Rough Go So Far
One of the more perplexing newcomers in this space is VinFast, the electric upstart automaker from Vietnam. On one hand, its parent company Vingroup is as massive as it gets, with ventures in hospitals, hotels, smartphones, Big Data, pharmaceuticals—just about everything. And it’s flush with cash.
On the other hand, making cars is hard, as we like to say. This is a car with massive ambitions from a country that’s experience making cars beyond CKD kits is minuscule; VinFast is still the only domestic passenger vehicle brand in Vietnam. Now it wants to break into America’s EV market, not to undercut competitors but to compete with Tesla.
It’s been tough so far, as these things usually go. Here’s Anurag Kotoky and friend of The Autopian Sean O’Kane at Bloomberg to explain the latest. The story centers on Pham Nhat Vuong, the richest man in Vietnam, and his troubled entry into the car game:
Vuong’s difficulties are proving costly. VinFast, his automaker that filed for a initial public offering a year ago, has delayed plans to list in the US. Vingroup JSC — Vuong’s conglomerate spanning homes, hotels, hospitals and shopping malls — and its affiliates and lenders have deployed a staggering $8.2 billion to fund the car company’s operating expenses and capital expenditures the last six years.
The return on all that investment has been meager: VinFast sold just 93,000 vehicles and 162,000 e-scooters.
Vuong has only doubled down, lining up another $2.5 billion for VinFast, $1 billion of which will come from him personally. This month, the company plans to start delivering longer-range versions of its VF 8 sport utility vehicles to US customers.
What’s still unclear is how quickly those SUVs will catch on in what is an increasingly cutthroat EV market, with Tesla slashing prices and putting pressure on incumbents that have been around more than a century. VinFast will need to spend heavily to familiarize Americans with its brand and set up networks for distribution and retailing vehicles, not to mention overcome the growing pains Musk endured when trying to mass manufacture cars.
As that story notes, various early reviews, including ours (thanks for the link, Bloomberg) have been mixed at best. The company is burning through cash, experienced executives from Western auto brands and customer goodwill. VinFast has just 310 cars on U.S. roads now but should add another 100 soon. And the Inflation Reduction Act, which incentives U.S. car and battery production, has done VinFast zero favors.
(As a side note, who’s buying these things? If you bought a VinFast, we want to talk. Get in touch.)
This may be a venture that keeps going as long as Vuong wants it to. But the odds are long here, as we all know.
More Upheaval At Volkswagen’s Software Division
The Volkswagen Group just can’t catch a break on the software front. In December I wrote about the long-stewing effort at VW to overhaul its in-house software division, now called Cariad. The goal was to unite what were previously disparate, every-brand-does-its-own-thing software and infotainment system strategies under one roof in order to prepare the entire conglomerate for a future of connected cars, subscription services, over-the-air updates and advanced autonomy.
It’s not hard to understand why that’s crucial. Given everything that’s coming, it doesn’t make sense to have, say, the Volkswagen brand doing its own thing on the software front and Audi and Porsche doing a different thing. Unifying this stuff is the only way to make it scale.
But things are still not going great at Cariad, according to Reuters. Such that a bunch of people there could soon get fired:
Carmaker Volkswagen is set to dismiss all but one of the executive board members at its software division Cariad next week to try to resolve development problems, a person familiar with the matter told Reuters on Saturday.
The unit – set up under former VW group CEO Herbert Diess -has exceeded its budget and failed to meet goals, contributing to Diess’ departure and replacement by Oliver Blume last September.
Cariad’s supervisory board is expected to sign off on the dismissals in a meeting next week, the source said on Saturday, adding that only the unit’s head of personnel, Rainer Zugehör, might stay on.
A VW spokesperson said the German company was analyzing Cariad and its projects.
One big reason for the frustration, apparently, is more delays for crucial future EV products like the Porsche e-Macan and Audi Q6 e-tron. That’s interesting because last year, software issues pushed those same cars back to 2024. I guess they still haven’t figured it out, and that’s a big problem because it needs those Tesla-fighting EV crossovers like yesterday.
Anyway, this morning Reuters also reported that Bentley’s production chief Peter Bosch is due to take over. Here’s an interesting tidbit from that story:
[VW Group CEO Oliver] Blume is not planning to shift gears completely with the new leadership, sources told Reuters on Monday – but he does intend to place greater emphasis on partnerships to get the carmaker’s software plans underway, rather than going at it alone.
“We will certainly make some changes, but this is not a 180-degree turn,” one source said.
The VW Group’s goal is generally always world domination; don’t just make cars, but Make All The Cars. If it wants this future at all it has to get the software right, but now it looks like it will turn to some outside help to get that done.
Your Turn
What’s your solution to new car pricing woes? When was the last time you tried to buy new, and how much did you pay?
Here’s one idea: just be rich! That’ll solve any new car-buying woes you may have. Have you tried being rich, or even better, being born rich?
Top Photo: Erik McLean/Unsplash
There seems to be a correlation with things you negotiate (haggle) over price and the price going up more than things you just buy. Houses and cars going up faster than refrigerators and computers. It is not a perfect comparison but there is something there.
Check out this graph; top is basically stuff you NEED:
https://images.squarespace-cdn.com/content/v1/5d4c54ec27aefd0001ed2ded/79989f4c-d909-4262-8569-017ee81dbac6/Screen+Shot+2022-05-16+at+12.52.26+PM.png
I like that TV line because that’s one of those items that some groups like to trot out as an item people blow their money on frivolously, when in reality they’re a fraction of the cost of what they were years ago while being larger screens yet lighter overall.
More likely it’s because houses and cars are financed, and rates have been extremely low for a long time, blunting the impact of rising prices.
Now that rates are higher, a decade of gently rising prices hits hard immediately.
Last new car was a 2017 Forester. Paid a few thousand below sticker.
I hold onto cars for a while, can repair them at home and don’t rack up crazy mileage (Forester is at ~60k miles and that’s the car that makes the ‘long’ commute). I don’t mind buying new. It’s easier to comparison shop dealers and there’s less of a pricing run-around since the new car is a commodity equal to the same model on another dealer’s lot.
I mean, yeah. Younger people are getting completely fucked in every way possible by everyone around them. The american dream is evaporating for entire generations yet the news just wants to talk about .05% of the population and which bathroom they should use, because nobody wants to address income inequality, skyrocketing housing costs, skyrocketing education costs, skyrocketing healthcare costs, and stagnant wages.
Meanwhile corporate America has pretty much been posting consistent “record profits” since 2020.
I work in the marine industry. The average new boat purchaser is over 50, and that means that boats, and engines, are all designed for 55+ year old tastes; conservative, QUIET, calm, ‘sereeneeee’, aka boring and slow in general, or fast and completely and totally unobtainable for the working class. It sucks. 20-30 years ago you could buy a small 18-20′ boat that looked sporty/exciting/fun and a high performance 150-200hp outboard, and haul ass. That entire segment is gone.
The automotive equivalent would be a landscape with ZERO affordable fun cars, no mustangs/camaros/challys, no GTIs, no Civic Sis, not even civic type Rs, absolutely no fun exciting things under 75k or so. Just boring family vans (pontoons), sedans (bowriders), and utility vehicles (fishing boats).
Right now, we are catering to the rich, just like in the 1930s, when the automotive brands were pretty much only selling to the 1% while the rest of the country was in a giant depression.
No surprise younger people aren’t buying new cars. They can’t afford to. They’re trying to save up for a house that was under 250k 5 years ago, and is now $650k, while paying back their student loans that have an interest rate higher than almost any other loan.
I feel bad for them, and I’m concerned about the future of our nation unless we see massive changes. Didn’t even touch on climate change.
Indeed. Ford went from selling Fiesta and Focus ST models in the $20s to…Mavericks. Nothing against that little truck, but…meh.
All that stuff about boats is greek to me – the fact that I am 45 with a career as an Architect and boats aren’t even anywhere near my radar is probably disappointing to any boat manufacturers. Bought our first house six months ago, so I will probably not be boat shopping for another couple of decades if ever.
And I fully agree with your opening statements – the Republicans are actively hostile to me and anyone I care for, while my supposed allies only worry about irrelevancies.
“the fact that I am 45 with a career as an Architect and boats aren’t even anywhere near my radar is probably disappointing to any boat manufacturers.”
I’m 49 and have a career that pays well enough that I could afford a boat… even years ago. But I have no interest in owning a boat because I know they’re moneypits. And I even have my boating license.
Makes more sense to just rent a boat the odd time you need it.
And so I’m another person who the boat makers are disappointed with… LOL
Only difference is I’m up in Canada so the Republicans don’t affect me the way they directly affect you.
I worked in the marine industry for years. Long enough to know I don’t want to own one. I moved a block from the ocean ten years ago and I’m one of the few houses in the neighborhood without a boat. My neighbors have a house boat, a ~25′ bow rider and a couple of jet skis.
One day I may pick up a small almuninum boat just to explore the coast… but I’ll have to be really bored with everything else before I jump down that rabbit hole.
A boat is a hole in the water — into which you throw money
This is such an ignorant statement.
Please understand that boating does not HAVE to be expensive. You can pick up a cheap aluminum boat with a modest outboard for $2-3 grand and have a ton of fun. If you’re willing to put in the work, you can build fast/fun stuff for around $5-7k. The nice thing about sticking to the low end is you don’t worry about depreciation, only upkeep, which compared to a car, is super easy. No rust. No suspension. No brakes. Minimal/simple interiors, etc.
Plus… no speed limits on most lakes, girls are in bikinis, everyone is having a good time. I love cars but boats are ultimately way more fun 😛
That’s really my plan. Small aluminum boat with the limited systems easily accessible. Light enough to tow with anything and rugged enough to beach regularly. We have a barrier island so we can do plenty of exploring with a small boat. If I ever get caught up on home and car projects I’ll start shopping.
How big of a hole depends on which boat though. I’ve contemplated getting a canoe which has next to nothing it ongoing costs.
Or if I was on a cottage on an island, a flat-deck pontoon boat that could also be used to haul materials/supplies if I had to do any work on the place… or just comfortably sit on while on the water.
Basically the bigger/faster/more powerful it is, the bigger the financial hole.
As a millennial that got a good job out of college, I lowered my living standard from what my wages suggested I could afford accordingly to match the changing economic landscape. I lived in the hood with roommates in a rat/roach-infested hovel, cooked my meals and rarely ate out, never used credit cards or bought much in the way of luxuries, rode bicycles everywhere, and drove a $1,200 beater for when I needed to travel long distances. Today I’m debt free and have money to spend on things I want.
My peers who 10-15 years ago started families, bought a modest $150k home in the suburbs(which are now worth double or triple), and low-end new cars, all on credit, are living paycheck to paycheck with no savings and no ability to afford anything fun, are still saddled with student loan debt, and are constantly one job loss or medical emergency away from losing everything. Even in cases where they make more income than I do. And they make what is considered good money by the standards of my generation, definitely in the upper 15% for their age group and upper 25% overall.
Things are not going to turn out so well when the next round of layoffs comes about. This economy has been collapsing since 2007 and the statistics have been manipulated to suggest otherwise. People have been using debt to pretend their way to prosperity.
The lower-middle-class living standard of the 1950s showcased in sitcoms like “Leave it to Beaver”? Today, that’s only truly affordable to the upper 20% of Americans. Using debt to pretend you can afford that living standard is only going to end in tears. This country is not what it once was.
There are lots of people much less fortunate than me working 2 or 3 jobs, living paycheck to paycheck, just to live in a rat/roach-infested hovel and eat processed junk food all the time, unable to even afford a simple clunker car(insurance/taxes/fuel/maintenance is out of the budget). Once an unexpected life-altering event happens, they end up homeless. Most of the homeless people I know have jobs and are still priced out of rent, and I live in one of the cheapest major cities for housing costs in the entire U.S.
Appreciate your point. Yet here’s what I am wondering. As a child in the 1960-70 era, we heard most all the same stuff then. Except there seemed to be a lot less homeless folks. It’s cool that shit turned out good for you, good results sometimes require some adjustments or sacrifices. So life/shit has gotten worse and out of hand in many ways. Not sure why except for the greed factor aka inflation.
For every homeless person you see, there are many more you don’t. The official statistics regarding this with certainty undercount the numbers.
Shit turned out good for me due to a combination of luck and good decision making. If either factor was missing, I’d probably be homeless right now just like some of the people I graduated college with. I didn’t start out with a silver spoon up my ass, but I’ve made it into the lower middle class, although I do not at all live like it yet. Staying there will be difficult, but at least my odds of avoiding total and utter destitution are decent. Planning to shun all of the modern “middle class” trappings and get me some land in the boonies, keep my bills to a minimum(renewable energy systems for power, a well for water), and maybe one day I’ll have a space where I can build my own toys.
State hospitals and institutions were still operational back then. Regardless of the conditions, these kept a good number of potentially unhoused people from sleeping on the streets.
“ Except there seemed to be a lot less homeless folks.”
There is a reason for that. in the 1930s, there were MANY homeless people.
Then WW2 happened. And the Korean War. And Viet Nam.
Many enlisted, many died.
One key thing that has changed is how we fight wars these days. We don’t use people for canon fodder like we used to.
So there are more people these days… and that’s one of the reasons.
One thing that people tend to forget when looking back at the glorious 50’s and 60’s American Dream®️ Life is that era was an aberration. Europe and the UK were badly economically injured by WWI and then the Great Depression hit them as much as the U.S. except that they then got WWII and the U.S. economy was not only uninjured by the war, but benefited from it.
After the war, American manufacturing was unchallenged since all of Europe and Asian manufacturing was bombed into rubble. From 1945 to roughly 1970 there was no foreign competition for anything sold in the U.S. and there was also a big export market for U.S. goods. Under those conditions, American wages grew wonderfully.
However, American companies grew complacent, quality suffered, wages got high, and suddenly: Volkswagen. Then Toyota. Then Honda. Those make easy shorthand, but the same was true in many other industries.
Once the world recovered from the wars, American had to compete with the products and their wages. Worse, in many cases since their factories had been destroyed, when they rebuilt they built modern factories – America was stuck with equipment from the 20’s, 30’s, and 40’s. The foreigners also had favorable wage agreements from workers just glad to have jobs after the war.
Too Long/Didn’t Read Version:
The American Dream years were a freak never to be repeated.
However, since then, with technological advancements, productivity per worker has more than doubled.
The issue is that the vast majority of any economic growth has benefitted the upper 0.1%, while whenever there is decline or any externalities, they’ve been foisted on the bottom 80%.
Wages, real wages, should have gone up in the U.S., even in spite of the U.S. losing its post-war advantages. Instead, the rich got richer, and everyone else got screwed.
Once the cheap oil runs out, any real recovery will not be possible.
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“The lower-middle-class living standard of the 1950s showcased in sitcoms like “Leave it to Beaver”? “
If you look closely at the ‘leave it to beaver’ family standard of living, there were a lot of things they didn’t have that we take for granted to day. Take the cars for example… they had one family car… either a basic Ford or a Plymouth. Nothing as fancy as modern BMWs, Mercs and other premium cars that are so common these days.
And their house was only a 3 bedroom house… not the oversized McMansions we have today. Did it even have a garage? And it probably had just one bathroom. And their kitchen didn’t have a dishwasher, toaster oven or microwave. Hell the stove area didn’t even seem to have a fume hood.
Also that house was in the middle of nowhere… with no public transit.
And note other things they didn’t have… stuff like TVs (let alone cable TV) or a fancy stereo. And of course they didn’t have any of the modern electronics we take for granted today.
Also from that era, many houses had washers…. but no dryers. People hung their clothes up on clothes lines back then to keep their costs down.
So if you really think about it, the standard of living we have today is higher than the fictional ‘Leave it to Beaver’ family had.
You misunderstood my comment. People are using debt to pretend they can afford all this new crap, in order to keep up with the Joneses. This has driven prices up for everyone, including those who try to live responsibly and avoid debt.
A 3 bedroom 1 bathroom house in a relatively low crime neighborhood, will require 3 times as many hours of work to afford rent today as it did in the 50s. A 3 bedroom house in the US of roughly 1,200 sq ft is going to cost you roughly $500k, which is a $3,000/mo mortgage payment. It is generally advised that you shouldn’t spend more than 1/3 of your takehome pay on housing, which means, you better be making at least 6 figures. For individual income earners, that puts one in the top 20%.
In the 50s, a one-income household could afford such a home and lifestyle as depicted.
All of those convenience items like a washer and dryer, a microwave, or luxuries like a TV are not necessities. Relative to the cost of housing, they are dirt cheap.
That one family car back in the 50s might have been a decent used car that took 500 hours of labor at median wage to afford. With the average used car going tor $28k today, that cost is close to triple.
People are juggling debt around working multiple jobs in a household to pretend they can afford a middle class living standard, when they really cant. The living standard they can actually afford is LESS than what they’d have been able to afford 70 years ago on a single income, at least when you consider the necessities. The inexpensive luxuries we have today that didn’t even exist then are a sort of afterthought in this assessment, and really don’t matter if you can’t afford the basics anyway.
This is in part why I’m building my own marine ply/glass semi-speedboat based somewhat on my experience as a marine mechanic—18′ reasonably narrow beam and minimal deadrise for speed and efficiency in the mainly sheltered waters it will be on with a small-ish outboard allowing for about 40 kn top speed, which should feel plenty fast. Under 2k lbs with trailer, so I can pull it with about anything, no water systems, minimal electrical, few-to-no below waterline through-hulls. Nobody makes anything like this. Partly, I get it where a lot of costs are based on length, so people want to maximize the footprint for occupancy to party on the water and they don’t care about the bigger engine needed as they probably want to pull a skier. I don’t fish, I plan on primarily using it in motion, and I don’t like many people, so room for 2(+2 with additional seats I’ll seldom use and might not even make) is plenty. If someone built such a thing, though, it would probably be well over $60k.
protip: Just restore an older boat. The hull designs and aesthetics are incredible. Hydrostreams, allisons, talons, checkmates, bajas, sleekcrafts, sangers, carreras, etc.
I feel like Carolina Skiff type boats could meet those needs and probably cost less than your price (depending, of course, on the motor). I have been out of the loop for a while, this may not come in at much less .
Edit: Looks like you can find 17′ with a 90hp Suzuki for ~$33,500 new.
“that means that boats, and engines, are all designed for 55+ year old tastes; conservative, QUIET, calm, ‘sereeneeee’, aka boring and slow in general, or fast and completely and totally unobtainable for the working class. “
As someone who has rented cottages along lakes, I consider this to be a blessing in disguise.
Quiet, calm and slow boats sound great for those of us with kids and want to use the lake for things like swimming, fishing or canoeing.
People in speedboats are often attention-seeking assholes who are a menace to everyone else. They’re the floating version of “loud pipes” assholes on motorcycles.
And note, I’m 49 and had my kids in my late 20s/early 30s. And I have my Canadian boating license.
And I could afford a boat, even when I was younger. But I always knew that boats, like RVs, are money pits.
Hence, I just rent a boat the odd time I’d need one. And I do my camping in a big tent.
I think Manufacturers might also be failing to factor in WFH workers like me. WFH for 13 yrs now and my wife WFH two days a week. We have a paid-off 2016 Highlander bought new and a nearly paid-off 2019 Kona bought off rental and neither have over 60k miles. We don’t commute far to work or at all and do not run up the mileage. We’ll likely not be in the market for a new car for several years yet. I have friends and co-workers in similar situation. New car demand at these prices is going to fall. Count on it.
This is me too. I have a short range EV (leaf) and a long range 04 volvo wagon that barely gets driven outside of a 150-300 trip every few weeks/months.
Wife is at home with the kids, and I WFH now. The idea of burning $500-700 a month on a car that wouldn’t get driven makes me laugh pretty hard.
My last (and so far only) new car was my Fiesta ST I bought in 2019. It was very much an impulse decision because I realized this was my last chance to get one that wasn’t ever beaten on and I wanted to finally use my A-Plan on something.
The STs are holding value very well in the current market craziness and I’ve thought about trading it in for something else but the problem is that there just isn’t anything currently on sale brand new that I both actually want to own and could afford.
Those cars were deals even at MSRP imho. I’d drive it until it blows up. Only bad thing about it is visibility.
These whining dealers were the same ones cheering and drooling with anticipation when they thought they’d be able to sell six figure Jeeps.
No sympathy for dealers here.
I bought a brand new fiesta ST in 2019 when dealers were just trying to get rid of them. Got a pretty good discount on an already cheap car with a reasonably low interest rate. I’m looking into new cars and anything that I want is just not viable for me now. It’s not just about car prices and interest rates, but everything is more expensive and just living costs more. My wife is carrying our 4th kid and we need to get something that will hold all of us, it’s looking like we’ll buy a 10-15 year old minivan or conversion van with cash instead of financing something. Maybe it will still be worth something when interest rates come down.
Protip: Pickup a ford econoline conversion van. They hold value if they’re clean, you can swap in a 7.3 powerstroke, and if they’re built out inside they can fetch $30-50k, even with high miles.
While that average price has risen sharply over the past few years, keep in mind it is a numeric average and it is based on transaction prices during a period of shameful dealer markups due to constricted supply. Numerically, given that the near-$48,000 figure is an average, there is as much money being spent below that number as above it. With the cheapest cars on the U.S. market going for around $20k, that spread below the $48k average is fairly narrow ($28,000) and there are a lot of cars in that group. It doesn’t help, of course, that manufacturers have focussed on the more expensive models and higher trim lines as production constraints have been easing, or that dealers have giddily tacked on ridiculous markups. But it also doesn’t help that buyers only want the cars the cool kids are buying. A mid-size sedan used to serve the typical family pretty well (and still would) but typical families don’t want mid-size sedans anymore. They’ll walk right past that $32,000 Honda Accord to look at the $40,000 CR-V or $50,000 Passport.
It’s not a “cool kids” reason people are buying crossovers. There’s a number of things we could talk about people buying that they don’t need, but people are buying crossovers because they find them more practical for their use case.
Where are you getting an $8k differential between a midsize car and the crossover? A CR-V or RAV4 starts $1000-1500 more than a base Accord or Camry, sure. But they all run in the $30k range. A $40k CR-V is a top-end, loaded Sport Touring hybrid, a $32k Accord is a more basic Sport Hybrid.
The midsize sedan hasn’t been the family car of choice for decades now, before the crossover push. Even if you look at minivans, the “sensible” choice, good luck finding one much under $40k.
The last time I bought a new car was December 2018. I got a 2019 Elantra Value Edition for $2.5K less than MSRP. It cost me $19.5K! A sub $20K car… If you ignore tax, title and fees. Out the door I believe it cost me a little under $22K. It’s paid off and I have been tempted by a few cars but I’m not pulling the trigger because of the rising prices. For example an equivalent new Elantra is going for $26K and after tax, title, and fees it’s $28.5K. Couple that with higher interest rates and no we’re not doing that.
The problem is that buyers are willing to spend $50,000 for a new transportation appliance and are willing to take out ridiculous loans to do so. I don’t think there is a good solution since Americans have accepted that massive amounts of debt are an inevitable part of life. It would take a significant cultural change to get buyers to want to buy affordable vehicles again, and until that demand exists, manufacturers won’t build them.
I think you can change “Are Willing” to maybe “Were Willing”. When interest rates were low the big number could be spread across the years and interest made little impact now though that’s changed.
Ex: Car $40K 60 mo.Loan $32200 (includes tag etc) sales tax 5%. Interest: 1.5% Payment $592 – month
Same car at 6%
Payment $662 -month
Difference $70 month or $4200 more over the life of the loan for the exact same car.
Note- that’s a $40 car with $10k down. With $1K down it’s $748 a month vs. $835.
$87 per month and $5250 over 60 months for the same car
Buyers seem to primarily pay attention to the monthly payment and often don’t consider the total cost of the car. I think people will continue to finance expensive cars even with higher interest rates. I could see terms getting longer with auto finance.
I hope I’m wrong. It would be great if buyers refuse to buy expensive cars with rising interest rates, but I’m not expecting that to happen.
Have never bought a new car in 50 years. Just not gonna do it. It’s just not a good economic decision. But hey keep raising prices. WTF?
What world are these manufacturers living in? Certainly not mine.
With limited income I refuse to feed the monster.
We got a ’23 Maverick for the wife in February. Dealer invoice, traded in her SHO, and paid for the rest. Don’t know when the next new one will be. I have a preference for pre-depreciated, unloved models.
I have a ’18 Clarity PHEV now with 50K miles, the man-cub reaches driving age next year. I’m thinking the next ride will be a low mileage Toyota Crown or VW Arteon.
To replace the 11 year old jeep I drive and bought new, I would be about 40% more. I optioned a new one on the jeep configurator and my then msrp $32K jeep would now be more than $45K now and it is not 40% more jeep. Some things are better like the transmission and stereo but other than that….
The last new vehicle I bought was my wife’s Sienna, in October 2020. At the time, we were just trying to score one of the remaining 2020s before the new hybrid 2021s hit the lots with their ugly styling, lower power, and far less useful interior layout.
Little did we know that we snuck in right before pricing started to go crazy.
I won’t pay a markup over sticker for anything, so even if I had wanted to buy something recently, I wouldn’t have.
I will say, as I always do when this topic comes up, that we shouldn’t be remembering the past with rose colored glasses either. New cars have always been for people on the upper reaches of the income spectrum, and until just a couple of years ago, the average prices of new cars were fairly stable in real terms over decades. Obviously 2021-23 has been different, but I can’t imagine the situation being stable. If MSRPs remain high, we will see the return of incentives/financing deals.
“I will say, as I always do when this topic comes up, that we shouldn’t be remembering the past with rose colored glasses either. “
I just wanted to highlight this point. In so many discussions about the cost of living in 2023, people seem to forget that a lot of people have always struggled to afford things like houses and vehicles.
Except that, in a lot of peoples’ experience, things that they used to be able to afford are now out of reach. It takes exactly one graph of housing costs vs median wage to illustrate this. It’s not rose colored glasses. The cost of living has increased relative to income, while the gap between the median American and the top income tier(s) is only getting wider
Houses and cars have followed a very different pricing track, but since WWII the average priced new car has not been affordable to someone making the average income at any point.
That unfortunately does not hold for the last 3 years when taken literally, nor is it holistically accurate. As the cost of other required expenditures increase, such as housing, the actual cost of things that have remained otherwise steady wrt inflation do end up costing more. I.E., they become a larger percent of your take-home revenue. The fact is that the median American takes home less purchasing power than they did in the past.
It’s much easier to increase the supply of cars than houses.
If the average transaction price a year from now is $60K, I’ll eat crow. But I don’t see it happening. Cars will return to their long term averages, and the price of housing, which is much more entwined with politics and regulations, will be mostly independent of other consumer goods.
The cost of housing does suck. I will concede that has gone up considerably relative to wages. Some of that is due to consumer choices and expectations, though. Buyers seem most interested in 3,000 square foot homes with 4+ bedrooms. Buyers are also willing to pay a huge premium to live in certain cities, even though no one is forcing them to live in New York City or San Francisco.
I know some people are genuinely struggling with housing, and I have sympathy for them. However, some of the loudest complainers drive a Lexus and live in a 4,000 square foot McMansion (or live in a trendy part of Manhattan). For those people, being broke is a choice.
The cost of housing issue gets pretty complicated, and a lot of it isn’t so much due to consumer choices as it has to do with zoning laws.
If a municipality disallows building of normal sized homes on normal sized lots, it’s difficult for affordable housing to ever be built.
There certainly is a group that seems to complain endlessly about costs while living a conspicuous consumption lifestyle though.
I think the real problem with housing is that homeowners have a disincentive to allowing increased density. If housing supply increases dramatically, my home drops in value. At best, my net worth decreases. At worst, I’m underwater. Housing is going to very hard to solve given the competing interests of homeowners and those looking to buy. Fortunately this is a car site, so we can leave the housing market to others (sorry- I think I brought it up so it is my fault).
As an aside, I’m a bit annoyed with the guy that wrote this post. Some elements of this post seemed deliberately political (i.e. blaming the high cost of vehicles on corporate greed). I don’t mind a little bit of politics when appropriate, but this reminded me too much of the bad old days of far left vaguely automotive journalism at that other website.
I don’t think there is anything political about mentioning corporate greed; it is simply an acknowledged fact of life.
How is “corporate greed” not a politically charged statement?
Is a corporation greedy or successful when it makes a high profit? The answer entirely depends on your point of view about our society and economic system (i.e. your political views).
The author made his political views clear when he stated that greed is partially responsible for high car prices. I hope this doesn’t become a regular occurrence here.
We don’t want to get too far into the weeds here on this car site, but obviously a corporation can be both greedy and successful. The existence of corporate greed is an accepted fact of life, not a shocking or controversial opinion. There’s no need to carry water for multi-billion-dollar corporations, they’re going to be just fine without you leaping to their defense.
“The existence of corporate greed is an accepted fact of life, not a shocking or controversial opinion.”
I’m not even sure how to respond. Agree to disagree, I guess?
The average new car has always been a little spendy, but few people couldn’t afford to finance a Geo or a Festiva when those existed. The difference being there is no Geo any more.
No Geo, but most people could afford to finance a Versa, Mirage, Rio, Trax, etc if they chose to.
A Metro in 1990 was about $7000, which is $16,500 today, or about where the Versa and Mirage reside (never mind the 30+ years of safety and feature improvement).
That sub-500 FICO Score group saw their choices in car purchase be picked up by Mitsubishi dealers…
I’ve been kvetching about how corporate greed is ruining cars for normal people for months now. The bubble is going to pop eventually. The supply of wealthy people who can afford new cars is finite. Bad, wealth favoring policy from both sides of the aisle is killing the middle class. Upward mobility is close to nonexistent in this day and age. The only reliable ticket to becoming wealthy is to be born into it.
While true rags to riches success stories do exist in today’s day and age, they’re increasingly rare. Trickle down economics have literally never worked but Republicans will never move on since their entire mission is to protect the interests of the 1% and the best solutions Dems give us are watered down third way nonsense that’s essentially just slightly gentler trickle down.
Capitalism will fail without regulation and the idea of free markets creating a meritocracy can’t work when people are born on drastically different spaces on the board. Alright I’ll stop now. The last time I bought a new car was a year ago. I got my Kona N for $500 off MSRP. It was not a great move financially. I had gotten tired of all the bullshit my MK7.5 GTI put me through and I wanted more performance and a little more edge.
Due to the ridiculous market my GTI had never depreciated so it felt like a good time to cash in. I had 5 figures in equity in it. Ultimately it was a dumb move financially. I have a higher interest rate (2.75% compared to 0%) on the Kona N and the payments aren’t really outpacing the depreciation. The model has been extremely unpopular in the US, and that coupled with Hyundai’s less than stellar reputation has already tanked values…not to mention its terrible fuel economy led to higher taxes than anticipated.
I basically set a pile of money on fire because I wanted something. I really enjoy the car but it given a do over I wouldn’t do it a second time. It’s a great car but the extra enjoyment hasn’t really been worth all the extra money I’ve had to sink into it. This isn’t a poor reflection on the car mind you-it’s been great and I thoroughly enjoy the Ns and sing their praises often. But I really didn’t need to incinerate all the money I have in the process.
I’m not considering a new car until it’s paid off and my wife’s car is about to be paid off, so we won’t be looking at anything again for several years…and frankly it’s just not worth it right now anyway. Our household income is on the higher end (not saying this to flex, just for context) and we can’t help but look at prices and go “why?”. As much as I love cars paying $50,000+ for cars for either of us just isn’t a smart move financially.
It’s not that we can’t so much as we won’t. It’s just not a smart place to have very much of our money tied up…especially when the bubble is going to pop. Cars are depreciating assets as is but folks buying at the top of the market are going to be hit the hardest when things come crashing down.
Well said. New is nice, but expensive. I don’t like setting my cash on fire at all.
It feels like rational thought has finally left the building for good…
And people wonder why they are broke, and unhappy?
Agree with you and your position 100% here. People seem to take pride in doing stupid things.
You consistently post thoughtful, intelligent comments. I don’t understand why you keep buying brand new cars. All of the crap I own is either appreciating or holding value. I’d get out while you can and invest in 90s JDM goodness. Stonks only go up.
…and this being the conventional wisdom in enthusiast circles is why there aren’t more cheap, fun new cars. Only buying used means only being able to buy the bland transportation appliances that are what the car-illiterate normies and company fleet managers go for.
Sure, but on the other hand I have no interest in going even deeper in debt so that future generations can pick up nice, reasonably priced used cars. My current cars are from ’93, ’96, and ’03 – and two of them are JDM imports. I don’t see this changing anytime soon as there are practically no cars available here that suit my needs and wants.
I’ve been tempted to buy a JDM car but those prices are getting dragged up too by the market. I also worry that parts availability might be difficult. Other then that I’d buy something JDM in a heartbeat. I’m fine with RHD.
Presuming your State will title & register your RHD JDM ride…
Not my fault most new cars suck. I have 6k into my 90 Civic Si and I adore driving it; it’s truly fantastic. New cars feel like bloated turds and cost 30k+, and get inferior MPG. What is the point? Safety, sure…. but I don’t crash. You’re effectively justifying a massive depreciating asset that is INFERIOR in many ways, on the off chance you wind up in an accident. I don’t see the value in that bet, that only pays off when you run into something.
I learned my lesson and my next car will hopefully be something Japanese I’ll buy used and keep until the end of time. I’m eyeing any of the Lexus products with that iconic 5 liter V8. An IS500 or RCF are likely what I’ll wind up with, although I do lust after the LC500 24/7/365.
It’ll either be that or I’ll finally bite the bullet on a Porsche. An actual one…not a damn Macan or Cayenne.
An LC500 in green is the best car ever built. I’d feel good in a Porsche. I’d feel perfect in an LC.
A Nori Green over tan LC500 convertible is my dream car
Get an aircooled 911. Stonks. Price only go up. The community is awesome, cars are easy to wrench on, almost no plastic, etc. It’s easy to justify occasional expensive service when they are almost always worth 40-50k these days in decent shape.
There is a part of my brain that is fueled by sunshine and unicorn farts. That part of me hopes that these factors (eg the regular folks being priced out of new cars, rising fuel costs, outdated infrastructure, and aging auto fleets) will spur renewed interest in public transit and help reduce our absurd car dependency.
…the rest of me just wonders if we’ll see a surge of interest in DIY carpentry a la the French.
You can’t enjoy a decent lifestyle on a degree in Transgender Studies, or some other non-STEM degree.
The last new car I bought was a Mk7 GTI SE, which cost me about $500 a month on a 5 year, 1.9% APR loan.
Today it’s a double whammy, with high base prices along with high interest rates, I cannot fathom paying $700+ for a car, let alone what that compounding interest is going to do over the 5-8 years people are taking out financing for.
That said, the Kia Rio is a great car, so I’m glad they’re still affordable; I honestly thought Kia would have killed it by now
Similar on a Mk7.5 with 0.9%. I’m glad I don’t want a new one, because it’s $5k more just to get another SE for the moonroof. But then…everything’s gotten more expensive, so…
They probably thought of killing the Rio, but being essentially the last man standing in the low-price segment (the Mirage and Versa are unthinkable to me at least) they may have realized that they’re going to start selling loads. I hope so, at least.
I bought a new car in 2019 and had an order all set for a Maverick at release, but backed out of that (and have been kicking myself ever since). The 2019 Niro was a bit of a pain in terms of finding a dealer who knew what to do with a PHEV, but the price ended up well below MSRP because I live in a state that didn’t sell many.
The Maverick was going to be invoice price because the dealer wanted to capture as many orders as they could, but I was holding out hope for a PHEV Maverick and decided to hold off.
That said, I also tried to order a Tucson PHEV (kinda glad that didn’t go through), and was told MSRP…until I’d been waiting for a few months, at which point they told me $10k over and I called bullshit. They offered to split the difference and mark it up 5k, but I’m not willing to do that, especially on a Hyundai that was already a little more than I would have liked.
Having gone to the lots recently, I do think that the dealers are starting to realize that the bottom of the new car market has gotten too high. They really try to explain how much you get for the high price and they keep running interest rates that seem hard to believe given rising interest rates in general.
I bet that PHEV Maverick does happen at some point, but I also bet that it’ll be close to $30K.
Actual transaction prices vs MSRP will start falling soon. I’m already seeing cash on hood offers and dealers are somehow still managing 0-0.9% rates
The real reason is called gouging
Forced uptrading is a form of gouging. Getting rid of all the cheaper cars and only selling the more expensive shit.
We need to bring back cheaper cars. Geely, Chery, and other Chinese need to start selling them here. The Chinese are very good at undercutting.
Someone will drive their Chery to the Lery, even if the lery is dry.
Yes, Chery, with only one R. Cheap Chinese knockoff lol
We could also finally sign on to the UNECE standards.
Good point. Yet I will never buy a Chinese built pos. I learned my lesson from that party toy piece of shit Torch bought…
Chinese cars may have some problems with IP in new markets. I don’t know if it’s still the case, but for a while they were pretty blatantly copying the styling from other popular models. They’d also have to meet US safety standards which may be easy if the platforms were designed with that in mind – or difficult and expensive if they need to start from scratch.
China uses modern safety and emissions standards now. Therefore, it won’t be any more difficult for Chinese cars than European cars, for example.
And China is still cheap and can still undercut.
They’ll probably have to enter the market as the low-end option to work out their bugs before establishing their ability to sell up-market models. Kind of the same thing that Hyundai had to go through with the not awesome Excel establishing a dealer (and very busy) service network that led to some solid vehicles and a premium brand a few years later.
US Regulators / Politicians will work (thankfully) to limit Chinese car sales in US.
The trend toward ever-more-expensive cars goes away once a certain generation is all pushing up daisies. Along with CUVs, white Reeboks, and fanny packs. And broadcast television news.
Fanny packs are here to stay
My annoyingly attractive and successful younger brother wears a fanny pack all of the time. 🙂
Is it a fanny pack or a cross body shoulder bag?
Maybe, but once they are gone, fresh new cranky olds take their place.
I’m not convinced of that. My own Gen-X is much smaller in number and won’t have the same kind of outsized impact that the boomers do.
Here’s hoping. I’ve watched some young-end boomers slide into the same patterns of those older than them.
Millenials are rooting for you, lol.
Your generation was also raised differently. I think one of the biggest issues with Boomers is that they were brought up during an era of rabid American exceptionalism and economic growth where greed was more or less encouraged and considered normal. I’m not going to generalize and say they’re all like this, but nearly every single Boomer I’ve ever met sees the world solely through their own experiences and cares most about their own needs. Selfishness was a feature when they were being brought up.
Personal experience trumps all in their minds, they’re always correct, and they’re always the most deserving of everything…again, because of the exceptionalism and greed that they were raised with. It makes them extremely rigid in their views, and due to the selfishness engrained in them and never ending belief that “the way we’ve always done things is the only correct way to do them” they haven’t adapted with changing times and technology.
The internet has opened up an entire universe of other opportunities, opinions, experiences, etc cetera and much of that generation has more or less just ignored those possibilities and dug deeper and deeper into their old beliefs. When new possibilities arise they will not consider them if they conflict with their own personal experiences. I deal with this when helping my family members shop for cars all the time, which I always get tagged to do.
If the person I’m working with is in the 50 or above bracket they don’t even want my advice in the end. I’ll recommend cars and get responses like “I had a bad Honda in 1986 and I will NEVER consider another one” or “I want something reliable but I’ll only consider German cars because that’s what we’ve always had”. It’s frustrating and I’ve started to push back on it.
The same shit happens for me professionally all the time too. I’m now in upper management in my field and when I have to interact with the fat cats, who are all Boomers because they’ve held those high end jobs for decades at this point and will never give them up, it never goes anywhere. I can bring a pile of data to support my point but if Senior Management Jane or John doesn’t haven’t personal experience with it it gets tossed to the side immediately and I get met with “well I’ve been doing this a lot longer than you and I’ve always done it this way, so don’t try to change my mind again or there will be consequences”.
It’s absolutely exhausting. I don’t see this type of stuff with Gen Xers because they weren’t brought up being told they’re God’s gift to humanity, the old ways are infallible, and that greed is okay. I genuinely don’t think it’s going to be a cycle of current folks aging into another bunch of cranky rigid resource hoarders. I think baby boomers are a one off combination of things that are uniquely challenging.
To paraphrase Pogo (an old comic book character), “You have met the enemy and he is you.”
Us Gen-Xers are in our 50’s now, fyi.
Gen-X is a weird cohort. Some, starting way back in the greed-fueled 80’s, bought into (or as some of us say, sold out to) the boomer/yuppie mentality. Some got caught by the crushing depression of getting pulled in different directions by boomers and complicit Gen-Xers versus the others of their generation that leaned away from that — and have become part of a highly medicated segment of society that makes them ideal consumers, all seeking to just buy some slice of happiness and not realizing that they’re spending their way into a hole.
The remainder of Gen-X are aging but tend to go the same way as the younger millennials and Gen-Z. But they’re a relatively small market segment in themselves, and more of an add-on to the economic and social impact of the younger generations. Basically, a statistical anomaly.
As a boomer got to say this: Everything you said is food for thought and consideration. And a good amount of the points made can be actually attributed to any older generation to a large degree. In that I mean that we have heard those same things from the generations before us. A lot of this is just basic human nature and behavior at work.
We were raised to believe that with hard work, honesty, and good vibes anything was possible in life. Then reality made an entrance. We are a huge generation. A lot of us are pissed off now that we are old and shit never changed for the better despite our best efforts. Life is hard sometimes…
Boomer here. I can’t understand the animosity towards our age group, particularly from younger folks who seem to be doing well.
No one made life easy for me or our age group. It’s still not easy but I’m not complaining. I’m appreciative of the opportunity to live in a country (USA) where initiative and hard work are sometimes – not always – rewarded. Maybe I should have done better. Maybe I still will. Not dead yet. Being a boomer provides no guarantee that life is a breeze and I have no idea where we acquired that reputation.
I have a lot of younger friends and seem to get along with them. We share interests, talk about work, have a drink and enjoy getting together. Are they all mumbling, gee I wish this old fellow and his unbridled optimism, belief in the country, hard work and capitalism would just die?
Anyway, I’ve always thought that shared interests were a great way to get past differences in age, social status, race, religion etc. Shared interests are also a great way to get past differences in ideology. We don’t have to agree to have a discussion.
In person, I have no issues with the youngers – or olders. But among keyboard warriors, I often see the same sort of unbending, entitled ideas that we olders are accused of, in the youngers. If we are, in fact, the fat cat arses that we are accused of being, then I have no doubt that those young warriors will become what they now despise.
But I don’t think we Boomers are really all that bad. And bear no ill will towards those who are younger. I like cars and hope the people I converse with here share my joy. Even if they don’t agree with my car buying choices.
Kind of a broad brushstroke of bullshit you present regarding those older than you…
I work as an engineer, my wife works as an underwriter for a bank. We have two kids, a house, blah blah blah, classic couple in their 30’s who I imagine would typically be the backbone of the new car market.
We cannot afford a new car anymore. Yes, our other car is paid off. Our housing costs are actually sort of reasonable given we bought a real fixer before the pandemic.
We bought a used Chrysler Voyager that was a former rental when looking for a new van. The reality is that manufacturers have all but eliminated base models, and even mid trims. I’ve said this before, the Odyssey that we wanted no longer comes in the LX, and the EX is vaporware. So a van, which was something you could buy for 30k easily a couple years ago, sometimes with cash on the hood and 0% financing, is now 42k with higher interest rates. It’s just not within reach of regular people who are reasonably responsible. The dealer tactics don’t help either.
I sort of hope the manufacturers get what they deserve at this point.
It feels like income inequality has gotten even more insane- not just the number of unfathomably rich people, but also the spread within professions. It feels like as a non-software engineer I’m part of an underclass. My friend, who has a math degree and taught himself to code, makes 50% more than me for a job that is in many ways easier. Also, the difference in salary between a company like Apple and where I work is astounding, with job postings listing at least double but often 3-4x for similar jobs. So I, who commutes locally(12 miles), am competing for housing with people who commute never or commute 1.5 hrs.
I have been looking for a new role, but now we would like to start trying for a family, which means we either need to wait for 3 months after getting hired, or I need to stay at my current company until I go on paternity leave.
I’ve found somewhat the same thing in mechanical engineering. High floor, low ceiling (relatively speaking).
I left for project management last year and haven’t looked back.
Most Engineers top out their income bracket in first 5 or so years. They don’t get an increase unless they move out of Engineer worket role and go into Managing other Engineers…
As a civil-structural, I certainly feel that. I’m lucky that the tech sector isn’t particularly strong in my area, otherwise I’d be competing for housing with their inflated salaries. It’s been like this for a while; tech sector with massive investment behind it results in high salaries while the construction industry for instance, operates on low margins (or so they’d tell you, those connected to the tops of these companies sure do well).
I feel you, 46 yo sr. mechanical engineer. Bought house in the Pittsburgh ex-burbs during the last financial crisis. We do well, but not new-car buying well.
This is one of the reasons I left engineering. I switched to nursing and never looked back. In about 2-3 years I was able to double my salary from what I made as my final year in engineering. I work less hours now too. The amount I make right now as a relatively new nurse, i’d have to be an engineer for probably at least 15-20 years. In the particular industry I was in at least.
The most frustrating part is when people find out you’re an engineer and automatically assume you’re raking in dough, lol. Especially when the olds insist that everyone my age is struggling because we all got ____ studies degrees. “Actually you told me that the world desperately needs engineers, I went to school and then the economy collapsed.”
Turns out I learned that companies need engineers, but would be really happy to not need us.
As a retired HR guy who did compensation it’s always been true that engineers start a great base and then their salaries go ….nowhere. You have to get out of engineering per se and into managing engineers to get any money. Why? I don’t know but t’was ever thus.
“IT” was the exception to this but I think that roughly 100,000 IT people have been laid off in the last year. That has got to impact wages… traditionally wages don’t go down they just stop going up.
A good starting salary as an engineer can’t even be counted on these days. Many companies made offers less than $15/hr, some as little as $12/hr(I was called a “typical entitled millennial” when I explained to the interviewer I used to make close to quadruple that and the wage offered wouldn’t even let me move out of my parents’ basement), for the same kind of work I’m doing now for a low-six-figure pay. Then when no one takes the job at such pitiful McJob wages, these same companies complain of a shortage and petition the government for VISA applicants. So for a period of time spanning years, I was washing dishes at a restaurant for minimum wage with my electrical engineering degree AND 8 years relevant engineering experience. Wages are being driven down by consolidated financial power in all sectors, even relatively high-paying ones such as engineering, medicine, computer programming, and IT included. Power/wealth has gotten so lopsided that the market can be rigged against the laborer even in cases where there is a genuine shortage of their availability.
Yup, that exactly. My salary as an engineer only went up $17k in the 6 years I was there. And I was told by my peers that the raises I was getting were amazing and I shouldn’t complain. Meanwhile, my salary as a nurse has increased $33k in just 3 years. Not saying nursing is all rainbows and butterflies, the work is hard. And I do miss the slower paced office setting sometimes. But overall I would say my job satisfaction and quality of life is much better now.
You absorbed the lie.
Haha yea that’s what I got as well. I graduated in 2010, right after the economy imploded. And it was definitely rough just to even get that first job out of school.
2010 as well! It was a nightmare.
My trouble-free ’14 GTI will be paid off in 3 months. Normally I’d be thinking about the next car by now, but I’m just going to keep it.
It’s roomy enough, fast enough, efficient enough, and it’s reliable. Thanks to working from home, it’s only got 42,000 miles on it. I can keep it going for a long time yet, I think, assuming nothing bad happens.
I’m really grateful I don’t need to replace it, because the new and used markets really suck for people like me who don’t make a ton of money.
Never understood that mentality; take out huge loan for thing you don’t ACTUALLY need (a used honda would have worked), finally years later make the last payment, it’s finally over….. I know, more debt! lmao. Why?!
You have a 9 year old car and it’s not paid off yet?
When will new car prices stop going up and up?
Probably never. All the manufacturers will keep raising prices until only people who are quite rich can even think about affording a brand new car. Used car prices will exceed $100k for CPO Honda Civics. It will be horrible. And then one day, a developing nation like India will start selling low prices and high quality cars, undercut the existing manufacturers, turn the market upside down, and then receive a lot of tariffs to protect existing manufacturers.
Basically 1973 all over again is what I’m thinking.
2008 when I bought my Trailblazer as a left over and this is when gas as hitting nearly $5/gal the first time.
Now I buy off lease , well maintained examples.
There are been a few examples that were not stupid expensive, then I find a 2 or 3 year old loaded example for less.
The timing is really better than it ever has been for some new entrant to come in, Yugo-style, and just undercut everybody
China could fill this role but they’ll probably be legislated out of competition here
India is available, too, we seem to finally making some efforts to be friendly with them. Not sure why we didn’t decades ago, but, whatever.
India’s biggest obstacle is that there are no Indian automakers, it’s 100% branch plants of multinationals. They won’t sent Indian cars to the US at an undercutting price point, but at one commensurate with their brand ambitions and pocket the difference; and they won’t send cars to America from India at all if the additional costs of building left-hand-drive there and the additional shipping distance add up to more than sourcing from Mexico and South America.
You mean like Tata or Mahindra?
Maruti may be associated with Suzuki, but I don’t see Suzuki selling their own cars here any longer, so…
They might have some clause in their license deal that limits where they can export, or maybe not, they already sell in South America. The new Alto would at least be pretty modern and already mostly to Western tastes
…research is tough.
I hope the Chinese are legislated out of establishing dealers in US.