this post was submitted on 06 Oct 2023
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Experts say you should not spend more then 30% of your income on housing (shelter, heat, water, sewer and electricity). If you need a car (live outside a city, have bad city planing, etc.) then this is one more pressure on people.
The current “normal” world exists now only for people making a lot more then the average.
Oh and to better illustrate the gap between prices and wages: https://en.wikipedia.org/wiki/List_of_countries_by_average_wage Compare to an average price of 48k https://www.caranddriver.com/news/a43611570/average-new-car-price-down-still-high/
Honestly you shouldn't even spend that on a car. Cars lose value overtime and are a bad investment.
Take your money and put it into a emergency fund or retirement
This is bad financial advice I hear all the time. People don't buy cars as an investment, they buy them as a consumable item or a form of entertainment.
Nobody says you shouldn't go to the movies because it doesn't generate a return.
I also don't understand the whole "it depreciates in value" angle. Yes, everything I buy new depreciates in value once it is no longer new. I'm not buying a car to immediately sell it. So who cares?
Are there people out there flipping cars like they do with houses? Maybe tell those people.
I bought my car new and people told me the same thing. I'm still driving it 13yrs later and have had no major maintenance issues; only regular maintenance like oil, tire rotation, lube etc. The most expensive thing I've put into it are new tires.
I'll buy my next car new again and do the same thing.
I've read if people buying new Teslas (with some kind of credit for buying an EV), driving it for a year or so, selling it for more than they paid and then repeating the process. Not sure if this is a viable strategy anymore (don't know if Tesla has that much demand anymore).
“Are there people flipping cars like they do with houses?”
Yes. Dealerships. Used car lots. People who offer you $3,000 on trade in and turn around to sell the vehicle for $9-11,000 after a detail and oil change.
People should never trade in or sell their car to a lot/dealer, because they are almost always settling for about a quarter of its value. But the convenience of not having to find a buyer is awfully tempting.
I don't disagree with anything you're saying, but I'm talking about new cars. Outside of profiting off of EV rebates as someone else mentioned, I don't know of anyone buying new cars to flip. Which is why talking to people about immediate depreciation seems silly to me.