this post was submitted on 17 Jul 2023

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Millennials And Gen Z Can’t Afford Their Auto Loans, And It’s Only Getting Worse (jalopnik.com)

submitted 1 year ago by danhasnolife to c/cars

34 comments fedilink hide all child comments

On average, AutoNews reports that 3.58 percent of 18 to 29-year-olds and 2.62 percent of 30- to 39-year-olds have been late on their auto loans by at least 90 days. For some context, just 2.13 percent of all borrowers are late. Keep in mind, these numbers are overall. In the first quarter of 2023, 4.55 percent of 18- to 29-year-olds were at least 90 days late. 3.66 percent of 30- to 39-year-olds were equally late. We haven’t seen numbers like these since The Great Recession.

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[–] RightHandOfIkaros 28 points 1 year ago (1 children)

We cannot afford car loans not because car loans are expensive, but because we cannot afford anything.

[–] [email protected] -2 points 1 year ago* (last edited 1 year ago) (3 children)

Why not both?

The average American spends $1k a month per car on auto loans, insurance, gas, and other car-related expenses, and the average family has 2.5 cars per household.

Maybe cutting those down or out completely would make people more financially resilient. Of course, businesses should pay people better, too, but decades of studies have shown us that planning our cities in a way that increases car dependency is more expensive and unsustainable for everyone.

[–] 13esq 18 points 1 year ago (1 children)

Not having a car in a city is feasible. It's much less feasible if you live in a rural or even sub urban location.

Inb4 "just move to the city then!?" Living in a city is typically significantly more expensive than rural or suburban areas. If they're already struggling financially, moving to the city probably isn't the answer.

[–] [email protected] 6 points 1 year ago* (last edited 1 year ago) (1 children)

I'm not saying everyone should move to the city, nor am I saying that we should get rid of all the cars. I'm saying the way we build our cities needs to change. We can't afford not to.

I live in a rural area; we could still have better public transit and less sprawl to help those who shouldn't own a car for financial reasons.

[–] [email protected] 2 points 1 year ago (1 children)

Those numbers seem fishy or out of context, at the least. We have something like 300 million vehicles on the road in the US so there's no way the average car owner is spending $1k a month on loans. I'm assuming that statistic is only for new car buyers which make up a tiny fraction of drivers.

[–] [email protected] 1 points 1 year ago

I didn't say it was just on loans, that's closer to $500-700.

On average, drivers are spending over $700 and $500 each month for new and used vehicles, respectively... https://www.bankrate.com/loans/auto-loans/average-monthly-car-payment/

When you then include insurance, gas, oil changes/tires/other maintenance, registration, and driver's licensing, this over $1k.

[–] [email protected] 11 points 1 year ago

That's probably because we can't afford shit

[–] Noxvento 4 points 1 year ago

I have sold my car. My wife has a company car and no expenses for mobility. It's freeing.

[+] Hazdaz -8 points 1 year ago (5 children)

Boo-fucken-hoo

The transaction price for new car purchases keeps on going up. All these young people think they deserve some $50k luxury SUV on their near minimum wage barista salary. No one wants to live within their budget.

Just over $48k is the average price of a new car right now. To realistically be able to afford that much car, you should be making well over $130k. Are you making that much money? So why the fuck do you think you can afford a nearly $50k car??

There are plenty of cars that sell for way less than $48k, but everyone these days thinks they deserve luxury thanks to brainwashing by influencers and FOMO.

[–] eneka 9 points 1 year ago (1 children)

I think a big part of it is also financial literacy. No eduction on how to manage your finances whatsoever and people make dumb mistakes when paired up with predatory dealers/financing.

[–] Hazdaz 5 points 1 year ago

I'm kind of sick of the excuses, quite honestly. Yeah, there is a lot of financial illiteracy out there, but there is also more importation out there to teach people than ever before. A simple google search of "how much car I can afford" or "car loan calculator" will pull a ton of sites which give you good, honest results for what you can REALLY afford. But people rather watch influencers with their rented out Bentleys than search for financial advise.

You can lead a horse to water but something something 30% APR something something.

[–] [email protected] 3 points 1 year ago* (last edited 1 year ago) (1 children)

You’re assuming these car loans taken out are exclusively for new vehicles - new car purchases have been increasingly the domain of the “rich” who will continue to skew the “average” up and up. Bentley just celebrated the best financial results earlier this year and will do a lot to push up the average even with what Gen Z that can afford new on their own hypothetically buying Mirages and Versas.

Something something Bill Gates walking into a bar and everyone inside becoming a billionaire on average.

And certain job sectors being hit en masse probably doesn’t help those who did buy new but that’s pure speculation on my part.

[–] Hazdaz -4 points 1 year ago (2 children)

That's a whole lot of yapping for "I don't want to live within my means". Could have saved you a bunch of typing.

[–] [email protected] 4 points 1 year ago

Decided to axe my snarkier comment to instead express that I hope you feel better and are more amenable to learning about mean/median/mode as well as the demographics of who buys new in the future.

[–] [email protected] 1 points 1 year ago (1 children)

I think that you shouldn't finance a car in the first place. If yoy can't afford new buy maybe a couple years old but a car is think not worth financing. Especially because it loses value so quickly

[–] [email protected] 2 points 1 year ago (1 children)

I agree that you shouldn't finance a car, but unless you've got ten grand saved up you can't afford one, and most people in the US need them to get around due to our shitty public transit.

[–] [email protected] 2 points 1 year ago (1 children)

Public transport is shitty in Belgium too but 10K for a simple car? People who can't afford a new car should imo buy a used shitbox and not fonance something(unless it's some rare car/oldtimer as investment).

[–] [email protected] 2 points 1 year ago (1 children)

You'd be hard-pressed to find a reliable used car for under $10k in my area. Anything less than that is over 15 years old and probably won't last long. And even then the cheapest thing I can find is still almost $5,000

[–] [email protected] 1 points 1 year ago

Rip, here you can find old(10-20y olds) but seemingly reliable cars for 2-5k

[–] [email protected] 1 points 1 year ago

Considering millenials are reaching middle age now, I can't help but read this like the boomer "avocado toast" memes when you call us "young people."

You should do some more research on new car buyer demographics. Young people, if buying new, are buying the cheap little econoboxes while every other segment is being purchased by 55-60 year olds. Those are the people buying $50k-$100k vehicles.

[–] Shardikprime -1 points 1 year ago (1 children)

Buying used cars is even more eco friendly. Much of the car pollution in the lifetime comes from creating it. Ideally you should use it until it dies on the streets to be eco friendly

[–] Hazdaz 4 points 1 year ago (1 children)

Much of the car pollution in the lifetime comes from creating it.

That's simply not true, but I am guessing you will continue to regurgitate it as if it is fact.

[–] [email protected] 1 points 1 year ago

Except it is true

The results reveal that if car owners keep their vehicles on the road 10 percent longer before sending them to the scrapyard, the overall carbon footprint of cars would decrease by 30.7 million tons. That’s the equivalent of a one-percent decrease in CO2 emissions. Researchers say the reason of this is manufacturing new vehicles actually produces more greenhouse gases than continuing to drive existing cars — even if they use gasoline.

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