Personal Finance

Going car free is getting more affordable.

Either way, as someone stated above, they are price gouging. Covid taught them that fake shortage works and we will pay so they are milking us.

Housing, food, car, health care...

My partner took her 2022 Toyota for service and the dealership offered to buy it off her. The price was only $1k less than she paid new. That's a year and a half of heavy use for $1k if she opts to take it.

A beater for 5k? Ive bought 500$ beaters less than 6 years ago!

500$ nowadays will not even get you a junker with its engine and transmission removed.

The used car market is so terrible where I live that I bought a 1999 Subaru Forester L with a completely trashed engine that could barely make it a block without overheating. I got it for around $200 in "scrap material" (Luckily the title wasn't a salvage yet).

So I completely took the engine apart myself and put in new head gaskets, pumps, belts, electronics and all that noise. I took it as a challenge to myself since my old cars' engine had completely stopped starting and absolutely nothing got it working again, and I had wanted to prove that I could fix a fucked up car. It took 2 months, but I saved so much money not buying an overpriced piece of trash that seems to saturate the used market right now. (Seriously? $6,000 for a beat up 30 year old sedan? Is everyone selling these cars insane?).

And the best part is that the total cost of this Subaru + all the parts needed was 1,700!

To put it in perspective I had found someone selling a 2002 Subaru Forester L for 3,000 on the side of the road. I could probably make a business out of this if I wasn't so slow...

Never did figure out what was wrong with the old car, we just ended up scrapping it because it was a complete lost cause. But if this were pre-pandemic I wouldn't have had to do that at all. I would've just slapped over 2,000 for a piece of garbage that needs some maintenance, and be on my way, no need for scrap diving, brain rotting and time wasting.

That was definitely my experience buying a car a few months ago. My car was totaled so I had to buy a replacement unexpectedly. I was seeing used cars with 30,000-50,000 miles selling for more than MSRP and new cars were very hard to find. I ended up buying a new car that was less expensive than the used cars I was looking at and ended up getting a much lower APR due to the fact that it was a new car.

Cash for clunkers and other programs killed the used market.

I bought a new car in 2018 for 19K. Everyone I know flipped at me for 'wasting money' and not buying a 5yo+ 10K car that looked like shit with 100K miles.

It's now worth 21K, after 50K miles.

I'm looking at trading it in for a 35K car in the next two years, and watching the value on that car never go down either.

The used car market is being strongly manipulated by the banks. Their inventory of repossessions has skyrocketed over the past few years, but they are limiting how many are going to auction so not to destroy the market and their margins. I've heard rumblings that with the push for EVs and their costs, carmakers are going to make them a service. You pay a monthly fee to use them and every few years you will get a new one. You will never own one outright. Who knows if this is true or not.

That is one reason I haven't bought a car in a long time. A car is a tool, they are not worth the price so long as I can keep what I have running.

Probably not the point of the post, but I've found the economics of owning a car in general has changed for me. It actually stopped making financial sense for me to own a car in 2017-18. The pandemic drove it home. We still have one car for the house, but I wouldnt be surprised if it isn't the last car we buy...

I grew up hearing all sorts of addages about vehicles. "New cars lose tons of value as soon as you drive off the lot, so you're much better off buying used".

Once I grew up and started buying my own cars, I learned that the best miles a car has are usually right out of the factory. The sound dampening wears over time. The foam in the seats wears out. Scratches accumulate, colors fade, odors accumulate. Hoses leak, mechanicals fail.

A lot of this can be fixed, or mitigated with proper maintenance. But the ultimate lesson I learned is that the resale value only matters if you actually intend to sell the car while there is still meat left on the bone. I'm fine driving a car into the ground until it's scrapped, so I don't factor resale value into my purchasing decisions.

Even back in 2018 I noticed the price gap between new and used cars wasn't as wide as I remembered it being back in 2011. I ended up with an Impreza with ~12k miles for $17k, but a new one would have been just over $20k. I was strapped for cash at the time, but I wonder if a new car would have been a better value even back then.

Increased safety features on recent car models are a factor here as well. In the decade before I drove, airbags became standard, and weren’t even required until I’d been driving for a bit.

And over the last 10 years, NHTSA has pushed for stability control, 5 star crash test ratings, etc…

Then the whirlwind of safety over the last 5 years where back up cameras became required, and blind spot monitoring, brake assist, lane keep assist, adaptive cruise control all became available features.

You can still buy a car without those, for sure, and unfortunately that still costs $12k unless you want 200k miles or rebuilt titles.

But as I’m shopping for my kids first car, I find it hard to draw the line on what safety features she can have vs not have, and suddenly a few safety features later, used cars cost $20k. A far cry from my first car that I bought for $1k and drove in to the ground.