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Why do new cars cost so much?


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2018 Mar 28, 10:07am   14,487 views  107 comments

by joshuatrio   ➕follow (4)   💰tip   ignore  

I'm half interested in pulling the trigger on a new Pilot or Highlander for my wife, but dayum, almost $40k to pick up a jacked up station wagon with a sunroof?

And it's EASY to get these cars well over $40-45k without even trying.

I've been reading on the joys of sub prime auto lending lately, but am wondering when the music is going to stop - and people quit financing cars for 7+ years.

I pay cash for my whips.

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1   Al_Sharpton_for_President   2018 Mar 28, 10:15am  

The Highlander, like many SUV’s, is an AWD van. Very reliable. But if handling is your thing, it won’t satisfy you. It’s your wife’s car, right?
2   Goran_K   2018 Mar 28, 10:31am  

Yeah I paid $70,000 for my truck last year.

3   HeadSet   2018 Mar 28, 10:38am  

Why do cars cost so much?

Because of easy credit. I also pay cash, but that is slim advantage when the dealers can sell to Joe How-Much-a-Month for top dollar on a 7 year nut.
4   MisdemeanorRebel   2018 Mar 28, 10:44am  

joshuatrio says
Why do new cars cost so much?


Because the Coastal Elites in California set the 'pace'. They don't mind a few thousand extra to virtue signal their Green Superior Morality. Just like they choose Greeny Greeny Choo-Choo over water. The Inland and Midwestern Rednecks can suck it, it's for the Greater Good.
https://www.popsci.com/environment/article/2009-05/obama-apply-californias-tough-auto-emission-standards-whole-country
5   FuckTheMainstreamMedia   2018 Mar 28, 10:46am  

HeadSet says
Why do cars cost so much?

Because of easy credit. I also pay cash, but that is slim advantage when the dealers can sell to Joe How-Much-a-Month for top dollar on a 7 year nut.


"How much do you want your car payment to be?"

This question is the kiss of death. NEVER answer this question. If you must finance, use an online calculator, factor the total cost including tax and fees, and determine what total price you are ok with, AHEAD of TIME.

How much per month is how they load in THOUSANDS of extra dollars in bullshit onto your contract.
6   Heraclitusstudent   2018 Mar 28, 11:01am  

joshuatrio says
And it's EASY to get these cars well over $40-45k without even trying.

Why do you think it should cost less?
Buy a Honda civic with 4 cylinders, basic options. You will save a bunch.
7   Heraclitusstudent   2018 Mar 28, 11:03am  

TwoScoopsPlissken says
Because the Coastal Elites in California set the 'pace'. They don't mind a few thousand extra to virtue signal their Green Superior Morality.


Goran paid 70K for a pickup.... I doubt he was trying to advertise his common sense superiority.
8   Heraclitusstudent   2018 Mar 28, 11:04am  

HeadSet says
Because of easy credit.


No, easy credit is how people afford it.
Presumably if it could be done much cheaper, there is enough competition that someone would do it.
9   Goran_K   2018 Mar 28, 11:08am  

Heraclitusstudent says
Goran paid 70K for a pickup.... I doubt he was trying to advertise his common sense superiority.


No, I just wanted a nice truck.
10   bob2356   2018 Mar 28, 11:09am  

TwoScoopsPlissken says


Because the Coastal Elites in California set the 'pace'. They don't mind a few thousand extra to virtue signal their Green Superior Morality.


Want to document a few thousand for complying with CA? Didn't think so. Pretty much no difference in price ca vs 49 state before this. Nice totally bogus argument.

The coastal elites boogeyman. Wow, so scary.
11   BayArea   2018 Mar 28, 11:10am  

As mentioned above, it's the easy credit.

Introduce financing, extend the loan period. Now your $30K car is a $40K car because the credit generation isn't scared by the monthly payment of a $40K loan extended over 7yrs.

Never mind the details.
12   Goran_K   2018 Mar 28, 11:16am  

BayArea says
As mentioned above, it's the easy credit.

Introduce financing, extend the loan period. Now your $30K car is a $40K car because the credit generation isn't scared by the monthly payment of a $40K loan extended over 7yrs.

Never mind the details.


Same thing with college education.
13   NuttBoxer   2018 Mar 28, 11:18am  

My wife bought a 2016 Accord Sport a few years ago, for about $30k total. So far it's had an oil leak, a recall for a battery solenoid, both LED strips have partially gone out, and at last servicing was told the battery is bad. All this in less than 3 years and 40k miles. Meanwhile, my 1994 Accord that I bought for $1,400(rough condition), get's about two miles more per gallon. So yes, I'd say new cars are a giant waste of money.
14   Goran_K   2018 Mar 28, 11:26am  

Man I thought Honda's were rock solid.

My GM truck has been problem free so far.
15   bob2356   2018 Mar 28, 11:27am  

joshuatrio says
Why do new cars cost so much?


Because people want them to do so much. Power everything, safety out the wazoo, more electronics than the space shuttle, sophisticated suspension and steering, ABS, horsepower out the wazoo, 6-8 speed transmissions, brakes that would have been formula 1 50 years ago, great build quality. A 2016 honda accord runs the quarter in 14.4 with the ac running, a 69 chevelle ss 396 muscle car did it in 16.3.

Want cars equivalent to yesteryear prices, they are out there. a Nissan versa lists at 12,000. Low end cars today are far superior to the better mid range cars of 20-30 years ago and can't be seriously compared to the junk from the 60's to late 80's.
16   Heraclitusstudent   2018 Mar 28, 11:31am  

Goran_K says

Never mind the details.


Same thing with college education.


This kind of shit works with college because there is only 1 Princeton or Stanford and people are willing to pay premium for it.
But for cars, the supply changes with the demand and different companies with similar cars compete on price.

They are expensive because people buy large heavy cars, with huge engines, huge tires, huge everything, and a ton of gadgets.
Buy a basic car and you'll be fine.
17   Tenpoundbass   2018 Mar 28, 11:32am  

Because life and labor is so cheap in China, it's all Executive and investor profit. They can charge you what ever the Super Bowl charges them for advertising.

A lot of Liberal that fucking hate our guts get rich by making your average car starting at $25K and $3500 a year for insurance on your average driver under 35.

I think they are trying to force everyone to take the bus with people they admit are inferior to us, that smell like piss and feet. While they take their self driving luxury cars in the prepaid express lanes. Elon makes a killiing, Ray Ray stabs a few bitches on the bus, everyone is making a killing.

Eat it up y'all.
18   Goran_K   2018 Mar 28, 11:35am  

Heraclitusstudent says
This kind of shit works with college because there is only 1 Princeton or Stanford and people are willing to pay premium for it.
But for cars, the supply changes with the demand and different companies with similar cars compete on price.

They are expensive because people buy large heavy cars, with huge engines, huge tires, huge everything, and a ton of gadgets.
Buy a basic car and you'll be fine.


What about $25,000 a semester to attend UC Riverside or $40,000 a year to attend Loyola Marymount?

It's exactly the same. An increase in available money via loans ALWAYS exerts inflationary forces on a product or service.

We're having this conversation on a Housing Bubble website for fucks sake.
19   MisdemeanorRebel   2018 Mar 28, 11:38am  

bob2356 says
Want to document a few thousand for complying with CA? Didn't think so. Pretty much no difference in price ca vs 49 state before this. Nice totally bogus argument.


California sets the pace. If California mandates higher emission standards or safety options, all the car companies have to obey it and thus make all their cars to conform to California Standards, and therefore more expensive parts must be used. Thus raising the price of the car across the nation.

Air bags alone are several hundred to over a thousand dollars.

Heraclitusstudent says
Goran paid 70K for a pickup.... I doubt he was trying to advertise his common sense superiority.


Talking about California Legislature setting vehicle emissions rules, not Goran's car buying preferences.
20   Patrick   2018 Mar 28, 12:41pm  

I worked for an auto financing startup recently, and learned a bunch of interesting things:

* it is illegal to buy a car directly from the manufacturer, just because dealers have enough clout to corrupt our laws like so many industries do
* nonetheless, auto sales are flat to declining overall, and lots of dealerships are barely surviving
* dealers make little to no money on the car itself, but instead make almost all their money on add-ons like floor mats, customization, warranties, and insurance
21   zzyzzx   2018 Mar 28, 12:51pm  

HEYYOU says
(Original tires all seem to wear out early for me)


It's not just you!
22   zzyzzx   2018 Mar 28, 12:59pm  

Why do new cars cost so much?

Emissions and safety regulations, most of these safety regulations are completely unnecessary.
Marketing departments requiring all new cars to have greater HP than performance of cars of 20-30 years ago.
Oversized rims
Way too much electronics and/or bells and whistles. Even things like power locks and windows are a waste of money, and only make your car less reliable. But you might not be able to buy a car without them both. Part of the issue here is that cars have gotten so much more expensive that manufacturers feel compelled to include things that used to be only in fully loaded cars as standard now. It's the whole the car is so expensive already, so it needs to have power everything (as in who the fuck buys a $40000 car that doesn't have power everything, even if you don't need it). I also think linger commutes and more time spent in traffic as contributed to this, since if you are spending more time in the car, you can justify buying a more expensive one.
Traction control. Nobody needs that!
4 door cars when you only need 2 doors. How often so you see more when 2 people in a car anyway? Not often!
Headlights used to be cheap, but now cost something like $1000 each if you need to replace one after a wreck.
23   bob2356   2018 Mar 28, 1:36pm  

TwoScoopsPlissken says

California sets the pace. If California mandates higher emission standards or safety options, all the car companies have to obey it and thus make all their cars to conform to California Standards, and therefore more expensive parts must be used. Thus raising the price of the car across the nation.

Air bags alone are several hundred to over a thousand dollars.


Air bags are a federal requirement see the Intermodal Surface Transportation Efficiency Act of 1991. So are crash standards see the National Traffic and Motor Vehicle Safety Act of 1966.

Ca has a waiver for stipiulating emissions standards only, not safety standards. Want to try again to come up with thousands for meeting CA standards and how it drives the price of cars?
24   RWSGFY   2018 Mar 28, 1:48pm  

zzyzzx says
HEYYOU says
(Original tires all seem to wear out early for me)


It's not just you!


And it's a good thing IMO because they are usually craptastic.
25   Goran_K   2018 Mar 28, 1:51pm  

RafiMaas says
You know what they say about guys with big trucks?


What?
26   MrMagic   2018 Mar 28, 1:51pm  

Goran_K says
Man I thought Honda's were rock solid.

My GM truck has been problem free so far.


Honda's are.

My Ridgeline has been problem free except for the air bag recall, which hit just about every Jap car.
27   RWSGFY   2018 Mar 28, 1:52pm  

Goran_K says
RafiMaas says
You know what they say about guys with big trucks?


What?


Let's hope it's something fresh and original...


Nah, not gonna happen.
28   Goran_K   2018 Mar 28, 1:52pm  

Satoshi_Nakamoto says
Let's hope it's something fresh and original...


I'm giddy with excitement.
29   Heraclitusstudent   2018 Mar 28, 1:52pm  

They compensate.
30   MrMagic   2018 Mar 28, 1:55pm  

Heraclitusstudent says
Buy a basic car and you'll be fine.


I deserve more than a basic car, that's why I've never bought one.

If a basic car is all someone can afford, there's a bigger issue concerning employment and how they manage their finances. It ain't the car.
31   joshuatrio   2018 Mar 28, 2:15pm  

willywonka says
The Highlander, like many SUV’s, is an AWD van. Very reliable. But if handling is your thing, it won’t satisfy you. It’s your wife’s car, right?


Yes, her car. We want something a little larger for trips, with the ability to tow small objects.

Goran_K says
Yeah I paid $70,000 for my truck last year.


Nice truck. I wouldn't pay that much for a GM product, but it's still a nice truck.

Heraclitusstudent says
Why do you think it should cost less?
Buy a Honda civic with 4 cylinders, basic options. You will save a bunch.


That's what I drive. It's 9 years old, has 80k, sips gas, and has never had an issue. I only drive it to/from the gym.

Patrick says
* nonetheless, auto sales are flat to declining overall, and lots of dealerships are barely surviving


That's what I keep reading - that apparently there is an auto bubble now - which is why I am waiting/hoping sales tank and I can scoop one up on the cheap.... The idea of paying $40k for a car just seems stupid.
32   crazydesi   2018 Mar 28, 2:27pm  

I was waiting for auto bubble to crash for last two years and could not wait any more so got a infiniti qx60 fully loaded for 50K$, MSRP is 62K$. I was surprised how they are able to give so much discount. This is dublin infiniti.
33   NDrLoR   2018 Mar 28, 2:54pm  

Heraclitusstudent says
No, easy credit is how people afford it.
And payment schedules stretched out to infinity. Today's prices sound high, but a brand new 1963 Oldsmobile Super 88 equipped the way most people liked them with Hydra-Matic, AC, power steering and brakes, all optional in that day, and a couple of trim upgrades came in at about $4,200, and that was considered a mid-level priced car, you saw them everywhere. That's $34,000 in today's money and those cars were financed for 36 months. By the mid-70's with inflated prices exploding, but not incomes, payments were stretched out to 48 months in 1975 to make them more affordable--that's also the first year makers offered what today we call incentives. Eventually we got to the 60 month period, a time over which most cars have reached 100K miles. I used to read Automotive News in the mid-80's and I can remember a proposal by Toyota in which buyers could actually sign over their home as collateral for the privilege of stretching payments over ten years. I couldn't believe anyone would be foolish enough to do such a thing considering the car is going to be virtually worthless by that time, but I'm sure a few gullible people fell for it. My friend in San Antonio worked for a large chain Nissan store for 13 months and from having zero experience became their top seller in four months. He said you would not believe the deals people would make with rolling over negative equity onto the price of a new car as long as they could afford the monthly payment, and management would sign off on it.
34   Goran_K   2018 Mar 28, 3:43pm  

Why do leftist love talking about other people's dicks?
35   marcus   2018 Mar 28, 3:44pm  

TwoScoopsPlissken says
Because the Coastal Elites in California set the 'pace'. They don't mind a few thousand extra to virtue signal their Green Superior Morality.


Tenpoundbass says
A lot of Liberal that fucking hate our guts get rich by making your average car starting at $25K and $3500 a year for insurance on your average driver under 35.

I think they are trying to force everyone to take the bus with people they admit are inferior to us,


No no no, you're both wrong. IT's the 8 years of Obama that made cars so fricken expensive. Duh ?

But now Trump is fucking us over on the price of bacon. Have you noticed that TPB ? How come Trump wants us to pay so much for bacon ? Obama used to let Bacon be on sale frequently, but not Trump. 8 dollars for a pound for bacon all the time. I never ate bacon a lot myself - just occasionally - but now it's a rip off.

WE know Trump wants inflation. Maybe he just figures bacon and Trucks are a good trigger for across the board price increases.
36   anonymous   2019 Jan 28, 6:05pm  

6 used-vehicle trends to watch in 2019

Analysts warn that what has gone up since the Great Recession must surely come down — at least a little.

The tepid outlook reflects macroeconomic concerns, such as the government shutdown, rising interest rates and the threat of tariffs — in addition to record-high vehicle prices.

"This year is starting to be quite interesting because there's a cloud of uncertainty as we start out" 2019, said Anil Goyal, executive vice president of operations at Black Book.

Here are six trends analysts are seeing:

Flat expectations - New-vehicle sales are widely expected to drop below 17 million after topping 17.3 million in 2018, while used-vehicle sales are expected to be fairly flat.

Pricing pivot - With new-vehicle affordability continuing to challenge many consumers, more of them may turn to the used-vehicle market.

Off-lease peak - With about 300,000 more vehicles coming off lease in 2019 vs. last year, Cox expects lease maturities to peak at 4.1 million units — three years after new light-vehicle sales set the record of 17.6 million.

Greater depreciation - Also, with an expected increase in supply, a higher depreciation rate is forecast for the year, Goyal said. Black Book registered an overall depreciation rate of 12.4 percent at the end of 2018, which is less than the 13.6 percent average over the last five years. The group is forecasting the depreciation rate to swing to a relatively high 15 percent this year, he said.

More SUVs - Three years after light-truck sales first topped 60 percent of the new-vehicle market, analysts expect more SUVs and crossovers to arrive on the used-supply side, which could lead to downward price pressure on those segments.

Long hangover - Chesbrough, of Cox, noted that the Great Recession led to a dearth of model-year '10 vehicles on the used market. "Because we only sold 10.4 million in 2009, well, that means there's nothing to sell, or very little inventory available," Chesbrough said.

The trough year still affects the used-vehicle market, he added. "So you still have a lot of that 10-year-old supply that isn't available, and it's forcing many independent dealers to come to the market and come to the auctions, and [they're] buying newer product than they might normally be selling," he said. That's pushing prices up in those newer model-year vehicles.

Acevedo, of Edmunds, said that in the 8-year-old-plus vehicle segment, "anything just flies off the lot."

More: https://www.autonews.com/used-cars/6-used-vehicle-trends-watch-2019
37   RWSGFY   2019 Jan 28, 6:41pm  

bob2356 says
Because people want them to do so much. Power everything, safety out the wazoo, more electronics than the space shuttle, sophisticated suspension and steering, ABS, horsepower out the wazoo, 6-8 speed transmissions, brakes that would have been formula 1 50 years ago, great build quality. A 2016 honda accord runs the quarter in 14.4 with the ac running, a 69 chevelle ss 396 muscle car did it in 16.3.


Yep. And then people jump into these wonderful performance machines and proceed driving them like it's fucking Model T with half of cylinders not firing...
38   clambo   2019 Jan 29, 5:28am  

Cars are too complex and fancy to be cheap sometimes.

My father bought a new Volvo in 2013 "loaded" "leather" etc.

It has some stuff that I could do without; extra airbags (4 in the front). front anti collision radar, front parking radar, rear parking radar, side blind spot radar, rear camera, electric windows, moon roof, GPS,

FYI, a car which is 1-3 years old is usually a great discount over a new car on the lot.
39   zzyzzx   2019 Jan 29, 6:45am  

NuttBoxer says
a recall for a battery solenoid,


What the fuck is a battery solenoid???
40   Tenpoundbass   2019 Jan 29, 6:47am  

clambo says
FYI, a car which is 1-3 years old is usually a great discount over a new car on the lot.


Used cars are still over the $10K mark.
Even 8 year old cars are pulling in $8K or more. It used to be once a car got past 7 years old $3500 was about max they could get. That was for a higher end car, economy cars were under 2 grand.

Cash for clunkers was all about supporting an auto business where the crappy coup starts at $23K and the average car payment is $400 and $3 to $5 thousand a year for insurance.

Thanks Obama!

Before Cash for clunkers you could find a car from the 70's or 80's for under a Grand. They were cars regardless what was wrong mechanically you could fix it for under a Grand. Most problems were well under 300 bucks. Water pumps and alternators(most common problem) were around 70 bucks and you could fix it yourself.

Now these new cars they are expensive as used cars as long as they paint, body and interior is in good condition and they still run. But as soon as you get serious engine or computer problems, they are junked. Because they cost more to fix major problems than they are worth, and your average car owner can't work on them.

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