Quote:
Originally Posted by Isaac Zachary
The median income for one person in the USA is around $45,000, and for an entire household around $70,000. That means half the population makes that or less. If you factor in taxes, half of individuals take home about $3,500 or less per month. 10% of that is $350 or less. And a household gets about $5,000 or less per month after taxes, so 10% would be $500 or less.
...But even then, the question is, can a person really save money by avoiding old cars and sticking with a monthly payment?
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State tax law varies, so I won't comment on that, but federal tax law allows large reductions in tax liability for dependents and lower income families, some of which are refundable, meaning you get the money even if you didn't pay any taxes. Over half of families pay zero federal income tax, meaning it's only the minority of people who pay any at all.
Two people working full time at Taco Bell should be able to afford all the things they need with a bit extra fun money. Adding in kids makes that much more difficult, but then again entry level jobs were meant to introduce new workers to the labor force, not raise a family.
I grew up in a family of 4 with the single income of my father working the frozen food section of Safeway. We didn't eat McDonalds because it was too expensive to eat out, but we had meat every dinner since he had the insider information on discounted meat. Always had at least 1 other non-family member living with us, in our 1 bathroom 0 shower (tub only) house.
There's some point in the vehicle depreciation curve where an older car just costs more to run than a newer vehicle. The very old car market is where people who can't get credit pay cash for a vehicle. A little bit newer car that would need to be financed eliminates those cash buyers and narrows the buying competition.
I sold a Pontiac Grand Prix for $900 cash, and it was junk. The lights sometimes didn't work for no apparent reason (dash would go dim). The trunk couldn't be opened. It had a larger engine but wasn't fast, and got 20 MPG.
Personally, I wouldn't buy a vehicle more than about a decade old unless it had some nostalgic value or otherwise was priced well below market price. The sweet spot for me is around 5 years old where over half the depreciation has already occurred, but 3/4 of trouble-free life remains.