Quote:
Originally Posted by Isaac Zachary
I take it that the econobox has never really existed. The average weekly wage has gone up some 15% since the 1980's until July of 2023. A lot of new cars, such as a new Corolla, are cheaper now than back then, but still not exactly within the price range of a median individual wage of around $40,000 per year.
The most I've seen recommended is 50% of what your yearly wage is, so that would put an individual making a median wage of $40,000 at a $20,000 buget, enough for a Nissan Versa, but not enough for anything after 2024. At that recommendation a family making a median wage of $70,000 can afford a $35,000 vehicle if you go by the 50% rule, so that would allow for a single new car or crossover, but not a new minivan.
Which I guess means the real econobox has been and always will be the used car.
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Cars aren't for everyone, they are for wealthy people. Most of humanity has not owned a car of any type or condition. That said, I could afford any Lexus brand new off the lot at the age of 25 on a $40k wage, because I saved and had few expenses. When I went to a Lexus dealership, the salesman gave me no time of day, which was appropriate because I wasn't really serious about paying cash for any car on the lot I wanted.
I don't pay much attention to "rules" because they are being promoted by people with different priorities and agendas. Both my wife and I are barely into 6 figure earning, but the most we've spent on a car to date is the 2006 Acura TSX I paid $17k for. I've read Rich Dad, Poor Dad in high school. I understand the difference between an asset and a liability. The liabilities I most value are the children, not the things that depreciate over time.
I'm 42, I think, and I've not ever bought a new car. I've only once bought a car from a dealership, but only because they sold the car at private party value. I might buy a new car someday, but I'm very curious what that circumstance would be. Would have to be the dual motor Cybertruck near $50k; possibly a Pacifica minivan if subsidies made it fairly cheap.
Your example of a $40k earning only having $20k to spend on a vehicle seems silly to me. I've never even spent $20k on a vehicle, and I've had nice vehicles.