Car affordability in 2022 and beyond

In a discussion about how to get a new car for under $20k, how Tesla does things has no impact.

Did Toyota have a real choice? Or even the American companies? The state laws protecting the independent dealer model came into effect in the years after WWII, and they were passed from dealers claiming direct factory stores had an unfair advantage. I guess Toyota and other newcomers could have tried doing what Tesla did. I think it would involve higher costs, while being foreign came with its own obstacles. Didn't Toyota and others start out in the US by a dealer that was a fan importing them.

 

For new cars, 30 is the new 20.
A sub-20k new car is mostly fiction because the click-bait, ad-driven articles nearly always forget destination charges which are nearly if not always well over $1,000, and then there are non-optional options, doc fees and the like. The 2023 Nissan Versa S comes with a 5-speed (good luck finding one) but the Mitsus and Kias have eliminated the millennial anti-theft system from their available options.
Remember, an $48,000 MSRP vehicle had a lot more profit margin to play with than some $20,000 MSRP econo-box so it's 'possible' for somebody to wheedle a dealership under $20k but most of the "well qualified' buyers with 830 credit scores and ready to take immediate delivery are not in the market for a bottom of the bottom-shelf model with zero options.

Top (Bottom) three cars in the US market......
1. 2023 Mitsubishi Mirage ES: $17,650
2. 2023 Kia Rio LX: $17,875
3. 2023 Nissan Versa S: $18,595

IMHO, None of these will be real-world available for < $20k out the door unless the economy screeches to a shuddering stop.
There are too many people looking for econo-boxes who cannot afford an "average" priced new car.

Markets.

 

Originally, those laws were written to protect dealers from their own manufacturers. Over the years, dealers used massive lobbying efforts to change those laws to prevent any other business model from any manufacturer.
All of that, unnecessarily adds to customer costs.

From Wiki: Car dealership - Wikipedia

While this isn't the whole reason car prices are what they are, it is a partial reason there aren't more cars at the sub 20k price point.

If you want more detail, here is the reference for the Wiki paragraph above: Markets: State Franchise Laws, Dealer Terminations, and the Auto Crisis - American Economic Association (aeaweb.org)

In short though, just where do you think dealerships got the money from, to buy state representatives?

 

ah, you mean like fossil fuel subsidies. i couldn't agree more. the $7,500. should go with every purchase, regardless of income or vehicle.
that's how the massachusetts $3,500. works.

 

Biking isn't all that ideal where I live either.

In the winter temps are often below zero Fahrenheit and the snow and ice stick for weeks to months at a time.

Off the top of my head, I also can think of 7 people here in town who have been hit by a car who were either biking o walking. Most of them died from it. I feel the streets are unsafe here for pedestrians and cyclists, even the ones with bike lanes.

True. But when my $15k used Toyota costs me about 17.2% average of my income for total vehicle expenses, what would it be in a $30k car? Logically I should keep on being a used car buyer. But I don't like what I see in the used car market anymore. I don't want a used, out-of-warranty car that will suddenly need a $9,000 repair out of the blue 6 months after taking it out on a loan.

 

Gross or net?
Seems to me that dot.gov gets a lot of revenue from Big Carbon.
Going back to those wonderful care-free pre-1840's days may be a groovy thing for some folks, but if you're going to do renewables, better make a plan for plussing up your distribution infrastructure.
Ask some folks out on the left coast for the deets on that....

 

i agree. but i'm not sure for profit firms are the ones to do it. they seem to like high profits and low investment

 

That's the gamble, isn't it?
At least with a new car you're covered with a little bit of a grace period with the OEM warranty AND you KNOW that you KNOW you KNOW how the car has been maintained and whether or not it was abused.
Actually EVERYONE should be rolling used cars, but unless you really take ownership over the ownership thing, you're going to be at the tender mercies of the dealers and their service departments - or an Indy.
The reason I've only called a tow-truck one time in 30 years of nearly all GMC ownership is NOT the fact that GMC builds quality cars and trucks, but rather that people who take charge of their maintenance generally have faaaaaaar fewer repairs.

Toyota builds great cars, just ask them.
EVEN great cars will break more often if an individual's idea of 'maintaining' a car means throwing the key-fob on the service manager's desk every six months and hoping that they will be gentle with you.

 

High profits and low investment beats heck irresponsible government management.
Example: Paradise Caly
Example: Lāhainā, Hawaii

Until corporate officers start taking perp-walks and doing HARD TIME following "mistakes" like Paradise, Lāhainā, Prince William Sound, and the Gulf of Mexico then we're going to continue to always do what we always did.
How many missing in Lāhainā?

 

The sub $20k car is going the way of the dodo bird. There may be only one in a few days and how long for that one. But that one is built by someone who knows how to build cars and comes with a long warranty. Which should make its long terms cost of ownership low.

There are lots of different affordability tiers depending on income. Your wants, needs and abilities may differ from others. So what. If a to be discontinued Kia Rio fits your needs maybe that is the car for you. (I bought a discontinued Avalon hybrid based on the corporation behind it and the 10 year parts availability guarantee.) If my needs and abilities to pay differ, so what. Doesn't make me better. Nor does the car I drive better fit your needs.

 

The Avalon is a great car!

 

ups drivers can earn up to $176,000. per year under new contract. because, inflation

 

was that a state owned grid?

 

I suspect it isn’t as much as you think: https://www.americanprogress.org/article/these-19-fortune-100-companies-paid-next-to-nothing-or-nothing-at-all-in-taxes-in-2021/

In 2021 Exxon paid 2.8% in federal taxes.
I wonder if their lobbying costs are deductible?

 

I agree 100% with this. But that's the problem with a used car. You have no idea how it was maintained.

When I know people who buy a car, only drove it to work two miles away for a couple months in a 35mph max speed limit town, and then suddenly need a whole new transmission. That's it. If that's the way it is I don't want a used car.

 

yeah, used cars scare me too. i had no choice as a teenager, but i feel bad for the unsuspecting buyer who winds up with my pip thinking at 86,000 miles, it won't have any major problems.

 

thanks!
a very good package for unskilled workers, if you can get it.

 

Not to sound judgemental, but even talking to people on this forum it seems that new car owners in general don't care what condition the car is in that they are selling to the next person every 3 or 5 years or so.

If used cars are no longer an option and new cars aren't either, I guess cars are no longer an option.

Edit:

Maybe I need to quit complaining and be part of the solution. Should I offer my car as a Taxi or Über service or as a loaner? There is no Taxi or Über or anything like that around here.