Whoa, Nellie! Avg monthly payment > $700.

Carolina Jim

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The average monthly car payment crossed $700 a month earlier this year, the highest on record, according to Cox Automotive/Moody's Analytics.

"I joke with people that every new car purchase is a luxury car purchase, I don't care what you're buying," says Ivan Drury, senior manager of insights at the car buying expert Edmunds. The average cost of a new car is hovering at the highest level on record, topping $47,000 a pop.

Drury says get used to these prices: "We're not going to see a sudden drop-off in price anytime soon, because there doesn't seem to be any resolution for the chip crisis."

Will this put a damper on the market?


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Lifeliberty

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That's just not smart finance. Sounds like people are buying out of their income range to me. I think a lot of people got new jobs plus stimulus payments, and thought the good times would last forever.
I bet correspondingly, repos are up too

There's are plenty of sub 30k cars to drive, but why would you when they give away credit?
 

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Cars are a status symbol these days. People buy out of their means in some cases and immediately put themselves in a financial hole for 5+ years. I personally would never take out a loan longer than 4 years or have a payment over $500. Or even pay MSRP for a vehicle. That's my criteria I've always had for myself. That has made myself always pay off my vehicle before the length of my loan.
 

carrellslake

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My monthly payment is $674 for a 72-month $45k loan. I chose to do that because the interest rate is 2.5%, so it’s only costing me $3500 in interest over 6 years.

I would rather invest the money I could have put toward the down payment. Obviously the last three months are not great, but I believe it is the better decision in the long run.
 

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negativezero

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Technology and regulations are also driving up the cost far more than when most of us were in our budget-minded vehicle buying days.

Increasing emissions measuring/standards, mandated backup cameras, computer back boxes with compulsory uplinking to manufacturer databases, etc. All of that stuff is comparatively expensive, and wasn't required on tons of relatively modern vehicles.

The days of cars being a mainly mechanical system are dwindling.
 
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Carolina Jim

Carolina Jim

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Technology and regulations are also driving up the cost far more than when most of us were in our budget-minded vehicle buying days.

Increasing emissions measuring/standards, mandated backup cameras, computer back boxes with compulsory uplinking to manufacturer databases, etc. All of that stuff is comparatively expensive, and wasn't required on tons of relatively modern vehicles.

The days of cars being a mainly mechanical system are dwindling.
Auto makers continuously showcase new goodies to regulators and are totally complicit in all these fluff requirements.

This industry is ripe for disruption - not only in the distribution end, but the product itself.
 

Yukon65006

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Next weekend will be the 1st time ever for me paying MSRP for a vehicle. Found a Subaru dealer hat had whet the wife wanted at MSRP, $150 doc and $300 Lic. No dealer prep, Admin, or any other add on packages. Picked up the Bronco in Feb at below MSRP and put down enough cash to get the payment where I want them budget wise at 1.9%. Will put down enough on her Subaru to do the same thing at 3%.

Granddaughter just this week said she wanted to get a new vehicle, got her Master 6 months ago and has been working for 4 months making pretty good money. Her 09 Prius is running fine so not a need just a want. After talking to her we convinced her to make the new car payment to an online saving account paying 1% for the next year. Using online calculators to show what a 6K down payment can do to monthly payments to someone with critical thinking skills makes the sell easier.
 

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mamamoose

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Cars are a status symbol these days. People buy out of their means in some cases and immediately put themselves in a financial hole for 5+ years. I personally would never take out a loan longer than 4 years or have a payment over $500. Or even pay MSRP for a vehicle. That's my criteria I've always had for myself. That has made myself always pay off my vehicle before the length of my loan.
How did you swing that with your Bronco payments? Put a lot down?
 

0ne

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My monthly payment is $674 for a 72-month $45k loan. I chose to do that because the interest rate is 2.5%, so it’s only costing me $3500 in interest over 6 years.

I would rather invest the money I could have put toward the down payment. Obviously the last three months are not great, but I believe it is the better decision in the long run.
Where on earth did you get 2.5% on a 72 month term with little/no down? One of the best credit unions in my area is 3.85% best rate for 72 month with strong LTV down payment. 🤔
 

0ne

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Next weekend will be the 1st time ever for me paying MSRP for a vehicle. Found a Subaru dealer hat had whet the wife wanted at MSRP, $150 doc and $300 Lic. No dealer prep, Admin, or any other add on packages. Picked up the Bronco in Feb at below MSRP and put down enough cash to get the payment where I want them budget wise at 1.9%. Will put down enough on her Subaru to do the same thing at 3%.

Granddaughter just this week said she wanted to get a new vehicle, got her Master 6 months ago and has been working for 4 months making pretty good money. Her 09 Prius is running fine so not a need just a want. After talking to her we convinced her to make the new car payment to an online saving account paying 1% for the next year. Using online calculators to show what a 6K down payment can do to monthly payments to someone with critical thinking skills makes the sell easier.
You put half or more down to get 1.9%??
 

kodiakisland

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Adjust that $700 for inflation and it’s probably not that out of line with modern day averages.
 

Ground_zero298

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Car loan rates were low before the great inflation. Same with credit card interest which they took the liberty of raising for us too. Then don’t forget the gas, rent, and groceries. Only thing free now a days is getting flipped off by other bronco owners.
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