Whoa, Nellie! Avg monthly payment > $700.

[Roger123]

For me the biggest issue with financing a vehicle (which people rarely, if ever, talk about) is the overall question of affordability. I'm not talking about "can you make the monthly payment" as much as I am "what price should you be paying in the first place."

When you stroke one big check you put a whole lot more thought into the total price of what you're buying than if you undertake the more (relatively) abstract idea of a monthly payment. I think its easier for most people to significantly "slippery ramp" the price of a vehicle purchase based on the operation of a monthly payment (and, derivatively, the "insignificant" increase in the amount of a monthly payment when you are looking at even pricier models) than when they are paying up front.

From a personal finance perspective, affordability really is the most important question, both for your monthly budget and net worth. When people finance, I think they are naturally inclined to play "fast and lose" with both of those issues. When you pay cash, you've basically put both issues to bed right in the beginning and you don't have to think about either again.

Mud Dawg

Good post

You make different decisions when there's literally $50K on the kitchen table and you have to decide what to do with it.

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[JerryC]

Spouse and I are both retired. Traded an 11 month old Bronco Sport in for my BB bronco last Monday. Financed $29000 at 1.85% for 60 months. Total interest to be paid...$1380. I can live with that. I'll probably trade or sell within 2 years anyway. Being retired, monthly payments matter, but so does interest and length of the loan. If someone can afford high car payments, I'm happy for them. It's all about perspective. What's important to some isn't as important to others. Hopefully the next couple of years won't drain us too badly before there's a change.

How did you do on the trade in of the Sport?

 

[GeorgiaDawgs]

How did you do on the trade in of the Sport?

It was a Badlands with everything. They gave me $37000. About $500 less than I paid for it in July of 2021. I had traded a Tacoma for that and made about $8000 on that vehicle. It helps that I get D plan because my sister works at the dealership. They are very good at being fair and honest about the financials. The Bronco I ordered was $43,805 msrp. D plan was $41,250. So I finance less than $30,000. Not normal for sure. With inflation and gas prices, the money is just going to other things unfortunately.

 

[Mpatient1]

For me the biggest issue with financing a vehicle (which people rarely, if ever, talk about) is the overall question of affordability. I'm not talking about "can you make the monthly payment" as much as I am "what price should you be paying in the first place."

When you stroke one big check you put a whole lot more thought into the total price of what you're buying than if you undertake the more (relatively) abstract idea of a monthly payment. I think its easier for most people to significantly "slippery ramp" the price of a vehicle purchase based on the operation of a monthly payment (and, derivatively, the "insignificant" increase in the amount of a monthly payment when you are looking at even pricier models) than when they are paying up front.

From a personal finance perspective, affordability really is the most important question, both for your monthly budget and net worth. When people finance, I think they are naturally inclined to play "fast and lose" with both of those issues. When you pay cash, you've basically put both issues to bed right in the beginning and you don't have to think about either again.

Mud Dawg

Agreed, too often people seem to only look at if they can swing the payment.

step kid recently bought a used Spark, price was decent, payments "affordable" but 26% interest! We told him it wasn't a good deal, but he felt he had to do it and is convinced he can refi when he's got a better work history under his belt. Even pointing out it'll be 50k+ if he can't refi wasn't a deterrent

I had a hard cap for what I was willing to spend and managed to stay a good 10% under that before taxes so I'm comfortable I can afford it, even if I'm not happy spending it lol. That slippery slope business is what kept me at a BD instead of a BL because I knew I couldn't pass on going Lux if it was available lol.

If the stock market hadn't taken a dump I'd have a substantial down payment, now I have 0 down and growth potential

 

[Rspayde]

I would guess that 75% of the population is ignorant to what interest rates are and how loan structure can effect the total amount they pay on something.

People thought we were nuts going to a 15 year mortgage but we went from paying close to $140K in interest on our initial 30 year mortgage to right around $30K on our current mortgage structure.

Blows my mind that there is now a 40 year mortgage option where the first ten years are interest only with the interest rate locked in for the entire loan at the time of loan generation. A lot of people are gonna get wrecked by that structure.

 

[MadMan4BamaNATL]

lol....smart money says we're no where near the 'end'

Sorry I’m so late to the party, Jimmy, but $700 per month for a new car really isn’t all that bad on the coasts or big cities. In rural areas or the Mid-West, bet it’s killer. The ways of the world.

Personally, I just don’t believe in down payments on cars. I usually do nothing, but with the Bronco (still on order, but seriously thinking about a Rubicon with Extreme Recon), I am already $1K on the order, and may give another $1K for no good reason. For a 60 month loan, $1K is only $20 per month basically, so why bother?

My Badlands build is looking like just under $60K before tax and title. The JLU Rubicon I’ve built on the Jeep webpage is actually much higher at $68K+, Landy Defender 90 is $69K, so Bronco is the cheapest.

We’re talking a car note of $1100 for my Bronco and around $1200 if I get the JLU since Ford won’t build my goddamn truck! To some, this is crazy money, even to me it is in a way, but look at these white collar salaries these days…..

My concern is always for the guy with the regular job that’s not a skilled trade, as those guys have been making killer, thus the now $70K-$90K pickups that all these boys are out here driving.

I don’t know how sustainable any of this is, but I guess that’s why everyone in this country is so damn angry all the time. Something’s gotta give, but it won’t be vehicle prices, these prices are here to stay and only will continue to rise.

Happy trails…..

 

[MadMan4BamaNATL]

Agreed, too often people seem to only look at if they can swing the payment.

step kid recently bought a used Spark, price was decent, payments "affordable" but 26% interest! We told him it wasn't a good deal, but he felt he had to do it and is convinced he can refi when he's got a better work history under his belt. Even pointing out it'll be 50k+ if he can't refi wasn't a deterrent

I had a hard cap for what I was willing to spend and managed to stay a good 10% under that before taxes so I'm comfortable I can afford it, even if I'm not happy spending it lol. That slippery slope business is what kept me at a BD instead of a BL because I knew I couldn't pass on going Lux if it was available lol.

If the stock market hadn't taken a dump I'd have a substantial down payment, now I have 0 down and growth potential

In the stock market, you haven’t lost a dime unless you’ve cashed out or sold, so best to hold right now and buy.

I’ve gone to town cleaning up on stocks that impatient guys have recently dumped. I’m making money almost as well as a year ago.

Commodities are the way to go my friend. Get back into consumer stocks once you see the market upswing again.

That’s free tips for all of you boys and it ain’t a secret!

 

[Carolina Jim]

Sorry I’m so late to the party, Jimmy

How'bout them Braves?

 

[Sherminiator]

We’re talking a car note of $1100 for my Bronco and around $1200 if I get the JLU since Ford won’t build my goddamn truck! To some, this is crazy money, even to me it is in a way, but look at these white collar salaries these days…..

My concern is always for the guy with the regular job that’s not a skilled trade, as those guys have been making killer, thus the now $70K-$90K pickups that all these boys are out here driving.

I don’t know how sustainable any of this is, but I guess that’s why everyone in this country is so damn angry all the time. Something’s gotta give, but it won’t be vehicle prices, these prices are here to stay and only will continue to rise.

Happy trails…..

Not sure where you live and what your housing costs are but Its easy to have a $2000-4000 a month mortgage payment in my area. Even with making say $150K a year between two salaries, swinging a $1K+ car payment with other bills is down right stupid. Take home is about $1800 a week or less (depending healthcare and investments into 401k/pension etc)

So basically lets call it like this:

$7200 a month take home
-2500 mortgage
-1000 car payment

So basically 1/2 of your income is being taken out by two payments. Then add in other bills and shit gets tight quick.

 

[MadMan4BamaNATL]

Not sure where you live and what your housing costs are but Its easy to have a $2000-4000 a month mortgage payment in my area. Even with making say $150K a year between two salaries, swinging a $1K+ car payment with other bills is down right stupid. Take home is about $1800 a week or less (depending healthcare and investments into 401k/pension etc)

So basically lets call it like this:

$7200 a month take home
-2500 mortgage
-1000 car payment

So basically 1/2 of your income is being taken out by two payments. Then add in other bills and shit gets tight quick.

Cost of living here in Atlanta isn't Jersey, but not much less.

You'd need to go a good ways higher for your salary analysis, but my statement wasn't about me, it's the fact that a vehicle that's just a Ford can cost $1000 per month and not even be luxury.

The average guy makes much less than $150K which makes the Bronco approach rich people money. Most new rides that are decent, along with housing is at rich people money; that's a problem.

We can call it inflation or whatever and spread the blame around, but the anger and dispora that many feel that leads to all sort of issues can easily be traced to this "pricing" of everything phenomena.

 

[ctandc]

Not sure where you live and what your housing costs are but Its easy to have a $2000-4000 a month mortgage payment in my area. Even with making say $150K a year between two salaries, swinging a $1K+ car payment with other bills is down right stupid. Take home is about $1800 a week or less (depending healthcare and investments into 401k/pension etc)

So basically lets call it like this:

$7200 a month take home
-2500 mortgage
-1000 car payment

So basically 1/2 of your income is being taken out by two payments. Then add in other bills and shit gets tight quick.

$2000-4000 mortgage payment? Jeez.

We live on 5 acres. Private drive. Land that borders us can't be developed. 2K sq ft brick Colonial. Detached large 2 car garage and detached shop. I would have to add my mortgage payment and the Bronco payment to reach $2K a month.

 

[FormerJeepJunkie]

“I have a specific financial situation that suits me and I think everyone else who isn’t in my exact situation financially is unable to handle currency properly!”

- People on this thread

 

[Carolina Jim]

anger and dispora that many feel that leads to all sort of issues can easily be traced to this "pricing" of everything phenomena.

I'd rank your point in the 'top 5' - but I think #1 is unrealistic expectations. The delta between cost of a loaf of bread in 1970 vs. 2022 is significant...but middle class 'lifestyle' differences are ginormous.

 

[MadMan4BamaNATL]

$2000-4000 mortgage payment? Jeez.

We live on 5 acres. Private drive. Land that borders us can't be developed. 2K sq ft brick Colonial. Detached large 2 car garage and detached shop. I would have to add my mortgage payment and the Bronco payment to reach $2K a month.

Guess you're in Southern or Western VA because in Northern VA, $4000 mortgages are likely hard to find.

All of this is relative and a matter of perspective based on where someone lives. Cities are more pricey than rural, but the cost of a vehicle is a constant wherever you are, which starts to make things not fair for the rural folk.

Being an urban dweller like I am, it's easy to be a selfish thinker, but I'm not. Most of my posts are for general consumption and I'm sensitive to the perspectives and experiences of others and can clearly see the contrasts.

I may be fine financially, but I know many are not. So as far as costs go, most people; globally spend over 50% of their income on shelter easily. In fact, in most of the world, people spend that percentage on food alone.

For the past few decades, everything has been sort of cheap here in America. Gas has been over $5 for the rest of the world for almost 20 years outside of the Middle East for obvious reasons and most US oil is exported, as profits are higher abroad; yet most Americans don't know this fact.

My point is, for the first time in forever, we in this country are starting to feel the cost of life that the world has experienced and it doesn't feel good or seem fair, but it's not changing.

So, $1000 car notes for a Ford or whatever are on the way, so plan now.

 

[ctandc]

Guess you're in Southern or Western VA because in Northern VA, $4000 mortgages are likely hard to find.

All of this is relative and a matter of perspective based on where someone lives. Cities are more pricey than rural, but the cost of a vehicle is a constant wherever you are, which starts to make things not fair for the rural folk.

Being an urban dweller like I am, it's easy to be a selfish thinker, but I'm not. Most of my posts are for general consumption and I'm sensitive to the perspectives and experiences of others and can clearly see the contrasts.

I may be fine financially, but I know many are not. So as far as costs go, most people; globally spend over 50% of their income on shelter easily. In fact, in most of the world, people spend that percentage on food alone.

For the past few decades, everything has been sort of cheap here in America. Gas has been over $5 for the rest of the world for almost 20 years outside of the Middle East for obvious reasons and most US oil is exported, as profits are higher abroad; yet most Americans don't know this fact.

My point is, for the first time in forever, we in this country are starting to feel the cost of life that the world has experienced and it doesn't feel good or seem fair, but it's not changing.

So, $1000 car notes for a Ford or whatever are on the way, so plan now.

Central.
I commute to Richmond for work. 15-20minute commute each way.

NOVA is (and has been) ridiculous on property values from all the people moving from NJ, NY, CT etc + DC + government employees. Property tax rates + lower cost of living + investment groups buying up more and more single family homes at higher than asking cash offers(to leverage equity / debt as capital without having a high tax penalty) caused many people to move South.

It's even cheaper if you keep going South and depending on the area, salaries actually stay higher than the cost of living drops.

The difference right now with oil / gas / natural gas etc is that we HAVE the infrastructure and the resources, but the risk of tying up millions of dollars to lease, survey, permit and develop ONE site for production - just to be shut down before production can begin - is simply not smart for capital investment.

That will change. Forget cars. Diesel for the trucking industry + rising costs of electricity as more and more power is relying on natural gas will make it clear that energy dependence is a National Security issue and always has been. It only takes a glance at the current conditions of much of Europe right now to see what can, and will, happen when sovereign nations depend on other sovereign nations for their energy.

Won't take much more. It would be already at the breaking point if so many people aren't now doing much of their work remotely and not having to commute as much.

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