Why do people get these huge loans? I’ve never had a car loan in my life and as I’ve moved up career-wise I’ve just never felt the need to put myself $20-50k in debt just for a fucking car.
Car prices increased terribly. Back a few years you could get a working used car for 400€, I’m now being told there’s nothing to be found for less than 2,000€.
Used cars have been 10k+ since covid.
- cheap housing is far from work
- they see local mass transit and cycling as impractical or socially unacceptable
- so they need a car to work
- they don’t have the capital to pay cash for it
- the social status value of a new car is seen as desirable
- they have mobility needs that are incompatible with local transit and/or make typical cars more expensive.
- they have family/other needs that mean they need a safer, more reliable car.
- they will lose their job if they are ever late, so need to prioritize reliability.
- they work multiple jobs, and/or have other requirements (child care, elder care, etc) that are incompatible with transit in their area and/or cannot be out off while a car is getting repaired.
- they are unable to DIY repair older used cars, cannot accommodate potentially extreme repair bills, and can’t assess if an older car is reliable to buy in the first place.
- the financing company will not give them a loan for something that doesn’t have enough value to avoid depreciating past the point of recouping losses over the life of the lease.
- the insurance company will not insure older cars at a rate that is doable for the driver.
- they don’t have the lump sum savings to buy a car outright, and loans are the only way to go to be able to continue to live and meet their life demands.
Wise of you to not buy a car if you don’t need it.
But I’m guessing you live somewhere where public transport is better than in most places in USA.
I agree you don’t exactly NEED to spend $50k on a car, but if you need a car to get to work, I think $20k is probably the minimum for something that is also reliable, even if you buy a used car there are limits to how low you can go if you are depending on it.I think that if you need to take a loan to buy a car, you should drive a modest car until you have money enough saved up.
I guess with some tenacity and know how you can find a cheaper reliable car, but not everybody has the necessary understanding of cars to buy old cars that are still reliable.When’s the last time you bought one, and how much did you spend? Sure you can buy a cheap old used car for not much, but usually that means it’s also going to need parts replacements sooner.
20-50k worth?
You might be surprised. I just bought a 2001 Toyota Tundra, super reliable Toyota, right? These list between $7-25k in my area with around my milage (180k). I got a super good deal on it, and it was in good visual inspection. Well, now I can’t find a timing belt sticker and the previous owner didn’t have a book of receipts. Toyota dealer wants $3500 to do the timing belt, something that has to be done every 80-100k miles or you have a ticking time bomb. There are only two independent shops that I would trust in my town, but have a two month wait almost all the time. I can do the job myself and have the tools, but most people would not be able to. Luckily for me, it is to replace my 03 Dodge truck with 350k miles on it, as that is just getting too expensive to keep running. I have already got new shocks, brakes, ball joints, center bearing, and full tune up. I already have over $3k in parts, with “free” labor. For me, this is worth it, but to the average person, you could easily have shop bills over $20k on a “reliable” vehicle that they paid around $10k for. That is a tall order for the majority of lower income people out there.
