By on April 22, 2014

 

consumeraffairs

$150 a week.

For some folks, this is a mere pittance. A lunch for four at a fancy restaurant that can be easily charged off to Uncle Sam and his seventeen trillion dollar debit card.

For others, it’s the beginning of a barnacle that will likely outlast their ability to pay it.

They will flex their muscles and run while they can. Then once they trip, due to a lost job or a family emergency, they will pick up an even heavier barnacle, with four wheels on it, and keep running.

It’s a vicious cycle of poverty. Where the poor always stay poor. After witnessing this cycle of automotive indebtitude for years on end,  I’ve come to blame one solitary thing.

Education.

Our society encourages dependency under the guise of capitalism. Young teenagers and adults are not taught to maintain anything… other than a bank account.

We, as a society, do not promote the idea of saving money by learning how to maintain things. We do it by offering the “rah-rah” cheerleading of self-help psychology. The anointing of so-called money gurus and experts who bring out the extremes of human behavior so that we feel better about ourselves.

The marketplace is about saving money by spending it. The more expensive the good, and the higher the debt, the more economic growth we have as a civilization.

When it comes to cars, appliances and homes, we are sent from schools of higher learning to a treadmill of perpetual ignorance. We are taught to buy it; not fix it. Maintenance and upkeep is meant for the professionals. Your payments create jobs and keep these hamster wheels of human work spinning in motion. Thereby creating a stronger economy.

It’s a fraud of the nastiest of orders. The mass of humanity spends their days performing relatively mindless work to pay off debts and hoping for a small dose of personal freedom once it’s all over. To keep this cycle going, we inflate everything we can at every level.

All debts are inflated these days by third parties that essentially do nothing. Housing values are pushed up by government policies and funny money paid to banks. The two entities most responsible for the economic collapse are now given all the tools to rebuild the cycle of debt.

As for the savers? They get their savings accounts obliterated from a 3% to 5% interest level, to 0%… plus billions more in fees.

The common citizen earns it, but they don’t get to keep it. Cars are now kept under shrouds of plastic and sealed steel so that ‘lifetime fluids’ and the basic steps of maintaining a car are kept well out of reach.

The CVT will save you a couple of miles per gallon. But once it breaks, your cost is likely to outweigh the entire car because you can’t rebuild it. As for those lifetime fluids, once the warranty runs out, it’s your problem.

One of the by-products of spending over 15 years at the wholesale auctions, and developing a long-term reliability study that focuses beyond the scope of Consumer Reports and other first owner focused publications, is that I get to see firsthand what hasn’t worked in the automotive marketplace.

I get to see the Volvo XC90 with the bad transmission. The Saturn VUE with a transmission driven by a cheap belt that is now broken and financially unsalvageable. The Dodge Intrepid with the 2.7 liter engine, that not even the Salvation Army can get to run right for 10 years.

What I don’t get to see is the educated kid who isn’t taught how to maintain their vehicle. I don’t get to see the title pawns that charge their customers 25% a month interest because their customers are working 40, but keeping nothing. Even with my business which is about 50% self-financing, I don’t get the customers who are under the knife of the seven year note.

One lost job, and their equity position returns to zero. What’s worse is that they get to pay even more the next go round.

Everyone has an opinion about how to reduce consumer debt and dependency. Some believe in the free market. Others would legislate their way into a conscripted paradise. As for me, I like excavators, open containers, and easy access when it comes to cars.

As for housing, health care, education and work life, I think the answer is a bit more complicated. So let’s stick to cars for now. What would you recommend to help change the economics of ownership?

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299 Comments on “QOTD: The Economics Of Ownership...”


  • avatar
    harshciygar

    Times have changed, as have cars.

    You used to be lucky to get 50,000 miles out of a car before trading it in for something better. My dad still laments that 1970 Chevelle he left on the side of the road over a $50 transmission fix.

    Then he tells me how he fixed a Camaro transmission in a Wal-Mart parking lot in the 80s.

    You can’t do that for dozens of reasons now. Forget the complicated nature of cars…people would call the cops on you instead of offering to help.

    We live in a disposable society. Cuba, meanwhile, keeps 50s American cars on the road for 60+ years.

    • 0 avatar
      Onus

      Nothing about newer cars makes them any more complicated in my opinion. They are just different.

      I grew up with computers so don’t see the problem. I’m also an IT guy, and amateur mechanic so that might be part of the reason. I fix stuff i haven’t seen before everyday. It may look complicated from the outside but when it comes down to it isn’t as bad as we think. You have to look at the systems in smaller pieces. It all starts to make sense after awhile.

      CVTs might have issues now. But, at some point rebuilding them wont be a difficult thing. Inside they don’t look to complicated.

      • 0 avatar
        pennintj

        Thanks to OBD it’s far, far easier to diagnose new cars over old cars, IMHO. I love having something that tells me my Ranger is idling rough because the air-bypass valve is coked up and the EGR has failed. I mean, granted anyone that’s owned a Ford knows these things are bad from the factory…but still.

        As for CVT’s: while I’ve yet to pull apart a car CVT having worked on scooters & UTV’s with CVT they’re actually easier to fix than traditional transmissions. Open side cover, remove the old shredded belt, clean up the housing, rinse & replace. If that’s *all* that fails, and it can be replaced, then I’d rather do that than swap a whole autotragic when something expensive fails (anything), or a standard when a shift fork gets bent.

        • 0 avatar
          Exfordtech

          The automotive CVT uses a steel chain between the variator pulleys. Typically the pins of each chain link extend beyond the edges of the links and are beveled to match the angle of the pulleys. The fluid between the pins and pulleys prevents metal to metal contact and becomes “sticky” when under pressure, thus providing the grip between the pins and pulleys to allow the transmission to drive the chain. Usually the failure involves metal to metal contact between the chain and variator pulleys. The resulting damage is catastrophic with alot of ground metal particles distributed throughout the unit, resulting in damage to expensive components like control bodies and torque converters and pumps.
          On another note, the pump in a CVT is typically high pressure (needed to control the variator pulleys and prevent chain slip). Parasitic loss of driving that pump limits the overall fuel efficiency gains of the theoretically infinite gear ratios. The disappointing MPG returns relative to the 6F50 was one of the reasons Ford abandoned the ZF CVT in the Freestyle/500.

          • 0 avatar
            danio3834

            The ZF unit used in the Ford products was a bit unique as compared to the more popular designs out there as it used a chain drive. The more common Jatco boxes use a steel belt. Unfortunately, they aren’t any more reliable.

      • 0 avatar
        ReSa

        True. And here lies the actual problem: cost of labour in relation to spendable income has risen, so having a mechanic poke around for a few hours to replace a 30 ct. washer is more expensive than replacing the module the washer is a part of.

        Increase spendable income (by raising minimum wages?) and your problems will be aleviated…

        • 0 avatar
          pennintj

          Doubtful. People will always attempt to live beyond their means. That’s why we have so many credit issues/troubles.

          Don’t get me wrong, I agree that income hasn’t kept up in the past thirty years, and we absolutely need to make some changes in that arena (again a discussion for another forum)

          But simply giving someone who makes $9 an hour $10 an hour isn’t going to change their spending habits, nor is it going to train them to have a “rainy day” fund that will make paying for a $3,000 transmission swap on a Chevy any more affordable.

          • 0 avatar
            thornmark

            The minimum wage “issue” must be seen as a political dodge.

            What happens when a country is flooded w/ low cost unskilled labor? Doesn’t that depress wages at the bottom?

            Why do some in DC want a national min wage? Is it a diversion from the above?

            Does it really make sense to req the same wage in Arkansas and NY?

            btw, if the Fed minimum wage were indexed by inflation using official guv measures from its inception in the 1930’s it would be @ $4.13. That says something.

          • 0 avatar
            ReSa

            My statement was ‘to increase spendable income’, merely with a tongue in cheek remark about increasing minimum wage ;)

            However, the documentary ‘Inequality for all’ does strike up an interesting theory of how minimimum wage and the current debt situation of the lower and middle class in the US are related.

            http://www.inequalityforall.com

            Without any political motive (other than being European…), I really recommend watching it!

          • 0 avatar
            FreedMike

            Thornmark, you’re missing the point. The problem with minimum wage is that the definition of minimum wage jobs has changed. Back when I was working for minimum wage, I was in high school or college. I wasn’t using the job to survive – I was using it to save money for a car. If I hadn’t worked, my family wouldn’t have been out on the street. And back then, that’s who minimum wage jobs were going to – people who didn’t need them to survive per se, or needed them as their first rung to climb on the job ladder. They were ideal for kids, students, or people who just needed a few more bucks in their pockets and could work part time. And in that case, yeah, it’s fine to pay the worker peanuts, and the workers understood and went along because they knew this was just a waystation to something better. The next step was to become educated, and get a white collar job, or learn a trade and become a blue collar worker. Either way, you could make a decent living.

            Flash forward to today, and kids who want to save money for a car aren’t going to get jobs at McDonalds, or other minimum-wage job offerers – those jobs are filled by people who are working full time at them to merely survive. These jobs aren’t a steppingstone to something better anymore – they’re the final destination, because all those white collar or good paying blue collar job they might have stepped into afterwards either don’t exist anymore, or are radically tougher to land. That’s a sea change. And that’s why workers in these jobs are pissed – they’re stuck in these positions, with no way upwards, and they can’t make ends meet. That’s a bad spot to be in.

            The problem, therefore, isn’t how much the minimum wage is, but the lack of upward mobility in these jobs. There’s precious little chance of making it to the next rung. The issue is job creation.

        • 0 avatar
          geeber

          Raise the minimum wage, and the mechanic will expect a raise, too. So we’re back to square one.

          Generally, people don’t go to the trouble and expense of learning a valuable trade with the expectation that they will only make as much money as people at the bottom of the ladder.

          • 0 avatar
            pennintj

            When I was still working on computers I had a law professor who had argued in front of the SCOTUS tell me that he wished he had my ability to fix and understand computers.

            Someone who spent his entire life practicing Law and had argued in front of the highest court in the land couldn’t comprehend how a computer worked, let alone how to repair one, and wished for a fraction of my ability.

            My response to him was simple; that I had spent *my* entire life learning how to repair things (computers just happened to be the thing at the time) just as he had spent his learning the Law.

            Repair is my specialty, just as the law was his.

            Experience is experience. I don’t expect someone who has never held a screwdriver in anger to understand how to use it.

            What *could* help is re-introducing “Shop” class in Primary Schools, especially if it taught the basics (this is how to check your oil, this is the sound brakes make when the wear indicators start screeching)

            But these days we have a hard enough time teaching kids English and Math.

          • 0 avatar
            dartman

            @thornmark- if you are going to use Wikipedia as a source for a political argument, you should at least use all of the information:

            “The minimum wage was re-established in the United States in 1938 (pursuant to the Fair Labor Standards Act), once again at $0.25 per hour ($4.10 in 2012 dollars[94]). In United States v. Darby Lumber Co. (1941), the Supreme Court upheld the Fair Labor Standards Act, holding that Congress had the power under the Commerce Clause to regulate employment conditions.”

            “The minimum wage had its highest purchasing value ever in 1968, when it was $1.60 per hour ($10.79 in 2014 dollars[94]). From January 1981 to April 1990, the minimum wage was frozen at $3.35 per hour, then a record-setting wage freeze. From September 1, 1997 through July 23, 2007, the federal minimum wage remained constant at $5.15 per hour, breaking the old record.”

            Now That says something. 1968—46 years. You wonder if there is some class warfare going on? You betcha! …and the working poor (and middle class) are being obliterated. The funny thing is, the guy that’s making $60k a year, he thinks he’s middle class, but he would be wrong.

        • 0 avatar
          thornmark

          Dartman>>Now That says something. 1968—46 years. You wonder if there is some class warfare going on? You betcha! …and the working poor (and middle class) are being obliterated. The funny thing is, the guy that’s making $60k a year, he thinks he’s middle class, but he would be wrong.<<

          Actually, virtually every news story cherry picks the 1968 peak w/o any historical perspective.

          What I was alluding to was the reality that official guv figures vastly under report the effect of inflation. As for the min wage, it is a diversion because raising it does not lift people out of poverty but it does reduce the opportunity of employment for people entering the workforce.

          Furthermore, the proponents of an increased min wage also usually support the wave of unskilled immigration. Historically unions looked out for their own by favoring lawful immigration. They knew more than anyone that large pools of unskilled workers depress wages at the bottom.

          Also usually unreported is the fact that union contracts often contain a provision for their wages to increase automatically w/ an increase in the official min wage.

          Btw, your spurious linking of middle class decline and the minimum wage is ridiculous. Which you seem to realize when citing the 60k figure.

      • 0 avatar
        krhodes1

        I agree 100%. I can fix my ’74 Spitfire, and I can fix my ’11 BMW. Different tools sometimes. Hooking a computer up to the BMW is no more scary than delving into the pair of SUs on the Spitfire. And the BMW is much more capable of diagnosing itself. Neither is rocket science.

        Cars are better than ever, people whine too much. I won’t have a car with a belt driven CVT though. Nor any automatic given a choice. That not out of fear of failure though. I made an early ZF 4hp22 go 400k.

      • 0 avatar
        danio3834

        Cars today most definitely ARE more complicated than they’ve ever been, but they’re still repairable if you have the will to learn how the new systems work and how to diagnose them. The good news is they’re generally more reliable. The march of progress will never end. If the people on the service end want to make money, they will adapt and provide solutions where there are problems.

        The layman and the Chevy-only, then domestic-only mechanic types have always been crying about the serviceability of new cars, but this is the biz they chose, they can’t say the writing wasn’t ont he wall 30 years ago.

      • 0 avatar
        Pch101

        In the olden days, an old car could be held together in a piecemeal fashion with rudimentary mechanical bits, tape and maybe a prayer or two. It might not have been sexy, but it could be done.

        The cars being made today are going to need replacement computer bits that nobody is going to make decades from now and that can’t be improvised. Those cars won’t become beaters because there will be no way for the backyard mechanic to fix them.

        Of course, the newer cars will be far more reliable in the interim, and better in just about every respect. But they won’t be much good to anyone once the electronics are dead.

        • 0 avatar
          DenverMike

          @Pch – That’s another reason to stick to the classics. Camaro, Silverado, Challenger, F-series, etc. Used parts will always plentiful plus the aftermarket and resto suppliers pick up where OEM parts leave off. Plus every everyone from the pros to backyard mechanic hack will be familiar with them.

        • 0 avatar
          krhodes1

          This simply is not true. There are already aftermarket computer bits available for my Range Rover for example. Body control board, suspension ECU, some other stuff. If there is a demand, the aftermarket will provide. You can already buy a stand-alone fuel injection system that is better than anything factory from 20 years ago.

          I predict it will be easier to get computers than body panels for a lot of low-volume cars. Computers are actually fairly generic, body panels are specific.

          • 0 avatar
            niky

            Anything is possible, but it’ll cost, and the knowledge required to wire up and program something like a MegaSquirt is pretty difficult to acquire for people who don’t have the time or inclination.

            If someday, somehow, everyone standardized to the same ECUs and boards, allowing you to buy a generic plug-in and download car-specific software from the internet… that… that would be great.

          • 0 avatar
            MBella

            Obviously not every ecu is the same, but do you think there are many differences in the module a supplier like Continental sells to Mercedes, BMW, or GM? As was said above, there are already plenty of places that rebuild control units.

          • 0 avatar
            fvfvsix

            “I predict it will be easier to get computers than body panels for a lot of low-volume cars. Computers are actually fairly generic, body panels are specific.”

            Not to mention that the tooling charges for PCBs are miniscule compared to creating stampings for body parts. I could (fairly inexpensively) have 100 copies of an ECU made as a boutique vendor. Software will be the only hurdle in this case.

          • 0 avatar
            Pch101

            Get back to me in twenty years, and let me know whether it’s possible to buy those things.

            Mechanical parts can be banged together by hand if necessary, or retrieved from a junkyard, or perhaps worked around. I wouldn’t assume that it will be so easy with the electronic stuff.

          • 0 avatar

            > Mechanical parts can be banged together by hand if necessary, or retrieved from a junkyard, or perhaps worked around. I wouldn’t assume that it will be so easy with the electronic stuff.

            Generally speaking modern electronics tend to be reliable if reasonably designed due to lack of moving parts. Corrosion is prolly the biggest problem.

            Presumably someone will find some solution for boards or whatever which have persistent issues. The only exception might be rare/uncommon cars.

          • 0 avatar
            BigWill

            “Mechanical parts can be banged together by hand if necessary, or retrieved from a junkyard, or perhaps worked around. I wouldn’t assume that it will be so easy with the electronic stuff.”

            Having recently pulled a working ECU from a 14 year old car at a U-Pull It lot recently, I’d respectfully disagree with your assumptions.

          • 0 avatar
            Pch101

            “Corrosion is prolly the biggest problem.”

            Heat and electronics don’t go well together. As it turns out, cars are exposed to a lot of heat, particularly under the hood where said electronics are often installed. The fact that fourteen year old ECUs can sometimes be used again doesn’t change this.

          • 0 avatar

            > Heat and electronics don’t go well together. As it turns out, cars are exposed to a lot of heat, particularly under the hood where said electronics are often installed.

            The engineers are well aware of this and use well-known methods of heat extraction.

            Regardless, electronics (esp digital logic) will fail first by “crashing” rather than physically breaking, so users are well warned if some heatsink were dislodged.

            Electronics “frying” is not typically caused by external heat but over-current or similar design error.

        • 0 avatar
          Rick T.

          Exactly right. No amount of preventative maintenance or tape could save the $4k module controlling the brakes on my Benz.

          • 0 avatar
            MBella

            I’m assuming you are referring to a SBC unit. Dealers sell them rebuilt for around $1200 retail. The 10 year warranty stared expiring on the first cars in late 2012, and they will continue to expire on many more. You will see many sources rebuild them for less than that.

          • 0 avatar
            korvetkeith

            Dealer wanted $3k for an ABS unit for my XJR. I bought a used one for $100. I also studied up on how to repair them.

        • 0 avatar
          George B

          PCH, most electronic and electrical problems are surprisingly easy to fix. Typically problems start with some conductor somewhere being broken so current can’t flow through that circuit. Something like a broken solder joint or a corroded connector. The hard part is finding the problem. The less common problem is a design issue where some component failing at elevated temperatures. Often those parts are visibly damaged with chunks missing. It takes a little more work to figure out why the part failed, but replacing components isn’t that difficult. Soldering is much easier than welding.

          • 0 avatar
            danio3834

            Yep, I’ve repaired more than a few GM instrument clusters with bad solder joints. Much cheaper than replacement.

        • 0 avatar
          chicagoland

          Lots of cars 10-20 years old are still running, and can be fixed easily with salvage parts. If they can’t, the design was crap when it was new, such as an Eagle [Renault] Premier.

      • 0 avatar
        WaftableTorque

        Onus, my years working in IT taught me the importance of getting rid of older equipment before they became problems. That seems to be 3 years for laptops, 4 years for desktops, and 4 years for printers (unless you had an HP Laserjet from the late 1990’s, in which case you kept it forever because they lasted forever because they hadn’t cut corners yet).

        The cost of paying an IT guy to fix issues was comparable to just buying new stuff.

        • 0 avatar
          Onus

          That is very true in the IT world. Especially with the quality of computers I have seen come in the nearly all of my career so far ( 7 years ). You’ll be lucky to get 4 years out of it before things start to go wrong hardware wise. Your warranty and on site support will pickup the early issues.

          I got a LaserJet 4 from my old job when they were tosing it out. It’s old, slow, and noisy, but can be fixed for a song and works on everything windows, linux, whatever.

          I used to work at a really cheap place so we were still messing around with computers from 2004 in 2011. Yikes.

          • 0 avatar

            The big LaserJet 4 was a tank. Very reliable. There was a noticeable decline in build quality between the 4 and 5 series. The 4s hardly ever needed service, the 5s needed it regularly. They were big and they were heavy but they kept working.

          • 0 avatar
            NoGoYo

            Where I work we have cash registers from 1998…which break regularly.

          • 0 avatar
            krhodes1

            The difference with general purpose computers (and printers) is cost. Sure those old HP 4s lasted forever – but they cost the EARTH to buy in the first place. I would rather the printer be a bit disposable and just get a new one every 3-4 years with all the latest whistles and bells for a fraction of the cost. My current HP color laserjet cost less than a set of toner cartridges for it does. If it so much as hiccups, it will get replaced with the latest and greatest without a thought.

            Similarly, when I got started in computers, a decent desktop was nearly $2K. And my very first computer from 1993 still boots up and runs fine. Of course, it is a total paperweight at this point being a 486SX with 4MB of RAM and a 120MB drive. I just ordered the bits for a new computer last night as it happens, 4.1Ghz, 16GB, 512GB SSD for about $600 with a fancy case and PS etc. The difference in capability between those machines is simply mind-boggling. This one will get replaced with something even better in 3-4 years. Just like it replaced one from 3-4 years ago.

            Cars, not so much. Cars are a little cheaper adjusted for inflation than they were 20-25 years ago, and a lot better and more capable, but if Moore’s Law applied to cars we would all have personal spaceships by now. Just completely non-comparable things.

            Computers CAN last quite a while still though – I have a Dell 830 laptop from 2007 in daily use. All it has needed is an SSD upgrade and a new keyboard. It doesn’t travel though – too heavy. It is entirely adequate for office work.

          • 0 avatar
            jpolicke

            Ah, those old ‘Jet 4s. Practically military in their ruggedness and ease of field service. When they started to misfeed paper you snapped on a new set of rollers. Five minutes tops. Fuser died? Drop the side panel, 2 thumbscrews and pull. You could keep one running forever if you wanted. The 5SI wasn’t bad either, just weighed a ton.

          • 0 avatar
            nrd515

            On my own stuff, 5 years is almost a perfect guess on how long a desktop PC lasts before something pukes out on it. my last one, that I built wigged out almost exactly 5 years from the day I first fired it up. The motherboard became intermittent so I would lose the power to the video card. But there are still some that never die. My first PC, a Packard Bell 286/12MHZ with 1 meg of RAM, and a whopping 65 meg hard drive is STILL working! Everything is original, except for the floppy drives! It runs an amateur radio packet beacon for a friend of mine. I sold it to him for $45 about 1999. He wants to see if it will make 30 years. I bought it in 1989. I wouldn’t bet against it.

      • 0 avatar
        harshciygar

        I’ve repaired cars 40 years old and cars 4 years old, but still out of warranty. I’m a young guy and know my way around computers, but replacing the timing chain on a Subaru H6 engine is one of the worst experiences I can wish on any backyard mechanic.

        Meanwhile, me and a buddy can replace the entire drivetrain of a Beetle in literally hours.

        It’s also costs. My mother-in-law’s Acura CSL just shat the transmission out. Cost to repair? About $4,000. You can buy two C4 transmissions for that amount.

        Sure, the Acura lasted for 180k miles, which is great…but even if she could fix it, would it be worth the time and effort? When you could double the life of a car by going to the junkyard and buying a whole drivetrain (that you could install in an afternoon, mind you) for a couple of hundred bucks, it made sense.

        Now you need to make sure you have not just the right engine and transmission, but the right wiring harness, the right ECU, so on and so forth. Again, not impossible, but certainly more time consuming than dropping in any sort of carburated engine.

    • 0 avatar

      Cuba keeps the 50’s American cars on the road by installing Lada parts or tractor engines from China. They keep the cars because they have to–until recently you weren’t allowed to own a car and now buying one costs more than the average Cuban makes in 10 years.

      But it’s a good lesson in repairing and adapting as opposed to throwing something away.

  • avatar
    Onus

    I wish this craziness would end. I’d like to be able to buy a house through saving. But, easy money makes that very difficult by inflating prices. But, I’ll do it one way or another.

    Like where i live houses are stupid cheap because no one wants to live here. The area has a bad rap for no reason. I don’t mind it having lived here my entire life. Since I’m 21 i don’t have kids that need to go to good schools. Thankfully i got through before the schools went to crap.

    Anyway, all the “poor” people i know. Nearly all of my good friends are such people, have gotten there by making bad decisions time and time again. I tried to help them before it got to this point but no one listens.

    • 0 avatar
      psychoboy

      “The rich stay rich because they keep doing the things that made them rich….Ditto for the poor”

      • 0 avatar
        Kaosaur

        And with reasonable reliability in this country, the former happens by being born rich and the latter by being born poor.

        The class mobility stats are out there for anyone to read, if you are so interested.

        • 0 avatar
          RangerM

          Get married, stay married, and don’t have children without being married.

          • 0 avatar
            28-Cars-Later

            Why?

          • 0 avatar
            danio3834

            I don’t know exactly what he’s getting at, but I can say for certain that the economics of getting un-married are rarely favorable.

          • 0 avatar
            SomeGuy

            Exactly. It is a truth people don’t like listening to though.

          • 0 avatar
            Onus

            Tax advantage for being married, and you’ll have tons of money without having kids. On top of that i read a study that say kids just make people less happy, everything seems to work fine until the kids show up. Makes sense to me!

          • 0 avatar
            krhodes1

            Add “get an education” to that. At least a High School diploma or a GED. My HS drop-out loser kid brother is the poster boy for that one.

            Ultimately, you are what you make of yourself. Anything else is just excuses.

          • 0 avatar
            Kaosaur

            > Add “get an education” to that. At least a High School diploma or a GED. My HS drop-out loser kid brother is the poster boy for that one.

            No, don’t. Really, not unless you can get it for free or paid-in-cash. You can get the HSD for free, so for sure get that, but unless you’re getting a STEM degree in today’s economy this is a bad investment. Student loans have zero legal protections from what’s looking to be increasingly predatory lending and you cannot declare bankruptcy to remove them. Every single consumer lending act does not cover student loans, which are increasingly being offered privately as federal/state funds get administered by these private lenders or get cut entirely.

            Poor people are much less likely to finish college and end up having to pay a higher cost for the same education as their richer peers; and that’s BEFORE you add on interest. Heck, the richer kids even get MORE grant/aid/loan money than their poorer peers. Way more people are going to college than should and indebting themselves for most of their lives just for the sake of fueling our consumer-based economy.

            > Ultimately, you are what you make of yourself. Anything else is just excuses.

            This is demonstrably untrue. If you stop looking at outliers and just look at the numbers, class mobility is either flat or pointing downwards (to poverty) in every major city in the US except for San Francisco.

          • 0 avatar
            ajla

            He didn’t write “go to college”.

            Learning how to fix HVAC units or style hair or make tiramisu or install cabinets can fall under the “get an education” umbrella.

          • 0 avatar
            krhodes1

            @Kausaur

            I said to at least complete high school, not necessarily go to college. If you do go to college, you need to be smart about it. I have a friend who is $400k in debt for the equivalent of a Masters in Art History (he defaulted a couple times). You can still get a degree from a state school for reasonable money. Or work your way through school. That is the sort of drive that will get you ahead.

            The urban poor have always been pretty well screwed.

    • 0 avatar
      redav

      “I’d like to be able to buy a house through saving”
      – Granted, it takes 30 yrs to save for a house (because that’s how long it takes to pay one off, but with that you trade interest for rent during those 30 yrs). But then again, many people buy what they can technically ‘afford’ rather than what they really need. Much like cars, there are perfectly good options that cost less & get the job done, but good luck convincing buyers of that fact.

      I often think about the difference in behaviors between the rich and poor, and I do think there is a difference. First, “rich” and “poor” are loaded terms that mean little except to foster antagonism. Instead, “successful” and “unsuccessful” might be more appropriate. Again, I believe they do things differently, and I believe those differences play a big role in why they are in the category they are.

      In regards to cars, one example is buying a car based on monthly cost. I expect that successful people will more often view a car purchase in terms of total cost, while unsuccessful people look at monthly costs. That unsuccessful person will then expect a car note in perpetuity, and will be more likely to pick leases and regularly trade in their car and thus be more likely to sink underwater on their loans. The total cost person is more likely to pay off the debt, keep the car longer without a payment and save up for their next car. I don’t think any of these behaviors are unusual or unexpected. I don’t buy the OP’s argument that not repairing your car yourself forces you into poverty because most every car today can last sufficiently long without massive investment to facilitate debt freedom.

      Another behavior I’ve thought about a lot recently is a batch v. flow financial model. Batch processes are like making a cake in your kitchen–you gather the ingredients, mix it, bake it, eat it, and then stop. Flow processes are continual–you do the same thing(s) all the time and the end product is perpetually output instead of the result of a batch process. To compare the cake baking example: if you have a cake factory, you can either make cakes like you would in your kitchen by preparing & baking individual batches, or you can load up everything into bins that perpetually feed a continuous process of mixing, pouring, rolling through an oven, etc. A flow process will generally be more efficient, but also doesn’t work well for infrequent tasks.

      But what does that have to do with money? I see a lot of people who approach their finances with a batch mentality: they go out on payday because now they have money. (Similarly, they talk about stretching their funds through the end of the month.) They dedicate their first paycheck of the month to a, b, & c, while their second paycheck goes to x, y, & z. They save money for specific goals. Like baking a cake, none of that is bad, and in fact it’s awesome compared to people who don’t plan. However, I do see such people have difficulty saving large amounts of money. Everything seems dedicated to an immediate need–they have difficulty getting ahead.

      Now, compare it to a ‘flow’ financial model. Examples of this approach are CD ladders & automatic paycheck deferrals for savings. Like inventory in a manufacturing plant, capacitance gets built into their system so that they are not driven by schedules or timing. For example, my father used to keep a separate bank account for paying all his bills. He calculated the 12-mo rolling average for everything–gas, electricity, gasoline, etc.–and deposited the corresponding average amount from each paycheck. In winter, the account balance would grow because electric bills we less, and in summer it would go back down. But his finances were steady & consistent instead of varying by the season. Another example is someone who sets up a car account: they start paying into it before buying to get used to having that bill; they use that money for the down payment; they continues to pay the note to themselves after the loan is paid off (just like before buying); they withdraw from the fund whenever repairs or a new car are needed. In this case, like the infinite leaser, they always have a car bill, but this guy gets to keep the money when everything goes well.

      Tax returns and a third paycheck in a month (for those on biweekly schedules) are a boon for ‘batchers,’ but those things don’t affect ‘flow-ers’ much. Flow-ers need a longer-term view & have to scale back their spending earlier to build in the capacitance (savings) into their system.

      • 0 avatar
        timcc23

        Agree with everything above. Great analogies. I’ve never thought about finances in terms of batchers and flow-ers, but I’m definitely a flow-er.

      • 0 avatar

        > But what does that have to do with money? I see a lot of people who approach their finances with a batch mentality: ..Now, compare it to a ‘flow’ financial model.

        This is technically wrong or at least misapplied. The “flow” here analogized by the cake factory is the pipeline model, and its efficiency comes from overlapping multiple instances of a process with a offset such that each station can always be utilized simultaneously.

        That’s completely different from just reorganizing how to expend a largely conserved quantity (of money). There might be a case to be made for a Just In Time optimization such that money is never sits without paying interest but again it doesn’t follow from the analogy.

        • 0 avatar
          redav

          No, it isn’t perfect, but a fiscal flow model prevents opportunity losses and permits flexibility to take advantage of sales, etc. Thus, there is a gained efficiency. Also, it is well known that people are neither rational nor particularly good long-term planners, and IMO, a batch mentality exacerbates these flaws. A flow model/habit minimizes the negative effects, thus yielding another improvement, if only due to psychology instead of the math.

          Also, there are differences in quality control methods between the two approaches. I suspect that those who use the flow control strategies for their money are going to have an advantage.

  • avatar

    There is a saying here:

    “either you’re gonna pay a car note or a mechanic”

    Older cars had fewer parts, fewer sophisticated parts and required less maintenance. I always maintain at least two vehicles that have very different purposes and I refuse to spend a lot of money on an old vehicle. Therefore, I switch up cars every 4 or 5 years – basically: whenever the extended warranty period ends.

    LEASING is a way for people who have the credit and finances to lease to avoid long term depreciation and repair fees on a vehicle – as well as a way to enjoy newer vehicles without incurring their ridiculous maintenance fees.

    I know people who lease brand new German cars and never have a problem within their 4 year ownership and I also know people who finance used German cars (50% off) and end up spending long on the maintenance and repairs.

    If you are willing to “have less” – sure you could buy an Accord, Camry or Volkswagon and keep it for a long time and upkeep it, but frankly: life’s too short to drive boring cars.

    If you can afford to drive better -why not?

    I have a coworker who drives 60 miles into NYC and 60 miles home every single day. If I was him, I’d be leasing a luxury car – anything to make that silly commute softer and nicer on my body.

    Don’t get me wrong, I think leasing only makes sense for some people. Most people can’t afford to come up with $3500 – $7000 every 3 years. Some can, however.

    But when you’re faced with vehicles designed to not last 100,000 miles before major maintenance is required – and psychological obsolescence is forcing you to consider having something newer – suddenly, leasing becomes a great thing.

    • 0 avatar
      jmo

      They required less maintenance? Are you insane? Points and carburetors didn’t adjust themselves.

      • 0 avatar
        FormerFF

        Truly. Older cars required far, far more maintenance.

        • 0 avatar

          Perhaps I should say that older cars didn’t require maintenance as expensive as newer cars…and as Steven points out, the maintenance required could be done by the average person, rather than a technician.

          • 0 avatar
            krhodes1

            Yes they did. Just the numbers were smaller due to inflation. I have the repair and maintenance records from new for my Moms old ’83 528e. Despite being an amazingly durable and reliable car only slightly more complicated than an anvil, I can assure you it cost several multiples of what my 3yo BMW will cost to get to the first 200k. And it cost more than a new 528i, adjusted for inflation. For a car with vinyl seats and a tape deck. And 125hp.

          • 0 avatar
            kmoney

            I think you’re both somewhat right. I worked as a tech till about 2007 and you could definitely notice changes in parts costs and maintenance costs between old cars and new. On more pedestrian cars, things probably didn’t change that much, as the cars themselves largely seem to have retained the mechanics and technology (at least outside of the passenger cabin) of their older siblings.

            On semi-upmarket cars however, things have gotten worse. The things that burn you now on new cars are $450 ABS sensors that require replacing an entire hub assembly, $250 door lock actuators or window motors, transmission speed sensors at $150-200 a pop. Yes, I get that people will call these repairs but, in my mind at least, these are the maintenance reality of modern vehicles.

            On the general maintenance side though, I will say if I plug most my old service and warranty records into an inflation calculator, most services cost the same or less today than in prior years.

        • 0 avatar
          28-Cars-Later

          Agreed. The sweet spot is probably right after OBDII to the advent of nanny devices.

    • 0 avatar
      vbofw

      Leasing does not avoid depreciation. Quite the opposite – it guarantees the lessee pays the bulk of the new vehicle’s depreciation. Typically 40-50% in 3 years.

      • 0 avatar

        vbofw

        I disagree with that.
        Keep in mind, leasing some Toyota Camry for $200 a month is completely different than leasing a BMW 7 for $1000 a month.

        The repairs, maintenance, fuel costs, etc are almost always gonna be more expensive on the higher-end vehicle in the long run.

        Thing is, the lease programs now usually offer “total maintenance bumper to bumper” with the exception of tire wear and break wear.

        • 0 avatar
          VoGo

          BTS,
          If you believe that leasing a new vehicle allows you to avoid depreciation, then I’d like to lease you a bridge.

          If you are paying $500/month to lease a car, about $120 covers interest, $30 covers warranty/maintenance and the remaining $350 is for depreciation.

          Which over 3 years is $13K.

          • 0 avatar
            Mathias

            >> If you believe that leasing a new vehicle allows you to avoid depreciation, then I’d like to lease you a bridge.

            I’ll take that bridge for the right price.
            I’m leasing a ’13 Cruze 1LT for 24 months, 30k miles, for a total cost, taxes included, of $3,900 or 13 cents/mile.

            My personal best was $70/month on a 2004 Vibe that I drove for 30 months from new. Depreciation is not exactly a myth, but sometimes you can get around it.

          • 0 avatar
            fincar1

            Yeah, c’mon, if you are leasing a car, you essentially are paying someone else to own it, and he’s going to be making money on the deal or he wouldn’t lease it to you.

          • 0 avatar
            Pch101

            Some leases are heavily subsidized. Particularly for luxury cars, leasing may be cheaper than buying and trading every few years.

          • 0 avatar
            krhodes1

            @PCH101

            I agree with you that leasing can be cheaper than buying and trading all the time. If you are going to do that, you might as well lease in many cases. But it is NEVER cheaper than buying and keeping the car.

            If you want to save a bunch of money, just keep paying your car payment to yourself after the car is paid for. Unless you are the unluckiest SOB in history, even after paying for all repairs and maintenance out of that money you will have enough to pay cash for a similar new car 5-6 years at most after the first one is paid off. I certainly expect 10 years of trouble-free service out of any modern car. One year of car payments will pay for an awful lot of repairs and maintenance. One year of car payments on my BMW is a dealer-installed new engine, for example. Or 2+ transmissions. Or 3-4 A/C evaporator replacements.

          • 0 avatar
            redav

            Leasing may be cheaper than buying and trading every few years, but that’s like saying you aren’t evil because you aren’t Hitler.

            Buying & trading every few years is an excellent way to sink yourself into a financial pit.

            Companies wouldn’t push leases half as hard as they do if it wasn’t to their benefit, i.e., not to your benefit.

          • 0 avatar
            Pch101

            Godwin’s law and leasing discussions don’t go very well together.

            It’s a matter of fact that leases are often subsidized for the luxury cars. I never discussed whether you could afford one, nor did I claim that cars were an “investment.”

          • 0 avatar

            “and he’s going to be making money on the deal or he wouldn’t lease it to you.”

            GM did not reach US$172.81 billion in debt by selling vehicles for a profit.

          • 0 avatar
            redav

            “Godwin’s law and leasing discussions don’t go very well together.”
            Says who? Actually, they go great together, which is why Godwin’s law came about in the first place–Nazis make great villains.

            You state: “It’s a matter of fact that leases are often subsidized for the luxury cars.” No shit. That statement might be relevant if anyone had somehow denied it–but I don’t see anyone who did–so why repeat yourself? What point do you think you make?

            I can throw out pseudo-fancy sounding terms, too. You pose a form of a false dilemma. You compared leasing to buying-and-trading every few years. I (and others) point out both of those options are bad in terms of “economics of ownership,” (you know, the whole point of the article). Do you deny both are bad options? Do you provide any reasoning that just because a lease is subsidized (cheaper) is becomes a good deal compared to anything other than a worse deal?

            You mention affordability and “investment.” Why? What/who are you arguing against on this point? Again, the topic of the article is “economics of ownership.” Do you pretend to suggesting a comparison of leasing v. buying-and-trading is not about which is a better financial option for the consumer (i.e., “investment”), but then intend to ignore discussion about affordability and/or “investment”?

            In fact, I have more pseudo-fancy terms: Graham’s Hierarchy of Disagreement. As you have no doubt noticed, my snarky responses & insults don’t a persuasive argument make. But that also means neither do yours. Too often, your responses to people who find fault in your comments never get beyond halfway up the hierarchy by disagreeing, but as I demonstrated with Godwin’s law, I can disagree just as well.

            Your response would have been much better if you had either supported (with additional info) why only lease & buy-and-trade should be considered (eliminate the false dilemma) or address how lease subsidies compare to other alternatives, such as buy-and-keep. You could have addressed how lease subsidization addresses the depreciation timetable (i.e., are you really paying for someone else’s ownership of the car?). Since you make such a stink about luxury brands doing it, you could have even elaborated why that matters (if it does).

            Here’s an example of decent reply:
            Praxis suggests that GM’s debt shows that leases are not in the manufacturers’ best interests because GM didn’t make a profit. I can counter the basis of that response by pointing out that GM’s inability to make money is not an indication of whether leasing or buying-and-trading is better. Furthermore, all car companies (that I can tell) strongly encourage leasing, yet not all end up in debt like GM, thus it is unreasonable to suggest that is the cause for their misfortune.

      • 0 avatar

        It does offer a lower cost of ownership compared to folks with less stellar credit and buy cars that are broken before they pay it off or those who “want to own it” but end up trading it in 3 years later anyway. It’s not a pure economic choice, but when you consider the lifestyle Americans often choose, coupled with a lack of interest in home repairs, it does have an economic advantage for many folks.

      • 0 avatar

        > Leasing does not avoid depreciation. Quite the opposite – it guarantees the lessee pays the bulk of the new vehicle’s depreciation. Typically 40-50% in 3 years.

        This is someone who supposedly gives financial advice on youtube.

        Incidentally taking financial advice from people on youtube is a poor idea.

    • 0 avatar
      VoGo

      One solution would be to tailor a purchase option for people returning their cars at the end of a 3-year lease. Essentially, you give them the option to keep their same car and payments, but for 5 years, at the end of which, they own the vehicle.

      Additionally, the dealer gives the buyer the right to do $500 annually in free service at the dealership. This way, the buyer will be able to replace tires, battery, brake pads, whatever comes up in the remaining years of ownership, without breaking their budget.

      This would mean more, profitable business for the dealer, and allow the buyer to actually build equity and get out of debt.

      • 0 avatar

        “One solution would be to tailor a purchase option for people returning their cars at the end of a 3-year lease. Essentially, you give them the option to keep their same car and payments, but for 5 years, at the end of which, they own the vehicle.”

        You can buy out your own lease, at the guaranteed future value. If you force the math to equal the same payment over 5 years though you’ll end up throwing a wrench in the works. Often folks get better lease tiers than their credit deserves in order to push product and deprecation is adjusted on vehicles differently.

        As far as pre-paid maintenance, it’s nice for budgeting, but it again raises the price and in the end gives the consumer less choice.

    • 0 avatar
      seth1065

      Big Truck,
      Hope your planning to pay through the nose by going over the milage limit. or buy your german car at the end of the lease because your friend in the example would never be able to lease a car with his milage which is over 30,000 miles a year. leases are for people who do not drive a lot or can write it off. My wife drives 15 miles round trip to and from work, a lease would work great for her if I always want a car payment , which I do not, so we bought a Honda Pilot paid it off , have not had any issues with it in nine years ( one dead battery) just maintenance done at a local indie. You would look down on me driving a nine year old pilot when you pass me on 280 in Nj but that is OK. My money has better uses than a never ending car payment. For the next 4 years collage so I plan on keeping the pilot a long time.

      I have a coworker who drives 60 miles into NYC and 60 miles home every single day. If I was him, I’d be leasing a luxury car – anything to make that silly commute softer and nicer on my body.

      • 0 avatar

        “You would look down on me driving a nine year old pilot when you pass me on 280 in Nj but that is OK. My money has better uses than a never ending car payment. For the next 4 years collage so I plan on keeping the pilot a long time.”

        #1 I drive wayyyy too fast to actually look down on people I pass.

        #2 Leasing isn’t for everyone. If you’re one of the top 25% who has a house taken cared of, can go on vacations when you want, has your children’s education paid for, has healthcare and is pretty much ok – then why can’t you drive the best you can afford?

        Leasing makes that possible without forcing someone to keep a vehicle for a whole 6 years.

        Many people – for example who used to lease BMW and Mercedes decided to give TESLA a try this time around.

        I believe the term for us is: early adopters

        • 0 avatar

          “Leasing makes that possible without forcing someone to keep a vehicle for a whole 6 years.”

          Mark the day, I agree with you BT

          Additionally you can keep up with technology as well as make easy switches to your lifestyle (like when you knock up a girl who thinks you looked good in that 3 series coupe and all of a sudden you have twins)

          • 0 avatar

            Frantz

            If not for having to look good for women (and clients), I’d care less about how I dress or how I look.

            If not for male bonding… I’d have two cars with V6’s in them.

            …but then I’d be kicked out of Team Move Over SRT!

      • 0 avatar

        SETH

        For my coworker, I’d recommend a hybrid with heated/cooled seats. Definitely a light colored interior/exterior to radiate heat faster during summer.

        I only drive 10 miles a day – and I only work 9 out of 12 months.

        TWO 6.4-Liters getting fewer than 12MPG makes no sense at all, but for me it’s more than manageable.

    • 0 avatar
      krhodes1

      The cheapest route to car ownership is very simple. Buy a simple, basic car, maintain it well, and drive it for 20 years or more. What isn’t there won’t break. Of course this means foregoing the fun toys and no HEMI POWAH! But you have to pay to play.

      Leasing is pretty much the most expensive way to buy cars. Even a modern German is cheaper to fix than the first three years depreciation on a new one.

      • 0 avatar
        tekdemon

        Cheap isn’t always the best…I’ve had a bad accident where my car was pinned between a silverado crew cab pickup and a gigantic hunk of metal made up of a caravan and a Hyundai accent that had just collided. Needless to say my car was totaled and I had some knee injuries despite wearing a seatbelt since my knee smashed into the dash. But you see, I was driving what was the latest model Civic Si at that time, one that had JUST had it’s safety systems completely overhauled with a new passenger compartment safety cage. One that saved my behind that day because this was no low speed accident (the pickup was doing over 50) and frankly if I had bought a used 1997 Civic I’d probably be dead because those 90s Civics crumpled like tin cans and they were so low who knows if the pickup would have ridden over me. The editor in chief here is also now in a much safer and newer car than he used to drive for similar reasons. What did I do after I totaled my car? I bought one of the safest and dullest new cars available at that time because I wanted to force the idiot behind the wheel to calm down and rethink priorities.

        Thankfully modern cars have come a long way so a relatively new used car would still be safer than even my then cutting edge for safety car, but to make it sound like there’s no reason to buy a new car that aces crash tests is plain silly. Even now I wish they had knee airbags back then because my knee is still messed up and probably will always be.

        Reality is that even if you buy used I’d at least buy something new enough to ace modern safety tests.

        • 0 avatar
          fvfvsix

          You speak the truth.

        • 0 avatar
          orangechallenger

          full size helps, but doesnt count the sorry cars like Volare

          my Lincoln Mark VIII was slammed by a Dodge Ram around 50mph and even the left door ( a big coupe) got jammed. my friend didnt wear seat belts ( even though i always insist ) and he flew from front to rear. but three people in car doesnt really get hurt. however, Mark VIII was the most over engineered domestic vehicle in 90s ( along with Aurora ) with high integrity body, few cars could do that.

          then, without much money and no car to drive, i got a 78 Plymouth Volare. i drive the car like snail all the time, even when i make a turn i have to use emergency lights ( it just doesnt make any turn over 15, since it’s a basic model, without anti sway bar )

          and eventually i got another Mark VIII to drive every day. but between a New Yorker died on me, plus a 5-day alive Tempo ( totaled in another accident ) and for Michigan winter another LeSabre comes.

    • 0 avatar
      duffman13

      BTR,

      While two of my 3 cars are older and my newest was a purchase, I do agree with you on the value of leasing, and may in fact go that route for our next car.

      My wife and I are planning to have kids in the next couple years, but none of our cars really work for family duties. My S2000 is a weekend/track toy and only 2 seats, my 92 Rodeo is just not going to cut it safety-wise as a family vehicle, nor is a Mazda 3 hatch big enough for 2 adults, 2 dogs, and baby crap.

      Since she works from home and doesn’t drive all that much, a low mileage lease on an midsize German SUV is definitely in the cards for us – It gives us the space we need on that short term basis, plus an out to go bigger once we hit that 2-kid+animals point. Plus, she’s never really had a fancy car before, so why not?

      We’re considering buying a 3-row vehicle now, But I don’t really see the point considering we won’t need that amount of space for several years, hence a lease. If I’m going to pay for depreciation anyway with a trade-in, we might as well forgo the process of selling the old car, which the lease does by design.

      • 0 avatar

        “Since she works from home and doesn’t drive all that much, a low mileage lease on an midsize German SUV is definitely in the cards for us ”

        I don’t know your pocket – and you are entitled to get what you want – but why buy a German SUV over a less expensive, domestic/Japanese import that will likely last longer and cost less when you get all the features?

        If I accidentally got my woman pregnant, I don’t think I could see riding around in HEMI’s any longer – and the way I drive, I doubt she’d let me.

        I’d probably pick a spacious, V6 powered domestic. Probably a Journey or a DODGE MAGNUM if DAMN CHRYSLER WOULD REMAKE THEM…

        • 0 avatar
          krhodes1

          If you are going to lease, you might as well go German as the lease payments are usually lower. They hold their value a little better, and BMW and MB subvent the leases to move the metal.

          But make no mistake, even a subvented lease is a bloody expensive way to own cars over the long haul. This discussion is supposed to be about dollars and cents – you get the feel good factor having a new car every 2-3 years but you certainly PAY for the privilege!

          • 0 avatar
            duffman13

            Well in my particular case, the money would work, and it’s only $30 off our current payment. It would only be for a single lease cycle, meeting our intermediate needs and acting as a treat for the wife before we get a long-term 3-rower.

        • 0 avatar
          duffman13

          Lease, not buy. At the current promo rate of $410/month for 10k/year, an X3 is more than adequate for our size needs, and inexpensive enough considering the payment on her Mazda 3 is $380. Then I can get rid of my beater SUV and commute in the 3 as a bonus.

          The other option is buying a 3-row C/SUV that we’d keep for a decade or so, she likes the Santa Fe Limited from the auto show this spring. The payment would be roughly the same if we get a used one, or $150-200 higher on something new; I won’t go for a term than 60 months unless the interest is sub-2%.

          The thing is, we are probably about 5 years away from a wanting 3-row for schlepping duties as far as space goes. Nothing is set in stone yet, we’re going to consider both options when we’re in the market next year, but like i said since we have that intermediate period as far as space goes, and the price point remains the same, why not pamper ourselves for a bit?

          Truth be told, we’ll most likely see how bad it is with just the Mazda for the first one, but it is something we’re considering because would does work for us financially, even if it’s not necessarily the smartest move.

          • 0 avatar
            fvfvsix

            @duff – Having hauled plenty of people in our F25 X3, I’d say don’t underestimate the space in that thing. A 3-row SUV sounds nice and all, but I would certainly hesitate to go bigger for quite some time. Yes, my payments on the 35i were FAR higher than $410 a month, but we paid our loan off in 20 months. It’s even better with no payment and a good bit of warranty left. If you can go the “buy and hold” route, I would advise it.

          • 0 avatar
            mnm4ever

            @duffman – I see how you are working your math but it isn’t quite the bargain you are making it out to be. A quick check of the BMW website shows the subsidized lease deal on the X3 “nicely equipped” (which is code for base model) is $420/mo with $4000 down, which will be more like $550/mo with 0 down. And zero down is really the only way to do a lease, anything you pre-pay is just fooling yourself into making the monthly payment cheaper. An X1 is closer to your numbers… $350/mo with $3500 down. But even that is more like $450/mo with nothing out of pocket.

            Compare that to Honda, which usually runs the best subsidized leases around. An Pilot EX with leather is $400/mo with zero OOP. Drop to an LX and its $340/mo. A Pilot is bigger than the X3. A CRV is closer to the X3 or X1, and the value is even better… zero down and $270 a month… $100 less than your Mazda. And I am willing to bet the insurance on either Honda is less than the BMW, saving even more money.

            Luxury cars are almost never going to be cheaper than “regular” cars, you are going to pay a premium for them. The lease specials can be good compared to the same priced car at a non-luxury brand, but then you won’t get all the toys you would get on that loaded up non-luxury brand either. Compare subsidized leases to non-subsidized and you can justify it, but that’s just smoke and mirrors. If you want a treat, get yourself a treat, but don’t fool yourself into thinking you are saving money.

          • 0 avatar
            Alfisti

            As someone else said, how much down? Plus PDI, delivery, taxes blah blah blah.

            Not to mention after three years you own NOTHING.At least you’d own the Mazda.

            Leases outside of legal shady tax write offs are for those petrified by repair bills that pale in comparison to ongoing monthly payments.

      • 0 avatar
        timcc23

        You point out one of the situations where it DOES make sense to lease. You need a certain type of vehicle now for a short time period and then you will need a larger vehicle. Going with a lease initially takes the hassle (and risk) out of having to sell a used car. If you negotiate well for the lease, you will have affectively negotiated a good “trade-in price” in advance.

        Leasing is the way to go if you want a new car every few years or if you are on a fixed income and need to know exactly how much you will spend on a car each month (and have trouble planning ahead). Anytime you purchase a vehicle, you take the risk that something will happen during your ownership period, lowering its value and increasing your costs.

  • avatar
    jmo

    “One of the by-products of spending over 15 years at the wholesale auctions, and developing a long-term reliability study ”

    So, just to be clear, when you started in 1999 the 15 year old cars at the auction (which would have been 1984 models) were in better shape than 1999 cars are today?

    Also, make sure to check your survivor bias – at least for cars in the Northeast and Midwest most 15 year old ’84 models had long since disolved into a puddle of rust.

    Really?

    • 0 avatar
      28-Cars-Later

      Atlanta may have had many early to mid 80s cars in decent shape in that time period, I know the Northeast did not. Fifteen year old cars when I started in the biz would have been MY89 and newer. There were a few survivors here and there but by and large they were not impressive. Common “survivor” car models which come to mind from the period were Ford Panther, Chrysler M-body, GM B-body, J-body, H-body, and C-body, the latter being the most prevalent at that time between 3800 Park Aves/Ninety Eights and 4.5/4.9 Cadillacs (also Big 3 trucks of all kinds). The bulk of the “cheapee” 10yo cars we dealt with were mid 90s of all flavors (esp Nissan, Honda, and GM models) and the “newer” ones were around MY01/02. I will say the mid 90s cars held up much better than their 80s predecessors despite only being up to five or six years newer.

  • avatar
    troyohchatter

    The first thing is that the manufacturers need to lengthen the warranty, bumper to bumper, to the typical finance time. 6 year loan? Then all functional parts of the car should be warranted for that long. Really, my brother drove his 1992 Accord to 310,000 miles with no more than preventive maintenance and gas. A new car has no reason not to funtionally last for 100K miles.

    Second, a realistic maintenance schedule. Let me give you an example. On our 2003 Honda CR-V, the maintenance requirement is (was, I traded it off) that you don’t touch the automatic transmission until 110K miles.. Then you do a drain, fill..then drive, drain, fill, then drive, drain fill. Why? Because this draining each time drains 1/3 the fluid each shot, and from what Honda figures, you ahve changed 3/3’s of the fluid in the three times you did the service.

    But any Honda tech worth their certification will tell you that the transmission, is as it has always been, requires ONE flush every 30-35K miles. But if they put that in the owner’s manual, as they used to, GM b*tch slaps them with their “lifetime fluid” and indicates that the Honda transmission reuqires more maintenance. Of course, they miss the part where unless it’s one of the troublesome V6 Autos in Honda’s history, a Honda Automatic with a 30K routine flush will outlast the car as well as one that has the prescribed 3X flush at 100K.

    But I think it’s a losing battle. See, back in the 50’s Harley Earl figured out the idea of “Planned obsolecence. That went away when the Japanese came in with their 5 year refreshes that refined but not reinvented. The difference between a 1992 Accord and a 1996 Accord was refinement, not anything functional.

    Now I currently have a 2012 and 2013 Mazda in my garage. The wife’s 2012 doesn’t have a USB jack, neither of them has a rear view camera or lane accident avoidance, bluetooth, and the list goes on of the technologies that they don’t have that is standard on most 2015 cars. In short, the car’s electronic interface and gizmos have turned the modern car into a computer, and we all know how quickly they become obsolete. Two model years old, and my Mazda2 is the eletronic equivelant of a door stop.

    • 0 avatar
      fvfvsix

      USB, as a worldwide standard, is fifteen years old. Bluetooth first became commercially available in 2000. I understand your point about obsolescence, but let’s not exaggerate. Sure, there will be cool new technologies available – but on average, it takes about a decade for a personal computer produced today to become obsolete.

    • 0 avatar
      dantes_inferno

      > But if they put that in the owner’s manual, as they used to, GM b*tch slaps them with their “lifetime fluid”

      Lifetime fluid is the usual line of stealership bull intended for suckers, err… I mean pigeons, err… I mean less-informed customers.

      One would be wise to follow the two rules of “lifetime fluid”:

      Rule #1: ALL fluids break down over time – especially when subjected to high-temperature conditions.

      Rule #2: See Rule #1.

      • 0 avatar
        MAGICGTI

        Wow, Dante, you sure are ignorant. How would a dealership making money off service benefit changing a 30k mile service interval into lifetime? You think BMW dealers were behind that shift?

        That’s the manufacturers, think GM Dexcool.

  • avatar
    psychoboy

    Maybe this is merely the next step in the long road of making cheap appliances of everything. People used to fix vacuums and washers, now we just buy new when something gets hinky. Eventually we’ll get to the point that we just buy a new house when the hot water tank floods the carpet.

    Maybe it’s the crossing of the “too cheap to bother fixing” and the “my status is tied up in my car” curves.

    Local labor is more expensive, remote labor is cheaper. A car built remotely is likely to be less expensive than a car fixed locally, especially when the parts to fix are apparently made of diamond encrusted platinum plated gold.

    Local labor might be expensive because we’ve spent the last three decades telling kids that they can’t make any money getting their hands dirty; that a college degree is the only path to success.

    Maybe we’ve spent too many years with absolutely no idea what being poor really looks like. “Poor” in the US is basically middle class in western Europe, when actual standards of living are compared. Put that with the status curve, and you find far too many people spending money they don’t have on cars they don’t need.

    Maybe Dave Ramsey’s idea of buying beaters and driving them into the ground isn’t all that extreme. My $2500 twice totaled 200,000 mile 2006 Accord is likely the best (and most beaten) car I’ve ever owned. It’s not worth fixing, but it’s not costing anything to own, either.

    I guess what I’m seeing is a confluence of a dozen different general issues that are piling up at the automotive market at the moment.

  • avatar
    vbofw

    This is a really meandering unfocused article. I suppose we learned people take out car payments, the government subsidizes mortgage interest, consumption fuels the economy (what else would?), the Fed has expanded its balance sheet, and not every consumer is laser focused on their net worth.

    If sticking to cars, long term ownership is what drives down car debt if you’re so inclined. Joe Median American making the $50k median income should buy a $22k CamCord, pays it off over 60 months, and enjoys another 4+ years of payment-free living, before dumping the expired CamCord for $5k.

    10 year ownerships is my approach to cars, but personally believe life is much better spent dedicating waking hours to getting better at your craft and raising your income, than figuring out how to save $50/month on the transportation budget, or trying to DIY brake fluid changes. Focus on the tens/hundreds of thousands annually, not the small stuff.

    • 0 avatar
      troyohchatter

      I never thought I would bring myself to buy new cars but when the dealer has a 4 year old, same model car with 100K miles on it and they want only $4000 less than I would give for a new one, well, whatt the hell? Steve deals in cars that I would happily drive if not being 46 years old, no kids, dual income, and a 60 mile commute. But if I had kids and additional expenses and drove less than 10K miles a year, heck, I’d be rollin in a 15 year old Lesabre tomorrow

    • 0 avatar

      There is only ONE car I could see owning for 10 years.

      There are very few cars that have 8-10 year refresh cycles. If refresh cycles were longer, it wouldn’t be so bad upgrading every decade.

      • 0 avatar
        FormerFF

        The gist of Steven’s post is about the plight of our low income folks. It’s nice that you and I have extra money to spend on cars, but not everyone is in that situation.

      • 0 avatar
        chevron

        This exact mindset, among people who can’t afford it, is a big factor in the cycle Steve is describing.

        Does it really lower your opinion of a person to find them driving a Camry from 2 or 3 refresh cycles ago? Is a late model Camry that much more of a status symbol?

        I’d say that until you can pay cash for a vehicle and not be hard up, you should be thinking of it as transportation and evaluate its ability to get from A to B reliably and affordably, rather than what it says about you or if people will notice that it’s 5 years old.

        So it’s a bit of poor people making uninformed, uneducated, bad decisions; a bit of Vimes Boots theory; a bit of being overly status conscious; and a bit of the system being set up to catch those who aren’t thinking and extract as much money as possible from them.

        • 0 avatar
          kmoney

          The cars as status symbols things is hard one to nail down. For a lot of lower income people, a late model Camry would not be so much a status symbol, but more of what I guess you could call a shield from a perceived lack of “success” in society’s traditional sense.

          I had a lot of friends and coworkers from a previous point on my life that would pour all their money into ridiculous financing and lease terms in order to have the latest and greatest vehicle. For most of these people, I think it was for the simple reason that they had no other way to define/differentiate themselves. People like to organize themselves in terms of status hierarchies, and if you are a low wage worker, with a high-school education, working a menial job making the same pay as the 200 other people you go to work with every day, a vehicle becomes your go to option for doing this.

          Yes, for many people the new car ever 4 years is an objectively bad decision, but the fallacy isn’t so apparent to the people who actually end up making them and emotional and self esteem factors come into play a lot more than they would for someone better off.

          • 0 avatar

            “The cars as status symbols things is hard one to nail down. For a lot of lower income people, a late model Camry would not be so much a status symbol, but more of what I guess you could call a shield from a perceived lack of “success” in society’s traditional sense….”

            THANK GOD there’s the CLA !!!

          • 0 avatar
            baggins

            “Thank God for the CLA”.

            Definitely Post of the Day.

            Big Truck has some goofy ideas, but he also spits out some real gems.

            I am glad he posts here, that’s for sure.

    • 0 avatar
      krhodes1

      Yet doing things like brake fluid yourself has huge payback. I flush mine annually, when I swap summer and winter tires. So no stuck bleeders, and I will likely never have to replace a caliper. I also clean out the crud in the calipers and lube the pins. And catch worn pads before they kill the rotors. With a $50 pressure bleeder, it takes less than 30 minutes. The dealer charges $200 to flush the brakes, plus it would take longer to take it there than to DIY.

      Maintenance is key. And for marketing reasons, the factory maintenance schedule is often not enough if you plan to keep the car long term.

      • 0 avatar
        FormerFF

        I flush mine every rotor change, which is about every eight years. I’ve never had a hydraulic problem with any of our cars, and I’ve been driving for 40 years now.

        I do occasionally run into someone who is what I call a member of the cult of the oil change. They change their oil every 3000 miles, for what reason I know not, other than it seems to be part of their belief system. I do mine when the manufacturer suggests. None of us has ever had an engine failure, but I’m spending less money for my no engine failures than they are.

        • 0 avatar
          IHateCars

          “I do occasionally run into someone who is what I call a member of the cult of the oil change. They change their oil every 3000 miles, for what reason I know not, other than it seems to be part of their belief system.”

          Lol!….awesome post! Yes, I run into these people too and they swear profusely by this logic. Seems expensive and wasteful to me, but whatever…
          Never discuss/debate three subjects…politics, religion and oil type/changes intervals! Lol!

      • 0 avatar
        bunkie

        You know, I wanted to do a brake flush on my car but I really couldn’t get any solid advice on how to deal with the antilocks. I read an awful lot stuff that sounded crazy to me. How do you deal with it?

        BTW, I’ve lots of brake work on my cars and my motorcycles, as well as dealing with a serially-leaky hydraulic clutch on my Yamaha a bunch of years back.

        • 0 avatar
          bumpy ii

          Depends on the car. Some of them have ABS modules which can be cycled by the factory scantool during the fluid change. The home-user version is to change the fluid, do a few quick stops on a gravel road to activate the ABS a few times, then do the fluid a second time.

        • 0 avatar
          duffman13

          It’s fairly easy – I track my S2000 and flush my brakes at least 3 times a year.

          You do it one corner at a time starting from the closest corner to the master cylinder. I prefer a gravity bleed (get a book to read while you wait). As long as you keep fluid in the reservoir, you don’t need to worry about getting air into the master cylinder. If you do, finish the bleed, drive the car, and actuate abs with some panic stops to purge the air, and then start over.

          If you use a fluid you can alternate easily like the ATE blue and gold, you know when the line is fully flushed. Otherwise, I use about 1/3 a bottle of fluid between both of the fronts, and the remaining 2/3 for the rears.

          • 0 avatar
            FormerFF

            Caveat to my post – if you track your car, you do need to flush the brakes at least once a year, as the duffman attests.

          • 0 avatar
            mnm4ever

            So how do you do a gravity bleed?

            I bought a Motive power bleeder when I got my GTI, and it works really well with the screw-on brake fluid cap adapter. But whenever I try to use the stupid clamps for regular fluid reservoirs I usually end up making a huge mess.

            There has to be a better way.

          • 0 avatar
            bumpy ii

            Gravity bleeding is easy. Take the cap off the master cylinder, put a clear plastic tube over the bleeder screw, put the other end of the tube into a cup or bottle, open the bleeder screw, and let it drip for an hour or two. Top off the fluid in the MC every so often. This does take a while to do all four, which is why most people use a pressure or vacuum bleeder.

  • avatar
    VoGo

    Troy makes a good point that car electronics are subject to rapid cycles of obsolescence. I’d like to see cars migrate to just having a simple, large screen built in, with a connection for smartphones. Then, manufacturers can focus on updating the smartphone apps to expand functionality to the latest electronic capabilities.

    • 0 avatar
      Land Ark

      I’ve been thinking about this recently and I’m pretty sure car makers are desperately trying to get cars on the Smartphone life cycle. Lots of people now think nothing of spending $200 on the newest phone – especially since the built in obsolescence of their own has made their battery life diminish. Plus, they can’t face the shame of a 3 year old phone.
      So car makers have started integrating these same things into cars, and people have demanded it. They’ve wanted it forever, but now they stand a real chance of making it happen by always putting the most up to date tech in their cars, knowing it’ll only be up to date for a few months and the “new” will wear off and the car will get traded in before the payments are finished.

      • 0 avatar
        duffman13

        Are there really people that think like this? I mean, I replace around every 2 years as my cycle comes up, but it’s not due to vanity.

        I mean, there are only so many charge/discharge cycles a Li-Ion battery can undergo before its battery life diminishes beyond a useful capacity. It just so happens that a 18-20 months, at least to me, is the point where that starts to become apparent. Even with a user-serviceable battery, being 2 years behind on processing power given any software updates will cause a phone to show its age. At this point, it just makes more sense to me to spend $100-200 on a new phone with my contract renewal versus $100 on a new battery for old, slow hardware.

        I treat my laptops the same way – by the time the battery gives up the ghost, the computer is down enough on power to warrant a newer replacement. I can stretch that further since I usually work plugged in on my laptop, but at 4 years I have <45 minutes of usable battery, which is quite useless. Please don'tpeg me as a tech/speed junkie; I also run a desktop at home that I'm generally on a 6-8 year replacement cycle, but I build those out way overpowered initially to give it that sort of lifespan.

  • avatar
    mikey

    Its the “don’t fix it unless it quits school of thought” Todays vehicles lull you into believing,you never need to lift the hood. Oil never runs low. Tires don’t need to be checked. A lot of folks don’t even wash their cars.

    In days of old cars didn’t give you a choice. If you didn’t change the plugs, or wires, it just quit. U joints, Voltage regulators, tires, required you to fix it. And fix it now.

    Don’t get me wrong, I believe that the modern vehicle, is miles ahead of what we had even 10 years ago.

    Being retired, and living on a fixed income, deb,t is not an option for me. If I need to replace my car, it involves digging into capital.

    I would much rather budget X number of dollars for repair and maintenance. If I want to replace my car, I would rather do it because I want to. Not because neglect forced me into it.

    • 0 avatar
      SCE to AUX

      I agree completely. Today’s better cars make for worse cars down the road, because they’re not being maintained.

      I’m a big fan of transmission maintenance – it’s the most neglected part of a car, and the most expensive to fix. The ‘crud keeps it sealed’ myth is also quite destructive to transmissions. My 01 Elantra transmission has a spin-on filter and a drain plug, just like an engine. There is no excuse for ignoring it.

  • avatar
    FormerFF

    The answer is public transportation. If we’re going to have a system that requires so many people to live on $350 a week (or less), those people can’t afford a car.

    • 0 avatar
      fredtal

      All your money problems with cars or anything else can be solved doing cold hard math. Look at the numbers and make decisions based solely on the numbers. I learned this 40 years ago when I made a budget and then sold my $2000 MGB that I couldn’t afford in exchange for a $200 VW.

      • 0 avatar
        mikey

        @fredtal…..Agreed. My wife ran our financial ship for years. She could do cold hard math in her head. She would give me the numbers, and between us, we made the decisions, based on the numbers.

        Due to my wifes illness I’ve been running the financial ship for 4 or 5 years.

        I have four tools. A pen, a cheap calculator, a three ring binder, and some common sense.

        No matter how you cut it, or justify it, cars are expensive. I happen to like cars,and driving them. I managed to accumulate too many of them. Three months ago I did a three way deal. I said goodbye to a very sweet 2SS Camaro, and a full size 4X4 long box. I ended up with a 2014 4cyl Impala, and managed to keep my 6 year old Mustang base model convert.

        Did I eat some depreciation ? Damn right I did! a heaping plate full.

        However, my budget numbers look a lot better.

    • 0 avatar
      psychoboy

      I live in one of the largest metropolitan areas in the US, also, one of the least densely populated.

      If I relied on existing public transportation I would have to walk nearly a mile, change buses three times, and spend over two hours in transit…..and then do the same thing to get home.

      This assumes, of course, that my job would let me come in 4 hours late, since buses don’t start running until long after my shift starts.

      No thank you. I’ll stick to driving my paid-for beater accord 30 miles in 25 minutes each way and using about two gallons of gas a day.

      • 0 avatar
        FormerFF

        That’s the problem. In most of the US, public transit stinks, yet we have legions of people whom we ask to live on a pittance. But that’s a societal problem, not an automotive one. In most of the world a car is a luxury, in much of the US it’s a necessity. That works if wages are high enough, and it doesn’t when they’re not.

      • 0 avatar
        AoLetsGo

        Houston?

    • 0 avatar
      SCE to AUX

      Public transportation turns political in an instant. Suburbanites don’t want to subsidize a broken system they don’t use.

      Ironically, many people using public transportation drive a car to the park-n-ride.

      • 0 avatar
        geeber

        The bigger problem is the lack of population density in this country. I recall reading that, even with projected population increases over the next 50 years, we will still only be at 1/6 the population density of Germany. That is assuming that we actually achieve those projected population increases.

        The population in many rural areas of the country is DECLINING. West of the Susquehanna River in Pennsylvania, for example, there are now 1/2 the number of high-school graduates that there were in 1990!

      • 0 avatar
        ihatetrees

        A partial solution to public transport could be a Lyft-like system of bottom up, emergent ride sharing.

        But like you said, public transit is infested with the cancer of politics. Cutting out politicos and their transit union pals is verboten in many urban areas…

  • avatar
    Zackman

    For too many people, a car is a necessity, like it or not. For the poorer among us, who’s to blame, really, for the vicious circle of overly-expensive lousy used cars and perpetual payments from dealers, some who are financial predators and very crooked?

    It appears to be a merry-go-round gone out of control, and time will tell if and when things change.

  • avatar
    KixStart

    If there was decent mass transit, the car maintenance/car loan dichotomy would not be a problem for the working poor.

    • 0 avatar
      geeber

      There is a very good public transportation system servicing Philadelphia and its suburbs.

      My cousins live in suburban Drexel Hill, just outside of the city. Twice now we’ve driven from their house to the Philadelphia Zoo, which is located along Girard Avenue in the city. That required crossing a variety of neighborhoods. That brief journey is a rather interesting trip, as it crosses a variety of neighborhoods.

      Near the city line, the old, stone houses were very nice (on large, single lots) and the cars were actually modest (mostly Fords, Hondas and Toyotas that were about 3-5 years old).

      In the neighborhoods closer to the Zoo, the cars parked along the street were old Benzes, Jaguars and BMWs, while the houses were run-down. You can imagine the maintenance costs of those cars. There were lots more satellite dishes in the poorer neighborhoods, too.

      I can’t blame that on lack of mass transit because, as I noted, Philadelphia and its suburbs are serviced by a comprehensive system of buses, subways, trolleys and trains.

      If we are talking about rural Pennsylvania then, yes, a car is a necessity because mass transit is virtually nonexistent. But not in the bigger cities around here. Plenty of city residents, however, still want a car anyway. And they aren’t choosing the most cost-effective vehicle.

    • 0 avatar
      28-Cars-Later

      I agree with you and echo Geeber’s comments, but in practice in my city at least “public transit” is not a sustainable force and cannot survive without steady tax increases/gov’t money. This may be a management problem I’m not sure, but in my view increasing public transit as it stands now rewards two bad behaviors, inefficient/ineffective management and effectively increasing a welfare subsidy. Privatization of which would be a good start, but as we’ve seen before as long as gov’t can be coerced its possible corporate welfare will ensue which really isn’t any better.

  • avatar
    johnharris

    There’s a lot here…enough to keep the trolls on the far left and far right energized for days and days and days.

    About ten years ago I saw a short letter to the editor written by an obvious right-winger, in response to an otherwise unmemorable anti-consumerism article in a Madison, WI paper. He said, “We can’t go back to Little House on the Prairie.”

    I despise right-wing nihilism, but his remark stings because it’s true. We aren’t going to get the genie back in the bottle. Even if a leader appeared who somehow combined the talents of FDR and LBJ, the landscape of politics has changed so much that the consumerism ship cannot be turned around. (Short of some End of Days catastrophe, but I am not one of those catastrophists.)

    I’m a verifiable center-leftie. I own a business and American-style consumption pays my mortgage, so I tend to be pro-business, to a point. I think taxation should be more progressive (though not tons more), and I think that there should be massive federal spending on education.

    Education offers the only possible relief valve from the regressive cycle Steven articulates. My father, a Fortune 500 executive with a PhD, did all his own car work. I remember watching him change the timing chain in his Ford Fairlane. I grew up thinking that sort of thrifty, hard-working self-sufficiency was normal. I was also lucky (daddy’s money) to get a solid education, which helped build vital critical-thinking skills of the kind that allow you to avoid poverty traps.

    This country needs to spend spend spend spend on education, from pre-K through college. We WILL get the money back. [Blushes and retreats to safety as commenters start gathering rocks.]

    • 0 avatar
      geeber

      We spend a fortune on basic (meaning, kindergarten through 12th grade) education in this country, and the level of spending per-pupil has doubled, after adjusting for inflation, since 1980.

      Additional increases aren’t going to help much, unless you are proposing that every child be taught how to repair a CVT or do body work, and make graduation contingent upon the attainment of those skills.

    • 0 avatar
      brenschluss

      “This country needs to spend spend spend spend on education, from pre-K through college. We WILL get the money back. [Blushes and retreats to safety as commenters start gathering rocks.]”

      I would love to agree with this, if our education system worked to encourage creative thinking and applicable problem solving that had obvious relevance to daily life.

      Instead, our framework is such that kids are forced to sit in a room they don’t want to be in, listening to someone they usually can’t relate to, talking about things they can’t care about, often simply because of the first two problems. A person can only learn something when they want to. This is without even considering the actual content, which sometimes hurts to think about.

      In my ever humble opinion, all but those who cannot operate without an exogenous structure would be much better off at a Sudbury-style school:

      http://www.sudval.org/07_othe_01.html

      These also tend to be inexpensive, very much so relative to other private options.

      I don’t know how to fix what we have now. It’s a terrible system and deeply entrenched.

      • 0 avatar

        > I would love to agree with this, if our education system worked to encourage creative thinking and applicable problem solving that had obvious relevance to daily life.

        For some perspective on this the prevailing (some say prussian) academy system is basically a factory version of how rich people used to be educated.

        Back in the day, an educated private tutor would force feed a spoiled brat some rote forms so they can speak properly in polite society; except now we hire the same tutor for a classroom of brats who’ll never be in the society pages anyway should those make a comeback.

        Granted a few kids do take in the knowledge and make something of it (note all the ye old scholars came from money), but that’s the exceptional case. The same is true today; a lot of college degree but very few able to apply those tools.

        This is in contrast to trade schools where students learn to do something more immediately useful. As depressing of a reality this implies, directing more edu resources to instant gratification probably works better.

    • 0 avatar
      SCE to AUX

      How much would you increase education spending? It’s always good politics to promote it, but the ROI on education spending isn’t there.

      Here in PA, I think we’re up to $12k/student. How much higher should it go, and will it really yield the kind of citizens who make wise financial choices?

    • 0 avatar
      FormerFF

      The problem is not a lack of skills in the workforce, it’s in the quality of the available jobs. I work for a distance ed school. We have graduate student advisers who are required to have a Masters degree. The pay is $15 per hour, and we have no problem filling the position with people who have degrees from quality colleges, quite often in fields you’d think are readily employable.

      I recall reading a statistic that 25% of the retail clerks in the US have bachelors degrees. Our current workforce is the most educated in our history, but that’s done nothing for the folks in the lower paying jobs.

      I don’t doubt there are some spot shortages of certain skills, but that usually has to do with an industry suddenly needing a higher than expected number of people, but if you added all of those unfilled jobs up, I’d be surprised if it were 100,000 positions. Remember the nursing shortage of a few years ago? Now there’s a nursing glut.

      Improving the skills of the workforce has no effect on the quality of the jobs offered.

      • 0 avatar
        darkwing

        No — our current workforce is the most *credentialed* in history. Unsurprisingly, as the number of bachelors degrees has gone up, the quality of those degrees has gone down. The bachelors degree is becoming the new high school diploma, and the masters degree is becoming the new bachelors degree.

        Unfortunately, all of those underemployed kids were paying for their degree as though it were worth what it was 30 years ago.

        • 0 avatar
          FormerFF

          Do you have data to support this? While I don’t doubt that as the number of bachelors degrees granted increased that the average academic performance may have declined a bit because more students who are of a lower academic talent level get degrees, I can tell you for certain that schools that used to be considered “safe” from an admissions standpoint are now very selective, and schools that were selective are insanely competitive.

          If the workforce had a skills issue, I’d expect we’d see an issue with productivity, which we do not.

          • 0 avatar
            darkwing

            Yes, but in bits and pieces — it’s more of a thesis than a single point. (And it’s tough to measure: the Harvard gentleman’s C of the 50s, for example, is now cum laude.)

            Acceptance rate’s a good indicator of demand, but it’s not a great indicator of quality. The thing the most selective schools tend to have in common is that enrollment grows slowly, or not at all — so as the college population grows, of course they’re going to naturally become more selective.

            A barista or a retail clerk with a GED isn’t going to be all that much more or less productive than one with an English degree, or a PhD in Russian lit.

    • 0 avatar
      tonycd

      I agree 100%. To be more specific:

      •End the age-old system of financing public schools through local property taxes, which enforces inferior education for poor people’s kids. (Full disclosure: I was lucky enough that I could afford to buy into a wealthy town and put myself on the positive side of this inequality, but it’s still wrong.)

      •Ditch “No Child Left Behind.” Its ever-escalating scale of test results is expressly designed so more and more public school systems around the country can be labeled “failures” and discarded in favor of alternatives including, not coincidentally, for-profit private “charter” schools that have been promoted by massive campaign contributions but never proven more effective for educating kids. And its underlying motive is to discredit and gut public education in this country so the political party that proposed it can pander to its regional and ethnic voting base that wants vouchers so it can quit paying for the education of kids who are the other color. (If you don’t believe it, note it was passed with the help of a prominent senator who supported it on the condition of increased education funding — a promise on which the authoring president then reneged.) It has public schools running scared to “teach to the test,” and it’s a cancer on our nation’s future.

      •Tax billionaires more so we can restore public universities to their original mission: a free higher education for anyone who qualifies for one and is willing to do the work. In my state, in-state residents with excellent academic credentials still have to pay up to $80,000 just to get a four-year degree. Many will remain in hock their whole lives because predatory bankers have locked them up in indentured servitude with predatory laws that make them continue to owe the balance on their student loans, with interest, even if they go bankrupt — and contrary to popular belief, half of all US bankruptcies happen not because of irresponsibility but by health problems.

      There’s nothing wrong with this country that couldn’t be fixed by more moral responsibility on the part of our nation’s billionaires. We have the money, but they lack the will to surrender a dime of it. They are deliberately choosing to consign us all to a future as a Third World country, and keeping us ignorant and indebted is a deliberate part of that design.

      • 0 avatar
        KixStart

        tonycd: “Tax billionaires more so we can restore public universities to their original mission: a free higher education for anyone who qualifies for one and is willing to do the work.”

        I’m with you on all this up to a point… I think the student needs to have some skin in the game. Low cost but not free.

        I can’t remember the title of the book or essay but Garrison Keillor has written about getting an education at the UofMN. It wasn’t free but it was something he could manage if he worked Summers.

        I think the experience is valued more, in many ways, if it’s not free.

        • 0 avatar
          Mathias

          >> I think the experience is valued more, in many ways, if it’s not free.

          “Free” my foot.
          I had my “free” university education in Germany. It was free in that it didn’t cost anything to attend, but you still have to eat, you still have to live somewhere — in my case, mom & dad, which also helped with the eating ;) — but it was a bear to do all the work to pass the classes.

          That’s one thing you can do when it’s “free” — you can fail half the class at the two-year mark and pass the survivors on to the next level of instruction. Fair is fair.

          Can’t really do that when everybody’s paying beaucoup bucks to your fine institution…

    • 0 avatar
      pdieten

      For the most part I’m with you but here’s the thing – 50 or 60 years or longer ago, it used to be possible to be uneducated and still support a wife and a kid or two, because there were family-supporting jobs for uneducated people. Anecdote: My father-in-law never went back to school after he graduated from Catholic school after the 8th grade, because his family had too many kids and not enough money, and so off he went to work, and then to Korea, and when he got back from there he got a union job running a punch press and that kept a roof over his own family’s head until he retired.

      People are not allowed to do this anymore. Fact of the matter is that a lot of people are simply not cut out to be educated, and in the 21st century a substantial percentage of that group are destined to be in shaky job situations and/or poverty for their entire lives. It used to be that people with a will to work could work. Now they do not have anyplace to go that will have them.

      If this problem is fixable, I don’t know how.

      • 0 avatar
        tonycd

        pdieten: You’re right.

        The answer is one “dirty” word: Tariffs. If we still made things here, people would be needed to make them.

        Some will screech this would make basic items unaffordable, and yes, they’d cost more. But people would earn more per family to afford them. The proof of this is how our dystopian Walmart present has pushed both trends the opposite way.

        • 0 avatar
          bumpy ii

          There is still plenty of stuff made in the United States. The cheap throwaway junk is what moved to other countries. The low-or-no-skill jobs were exported once it became easier to do that than import the workers.

        • 0 avatar
          duffman13

          tonycd,

          We still make stuff here. Fact of the matter is that we make more than ever. The issue is technology – Now a warehouse-sized manufacturing operation that was full of 100+ guys operating machines is a <10 man job. A whole crapload of robots, a handful of BS-level systems engineers to oversee the process, and a handful of maintenance guys that repair and maintain the robots. Everything is automated, so we don't need to pay people anymore.

          • 0 avatar
            onyxtape

            That’s right. We are a manufacturing powerhouse – more than any time in history in terms of dollar amount of goods manufactured.

            About 10 years ago, I read a story about Sony’s last CD factory in New Jersey, and how it was responsible to creating something like 60% of the world’s CD media at the time. It only required 400 people to operate.

            Unemployment will steadily increase due to automation. The minimum wage will at some point surely transition to something like a “minimum living allowance” when there simply won’t be enough work to go around. The current human paradigm of requiring work to earn a living will have to be reexamined at some point.

          • 0 avatar
            pdieten

            Yeah, that’s the whole thing. From the standpoint of my father-in-law’s old employer, paying him an hourly wage to stand there and run a punch press, plus pay for his retirement and healthcare (and even now my mother-in-law is still receiving his pension, nearly a quarter century after he stopped working for them) is incredibly inefficient. But that inefficiency is what put money in people’s hands. And it’s what’s keeping her finances afloat. What would she do without that money?

            Bitch all you want about unions, and there’s plenty to bitch about, but that’s how money went into people’s hands for them to go spend on houses and cars and vacations and whatnot. Increasing efficiency is why people aren’t getting hired for family-supporting jobs anymore.

            People who cannot function in a knowledge economy or provide value in the labor market still have to eat and stay dry, and if work is not going to provide a mechanism to accomplish that, then something else is going to have to – whether that something is providing a Communist-quality lifestyle at taxpayer expense, or something else, I just don’t know. Wishing away the problem is about as effective as wishing to hit the lottery, and I prefer to hope that nobody wants “Soylent Green” to become a reality…

          • 0 avatar
            brenschluss

            Humans are the only creature on Earth that will go to great lengths to ensure that as many members of the species as possible are comfortable. Nothing else cares- if you’re the slowest gazelle in the pack, you’re not getting a piggy-back ride, you’re dinner.

            We’re only pretending we’re above such laws. We have codes of behavior that we’ve created over time which place us on a pedestal above nature and provide layers between us and reality. Things will continue to appear progressively more f*cked up as we dampen and willfully neglect our instincts.

            I am by no means the cream of any crop, frankly. I’m just me, and that’s OK because I’m at least serviceable at a couple of things. But personally, were I unable to perform any type of work at an average level of proficiency, I would really be second-guessing my place in this society.

          • 0 avatar
            pdieten

            Well, humans no longer have predators, so the practical applications of your theory may be a bit problematic.
            I’m a little curious to know what you think you can say to people to convince them to voluntarily remove themselves from society if they become a burden. If you come up with something, try it out and then come back and let us know how that works out for you. Bonus points if it’s somebody who (for now) cares about you.

          • 0 avatar
            brenschluss

            You’re absolutely right. No one accepts being told that they’re the chaff of humanity: it needs to come from within, and unfortunately that’s a thought that seems less likely to come to those who could use it. Hence, I said “personally,” because were I to lose all of my abilities but retain all of my thoughts, I’d be sucking a gun if I still could. That’s just me.

            We have predators, but they only come into play if you go into the woods with nothing but the hair on your back. We can effectively fight off disease or a bear with technology, but maybe that comes with unforeseen consequences.

          • 0 avatar
            Kenmore

            For a handsome guy, brenschluss, you get into some pretty grey moods.

            Whereas everyday I look more like Pope John XXIII but am actually pretty upbeat.

          • 0 avatar
            brenschluss

            Should be said, I’m not C.E. Middlebrooks of Turbonique, and am in fact probably even better looking, depending on your taste.

            I’m on a pretty even keel, but yeah my thoughts are of a darker shade than most folks. More of a warm, soft brown than grey though.

          • 0 avatar
            tonycd

            “Everything is automated, so we don’t need to pay people anymore.”

            duffman, there’s some truth to what you say. But in a country where the roads, bridges, sewers and more are falling apart for want of the people and dollars to fix them, it’s not the whole story.

          • 0 avatar
            AoLetsGo

            “brenschluss” thanks for the sideline read about the Demented Rocket Propelled Genius of Turbonique.

          • 0 avatar
            Kenmore

            “I’m not C.E. Middlebrooks of Turbonique”

            Me so heartbroke.

          • 0 avatar
            brenschluss

            I’m sorry. In fairness, if he’s alive and well, he probably isn’t using his own picture on message boards. I had to be Some Chump.

            AoLetsGo, hell of a story, right?

  • avatar
    pennintj

    The real problem is how do you educate a used-car buying public on how to make an informed decision when they wander onto a used car lot. Especially someone whose only option is to buy a car from a “Pay as you Go” lot which is becoming more prevalent in our Society.

    When someone is faced with buying a “Beige” Corolla, “Flashy” Mustang or “Luxury” German car for the same weekly payments, how do you convince them the best car for their needs is actually the Corolla?

    Most purchases are emotionally driven, and with car purchases doubly-so. Most people as a kid dream of owning an American Muscle Car or German Luxo-barge, but don’t realize that most likely they’ll have been owned by someone who could a) afford it from the onset b) ditched it when the bills started piling up, passing the “big” pending bills onto the next sucker.

    As far as educating people on how to become DIY driveway mechanics, I wouldn’t hold my breath. People barely know how to put air in their tires, let alone have enough time to schedule an oil change at Jiffy Lube. I certainly don’t expect them to learn how to change brake pads.

    Hell, most cars I hear on the road the driver is oblivious to the fact the “screeching” sound their car is making is the indicators telling them it’s time for a change or things are going to get *very* expensive.

    • 0 avatar
      jmo

      ….

    • 0 avatar
      redav

      “As far as educating people on how to become DIY driveway mechanics, I wouldn’t hold my breath.”

      Not only that, I think we should consider how much harm an inadequately skilled DIYer can cause. It’s become a trope how often we hear about self-proclaimed handymen screwing up and having to pay a pro to fix the original problem plus repair the additional damage they caused.

  • avatar
    troyohchatter

    It starts at childhood. My father would tan your hide if you didn’t use the kick stand religously on yoru bicycle.

    Fast forward to last week. My mailman dropped off 5 bikes he wanted me to look at. Junk. Every bike had, due to being dropped, kicked, left out in the rain, etc; been abused to the point where I couldn’t fix it without charging more in parts and labor than what the bike was worth.

    Meanwhile, in my shed behind the house, a 1984 Panasonic Sport 400 and 1976 Concord Pacer S/S are sitting. Put air in the tires and they run as well as anything ou can buy under $500. In 100 years, the same will be true. Picked them both up cheap, keep em out of the rain, and use the kickstand.

    EDIT: I wont’t touch the business/left/right/center/political things coming up. That’s for another forum.

    • 0 avatar
      jmo

      Look at this:

      1956 Sears Catalouge bike price $66.95.

      http://i680.photobucket.com/albums/vv167/DrTankenstein/my%20bikes/BRB/inspiration/1956SearsChristmasBookpage349.jpg

      Today at Walmart $79.95.

      http://www.walmart.com/ip/Granite-Peak-26-Men-s-Mountain-Bike-Black/34931885

      The relative price of a kid’s bike has fallen by almost 90% in inflation adjusted terms. Kids don’t take as much care as the items are vastly cheaper.

      • 0 avatar
        Toad

        …and the WalMart bike is arguably a much better bike. Multiple gears, off road capable, front shocks, lighter weight..

        The good old days really were not that great.

        • 0 avatar
          Slow_Joe_Crow

          Actually the Walmart bike is a piece of flashy cheaply made junk that works poorly when new and swiftly disintegrates into a pile of junk that is unfeasible to repair because the parts cost more than the bike. Those old clunkers with coaster brakes and one gear could last a very long time with very basic maintenance because they were simple devices built from quality materials and for ordinary riding are better than that Walmart bike.
          A quality hardtail mountain bike with multiple gears and a suspension fork runs about $400-1200 at a bike shop and will last for years because the components are better quality and worth replacing when worn. While technology has advanced, quality and repairability have not always advanced so we have lots of “disposable” tech these days that cannot be repaired because it is either uneconomical or inaccessible.

          • 0 avatar
            Zackman

            Whatever happened to the 3-speed “racer” bikes that were all the rage when you wanted something beyond a single-speed, balloon-tired, coaster-brake bike? That’s the bike I would like, not a 10- or 15-speed where you only use a couple of the gears like I used to.

          • 0 avatar
            AoLetsGo

            While your right that those Walmart flashy bikes are junk, if 95% of your riding is the occasional jaunt around the block there are just fine. Ride them hard and long on the trail and road like I do and they would fall apart like tissue. For me it is Specialized on the road and Yeti on the trail and lots of maintenance!

          • 0 avatar
            bumpy ii

            “Whatever happened to the 3-speed “racer” bikes”

            Hipsters bought them all up and renamed them “Cafe racers”.

          • 0 avatar
            redav

            “Whatever happened to the 3-speed “racer” bikes that were all the rage when you wanted something beyond a single-speed, balloon-tired, coaster-brake bike? That’s the bike I would like, not a 10- or 15-speed where you only use a couple of the gears like I used to.”

            That almost sounds like an argument against all the newfangled transmissions in cars. Who needs disc brakes or 8/9/10 speeds in a commuter appliance?

            But speaking of bikes, I’ve experimented with stripping off the front derailleur & chainrings to drop weight. I’m currently thinking of deleting the front brake on one with hydraulic discs in the rear. I live in a flat enough area that can get away with those mods.

          • 0 avatar
            FormerFF

            The 3 speed “English Racer” was really a utility bike, meant for transportation, not sport. What has replaced them are typically called commuter bikes. Some are available with planetary hub gears much like the the 3 speed had, but can have as many as 8 speeds.

            Those English 3 speeds were OK in flat terrain, but were heavy and didn’t have much of a gear range, so didn’t work well on hills.

    • 0 avatar
      tonycd

      Troy, I wasn’t that smart. :.)

  • avatar

    The key to fixing vs. replacing is a good cost/benefit analysis. Why fix a TV or appliance, if it’s 10 years old, the cost to repair it is $300, and you can buy a new one for $400? Why keep a car that cost more than $300 a month to repair, when you can drive a newer one, with warranty, for less?

    Some of this is just common sense, but I agree we don’t do enough to educate people about how money and finance works.

  • avatar
    danio3834

    Here’s the thing, there are plenty of 10 year old cars that can be had for relatively little money that are still plenty reliable if even basic maintenance is done. That’s something that previous generations of “poor people” didn’t really have the benefit of.

    Ustabee, people of lesser means would buy “beaters” for a few hundred bucks, do no maintenance, and hope they’d last a year or two until the next beater came along. Those beaters would be mostly used up by 100k miles and 10 years if they even lasted that long.

    So in my opinion, the problem isn’t with the cars, it’s the mentality. People who don’t have the money often try the hardest to appear that they do and get in over their heads. Young people especially. $2500 can’t buy you much if any style, but it can get you a ride that will get you to a job without too much hassle. Developping a good relationship with an honest mechanic will keep the right sub-3k ride going for a long time cheaper than payments on a loan. But will you look cool and rich? The great demand for this vanity has created the availability of the easy credit to satisfy it.

    • 0 avatar
      geeber

      Author Virginia Postrel has an interesting theory on this – many people who come from poor areas, or historically poor ethnic/social groups, once they get a little money, will do everything possible to avoid the appearance of being poor. Hence, some of the spending decisions that leave outsiders scratching their heads.

      • 0 avatar
        baggins

        I think there is some truth to this. In the inverse direction, I come from an upper middle class background, and have achieved the same. I have a lot of disposable income, but most weekends I wear shorts with holes, an stained T shirt and worn out deck shoes. I drive a late model accord.

        But I know how many zeros are in my investment accounts, and I know where I live. I’d prefer that most people think I am poor, in fact.

        I guess people always want to be something there are not.

        • 0 avatar
          danio3834

          I agree. Having people think you’re poor when you aren’t is FAR more advantageous than having people think you’re rich when you aren’t.

          Much of the baggage associated with envy is avoided, as well has many of the barnicles that like to attach themselves to obvious wealth.

      • 0 avatar
        redav

        An interesting corollary to the idea of “not looking poor” is where they choose to spend that money. One’s car seems like a popular choice, but so do clothes & jewelry. Why some things are picked and not others would be a very interesting study.

    • 0 avatar
      AoLetsGo

      DWP – Driving While Poor
      Just this past weekend I was walking the dog and went by a parking lot with a white guy in a real beater surrounded by two local police cars. Not sure what he did wrong but in some communities driving a total piece of junk is just asking for a ticket, not the “right” way things should be but they reality for some.

      • 0 avatar
        28-Cars-Later

        We got arrested for DWP on a Friday night…

      • 0 avatar
        ajla

        “driving a total piece of junk”

        I don’t think anyone is advocating driving around in junk.

        There is a difference between driving a ’94 Caprice that is a smoking, squealing, rusting hulk and owning ’94 Caprice that is clean, has matching tires, and all its exterior trim pieces are intact.

        • 0 avatar
          danio3834

          “owning ’94 Caprice that is clean, has matching tires, and all its exterior trim pieces are intact.”

          Hey! I’ve got one of those around here somewhere. Black, 4.3L V8, runs nice. Gets all the attention from the GM B-body “enthusiasts” working the tire shops.

          I think I might swap it over to a real LT1 with a heads/cam package that I have lying around, but keep it stock looking right down to the factory aluminum wheels.

          • 0 avatar
            28-Cars-Later

            Unless you’ve got something special, the 4.3 was a V6, not a V8.

          • 0 avatar
            bumpy ii

            L99 4.3L V8 was available in the late whale-body Caprice.

            http://www.cheersandgears.com/topic/22932-43l-baby-lt1-v8/

          • 0 avatar
            danio3834

            ” Unless you’ve got something special, the 4.3 was a V6, not a V8.”

            Nah, it’s really not a special engine at all. Some people buy them by mistake thinking they’re something they’re not. They do return good fuel mileage, though.

            You have no idea how often people insist on seeing the 8 spark plug wires when you say you have a 4.3L V8. It looks identical to the 5.7L LT1, so some tend not to believe it anyway.

          • 0 avatar
            TheyBeRollin

            Nope, it’s a V8. I bought one 15 years ago. Aside from the weird distributor on those three years that would destroyed when the water pump seal went, they were awesome. Decently fast, rode nice, and that car just saved my sister’s life a few months ago (a crying shame – over 200k on that car and the body was straight before that high-speed head-on and still able to move itself in spite of that). I wouldn’t have called it super reliable, but general maintenance and repairs were still far less than buying new.

            I have a hard time giving up my current beater (by my standards; many people would consider it pretty nice) because cars have simply become too reliable. It is impossible to financially justify getting a new one when this one costs me about 650-700 a year in fluids and minor repairs, but new parts now can’t be bought from the manufacturer. The hard part is that used car premiums are so high now that I could sell this car with 60k more miles for more than I paid for it 7 years ago (how often does a “depreciating asset” increase in value?).

            I’m looking around now, but I strongly suspect my next car will be acquired new (a first) due to the high used premium. This new car will probably be a leased “German luxo-barge”, as described above, so I can evaluate the reliability and costs, then either pay the residual if I can turn around and sell it for a profit (hard to predict) or to keep it if it is reliable. I know most people can’t do this, though, and I totally agree with the post that leasing to a monthly budget is not how you get ahead financially, it’s how you get into debt servitude. Never lease if you couldn’t afford to buy to begin with.

            I suspect 60-70% of the longevity difference between two cars comes down to the owners. 20-30% is probably intrinsic to the design. The remainder is environment and a roll of the dice.

        • 0 avatar
          AoLetsGo

          Well you are right no one is advocating driving junk. But the reality is if you are driving an old car that is not a classic in an upper income community that has a heavy police force with nothing to do, you will be a profile target God forbid you are a person of color driving the old car, then you really have to be careful!

          • 0 avatar
            danio3834

            There’s some truth to this. A buddy of mine drove an old Ford F100 that looked like a meth wagon when we were in college. When driving through the nicer parts of town on his way to school, he would often get spot checked for BS reasons.

  • avatar
    brettc

    I like to fix things myself for the satisfaction of doing it and because I’m cheap. That being said we currently have two new cars (I know, only old cars without a payment is the way to go) that I intend to keep for the long term. So recently I got into detailing and am now buying way too much in terms of detailing supplies off Amazon. But since they’re new cars I want to keep them looking good for whenever I sell them or trade them. We currently have a 14 year old Jetta I’m preparing to sell and it looks amazingly good for 14 just by caring for it over the years and doing a polish/wax and interior detail recently. People need to take pride in the things they own but it seems that’s not a big concern any longer.

    And yes, massive amounts need to be spent on education. If only all of that Iraq/Afganistan money went into education instead. Imagine the possibilities.

    • 0 avatar
      darkwing

      It might surprise you learn, then, that we spend the total cost of the Iraq war — and more than the total cost of the Afghan war — on education every year. (A hair over $1T a year, all told.)

      Let’s worry about the effectiveness of the pile of money we’re already spending, before you start worrying about taking another pile from somebody else.

  • avatar
    Stumpaster

    You have to factor two things – your time is money, and the middle class is no longer middle class because just like the poor they fund one month at a time and pay through the nose for everything.

    That means that for most it is not a good proposition to spend a day under the car when you can spend it saving money on the lawn care or home repairs. That’s real money back in your pocket.

    My solution is simple – if you are poor, BUY NEW a Honda Fit or Mazda 2 or Yaris and enjoy your life. But then you may be ridiculed on TTAC for driving a non-responsive dog next to an Accord Sport while you both crawl in the morning commute traffic. Worse yet, your own poor family that buys used overweight SUVs will laugh at you and which young adult wants that!

    Forget education of children – the teachers simply don’t get paid enough to be any good. Educate the adults on how to educate their children. Then you are going to start making inroads.

    • 0 avatar
      Toad

      If you buy new and take reasonably good care of your car that Honda Fit, Nissan Versa/Cube, Mazda2, Corolla or almost any other car will last for many years.

      That’s good advice whether your or rich or poor.

    • 0 avatar
      fvfvsix

      You do make a good point. We are by no means poor, but I’ve owned 4 honda Civics in my adult life. Just about every one of my family and friends were perplexed. Go figure…

  • avatar
    Crabspirits

    “Costs more to fix than it is worth.”

    Every time I hear somebody say that, I cringe. Why not just say “I am letting what other people (most of whom lacking in technical insight) think of my car determine on whether or not I should fix it.”

    I work as a mechanic on off-highway equipment. Most of the machines I maintain cost $50k+, and are worthless as soon as they get dirty. If I used that line, I would get fired really quickly.

    We can use the straw man in the form of the PC, but in the context of an automobile, I think it’s closer to the USS Gerald Ford.

    • 0 avatar
      DougD

      Yup. I think maybe the yardstick should be “Does it cost more to fix than it’s worth to you?”

      I spent $1200 on parts for my 2001 Focus in February (Battery, alternator, stainless exhaust) which is a lot to spend on a car that’s basically worth $2k. But if it enables me to use the car for six months or a year longer it’s worth $15k to me, because that’s what a replacement would cost.

      • 0 avatar
        danio3834

        That’s a good way to think about it. I get asked all the time, “How long do you think this car will last”. My response is always, “However long you want it to”.

      • 0 avatar
        jmo

        Well, if a new Focus is 15k and it lasts for 15 years that’s 1000/year. If it’s costing you 1200 every 6 months to a year to keep your 01 on the road, then it would be cheaper to buy a new one.

        It all hinges on how often you’re getting hit with those $500 or $1000 repairs.

        • 0 avatar
          danio3834

          You’re making the incorrect assumption that the new 15k Focus won’t start needing repairs of its own in 3-5 years.

          • 0 avatar
            jmo

            Say a civic then ;-)

          • 0 avatar
            FormerFF

            I had a 2002 Focus. Between years 3 and 8 I spent about $1200 on repairs, almost exactly the same amount we spent on my wife’s Honda for that same period of time. Years 8 – 12 were considerably more expensive, which is why we traded the Honda at year 8.

      • 0 avatar
        FormerFF

        When deciding whether or not to fix an older car, what I would recommend is to estimate how long that repair will keep the car going. I had a 2002 Focus and my rule was that if the car was going to cost me more than $150 per month for repairs and maintenance, I would get rid of it. As it was, it never got to that point and I sold it recently because I wanted something newer.

        Considering you can get a new car in that class for around $18,000, if you’re spending more than $1500 per year on repairs and maintenance, you’re not really saving much.

        • 0 avatar
          DougD

          The last 4 years It’s been one major repair per year, so it’s working out OK. I plan to keep it 2-3 more years.

          Other factors are insurance and taxes. My insurance costs are very low with the older car, and buying a newer $15k car would cost me about $2k in tax.

          I guess our family is in the minority that we live below our means, and carry no debt. We have the smallest house and oldest cars, but don’t have money issues keeping us up at night either.

          Agreed this is a fascinating issue much bigger than a car blog.

  • avatar
    danio3834

    In response to the question of “what do we do about it?”. If we’re talking about “we” in the collective sense, not a lot. People want what they want. It would be nice if people could be held more accountable for their debts, but I don’t see that happening.

    We as individuals should show each other the way and help each other out. Many people don’t maintain their own cars because they don’t have the knowledge, the means or the will to do so. I do my best to help out as many people with their car related business on a day to day basis as possible by being fair, honest and going out of my way to help them make good automotive decisions. If many of these people didn’t have someone like me, they would have ditched their used cars at the first sign of trouble and signed up for a note.

    Those are the small things we as car people can do to help the problem. Educate people one at a time by showing them the way. I don’t have any faith in an education system run by people who themselves don’t understand how to make good automotive decisions. A top down “pour money into education” is just passing the buck.

  • avatar

    My two cents: there are two potential issues re: changing nature of car ownership.

    1) There are two types of people: those who hate personal debt and either avoid it like the plague or make plans to get out of it ASAP; and people who consider personal debt an integral part of their lifestyle and give it little thought beyond maintaining overleveraged positions for life. My impression is that of the two groups, the latter group is getting much larger. The car market will adjust accordingly.

    2) The self-driving car will change everything. As long as we’re making armchair predictions, I’m going to guess there will be bifurcation in the new car market. One small group (enthusiasts/wealthy consumers) will buy/sell/lease cars the same way they do today. The vast majority (consumers) will use carsharing or similar short-term leasing to pay for single-trips. At first the consumers will keep their current cars and use carsharing sparingly, perhaps for 10% of trips. As they rely more on carsharing, and as their own personal vehicles age into planned obsolescence, consumers will eventually dump their personal cars and rely solely on carsharing. The cost of travel will increase (demand pricing for carsharing, fewer cars), and consumers will either move closer to cities or further away. The suburbs, a relatively recent invention in human history, will disappear in favor of small, densely populated city states and lawless “Mad Max” style hinterlands between gated cities. New cars will have optional armor plating and gun turrets to meet the needs of modern road warriors. Artificially intelligent cars will revolt against their human owners, leading to an apocalyptic struggle for the fate of mankind, where the living envy the dead.

    Also, the US government will approve clear turn signals bulbs.

  • avatar
    SCE to AUX

    I wonder how this problem will play out in developing markets, like China, where car ownership is exploding.

    I suspect the used car market will be flooded with unmaintained vehicles, and many Chinese folks are buying more than they can afford. IIRC, the main catalyst in the Chinese market was development of the installment plan.

  • avatar
    omer333

    I know from leasing my last two cars, both were Hondas, that in the lease agreement there was an incentive to bring the car to the dealer for all maintenece; they’d give you more for your trade-in at the end of the lease if you wanted another Honda.

    I think that’s part if why I didn’t feel connected to them. I’m no mechanic, but I was always looking under the hood of my cars prior to those Hondas, checking the oil, listening for different problems, I even did my own oil changes and small repairs when I was able to, it was neat to me.

    I know it sounds crazy, but I look forward to doing the oil change myself on my Dart.

  • avatar
    redmondjp

    The issue that I see is much bigger than just cars – it’s a complete lack of financial management and decision-making skills. Let’s head out into the sticks away from the big city an hour’s drive or more and see what we find:

    Hmmm, OK, we’ve got an 80-year-old tumble down house with an assortment of blue tarps on the roof.

    But what’s that on the eve? Oh, that would be a satellite TV receiver dish. Interesting.

    Now let’s look at what’s in the driveway. It’s a truck. A jacked-up truck. With really huge, shiny wheels and super-knobby tires. A truck that will be lucky to get into double-digit fuel-economy range (unless it’s a diesel, but for this story, let’s say it isn’t).

    So we’ve got somebody who 1) can’t afford to fix their roof, but 2) CAN afford satellite TV, 3) CAN afford a gas-sucking pickup with $5K worth of unnecessary aftermarket dress-up stuff on it, and 4) can’t afford to put gas in said truck!

    It’s all about choices . . .

    • 0 avatar
      geeber

      My wife teaches special needs children. There are two classrooms for these children, and she is one of two teachers in these classrooms. There are between 4-5 aides for both classrooms, and they are generally former welfare recipients.

      One guess as to whether the teachers or the aides are the ones who pack a lunch every day, as opposed to regularly ordering lunch from local sub shops and restaurants (which also require a tip for the delivery person)…

      • 0 avatar
        Dan

        “There are between 4-5 aides for both classrooms, and they are generally former welfare recipients.”

        Former?

        • 0 avatar
          geeber

          They aren’t receiving Temporary Aid to Needy Families (TANF) payments (this the program that most people commonly think of as “welfare”).

          They may still be eligible for Supplemental Nutritional Assistance Program benefits (SNAP benefits, or what we used to call Food Stamps).

          They receive health insurance coverage through their job, and so do their children.

  • avatar
    7402

    I tell young people to consult Mr. Money Mustache’s blog to learn a solid approach to financial life (there are others, but his is pretty sound). He discusses cars often. Here is one of the gems:

    http://www.mrmoneymustache.com/2011/04/19/how-to-come-out-way-ahead-when-buying-a-used-car/

    Basically, reduce your wants and satisfy your needs. Buy the car you need, and only buy the miles you need.

    • 0 avatar
      FormerFF

      I think that was probably good advice a few years ago, and may again be valid a couple of years from now, but the prices of used cars is such that you don’t really save that much these days.

  • avatar
    87 Morgan

    I find this subject fascinating as both an observer and participant. I have been blessed and can afford to either have a car note for realistically any available unit within reason. I choose however to be the buy used, pay cash, and maintain as I go.
    Several issues factor into this. First, the tax law locally (co) does not benefit the new car lease or purchase as license plate expense (read registration fees) are exponentially more expensive in new. To the level of $100 a month or more if you were permitted to amortize the fee monthly. So the five year old used car becomes far more attractive to own.
    Second: for the wannabe shade tree mechanic with his sears craftsman tool set (me) the iPad and YouTube have been a great innovation. I have found video of every repair I have needed to make on line and successfully completed them. Couple this with loaner tools from the local auto supply shop when needed. I can’t necessarily quantity the dollars that I have saved but I feel as though I am coming out ahead, plus the satisfaction of having some blue collar left in this starched white shirt I wear everyday is priceless.
    Third, I have a six year old Burban, three year old import pickup and a 42 year old Chevy, what I feel is a good mix of multiple discussion points here. I don’t find anyone of them to be unreliable. The old one sits every winter for long periods and as of yet I have never had the need to tinker when spring rolls around. Fires up every time, now full disclosure the ignition system has been updated to modern standards so this helps quite a bit. I will say though, the maintenance in the newer vehicles is easier than the old.

    Finally, I find the argument that is is better to make a payment on a car under warranty to be a feel good statement rather than someone just saying that they like new cars and are comfortable with the idea of expending their resources on an item that depreciates dramatically the first three years and then tapers to a more plausible figure. A 40k car is worth 10k in 8 years whether you pay 25k for it when it is 3 years old or buy it new. A car will never have a return on investment it is all about how to minimize the loss. To each their own I say. If everyone bought used it would make it a lot harder on the rest of us.

    Steve, the real point of your article, I believe points to socio economic issues that are far deeper than a car blog. You see the symptoms in a lot of cases not the cause.

    • 0 avatar
      jmo

      “that depreciates dramatically the first three years and then tapers to a more plausible figure.”

      That was true many years ago, it’s not true now. As cars have gotten more reliable the new car premium has declined significantly.

  • avatar
    robc123

    A drunk man lost his keys- he started searching under the lamp post where it was light, even though the drunk was never on that side of the street. He searched there because it was easier to search for lost keys under the light than it was in the dark.

    This sums up the discussion and the logic behind.

    Let me help, the reason why things were better in the good old days was because it was pre 1971. That the dollar was on the gold standard- less inflation less actual price rises and less globalization to bring the cost of labor down. The nearest competition was japan and germany- which the USA bombed the hell out of just decades prior.

    the current dollar is worth less than 1 cent on an inflation basis and people in china work for pennies a day, this very simply is why everything sucks.

    The logic of trying to go backwards with technology to save a buck by working on it yourself is flawed because the author doesn’t take into account the opportunity time cost other than government bonds or interest at banks.

    Re-framed its just a transportation problem- getting from A to B to buy goods, services and I assume to go to work.

    We don’t have to know economics or MBA’s to know things are bad for most, getting worse for the middle class, but you do have to start changing your lifestyle if you want to get ahead. Part of this moving closer to work or where work areas are, second is time cost- would I get paid more per hour to work on my car, which I don’t really need or pick up a second job and invest that money in the stock market or real estate.

    I like cars but don’t drive much less than 8k yr in an old car- because I live downtown, work downtown and bike around in the summer.

    The tens of thousands I save every year in real money and time traveling costs are used to invest in RE or the market and with the time, a bit more is spent at work- making me more productive than any employee and putting my self in line for continued promotions. This is how I frame the fix it yourself issue.

    • 0 avatar
      danio3834

      Repair shop labor rates can reach over $100 an hour, plus parts markup. Most people in an average income bracket will be well served to DIY, even if it takes them 3x the labor time to complete the job. This doesn’t necessarily include loss leader type things like oil changes where it’s fairly easy to find places to do this service at a lower cost than DIY.

      However, I still recommend people DIY their oil changes for the assurance that at least it’s done right. Most quick lube places aren’t trustworthy enough to give any sense of surety that the drain plug isn’t cross-threaded and oil actually added.

      • 0 avatar
        FormerFF

        I can get the oil changed on my car for $40, and it only needs it once a year. I’d save my time for things where the labor cost is a significant amount, like a brake or struts/shocks job.

  • avatar
    OneAlpha

    My vote is for the Cuban solution, boys and girls.

    I used to own a Thunderbird SC, which came with adjustable shocks. While it died before the repair actually came up, I was going to just replace the adjustable units with regular shocks. Before it died, I had fabricated new power steering and transmission lines, exhaust manifolds, shifter and windows seals.

    My dad’s Crown Vic came with air springs. When they failed, we threw them in the ravine and replaced them with an $85 set of VatoZone cargo coils. Worked just fine.

    We yanked the adjustable aero and suspension out of my brother’s 3000GT VR4 when those systems died. Also, we replaced the oil pan gasket with the engine still in the car. Again, worked just fine.

    When I finally get around to my W124 or W140 project car (haven’t decided which one yet), that thing’s staying on the road till the Second Coming, and when parts fail, they’ll get replaced by stuff from the Summit Racing, Grainger and McMaster-Carr catalogs.

    Do for yourself. It’s the only way to be sure.

  • avatar
    Cabriolet

    Not posting from the right or left. I live on Long Island and 20 years ago we had about the best education system in the country. Today it is going to the dogs. The teachers are over paid the principals make $300,000.00 a year and every year the school budget get increased. It seems the more money you throw at the problem the worse it gets. Today everyone is told to go to collage and not work with their hands. They put in 4 years studying the sex life of turtles and wonder why they don’t get the big bucks. They go to get the car fixed and find out the grease monkey that fixes their car is making more money then them. The poorest schools get the worst teachers and then they wonder why the poorest kids do not do well. In NYC they have charter schools that actually teach the kids something and the teachers union wants them closed down. Charters schools are the best thing that has come along in years for teaching the poor but do not use union teachers. I rest my case.

    • 0 avatar
      Drzhivago138

      I’m not sure how much of a case you had to begin with. (Though I do agree with some of your points).

      Plus that phrase is inappropriate for use outside of a courtroom.

  • avatar
    blackcayman

    Buy used Hondas & Toyotas when they pass 100K miles because they take another drop in resale when they do. Preventatively Maintain them rather than respond to breakdowns – its cheaper. Drive them the 2nd 100K miles and offload them

  • avatar
    raresleeper

    The problem is that 90% of us Americans suffer from something called Consumption Vanity Disorder. We are conditioned to be vain and arrogant, and material items help bolster that. Our modern culture with all of this material crap everywhere further nurtures that notion.

    Some suffer to a lesser extent than others, but the overwhelming majority of us still have this disease, just different variations and extents of it.

    As for the remaining 10%… well, they’re a dying breed.

    Since the end of WW2, we’ve been thrusted into consumerism. In other words: spend, baby, spend. And if you can’t spend… borrow :)

    Couple that in with technology, stagnant wages, and the rising costs of- well, everything, and you have this mish-mash we call life in America.

    The days of a $12 fix on your ’84 Cutlass Supreme are long gone. But, on that same token, if you maintain your modern vehicle the right way, you may very well be able to carry your modern vehicle to new heights- for example, 250k miles, +, whereas your Cutlass may have puked its transmission’s gears or require an engine rebuild… again.

    Car ownership is technically not for the lowest 5% or perhaps 10% of income earners. That’s why we have busses. Use them. They are there for you.

    Get a pell grant. Get financial aid. Yes, they still offer that to poorer families. Break the cycle and get your education. Even if no one else in your family has and they all think you’re stupid for it.

    Use your dreams of cars, living in an exceptional school district, whatever, as motivation to strive to be the best in your college courses.

    And once you graduate, maybe- just maybe- you can finally afford a decent car and land a decent job and therefore get your piece of life in Utopia- a.k.a., Suburbia. A white picket fence and a golden lab named Fido in the yard.

    Good luck, kiddies. You’re going to need it.

    • 0 avatar
      geeber

      “Consumerism” and the drive to buy more “stuff” existed long before World War II.

      The increased adoption of mass production, along with the mechanization of agriculture, gave more people who weren’t a member of the 1 percent or upper-middle classes the opportunity to participate.

      • 0 avatar
        Pch101

        You have it somewhat backwards. Consumer credit has been a supply-driven phenomenon.

        Mass production drove the need for consumer credit, because producers couldn’t sell enough goods to keep their lines running without getting their customers into debt. Marketing exists to ensure that the demand will match this capacity to produce.

  • avatar
    Conslaw

    The first thing I would do is mandate pay-at-the-pump auto insurance. That would accomplish several social goals. First it would virtually eliminate the uninsured motorist problem. Secondly, it would reduce the marketing costs implicit in auto insurance. Thirdly, it would be a gentle incentive to drive a fuel-efficient vehicle. Finally, it would minimize the effect of lawyers and lawsuits on the cost of insurance. (Pay-at-the-pump is first person insurance.)

    Next, I would make small loans available through the post office – which is a proposal that is currently on the table. This would make the market for subprime loans less predatory.

    I’m not sure I would impose any new regulations on the sale of cars. I think as part of the emissions program, I would designate a portion of gas-tax and/or registration funds to go to a fund that people could use for loans to repair their cars to meet emissions regulations – and to run at all if the car is not functional. That gives people transportation and cleans up our air from the worst offenders.

    • 0 avatar
      sproc

      As much a problem as uninsured motorists are, I don’t think I can stomach pay at the pump. The idea of fully subsidizing someone else’s teen or a multi-DUI high-risk pooler is too much to swallow. I simply can’t equate it to say, health insurance, where I do feel society has an obligation to take care of those with the greatest needs.

      In fact, doing this might even have the opposite effect of what Steven is looking to achieve. Not having to consider insurance premiums might encourage people to buy/lease even further above their means.

      I agree with the rest of your post, though. In fact, California already does much of what you suggest, offering free smog testing and a repair subsidy to low income residents.

      • 0 avatar
        Pch101

        You are already subsidizing drivers who have no insurance. What makes you think that you aren’t?

        It would be better to collect something than nothing. Right now, the uninsured pay nothing.

    • 0 avatar
      George B

      Instead, I wish my state put insurance companies in charge of license plates. The insurance companies would get valuable advertizing space and you could give people driving with “bad driver” insurance more room. If you don’t make your insurance payment, the insurance company takes back their license plates.

    • 0 avatar
      Pch101

      The Aussies include third-party bodily injury in the registration fees. It’s a great idea. As it turns out, car insurance there is dirt cheap compared to the US, in large part because the insurers don’t have to worry about paying to fix people — the cost of repairing and replacing cars is more predictable and usually lower, and the savings get passed on to the customer.

      Americans go out of their way to make car insurance and healthcare far more expensive than they need to be. For a country that lives on Costco, it’s amazing how we allow ourselves to get fleeced for other things.

  • avatar
    Maymar

    As someone who lives somewhere the roads spend six months a year coated with what I can only assume is hydrochloric acid, and then beaten with a jackhammer. I’d just like to see better rustproofing. If I want to pay cash for my next car (putting me around beater territory), it seems my only choices are VWs (that bring their own glut of issues), or any number of cars that are getting nature’s help to be worthy of the Brown Car Appreciation Society. Hell, I pop the hood on my increasingly decrepit Hyundai, and I’m faced with nearly as many rising parts as the exterior (and this is after 10 years/100k).

    DIY is a great idea, until the entire car becomes a mass of fused parts.

    • 0 avatar
      87 Morgan

      Search craigslist in the non rut belt states and buy a one way ticket on Southwest and take a road trip. Plenty of non rusted out six year old cars in AZ, CO & NV that have major airports. If you buy from a dealer they will come pick you up. We did it all the time at the Subaru store I worked at since they are/were notorious for rotting away in the Midwest. My neighbors Tribeca looks brand new and has 160k or better on the odo.

  • avatar
    tankinbeans

    How many cars would cost a heck of a lot less to keep running if the basic maintenance were kept up on to begin with? I hear much of the time that X car isn’t worth fixing because a bunch of maintenance items are going tits-up all at once, but had those repairs been made as they arose would the situation be different?

    My family fell into two camps, dad was hyper-anal about oil changes (every 3,000 miles to prevent imminent failure), mom wouldn’t pop the hood to check windshield washer fluid and would instead roll around with dirty windows most of the time.

    It seems we pay attention to oil, and rightly so, but ignore everything from suspension to transmission and cooling. Where is that midway point between following the manufacturer’s, sometime seemingly excessive, maintenance schedule, and not fixing what isn’t broken? Surely replacing certain things before they completely wear out, even if still serviceable, provides dividends.

    I’m very curious about this and hope I didn’t make it too confusing to follow.

    • 0 avatar
      sproc

      Even if you don’t have the skills to replace/repair many items, some of the simplest visual inspections can safe you a lot of heartache: CV boots, pad wear, exhaust piping, accessory belts, etc. I would wager the majority of Americans wouldn’t have the slightest clue what to look for, though.

      Also, manufacturers have not done the DIYer any favors by encasing everything they can in plastic and making far too many systems require proprietary special tools.

      • 0 avatar
        George B

        I haven’t had CV boots replaced in 20 years. It’s cheaper to pick up remanufactured axles at NAPA and replace everything with one labor charge than to replace individual CV boots. Brake pads give lots of audible warning as they wear out and I’m not sure there’s much parts savings in avoiding rotor damage. Having rotors turned is a significant percentage of the price of new brake rotors and there is no delay and 2nd trip to the auto parts store if you install new ones.

      • 0 avatar
        tankinbeans

        Makes sense. I know that I’m trying to get an idea about my own car maintenance with my Blazer, which I’ve heard is one of the easiest things to work on. It’s slow going, but I’m determined to learn how to keep myself out of trouble and be able to do most of the simple things with cheap parts, but expensive labor, myself.

        Regarding what George B said, I had to replace one of the drive-axels because the boot shat the bed and had diahrrea under the wheel well. It ended up being fairly simple once I figured out how to get the darn thing out of its housing. Friend, who was helping, didn’t tighten everything up as much as he should have and the ball joint shat the bed. Moral of the story, check all connections yourself even when being helped (he’s more skilled than I am, or he says he is, and I’m trying to learn what I can from him.)

  • avatar
    DC Bruce

    I suppose we could spend less time in public schools teaching kids about bullying and sensitivity and such and teach them some basic micro economics, the sum and substance of which is “there’s no free lunch.” And we could teach them basic household finance — it would be easy to make this into a game.

    There are a fair number of rich people who live modestly: that’s how they got rich without winning the lottery.

    I don’t think the basic education system gives anyone the tools to, for example, decide when it makes sense to sell your old car vs. fixing it; or to understand that that 10-year old German luxury car is cheaper than the 10-year old Japanese car for a specific, financial reason.

    If you look at any public debt statistics, you will find that overall private debt has grown hugely, per capita. This has financed a lot of consumption.

    I grew up in the 1950s and early 1960s as the only child of a guy who got discharged from the Navy (an officer) and took a white collar civil service job. We had one television, one car (a stripper American sedan that my dad would typically keep 5 years) and lived in a 3-bedroom tract house with one bathroom. We took 2 week vacations at a rented cottage at the beach, to which we drove.

    By today’s standards, that’s poverty, even though it was clearly middle class back then.

    My dad, like most middle or lower class people of his generation, had “farm values.” If you’ve ever lived on or worked a farm or ranch, you know that a farmer or rancher has to be good at fixing things . . . or he gets eaten alive by expenses.

    Today’s opinion leaders (mostly academics and wannabees) denigrate “manual labor” whether its digging ditches or repairing $90,000 BMWs. Arrayed against that are stores like Home Depot and Loewe’s which aggressively promote D-I-Y for home improvement and gardening. But auto parts stores and their customers are distinctly “downmarket.”

    Some of my friends were alternately shocked and amazed when I told them that I replaced the entire cooling system on my Z3. I pointed out to them that my afternoon’s labor resulted in a saving to me of about $1000, income tax free. And that, even at my rather high rate of pay, that was pretty good money. Besides, I enjoyed it and got a sense of satisfaction from having done it.

    As for the poor folks and their cars, there are some non-economic things they can do. First off, understand how to have good credit — it doesn’t always take a high paying job. Second, work really hard at underconsuming: don’t buy what you don’t really need. My great fear is that with the social breakdown, among all races, among lower class folks, these people aren’t acquiring the mental tools needed to get out of where they are, or (now) where their parents are. Most importantly, they’re not learning deferred gratification, which is the key to financial success not matter what “station” you are born into.

    The second thing for these folks to try and understand is that what they are buying — because that’s all they can afford — is transportation, and it needs to be as cheap as possible.

    In the old (pre-WW2) days people lived crowded together in “tenements” in big cities for one reason: there was public transportation that they could use to get around, including to work. Despite the cheering from the “new urbanists,” there’s no desire to go back to those days. People don’t want to hear the toilet flushing next door, don’t’ want to hear the family arguments, don’t want to hear the garbage truck coming at 3:00 a.m. and so on. Only air conditioning makes modern urban living palatable.

  • avatar
    Scott_314

    At some point we started allowing kids to hate math. We let it pass because it’s ‘not their favorite subject’. While there’s still the 20% out there that can work with numbers, this created a massively stupid 80% of the public when it comes to finances, debt, retirement planning etc.

    In terms of repairing your car vs our disposable society, it’s partly because things today ARE more disposable, and also because of ignorance, fear, and lack of time.

    I for one am terrified of my car falling on me… even with jack stands.

    • 0 avatar
      Drzhivago138

      Makes sense. I’m slightly scared of tires, especially filling them. All that air wants to get out of such a small space, and it doesn’t care who it hits…

      • 0 avatar
        Scott_314

        ?? It’s fairly common news that someone is crushed by their car while working on it. I just googled it and found two in the last week, and it isn’t even summer.

        I fill the air in all 16 car tires I own using a bicycle pump :)

    • 0 avatar
      fvfvsix

      I have jackstands that are made in the USA, and are designed to support buses. Look up Gray Mfg.

  • avatar
    55_wrench

    DIY’er here. And it’s not as fun as it used to be, BUT:

    total cost of ownership is made up for the most part of:

    Cost per mile to operate

    Depreciation (or lack of it)

    –so if you want to stay out of debt, do your homework, find a reliable car, pay in cash if possible, or finance < 2 yrs, then accelerate the payments. Change fluids per factory intervals, and educate yourself in how to do basic repairs. Youtube is your friend.

    If you can afford a new car, go for it.

    For those of us who would prefer not to take that 1-2 year depreciation hit, get a 2-4 year old up-line car that has already proven itself, then
    take good care of it. You'll be surprised to know you can hit 200K with few problems.

    That's not to say I haven't had some lemons in my time, but they are getting fewer and far between as I get more diligent in my research.

    • 0 avatar
      FormerFF

      I’m not seeing that big depreciation hit on the first couple of years any more. I was looking at off rental cars from Hertz, because they seem to have better prices than do the dealers, and for the most part, newer, smaller cars that are a few years old are either ex-rental (mostly) or ex-fleet, the retail buyer of a car like that keeps it for a while. (yes, I looked on Craglist, not much there and more expensive than Hertz) I found a nice dull 2012 Sentra S with about 48k miles for somwhere in the $12,000 range. If I look at the pricing on a new Sentra S on Edmunds.com, it’s right at $16,000. The used Sentra is 75% of the price of a new one, and has approximately 75% of its life left. I see no reason to buy the used one.

      Buy a new one and keep it at least eight years.

      • 0 avatar
        jmo

        “I’m not seeing that big depreciation hit on the first couple of years any more.”

        Many of the B&B seem to be repeating what their fathers told them in 198? and haven’t adjusted their thinking to the current market.

      • 0 avatar
        28-Cars-Later

        The buyout value of leases I have seen is right typically around 60%, you can calculate this by reading the fine print and factoring in an MSRP minus incentives. However it seems for the small bread and butter car, this isn’t the case.

        MY12 Sentra’s MSRP’d between 16 and 20 depending on package, and they claim the average price of said Sentra is $11,772 in fair valuation @ 36K.

        http://usnews.rankingsandreviews.com/cars-trucks/Nissan_Sentra/2012/prices/

        The market agrees:

        04/15/14 OHIO Regular $11,100 40,697 Avg WHITE 4G A Yes
        03/25/14 RIVRSIDE Lease $11,700 40,908 Avg GREY 4G A Yes
        04/01/14 OHIO Regular $11,000 41,273 Avg BLUE 4G A Yes
        04/15/14 OHIO Regular $11,200 41,442 Avg RED 4G A Yes
        04/15/14 OHIO Regular $11,200 41,520 Avg BLACK 4G A Yes
        04/08/14 OHIO Regular $11,100 41,878 Avg GREEN 4G A Yes

        Models like this are tricky because the 24-36mo drop is too low to put 12K into a car starting to come up on its maintenance schedule and will need at least two new tires. I’m going to go ahead and blame the Fed’s artificially low interest rate and also the enhanced sub-prime lending trend. Little throwaway cars like this should have halved by 36mo/50K in value and this just isn’t the case with a large pool of downtrodden buyers who are given easy credit and cheap rates (relative to the used car rates of say 2005)

        • 0 avatar
          FormerFF

          Couldn’t those same buyers use that easy credit to buy a new car?

          • 0 avatar
            28-Cars-Later

            I’m not and never was an F&I guy, but I’d say it depends. If your credit is sub 650 let’s say, Nissan may not want to finance you at all or if they do at a crappy rate. Sure you might be able to get into a Mitsu or a Dodge Avenger, but maybe you really want that Sentra. Maybe Ally will step in and offer you similar or better terms on the used Sentra vs Nissan. Maybe 16K+dest+tax for base Sentra is too much and the used lot is only looking for 13 otd? $4K or so isn’t much on 84 month payments but on a traditional financing schedule it does add up.

      • 0 avatar
        87 Morgan

        I see your point, for a sentra…..

        Now do the same math on a suburban….75% of 55k is 41. Same percentage yields 14k. I’ll take a pass on the new one and buy the used even if only has 25% depreciation the first two years.

        • 0 avatar
          FormerFF

          You are correct, for more expensive cars depreciation makes up more of the total cost of ownership than it does for inexpensive cars, until you get to the prestige brands. The reason I chose the Sentra was that my point was that for someone looking for a low total cost of ownership, there’s not much benefit in buying a late model used car. If you’re buying a car that was expensive when new, I assume you’re not that concerned about saving money.

  • avatar
    TW5

    Meals and entertainment are subject to 50% restrictions, thus, they are amongst the most difficult expenses to write-off.

    Education is definitely half of the problem. Students can graduate high school without a single personal finance class. We are the wealthiest capitalist nation on earth, which suggests we’d make personal finance and economics part of our education core. Nope. Canterbury Tales is much more important.

    Self-education is great, but it also leads to some misconceptions: “The more expensive the good, and the higher the debt, the more economic growth we have as a civilization”. National income is often regarded as a function of real money. Real money has CPI adjustments and inflation premium adjustments. When the cost of housing doubles in 20 years (as a function of median household income), and the cost of oil increases 800% in less than one decade, economic contraction or collapse are not far away. The business trend towards consumer debt is predicated on historically low interest rates, not the belief that endless economic growth can be achieved with over-leveraging.

    The lack of maintenance culture is also attributable to complex economic forces. It is inefficient to duplicate manufacturing and maintenance for most manufactured goods, especially as real cost of goods declines. Furthermore, as household income has risen, the opportunity cost of performing your own maintenance has risen. It is no longer cost-effective to buy specialized tool sets for vehicle maintenance. Consumers are better off allowing the private sector to determine the best way to spread overhead costs. Vehicle maintenance is something for vehicle enthusiasts who find the work to be therapeutic and meaningful. The economic case for maintenance only works if neighbors teach neighbors and the maintenance tools have virtually no idle time. I believe this is the onus for the DIY car garage model.

    • 0 avatar
      Drzhivago138

      I never read any more than a single story out of the Canterbury Tales back in HS, even in AP Lit.

      Right now I’m taking Literature and Writing courses for a job in technical writing. Come at me, bro.

      …I think that’s what you’re supposed to say to challenge someone? I don’t know–Minnesotans aren’t known to be a very confrontational bunch.

  • avatar
    jacob_coulter

    Car debt is just another symptom of a larger cultural problem, mainly that everyone is entitled to some sort of comfortable, affluent lifestyle regardless of their actual finances. I really don’t know how you solve it without changing people, I don’t see a political solution.

    The same people that rail against financial institutions for being predatory with high interest rates and pushing loans for people that shouldn’t be buying something would also scream bloody murder if banks stopped lending to these same people. That’s why we had a housing bust, home ownership became a “right” that was even subsidized. The old “put 20% down” way of doing things was turned into some sort of form of racism.

    It’s like you can’t win, if you lend to lower income people, you’re a predator, if you don’t, you’re cold-hearted and/or a racist.

  • avatar
    tjh8402

    It’s funny, when I bought my car, I intended to work on it myself (as my job afforded me the luxury of only working 9 days a month). Since then I got a second job, so the free time I originally intended to spend working on the car is no longer available, so now I’m paying extra to have a mechanic do repairs that I originally intended to do myself. Thing is, I still end up ahead, because even with a BMW, I wouldn’t be spending $500-$600/month on labor for repairs on the car, which, is what I’m earning at the second job.

  • avatar
    APaGttH

    Steve:

    A very great story/op-ed piece. I have had similar observations about the direction of the United States, and Western Civilization in general. It is all a very Zorg Enterprises sort of world about how consumerism and jobs are created by faux needs to keep people employed and fed.

    To stick to the issue of cars – specifically – as you requested.

    As someone who has owned cars for 29 years now, my observation is cars have gotten dramatically more reliable in the course of that time. Standard maintenance has stretched out, and regular care items seem much cheaper, when adjusted for inflation.

    Some repair items on the car are, in my opinion for the better. Electronic fuel injection is much better than a carburetor (I remember saying my little prayer on 15 below mornings with a struggling battery and having to feather that gas pedal juuuuuust right). Solid state electronics are generally easier to replace and some items under all those plastic covers and break away clips are easier to service.

    But, as you noted, when things break today, what was a rebuild away is now a very expensive replace – and it quickly becomes not worth it. Rebuilding a tranny has given way to just buying a new one. I agree about the ludicrous nature of “life time fluids” and sealed systems. Items like the tranny fluid dipstick are going the way of the doodoo bird.

    There is however, an even more sinister issue that puts those on the lower income ladder on the endless treadmill. You’re hard pressed today to not buy what would be deemed an econobox by 2014 standards and not get to $20,000 sticker in a hurry. Ya, a Kia Soul starts for under $15K – load it up and you can tickle $28K now. YIKES! But that’s OK, you can finance it for 72, or 84 months – with no money down. Now you can drive your 80 mile round trip commute because you can’t afford to live in the city in style. And when that Kia Soul is chewed up and spit out with 160,000 miles on the odometer at 4 years old, it’s OK – roll that negative equity in a Chevy Spark – at usury interest rates, and you’re all good.

    In the United States, wage growth for the bottom 90% has been flat for 20 years – by some methodology 30 years – when you factor for inflation. Generation Y isn’t driving because they hate cars – they can’t afford them. Then we engage in this debate on minimum wage, which when you adjust for inflation should be around $9 an hour, and has the least buying power today since 1948.

    I’ve posted many times – metaphorically speaking – if the guy building that Toyota Corolla in Mississippi can’t afford the Toyota Corolla, there is a bigger problem with our economic engine – and it will eventually fail. When it does, only those at the very top, the top 1% will be relatively safe – the rest of us are kind of screwed.

    Government regulations and safety demands make it impossible to build an inexpensive transportation device today. No automaker is going to give two middle fingers to planned obsolesce and build a truly “lifetime sealed transmission,” when we probably have the technology to do it. Heck, the infotainment screens in the common econobox are outdated before the average car hits 26K miles today.

    There is no easy answer – but the engine of the United States economy, when truly healthy is 80% fueled by consumer spending – with a huge portion of that coming from the buying and selling of homes. The only way the engine keeps running, is demanding that consumers buy more and more. To get them to buy more we squeeze every drop of blood out of the workers, to get the lowest prices; and that hurts those at the bottom the most.

    It just isn’t sustainable.

    • 0 avatar
      28-Cars-Later

      Well put.

    • 0 avatar
      TW5

      Workers are getting squeezed because government regulations create consumptive patterns that do not benefit the worker. Housing costs are about 200% higher than they were 30 years ago, but an overwhelming majority of houses are already built so output doesn’t rise sharply. Instead, home-owners become speculators.

      Same problem exists in education. What’s the marginal cost of admitting more students? Basically zero. The classrooms are idle most of the time. Universities force faculty to teach one more section, which makes them threaten to strike, but ultimately, they realize they have it pretty good. Perhaps, the university hires some more administrative grunts and lecturers, but quality jobs are rarely added to the payroll in any significant number. Many universities fall prey to the building glut. They can’t really save any money by demolishing the building so admissions rise and students are put into online courses. Few jobs created, almost none locally. Nice.

      Healthcare has similar problems. Costs are inflated by the third-party-payer system. Providers don’t want to lose revenue so they buy billions of dollars in new medical equipment. Analysis is outsourced. Medical machines are not manufactured in the US, and the components are non-US, hence the medical device tax in ACA.

      Bad government policy has caused a spike in the cost of living. Workers need more money to get by, yet the government needs more tax revenue from workers to cover mandatory largess. The worker is caught in the crossfire. Government can do whatever they want to make corporations shoulder the cost of their policy. It won’t work. Consumers will have to find new low-cost options for housing, healthcare, education, and transportation. Government reform is not going to happen anytime soon.

      • 0 avatar
        jmo

        “Housing costs are about 200% higher than they were 30 years ago.”

        http://www.hsh.com/natmo84.html

        A 30 year fixed rate mortgage was 14.46% in 1984.

      • 0 avatar
        tonycd

        TW5, most of this is simply inaccurate.

        US taxes are among the lowest of any industrialized country. Likewise, government help to poorer citizens is also among the lowest of any industrialized country. US worker income hasn’t been gutted by “government regulations.” If anything, it’s been gutted by the lack of them — the abolition of the tariff system that kept jobs in this country for 180 years until the 1980s, when it was dismantled for the benefit of the monied under the rhetoric of “free trade.”

        I do agree that government reform is not going to happen anytime soon. But it’s going to have to happen, and that will only happen if we demand it, so we can’t give up. And that reform has to start with the removal of the poisonous Citizens United and the dismantling of the media monopoly that prevents most Americans from even hearing a non-corporate version of what’s being done to them.

  • avatar
    George B

    Steve, my Dad spent a lot of time working on car maintenance and repair and passed along knowledge to his children as we fetched tools and held the drop light. The most important thing he taught us was that we could repair things. That was good, but much of his advice needs to change with the times.

    He wasted lots of oil changing it every 3000 miles, but never made similar efforts to change automatic transmission fluid. Today a failed automatic transmission is more likely to send a car to the crusher than a worn engine so draining/refilling “lifetime” automatic transmission fluid every two years should be the new rule of thumb.

    Today what makes a car a “beater” is oxidized paint, not smoke from worn engine rings. The difference between restoreable antique and scrap metal is the amount of rust damage. Despite this, my Dad spends time under the hood replacing parts before they wear out while almost never washing and waxing the outside. An average car can last about 12 years with ease, but nobody will want to ride in it if you don’t work to protect the paint.

    Besides automatic transmissions and paint, the other area that my Dad has difficulty with is hidden “complexity” on 21st century cars. Electric windows are fairly simple to repair, but the worn window regulator is hidden behind a door panel. Instructions from internet car forums make this type of repair fairly easy, but my Dad’s generation doesn’t combine wrenching and computers very well. He would panic when the “check engine” light comes on instead of reading the OBDII codes and doing a Google search to figure out what they mean.

    • 0 avatar
      Steven Lang

      Awesome story. I enjoyed it. Hope the lessons carry forward at least a few generations.

    • 0 avatar
      FormerFF

      As George pointed out, there is a wealth on information on the Internet as to what might be the problem when your car needs something. Even if you’re not going to do your own wrenching, always check with Google if your car starts acting up. When the check engine light came on in my old car, I found out what the problem was before hooking up the OBD reader and was able to easily fix it.

  • avatar
    PandaBear

    Some vehicles are still made well but sell for more than before, and there are used vehicles that have reputation that last a long time for consumers with less money, and you can get loan from credit union for used car now too.

    The problem is, people want new cars, want them now, and money is cheap to borrow. That’s the perfect storm for stupidity and you cannot save people from that.

    It also doesn’t make sense for a lot of people living in the rust belt to care about reliability when cars rust in 8-10 years, vs those not in rust belt that drive for 20 years.

    Some manufacturers capitalize on the “buy new and dump them after warranty expire” mentality (cough cough, VW) while others tend to focus more on durability (Toyota, Honda, relatively speaking). They pay for or get reward for their actions in the market place in residual value and customers’ willingness to pay for their products.

    It is a fair game after all.

  • avatar
    Big Al from Oz

    @Steven Lang,
    In you final paragraph you made this comment;

    “What would you recommend to help change the economics of ownership?”

    The reality is what’s driving the cost of vehicles.

    Vehicles have become cheaper, it’s just we are purchasing ‘wants’, not what is necessary to prevent us from walking, utilising public transport, etc.

    I do read that many on this site use ‘cultural’ reasons to justify what they want/expect from a vehicle, not what is needed, if needed at all.

    There is a pecking order which determines the so called ‘car culture’ within all nations.

    1st; the economic situation of a country/culture (affordability),

    2nd; is the controls and influences regulating what can and can’t be driven, and

    3rd; is the ease at which to use the vehicle, which includes; physical infrastructure (roads/parking/etc) and engineering support/logistics (spares).

    Consumerism has made the automobile into a fashion and status symbol. Just like man used chickens and goats just after we stopped swinging from trees, we had to appear better than the next.

    To humans status is extremely significant. It drives progress and improvement across all aspects of our lives and societies.

    I think most who blog on TTAC drive a vehicle above and beyond what they need. They are a want, an in some instances to display where they want others’ to perceive their status in society.

    Motor vehicles are really a display of status and wealth, but also a façade that some hide behind to give them the comfort and security they are seeking within their culture.

    I’m not different, I don’t need the vehicle I drive. I drive the vehicle because of what I WANT to use it for.

    That is to support my lifestyle, culture which amounts to status in society.

  • avatar
    TAP

    @LOLcopterpilot- That’s a great, funny little piece of writing!

  • avatar

    What sells most cars is “parking lot parity”. Mom doesn’t want to have the crappy minivan in the school lot when the other Moms have a new three row SUV with a spiffy backup camera. Dad won’t want to go to work with an old Impala when the other folks are parking new Audis and loaded Accords. Folks won’t admit this, but it is true.

    I have two paid-for cars. I DIY quite a bit, have fixed hoses, window regulators, etc. More than once, usually while looking for the bolt that rolled just out of reach, I ask why I don’t go to the car store and get a fresh one. I would roll for any normal car and a decent percentage of the non normal ones. I then think of the depreciation and taxes I’d eat and find that bolt.

    My 2003 BMW is still “a bmw” to the masses. The “value” is probably $4k with the 306k on the odometer. Short of the engine puking a major “internally lubricated” part, it is worth fixing just about any part, and as I DIY, I see it running until that part lets loose or there is a bad day on the road. I could go get a new one tomorrow, but it is not a smart use of money…what would I gain ? Bluetooth ? I keep my cars clean and straight, replace the bushings and links on a schedule. They all drive “new”, which isn’t that hard to do.

    I see clients all the time who drive up to the office in a recent leased car. Shiny and pretty. They also work two jobs and need “time to pay”. Parking Lot Parity.

  • avatar
    mart_o_rama

    This article made me think of the book Zen and the art of motorcycle maintenance, by Robert Pirsig.

    It’s been referenced many times over the years at TTAC.

    Still, it pleads the case of quality and care and self involvement, three things not alien to car ownership.

  • avatar
    AoLetsGo

    Insurance is the a major factor that many do not consider.
    My record is clean but my car insurance is much higher these days than it used to be! Also I know it is off topic but don’t get me started on the rising cost of health, home and life insurance.

  • avatar
    baggins

    “For some folks, this is a mere pittance. A lunch for four at a fancy restaurant that can be easily charged off to Uncle Sam and his seventeen trillion dollar debit card”
    As Seinfeld said to Kramer, “I dont think you know what “write off” means.

    First of all, if something is tax deductible, that just means you can use it reduce your taxable income, not that “uncle sam” pays for it. Uncle Sam just doenst get to take its cut from the offset revenue. Unless you believe all money belongs to the government, not sure how the govt pays for the meal. Dont worry tho, the state still gets 9% here in calif on restaurant food.

    Secondly, meals are only 50% deductible. So given typical tax rates, the govt doesnt get $25 in tax due to the deduction of that 150 dollar meal. So even if I accept that Uncle Sam is “paying” for what it doesnt tax, its paying 25 bucks of the 150.

  • avatar
    oldyak

    Since I seem to always be the ‘last commenter’
    The article started out really interesting and then you just dumped it on the readers…..

  • avatar
    troyohchatter

    “Cost more than it’s worth to fix.” I resemble that remark. My 2000 Honda CR-V had quite a bit of $$$ put into it over the last two years. Then this year I looked it over. Rear trailing arm bushings, tires, potential propeller shaft, and a few other things. In addition, there are a couple of select items on the 1st Gen CR-V that go out due to age that you may not find a replacement part for.

    So over the last 3 years I would have put close to what I felt the value of the car into maintenance and upkeep. And it’s all good, as long as it stays on the road.

    But if I total it, the insurance company will give me x amount of dollars, and that x doesn’t take into account the money put into the car over the last 3 years. Of course, things get cheaper if I work on my own but except for fundamental preventative maintenance, mine goes to the shop.

    I ran the numbers and decided I’d better get a new car, a Mazda2. I have a $3000 cash outlay as a down payment, covered by selling the CR-V for $3500, and $180/month payment on an incredibly low interest loan for 5 years or whenever I decide to pay it off which, the way I am, will be shortly. Meanwhile, the Mazda puts around $1000/year back in my pocket in decreased fuel cost. Since those are taxable dollars, it’s actually closer to $1300 or more

    Then there is the other items. More safety equipment, quieter, more refined, more fun to drive, overall safer and more enjoyable. Those items have a value as well.

  • avatar
    troyohchatter

    I work with a guy that bought a new car about the time I bought mine. He bought a Dodge Journey (yes, he’s an idiot), 4cyl, 2wd, for 24K. He made fun of the Mazda2 being a puddle jumper or econobox or whatever.

    Funny; he shut up when I explained to him that I bought my 2002 Ford Ranger new and my Mazda2 new COMBINED for less money than he paid for his Journey. I went on to say that the less we say about the bath he took on the HHR he traded in, the better. I then explained to him that, with 1 driver in the car, which is how my car spends 95% of its time, both cars are essentially the same size unless he can give me a viable reason to haul around 3 times as much “air” in the cargo area. Oh, and to finish him off, I hit him with the additional 10-15MPG that I get to enjoy over his car.

    I never once used the phrase “You’re a moron” but once I pointed all of this out, it kinda became clear. Punch line? Guy told me he’s gone the last 15 years and always had a car payment. Guess that’s how life goes when you trade every 3 years or so. I drive em until it becomes financial nonsense to do so.

    • 0 avatar
      28-Cars-Later

      In fairness everything was more reasonably priced in 2002, you could prob have picked up a 2WD 5spd Ranger then for $10K.

      Oh and you can feel free to use the phrase moron with this guy. HHR to Journey, really dude?

  • avatar
    tankinbeans

    Is it possible that a person leasing could come out ahead at the end? They make their lease payments on time and also sock the amount for the lease buyout in an interest-bearing account until the buyout date is reached. Could they end up coming out ahead by earning some money on those additional payments rather than paying the interest out?

    Obviously, this would only work for people who can afford to make double payments, and the interest-bearing account of whatever type would have to return more interest than would be required on a traditional loan.

    Not a financial planner, but curious.

  • avatar

    > Is it possible that a person leasing could come out ahead at the end?

    A lease is in no way a unique & magical payment method. It’s exactly the same as a loan except you’re only financing part (the depreciation part) of the price of the car.

    In some cases you can get ahead because manufacturers are willing to subsidize select leases, same as subsidizing select loans to get people in the door. For those who upgrade to a new car every few years anyway those are worth looking into.

    • 0 avatar
      PandaBear

      You can be ahead by getting the chance to bail a lemon, and you can get ahead if your car has a federal tax credit (i.e. EV) that you cannot get due to AMT (or making too much money) and the lease will deal with it.

      Or it is a company car that you can expense instead of depreciate.

      Other than that, probably not much of a way you can get ahead.

  • avatar
    JK43123

    The economics of ownership are, that poor people shouldn’t even play where cars are concerned. They should use mass transit…which of course stinks in much of the US, but where we should be investing for the future.

    John

  • avatar
    Featherston

    It’s interesting to me how many Americans equate public transportation to poverty. You know who takes public transportation to work? People from ghettos like Greenwich, Bryn Mawr, and Kenilworth.

  • avatar
    carlisimo

    “It’s a fraud of the nastiest of orders.”

    It might be, but the people pushing it actually believe it, which I suppose means it’s not fraud. The establishment position – honestly heartfelt – is that if everyone lived within their means, the economy would shrink and they would lose their jobs. Maybe 8 million cars sold per year in the US is the “right” number, because the rest of us should be buying used, or riding a bicycle. Suggest that to an economist and they’ll tell you that it would doom the entire Midwest to poverty.

    In the long run it’s probably beneficial to stop encouraging debt – but who ever thinks of the long run?

  • avatar
    billyjoejimbob

    I don’t buy it. I call BS. Safe and highly reliable cars are dirt cheap, on craigslist. Two weeks ago CL score: almost perfect condition ’06 Grand Marquis, 26K miles, got it for 7k cash. I could drive that Panther for the next ten years easily. But I won’t, I’ll get bored with it in six months and sell it for 8,500 with 35k on the odometer. But that’s not the point. Ok, it is the point. I’ll make a profit on it either way. Cars have become almost free, or at least easy to make a small profit on if you buy right. I’ve done so several times since this craziness in used car values started around 2011 or so.

    This seems to work, for me, primarily only with Panthers, Buick sedans, and Avalons (PBA’s for short). These platforms seem to be reliable, safe, and not terribly in demand. Very well maintained low mile examples are plentiful on CL.

    “Yeah but those are big, ugly old man cars that suck down gas dude” you say?

    “Yes they are, genius” I reply sarcastically. Go ahead and pay 22k for that used 95k mile 2011 Jetta TDI because its stylish and fuel efficient and saves 25 bucks a week in fuel costs vs my PBA. Do it punk. Then when your POS Jetta is in the shop 18 times in 12 months vs zero times in 12 months for my PBA and your repair bills total up to 5k plus the 15k in cost difference on the initial purchase, plus the fact that you had to finance your precious TDI and are thus paying interest, well, see punk, it goes on and on and on about how incredibly stupid your purchase was. At least you didn’t lease it, that would have been even more stupid, but I digress. You’ll have to drive the Jetta about 35 million miles to make up the cost difference in fuel savings and fictional “reliability savings” that only a “newer car” affords. BS. Pure, stinky, slimy, greenish brown, corn laden Chipotle hangover, BS.

    Not picking on Jetta TDI’s, just an example that worked well. Any car that people pay WAY to much for would work. Even a Camry or Accord. Yes, they are crazy reliable, but they simply are very hard to buy cheap, and thus are not a good value like a pristine PBA. Because I’m all about value. Bert Kaempfert’s got the mad hits. You try to match wits. You try to hold me but I bust through.

    Ok, the nurse is here with my meds now.

  • avatar
    Power6

    Steve, just getting to this now but hopefully you are still reading the comments as I am curious as to your thoughts.

    It seem you inctie the old men here to start pining for the days everyone fixed their own stuff and point to the modern disposable attitude as the root of the problem.

    The thing is, the economic power of the US or any country is specialization. That means people become more interdependent and less self sufficient on their own. This is pretty much necessary to compete in the global economy. Do one job do it well. Most people don’t work at that 40 hours a week any more it is 50 or 60 maybe. If you have a family what time is left for working on the car? And what use is there spending much time developing skills to work on the car? It doesn’t make any sense to me. I does not bother me one but that anyone I work with can’t possibly fix their own car. They have developed specialized skills that they can exchange for currency to participate in the interdependent economy by letting the expert fix their car. They can then spend more time honing their most valuable skills.

    To pine for the days when one fixed and serviced their own stuff…just seems like old cranks who can’t deal with the fact world has moved on to me.

    Now for me, the currency I run short of is time. We do alright the wife and I. Just the one kid. Could have big lease payments and shiny new cars if I wanted. But we drive oldies. I have lots of experience wrenching on my own cars. But I don’t always have the time. I have developed specialized skills that pay well. So I had the Toyota dealer fix some stuff on my Lexus for what the Internet says is a ridiculous sum of money. But hey I need the car to get to work and I can’t get to working on it for a few weeks and then I have to burn a day either off work or not spend time with my daughter. Pretty easy choice for me.

    This is how I see leasing getting bigger. People just need wheels and ongoing service and get on with whatever specialized thing that they do. We need this sort of setup for used depreciated cars, what do you think? I know you do some sort of “service included” type of thing?

    Now I am sure there are some holes in this theory, I am I guess upper middle class so maybe my theory falls apart if one does not have a specialized enough career that affords them enough economic advantage to pay others to service their car. But I can’t see the future of a competitive US economy hinge on more general skills and less specialization.

    • 0 avatar
      danio3834

      The cranks are prescribing as much DIY as feasible for poor people where the economics of doing this does the most to make them less poor. DIYing repairs on an older ride instead of signing up for a note they can’t afford is sound advice as far as I can see.

      • 0 avatar
        Power6

        I can see that. Certainly no matter how much money I have I will take on some repair of my cars. but does that make sense for one who does not already have the knowledge. I.e. could they better spend their time on a career related enhancement that would have a lasting effect on income.

        So where do we draw the line? Changing oil, brakes, how about swapping a head gasket or a timing belt job. Some things require special tools or take a very long time if you are learning as you go. A buddy of mine had the rear diff go bad in his Mazdapseed6. He got a cheap one used, swapped himself but car was up for over a week and he rented a car, between family and work obligations you only have so much time. He did still save money over a new diff installed by Mazda dealer but he could have found a local mechanic probably would have cost the same.

  • avatar
    unimoged

    Going back to the main point in the article which is “Financial Slavery and how we have been conditioned to accept it.” I really appreciate what Steve has raised in his article which is a true epidemic in our country.

    The educational system teaches us to be dependent on the process and it kills our creativity and resourcefulness to fix things. With that said, we know how to use the system to research a car to death before buying and we know how to use the system to get the loan and the finances but we have no clue to what it takes to keep a complex vehicle running.

    This is all well for the minority of the population that have a solid job and a high credit score. They can lease the Benz or the Bimmer and drive them into the ground for 60 K Miles and do no maintenance whatsoever until the oil turns to muddy sludge. Then, they turn it back in and get another one and this car ends up on the auction block.

    But for the majority of the population, that sits on the catcher end of this game, with iffy credit and unstable jobs and this unsatisfied “I want it now” need of the brand names like the benzes and lexuses and BMWs.

    These people they will end up buying someone else’s problem due to lack of maintenance. They are lucky if they finance it at at 10% at a credit union but the majority can’t qualify and they get herded to the “buy here pay here” lots, where they get clipped with 30% interest and a tracking device or two, installed in their cars, one under the dash and one below the speaker panel under the rear window.

    Now this “buy here pay here” proud customer is driving a car that needs major maintenance because it is worn out but looks good. He or she can’t afford the oil change because they have to pay the man weekly 200 or so dollars.

    Now the car fails and the proud owner tows it to their home because they have no money to fix it. Now with no car to go to work, the job is lost. 2 payments are behind and the “buy here pay here lot” sends their favorite guy with the snatcher short wheelbase tow truck.

    He doesn’t even pull into the driveway. He stays in the street and stretches a steel cable from his truck to the back end of the car and drags it out into the street with the tires screeching and the owner standing on his porch flabbergasted. After the car is dragged into the street, it is legal to tow it away back to the lot.

    At the lot they celebrate the arrival of the car since they didn’t have to go to the auction to buy it and its cost has already been recovered through the original down payment and the few payments made by the proud customer that bought it.

    It is a free car to them to temporarily fix it and sell it again to the next ready buyer willing to be enslaved at 30% interest so the cycle of misery can repeat itself.

    We wouldn’t be in this financial epidemic if we teach our children three basic habits;

    1. Don’t buy it if you don’t have the cash saved up.
    2. You don’t need a Bimmer with 180 K Mi no matter how good it looks.
    3. Open the oil fill cap. If the sludge is caked like mud, just walk.


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