Sad, but I think I’m out

[VandalSibs]

The average age of new car buyers is 53. At last check 27% of all new car buyers are over 65. There is a very large group who are asset rich but on deferred or fixed income. (And that is not even counting the idle crypto bros who will be very rich until they are not.)

Plus, people that just plain have their finances well budgeted and in order.... my wife and I have our R1T that we bought new, while still have other financial commitments. We are still saving money every month on top of bills and such. Are we saving as much money as we could if we didn't buy the truck? Of course not - but we aren't being dumb about things either.

Now maybe the RV purchase could have been thought out a bit better..... but that's the nature of owning a travel trailer.

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[Mos Eisley]

Your savings and other debts have zero impact on your income. @TexasBob has a good point above that someone who is retired might have RMDs below $100K fitting them into this category.

You asked, "Who's buying a $60K vehicle that has an annual income less than $100K?"I gave examples of many ways one could readily afford a vehicle of any cost, irrespective of their income.

 

[NCSwa]

All these make total sense, I guess I am hoping the younger generations, making 60k/80k a year aren't spending 60k on a car, but they probably live with their parents anyway, so who knows, maybe they are....

 

[Mos Eisley]

All these make total sense, I guess I am hoping the younger generations, making 60k/80k a year aren't spending 60k on a car, but they probably live with their parents anyway, so who knows, maybe they are....

I think we are all on board with living within your means.

 

[Jeremy3292]

The average age of new car buyers is 53. At last check 27% of all new car buyers are over 65. There is a very large group who are asset rich but on deferred or fixed income. (And that is not even counting the idle crypto bros who will be very rich until they are not.)

I'm fairly young (under 40) and can't believe some of the financial advice being given out these days.

"Why pay off your car or house loans early at 4% when you can easily make 7% in the market"
"Interest rate spread bro haven't you heard"

Everyone looks like a genius in a bull market.

 

[Jeremy3292]

Me. I’m on social security. All the rest of my money is already mine.

Not a slave to the man.

That's a technicality though on "annual income" haha

 

[mic-chris]

I'm fairly young (under 40) and can't believe some of the financial advice being given out these days.

"Why pay off your car or house loans early at 4% when you can easily make 7% in the market"
"Interest rate spread bro haven't you heard"

Everyone looks like a genius in a bull market.

The funniest things I have been seeing lately are people shaming others for saving for retirement. "You can't touch that until 65 bro". It is a shame the financial literacy these days. Retirement snow balls but tiktok advice is hurting the youth.

But I do wonder how so many afford quad R1s lol. I am a pretty high income earner and would never think of purchasing a 120k plus car. That is why R2 is perfect for me. Can barely get a new ICE car for under $50k so to me $60k for what you get with an R2 performance launch edition is a good investment. I do think the premium is the wrong price point though. Only a few grand less with a lot less features comes out to be like $40 a month if you put a minor down payment down.

 

[Zorg]

I'm fairly young (under 40) and can't believe some of the financial advice being given out these days.

"Why pay off your car or house loans early at 4% when you can easily make 7% in the market"
"Interest rate spread bro haven't you heard"

Everyone looks like a genius in a bull market.

Until market turns. What's the average? Market is up 7 out of 10 years, I think.

 

[NY_Rob]

Who's buying a $60K vehicle that has an annual income less than $100K?

That's what loans are for.. couple that with a trade-in vehicle and a decent down payment and you don't need to make $100K/year to afford a $60K vehicle. Not everyone has crushing debt either, if your home is paid off and you don't have student loan payments it's easily accomplished.

Of course I'm nor referring to someone who's going to flip their cars every 2 yrs, but if you're planning on keeping it 5-10 yrs it's not a ridiculous investment.

 

[Millbarge]

I'm fairly young (under 40) and can't believe some of the financial advice being given out these days.

"Why pay off your car or house loans early at 4% when you can easily make 7% in the market"
"Interest rate spread bro haven't you heard"

Everyone looks like a genius in a bull market.

Ok but your mortgage is for 30 years. What is the average market return over a 30 year period? If it's higher than your mortgage interest rate, that's still sound advice.

 

[tivoboy]

Exactly - no one who makes under 100k should be buying a car for 60k, 20k max

There are many ppl who are quite wealthy, who have ”annual incomes” under 100K, with no concern for spending or tax impact.

 

[tivoboy]

I'm fairly young (under 40) and can't believe some of the financial advice being given out these days.

"Why pay off your car or house loans early at 4% when you can easily make 7% in the market"
"Interest rate spread bro haven't you heard"

Everyone looks like a genius in a bull market.

My niece was buying a new car.. I told her to finance it for sure. She got a good loan at 3.5%, she has good credit but “only” 85K in income (not including deductions etc.)

I told her it was far better to continue to maximize her contributions to her employee pre-tax savings plans and to keep her after tax tax contribution to her ROTH IRA as high as possible. She puts in the money in, I manage the account - so she does quite well. ;-)

Good use of lending/debt can be easily and legitimately justified assuming it’s not just to spend more money. Even paying down DEBT (like a high interest credit card) would be a good use of taking on a loan on a car at ~ 4.5-5.5% rather than paying in precious cash.

Just a couple ways to think about it.

 

[Jeremy3292]

The funniest things I have been seeing lately are people shaming others for saving for retirement. "You can't touch that until 65 bro". It is a shame the financial literacy these days. Retirement snow balls but tiktok advice is hurting the youth.

But I do wonder how so many afford quad R1s lol. I am a pretty high income earner and would never think of purchasing a 120k plus car. That is why R2 is perfect for me. Can barely get a new ICE car for under $50k so to me $60k for what you get with an R2 performance launch edition is a good investment. I do think the premium is the wrong price point though. Only a few grand less with a lot less features comes out to be like $40 a month if you put a minor down payment down.

It's better known as the monthly payment generation...no one owns anything. I do my best to stay out of that mindset as it's what my generation and younger thinks about when determining what they can afford or not. Until you lose your job or get laid off, which has happened to me before. Paychecks don't last forever. My wife and I have been maxing out our 401k's bc one day we might not have jobs so saving while the going is good is paramount. You also can touch a 401k at 55 years pretty easily if you just leave your current job at that time, so that's why we always consolidate into our current 401k's.

 

[CharonPDX]

Who's buying a $60K vehicle that has an annual income less than $100K?

"Income" and "wealth" are two separate things. Many "wealthy" people actually have very low "income". See Steve Jobs before his death, see Mark Zuckerberg, Larry Page, Elon Musk. All of them were/are billionaires, yet officially have very low salaries. Thus their "taxable income" is very low. Qualifying them for many "low income" tax credits. (Sure, every few years they sell a bunch of stock, so in THAT year they have high income.)

 

[Jeremy3292]

Ok but your mortgage is for 30 years. What is the average market return over a 30 year period? If it's higher than your mortgage interest rate, that's still sound advice.

Yes, I was just pointing out owning things sometimes is better than trying to play the market every chance you get. When the market inevitably goes down, having a hard asset you own is worth a lot. A healthy balance of both is needed as of course you want to build wealth over a long time.

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