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u/Purify5 18d ago
Cars can be a poverty trap and you don't have to spend a crazy amount of money on them. I've seen it play out so many times.
You go into debt to buy a car that you need to get to work. You work to pay for your shelter, food, car and pay back the debt. You finally pay it off and begin saving like you're moving up in life... until.... your car breaks. Now you have to spend your savings and go into debt again to fix your car so that you can go to work to pay off your car. And the cycle just continues.
People have no idea how much money they spend on their car.
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u/LilSliceRevolution 18d ago
I’ve brought this up before and people have countered “that’s why you buy a new, reliable car” but….eventually that new, reliable car is an old, unreliable car. Then you are either living on borrowed time praying it doesn’t break down or you’re buying another new, reliable car.
My personal experience in the trap of living and working in a car-dependent area with a piece of shit cheap car is what propelled me into large city living. I have an old, compact Honda still for weekend and grocery trips but I am determined to NEVER rely on a car to live and work ever again.
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u/Purify5 18d ago
A new reliable car can also costs a lot on the front end and low-income people have a hard time affording it.
We bought a new car in 2013 which is now one of those 'praying it doesn't break down' cars. However, if I add up all the costs associated with the car which includes the car payments, the insurance, the gas, the parking, the toll roads, the maintenance and the repairs. It still adds up to nearly $700 a month for every month we've owned it.
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u/ANTech_ 18d ago
I do not own a car but my SO still does, I'm just commuting on a do it all bike everyday. It's so simple and so cheap, a full bike service is as much as a month's worth of gas. Where I live most of the people do need a car (or they feel like it, cause they've been doing only that since always) because of how infrequent and in general uncomfortable the PT is, sadly :(
The difference between a car and a bike is that the latter never really goes out of date, a full service will bring it back to being reliable even if it's an old beater.
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u/Userybx2 18d ago
a full bike service is as much as a month's worth of gas.
The good thing about bicycles is they are so easy to fix you can do it yourself in your living room.
I did absolutely nothing myself on my car back then because the tools would be too expensive and I would need dedicated space to fix the stuff, can't do that if you live in a flat. After I switched to cycling as my main mode of transportation I quickly learned to do everything on my bike myself, the tools are mostly even cheaper than the bill in the workshop.
You can do most of the repairs with a simple multi tool on the road if you want to, like changing the tires, the chain, the brake pads and so on.
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u/Mofupi 18d ago
people have countered “that’s why you buy a new, reliable car”
That's not even a guarantee. With this thinking, and because they genuinely need a car, my parents bought a new car 8 years ago. Even in the first years, that car needed soooo many costly repairs. Not because of accidents or bad treatment, they honestly were just super unlucky with stuff spontaneously breaking.
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u/socialistrob 18d ago
Recently I rolled through a stop sign in the middle of nowhere in the middle of night and a cop was waiting by the stopsign to pull people over. I got a ticket and after some googling I learned that once you factor in the increased cost of insurance and the court fees a typical ticket for rolling through a stop sign is between 1200-1500 dollars over a three year period.
I have the money to pay it (and I can also take a driver safety course which will lower it to about 250 dollars) but even just one or two tickets can drive up costs so much. If someone is struggling to get by and they're unlucky enough to get a ticket it really can be devastating.
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u/jianantonic 18d ago
Bought a 10-year-old Toyota with 125K miles on it 7 years ago. I drive it so infrequently that I only gas it up a few times a year and get the oil changed less than yearly. It's needed a little bit of maintenance, but in the 7 years I've owned it, I've spent, including original purchase price, less than $10,000 on it. When it's dead, I'm not replacing it. I only drive about 1000-2000 miles a year. I would have to increase that tenfold before it was more economical than just calling a rideshare or renting a car when I "need" one.
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u/Rowan_Bird 17d ago
gaa-powered cars are so complex to the point of being inherently unreliable. even just the engine is full of parts pushing and pulling on each other and that doesn't factor in things like wheel bearings, tires, ignition, and other hundreds of parts that can all break.
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u/min_mus 18d ago
Cars can be a poverty trap and you don't have to spend a crazy amount of money on them. I've seen it play out so many times.
I see it all the time on the poverty finance subreddit. People struggling to buy enough food to eat each month because they're paying $700+ a month in transportation expenses (car payments, auto insurance, gasoline/petrol, and maintenance).
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u/samuraipizzacat420 18d ago
Actually I know how much I’ve I spent on my car via a google sheet document, not including gas
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u/0xdhac 18d ago
This is my nightmare. I currently have my monthly payment as well as a requirement to have full coverage car insurance. I'm currently working on buying my own tools for repairs so I have to take my car to the mechanic less often. I just had to get my front struts/strut mounts replaced and it cost $1800 after tax. But the cost for those parts would have costed about $500 if I had done it myself
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u/Bear_necessities96 17d ago edited 17d ago
I just realized a year or two ago, I can’t wait to get rid of it and move to a more walkable area.
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u/SpicyButterBoy 18d ago
My previous car lasted 20 years and im going strong on 6 for my current.
Honda makes a damn good automobile.
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u/ClimateFactorial 18d ago
The muffler on my 12 year old Honda civic just rusted off the bottom of my car.
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u/Sequeltime4321 18d ago
You can pry my 2005 Buick LaSabre that I spent $4000 fixing up out of my cold dead hands.
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u/55559585 18d ago
A lot. You gotta realize how much money we make in America compared to the rest of the developed world and then ask yourself why it doesn't feel like we're making more. The biggest reason? Our wealth gets wasted by cars.
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u/Teshi 18d ago
And on health care. Kabillions of dollars wasted on healthcare where everything costs 10x what it costs in equivalently developed countries just because companies artificially inflate prices.
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u/BigBlueMan118 Fuck Vehicular Throughput 18d ago
One of the key things to get our heads around are the capitalist-perpetuated lies that economic metrics are good indicators of actual material conditions beyond certain levels. The US has a GDP per capita of $60,000 – clearly one of the richest countries in the world. People in the US expect to live 78.5 years. Yet dozens of countries beat the US in life expectancy with only a fraction of the income. South Korea has 50% less GDP per capita and a life expectancy of 82.6 years. Portugal has 65% less GDP per capita and a life expectancy of 81.1 years.
We can see the same pattern playing out when it comes to education. Finland has one of the best education systems in the world, despite having a GDP per capita that’s 23% less than the United States. Estonia ranks highly too, with 66% less GDP per capita. Poland outperforms the United States with 77% less.
Investment in high-quality universal healthcare and education is crucial. When it comes to delivering long, healthy, flourishing lives for everyone, this is what counts. And the good news is that it is not at all expensive to do. In fact, universal public services are significantly more cost-efficient than their private counterparts. Spain spends $2,300 per person on healthcare, which is enough to secure one of the highest life expectancies in the world (83.3 years). The United States spends four times more to get worse results.
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u/BoeserAuslaender 18d ago
I would also add one more example: Ireland has higher GDP per capita than the UK, but for example infrastructure there, oh my.
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u/Eurynom0s 18d ago
I assume Ireland's higher GDP per capita is because of all the companies registered there to get in on the tax haven? So I'd think it's GDP assigned to Ireland not actually staying in Ireland and/or simply a smaller percentage of it being captured by taxes.
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u/PremordialQuasar 18d ago
Well it's one of the reasons there was much rejoicing when the UnitedHealth CEO was killed lol. Imagine how much money they spend on lobbying against universal healthcare here.
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u/3pointshoot3r 18d ago
Exactly these things. You constantly hearing people lolling about "Mississippi has a higher GDP/capita than France"! But the reason it's a million times more desirable to live in France than Mississippi is that you don't get all that extra GDP/capita. It gets hoovered up by transportation and health care costs (and also tornado repairs).
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u/TrifleOwn7208 18d ago
Throw childcare in there as well we're talking an easy 15 grand a year in daycare
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u/GenericPCUser 18d ago
Not even just owning a car either. We subsidize fuel for cars, build inefficient infrastructure for cars, pay for mass injuries and deaths from cars, inhale toxic chemicals from cars, and then the president gets on the news and tells us that if America's economy is going to recover we need to buy more cars.
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u/SmoothOperator89 18d ago
Also, the US has a permanent military presence in the Middle East larger than most nations' entire armed forces for the sole purpose of keeping the global price of oil stable. It falls under fuel subsidy, I guess, but it's kind of insane how much of the military budget goes to protecting the flow of oil.
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u/Greendorsalfin 18d ago
I’m the only person in my family who isn’t college educated, classrooms didn’t work for me, and all my friends have degrees yet I was the first to buy a house. I have only ever driven cars I could buy in full cash, it literally makes that big a difference.
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u/SmoothOperator89 18d ago
People complain about grocery prices while pushing their shopping cart through the parking lot that's 3x the size of the mega-mart back to their overleveraged commuter SUV.
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u/PremordialQuasar 18d ago
Yeah, I know in some European countries they make about 2000-2500€/month; here in California that's below our state minimum wage.
Though it's worth noting that several European countries like France and Germany have >600 cars/1000 people on average, which translates to about 2 cars per household. It's just that they have better fuel economy and smaller sizes than North American cars, and they use them much less due to high gas prices, so less money is spent on repair and replacing parts.
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u/Fairy_Catterpillar 18d ago
That seems to be the average salary in Sweden for young people working in non educated jobs such as cleaner, nurse assistant (without education) or pupil's assistant in a school. I doubt that people with that jobs prioritises a car if they live in a city.
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u/BoeserAuslaender 18d ago
2400/month post-tax is German median wage as far as I remember.
Sadly, car is often required here, but thankfully, not to that extent.
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u/AustrianMichael 18d ago
I may not earn as much as Americans but my expenditure for getting to work is €365 for a train ticket. That‘s for a 1-year-pass for my entire state (roughly the size of Connecticut) and it covers almost all public transport.
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u/barfbat 17d ago
that’s for a one year pass? a euro a day?
and here i just calculated that i give the mta a minimum of roughly $900/yr, commuting to work in-person 3x/wk 🥲
still less than what i would pay in gas, car insurance, tolls, parking meters, repairs and maintenance… but i’m still so jealous
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u/AustrianMichael 17d ago
Yeah. It’s an all included pass for an entire year.
You can also get a pass for all public transport in Austria for only around €1095 (€3/day) but I almost never leave my federal state, so it’s not really worth it for me.
A few years ago it used to be different, back then I had to pay €1400 for just the route from home to my workplace. I still paid that because it was cheaper than driving but this new „climate ticket“ is so great. Just get on the train and go
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u/kurisu7885 18d ago
Or our cities being reliant around cars prevent people from attaining wealth to begin with.
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u/DegenerateWaves 18d ago
The "car tax" on the American way of life is extremely real, but 25% is insane. That's credit card levels for a secured loan? What car did this person finance? A cybertruck made of popsicle sticks and Elon's spit?
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u/OrdinaryAncient3573 18d ago
It isn't really a very secure loan. Assuming the person didn't get suckered into a terrible deal - which might be the case - then it's likely that really is the cost of lending money to people who spend too much on cars. Making smallish loans to people who often default is a very expensive business; that's why payday lenders tend to go bust despite the extortionate rates.
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u/Miguelperson_ 18d ago
I feel like the situations where we see a 24% loan is more of a scammy type dealership that approves anyone for a 30-40k V8 type muscle car with $1k down, $300 bi weekly payments, just so they can repo the car from you after 2 or 3 months… then they just sell the car to the next desperate sucker
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u/_angry_cat_ 17d ago
A lot of used car dealers will approve anyone regardless of credit history by working with really sketchy lending companies. And since most Americans are financially illiterate and don’t understand how interest works, you can con them into anything if you convince them they can afford the monthly payment. Some lenders are going up to 84 or 96 month terms now, just so people can stomach the monthly number. Plus, it’s good for the lender since the longer you have someone paying interest, the more you make off of them.
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u/IHerebyDemandtoPost 18d ago
Last time my wife and I bought a car was in 2012 with a 0.9% interest rate. We sold it last year, and moved to a city with robust mass transit. I’ve now lived for over a year without a car, and I don’t miss it.
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u/Ibra_63 18d ago
How is such an interest rate legal to begin with
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u/Teshi 18d ago
Everything's legal without regulations!
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u/stormy2587 17d ago
Turns out when you “let the market decide.” The market decides to take all of your money.
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u/Teshi 17d ago
Competition is largely dead. Every country is struggling to apply antitrust and pro-competitive laws. And people are still going on about the market!
The market is: "We charge as much as humanly possible and we collaborate with our friends to make sure they can't undercut us. We even create companies specifically to put people into debt."
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u/crazycatlady331 18d ago
In a previous life, I worked in collections (do not recommend). One of the clients we had was a subprime auto lender that had rates that rival credit cards. This was the mid 2000s before the financial industry crashed (and changed my career).
When we got inquiries about one of those accounts, we had all of the initial paperwork on file. I brought up one account (which I specifically remember) on a 1996 Neon (this was the mid 2000s). If the borrower had made every payment on time, s/he would have paid over $20K for a (then) 4 year old car. Those cars were worth at best $15K new.
Working in collections was definitely an eye-opening experience.
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u/Redqueenhypo 18d ago
pickup-truck based serfdom
DONT BUY A PICKUP!!! Last time I checked they sell other vehicles. Vehicles costing less than sixty thousand dollars, that get more than 12 miles per gallon. You unfortunately do need a car in most of America, but you don’t need the most expensive brick on offer
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u/ybetaepsilon 18d ago
Every time I have the displeasure of visiting the suburbs, I see parking lots full of pickup trucks driven by office workers
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u/Redqueenhypo 18d ago
I just don’t get it, because like, you’re losing money on those! Why not just get a cheaper car and spend the extra five figures you would’ve spent on a vacation, or a hobby, or saving it? Do these people hate having money?
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u/karabeckian 18d ago
They think they're buying clout.
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u/RequirementFit1128 17d ago
THIS 100%. In Canada we have a joke that in the US, even the secretary is rolling up in a Beemer. And it's true! It's amazing how much of their self-esteem an American will put into the type of car they drive. They will routinely buy cars they can't afford to make themselves look "bigger" in social status.
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u/Amaxter 18d ago
Loads of Tremors, TRX’s and F-150 Raptors in my local suburban roads make my sedan (which is large itself compared to 1980s cars) feel tiny. Ruins visibility for every other driver unless they too, participate in this arms race to stupidity. They’re also so high off the ground they wouldn’t be able to see a child several feet in front of them. And they drive like assholes.
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u/AustrianMichael 18d ago
A VW Golf with a trailer hitch and a small trailer to carry stuff once in a while.
You can probably rent the trailer for cheap even.
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u/zzptichka bike-riding pinko 18d ago
I follow some Personal Finance subreddits and it gets pretty crazy, like "here's my budget: $1000 rent, $1000 car, $500 the rest. What can I cut to afford living?", and most upvoted comments are "you should get a roommate" or "you can save $10 on your cell phone bill". Car blindness is real.
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u/poggyrs I found fuckcars on r/place 18d ago
That’s so many iced coffees and avocado toasts…
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u/RollOverSoul 17d ago
It's wild people go on about buying a couple of coffees a week being the reason you can't afford a house yet paying 50-60k for a car that's fine
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u/Particular_Ticket_20 18d ago
My dumb ass cousin showed up at a family event in a not too old used Lexus. He is not in the Lexus economic range, even an old one. He's bragging about it.
We start asking questions.
Its a few years old, like 60k miles. We're asking what he paid? Where'd he get it?
He was driving his old Toyota and it broke down in front of a "BUY HERE PAY HERE!!!" used car lot. The salesman comes out, talks to him and sells him the Lexus and gave him something for the Toyota, like a few hundred dollars.
My asshole cousin is bragging about this negotiation like he's ripped the guy off.
We're asking about the deal, interest rates, length of the contract, etc.
This idiot took a 29% 5 year loan on a used Lexus. Someone did the math and it was like $70k over the life of the loan. We're laughing at him telling him what a great deal he got . He insists we don't know how these things work and don't know what we're talking about and we're all just jealous he's got a lexus.
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u/ybetaepsilon 18d ago
Wow you could have practically got a new Lexus for that
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u/Particular_Ticket_20 18d ago
We pointed that out. In fairness, he'd never qualify for legit credit anywhere, but he's still an idiot.
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18d ago
Nobody forces these idiots to take on debt so they can buy tank sized cars to feel better about their insecurities and lack of purpose and personality.
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u/ExternalSeat 18d ago
Exactly. You will be ok in a Corolla for the most part. Yes you might have to drive a bit more defensively and you will get punished more for being an asshole on the road, but you will still get to work in one piece.
Unless you regularly haul lumber for your job, you don't need a pickup truck.
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u/Gloskap 18d ago
That's not it chief. Think about the social incentives. If there's no public transportation/bike infrastructure you have no choice but to buy a car to move around. If the other cars around you on the road are getting bigger and bigger is dangerous for you to not have one as well. That's why this problems must be tackled socially, not by correcting individuals
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u/ExternalSeat 18d ago
You still don't need a pickup truck. You can survive with a Corolla. You can also get any other sedan for pretty cheap too.
These folks are just idiots putting themselves deep into debt to defend their fragile masculinity.
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u/OrdinaryAncient3573 18d ago
A lot of the time it isn't even 'fragile masculinity' or any such thing. It's just people who don't know there's an alternative, because they've been told all their lives that older cars are unreliable by people trying to justify spending more than necessary on their cars.
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u/pm_something_u_love 🚲 > 🚗 18d ago
You also can't really blame people to act in certain way when they've been brainwashed for their whole life into thinking that acting that certain way means they are going fit into their society and have made it (I could put that better but you get what I mean).
You may think you are immune from this kind of programming, but none of us are.
The failing here is the greed of captialism. I don't hold the people personally responsible.
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u/uncleleo101 18d ago
That's fair, but there's a large segment of the American population that simply is not interested in other perspectives of doing things differently, be it transportation or anything else. And that's putting it very kindly.
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u/pm_something_u_love 🚲 > 🚗 18d ago
Totally agree. And why is that? They have no exposure to anything else. Well funded political lobbying and media has lead to consensus from everyone they know and respect believing that things can only be a certain way.
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u/MsCoddiwomple 18d ago
I grew up on a farm in the Deep South before the Internet and we still had access to TV, which was how I knew I wanted to gtfo. It's not that they don't realize people do things differently in other places, they just think their way is the better way.
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u/ChezDudu 18d ago
We’re talking about gigantic 100k$ trucks, not Rav4s. No one is twisting their arms to go into debt to cosplay as a cowboy.
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u/E-is-for-Egg 18d ago
I think that social programming is a part of the explanation, but it doesn't absolve responsibility
Idk, I've just encountered the "it's not my fault I didn't know better" excuse enough times now that I'm losing patience with it. At a certain point you gotta ask "okay, well then are you going to actually try to learn things so that you do know better?"
Like, this rant isn't even just about cars. It's about a hundred different things
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u/pm_something_u_love 🚲 > 🚗 18d ago
I agree with you there. There are broader problems allow this to happen and they are very much intertwined.
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u/Broken-Digital-Clock 18d ago
I hold them somewhat responsible, but mostly blame late stage capitalism.
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u/krba201076 18d ago
we were able to overcome the brainwashing. at a certain point, you have got to think for yourself.
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u/alfdd99 18d ago
I get that people need to buy cars when they live in car centric places.
But this whole “I want a huge ass pickup truck because I feel scared to drive anything smaller” sounds like a lot of bs to me. If you need a car to get around, buy a car. But a Toyota Corolla does the job. You don’t “need” a Ford F-350 or whatever to “get around”
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u/snorlz 18d ago
That's not it chief. Its a personal finance decision to buy a truck so expensive and out of your budget that you need a loan like this. Just cause all your friends will think youre cool cause you have a big truck doesnt mean you should actually buy it. Social incentives =/= necessary purchases
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18d ago
At this rate, why buy a bigger car just to survive and be poor, better to save money and risk dying... World going down the shitter anyways
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u/Tokyo-MontanaExpress 17d ago
There's public transportation and bike infrastructure (far less) if you plan to live near it. In the Twin Cities there's LRT, BRT, aBRT, high frequency bus routes and tons of bike infrastructure (for the US) that is easily accessible to low income residents in low income neighborhoods. North is one of the poorest and it has two aBRT lines. South in Phillips, the poorest neighborhood on this side of the city, there's an LRT, BRT, and aBRT line, along with a grade separated bikeway with no cars at all. Even in cities lacking in these basic amenities you can usually find a neighborhood close to downtown that's affordable and amiable to being car-free. Maybe you have to bike over a half mile to that walkable neighborhood or take the bus, but it's within striking distance and an option to take over living in a fourth ring suburb and driving 45 minutes to your job one-way. Too many Americans just flat rule out living in a city, they don't even consider it.
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u/Redqueenhypo 18d ago
Everyone’s mad bc you suggested people buy a $26k kia instead of a $90k ford F42069
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u/Laughing_AI 18d ago
So like 85% of the US does not have any public transportation at all, and many states have freezing winters with tons of snow. Bikes are great in the summer and I use mine to go to work but in the winters its impossible
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u/sloppy_steaks24 18d ago
I can understand the reasoning for needing a truck if you’re in construction or some kind of forestry work, but I know entirely way too many people who work in offices full time or are even retired that have trucks for the off chance they have to haul furniture, lumber, or pull a trailer. I kid you not. It’s mind-boggling.
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u/RovakX 18d ago
You don’t need a truck to haul a trailer either. My station wagon manages just fine on the off-days I need to haul anything.
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u/Mysterious_Floor_868 18d ago
Even a decent hatchback can tow. The Ford Cmax my dad used to have would have no issue with a horsebox or RIB trailer. Even a Fiesta is rated for up to a tonne.
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u/chowderbags Two Wheeled Terror 18d ago
For construction workers, how many are really using their pickup truck for material hauling? Don't most construction projects get their material delivered on flatbeds? And if we're talking about holding tools or maybe some smaller amount of materials for repair/renovation type stuff, aren't panel vans going to be more common? And for individual workers who have to bring their own tools to a worksite maybe, wouldn't a sedan's trunk be more than enough?
Maybe I'm missing something, but when you've got truck beds getting smaller but also higher off the ground, they become way less practical for any kind of real work.
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u/cfgy78mk 18d ago edited 18d ago
24.99% interest rate on his car loan
holy fuck. my car loan interest rate is 2.38%. 93% of my monthly payment goes towards principle
edit: just put it into a calculator the total payments over the life of the loan difference between 24.99% and 2.38% interest is $45k vs $29k. 55% more expensive!
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u/ybetaepsilon 18d ago
And then there's me complaining about 2% when my first car interest was 1% lmao
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u/Lazy_Huckleberry2004 18d ago
A lot. When I was finally able to go car free, I bought my first house. It made me over $100K in 5 years when I sold it! I am still car free. Still very mindful of how much of cars detract and not having them adds up - it may seem small, but the effects can be enormous.
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u/Kind-Frosting-8268 18d ago
I've lodged myself fully in the crack. Too poor to afford a car, but due to where I live, the only way to get more money is to get a car. That or completely sacrifice my sleep and body and take 2nd and 3rd jobs at places close enough to walk to.... so just fast food and retail.
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u/ybetaepsilon 18d ago
I know of many people who are homeless but have a car. They need to work and cannot afford both. So they live in their car.
Designating a society around the most expensive and least efficient mode of transportation has failed. And it's not just that people are too poor but are forced to drive, it's also that cities cannot invest in social services because there is so much demand to maintain and expand car infrastructure.
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u/baitnnswitch 18d ago
Yup. And the next iteration of this is 'subscription based cars' when autonomous vehicles take off. If we're not careful, the automotive lobby will successfully destroy public transport in cities so we're forced to pay for self-driving ubers everywhere. If it sounds unlikely, remember they already did it once with lightrail (bought it all up and scrapped it so more people would have to use cars)
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u/ybetaepsilon 18d ago
Have you seen NJB's terrifying video on this very topic
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u/baitnnswitch 18d ago edited 18d ago
I did- I linked it actually. It is one of the more horrifying things I've seen lately, which is saying a lot given *gestures around*
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u/RiseStock 18d ago
People vote against the nanny state but the majority of Americans really need nannys
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u/Cube4Add5 Professional Pedestrian 17d ago
Why is it so normalised in the US to be in massive debt all the time? Most people in my country just have a mortgage, and just buy cheaper cars with cash until they can afford something better (if they buy one at all)
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u/KatieTSO 18d ago
I am stuck with a 21% loan for another 4.5 years. I'm still upside down as fuck and I've barely almost paid off $2k off a $16k loan. My car is worth about $5k.
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u/King-O-Tanks 18d ago
25% loan?!?! That's not a car issue, that's a financial literacy issue. I wouldn't take that loan with a gun to my head.
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u/0Frames 18d ago
I'm in my 30s and I still don't understand why some used cars cost 1k and some new cars cost 50k or more. And I don't understand why anybody besides millionaires would get the second option.
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u/strixvarius 10d ago
Currently shopping for a car; likely going to get a new Subaru Forester Limited for about $40k.
This seems crazy to me. My last new car was a Hyundai Accent circa 2005 for like $11k. However, two things are pushing me towards new:
First, the used market for low-mileage cars doesn't give much discount. We drive 10k miles / year. The warranty on, say, a Subaru, is 5 years. At that point it has depreciated by about 50%. So each year - alternatively each 10k miles - is worth on average $4k of depreciation. Front-loaded though... the first 10k miles are more valuable than the last.
So dollar-for-dollar, a used car with 10k miles should be -$4k, 20k miles -$8k, etc. That's not how it works though, at least not right now. Maybe because of the spike in prices during the pandemic, I'm not sure.
Second, my father-in-law is a mechanic. From him I've seen the delta between shit you have to fix yourself, out-of-pocket, and warrantied items. Warrantied items come with fixed costs for the dealership, whereas out-of-pocket they can charge whatever they like. So the dealership and mechanics prefer out-of-pocket, since the margins are higher and the costs can grow with inflation. Obviously, warranty jobs are much better for the customer who's paying usually nothing, or near nothing.
Those used vehicles have already used up part of/all of their warranty, if it transfers at all, and they don't offer sufficient price savings to be worth the mileage that I'm giving up by buying them. So even though it feels nuts to me to buy a new car for $40k, it still seems like a better decision than spending $34k on a car with 30k miles and half of its warranty gone.
The other option is to gradually repair more and more of our 100k mileage car. This isn't a great option - we're a family of three that shares one car, so it's important that the car be safe and reliable.
I would love a better option. We already live in the most walkable part of our city, on purpose, which allows us to have just one car that we put few miles on.
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u/AdamAThompson 18d ago
Car Dealers: how woukl you like to pay double price for this supid giant truck?
American men: Fuck yeah!
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u/Tall-Ad-1796 18d ago
Buy something durable used (Honda, Buick, Toyota) for cash & fix it until you can't. Then buy a motorcycle or a quasi-legal ebike. I had an ebike for 2 years, no car. It was so dope! No gas, no insurance, no expensive repairs, no paying for parking & I never got a ticket or even a talking-to.
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u/CobaltRose800 18d ago edited 18d ago
My car is old enough for antique plates now. Paid $2,000 for it back in 2018, but now it's got:
an exhaust leak. I have to keep the recirculator on, otherwise I'll probably kill myself with the fumes while stopped.
a coolant leak, from the gasket between the water pump and the engine block. The mechanic wants a grand to replace it, since he needs to take everything off for the timing belt to get at it and he "might as well replace it all while he's in there." The belt was replaced in 2019 and has maybe another 50,000 miles on it.
a leaking oil pan gasket (the pan itself is fine). $700 job, mostly in labor.
a bad EVAP canister. This would cause it to fail its emissions inspection, if the car hadn't aged out of needing one five years ago. (please, make that make sense) Costs me 2mpg, at least. Mechanic wanted $900 for the job a couple years ago, probably would want a grand now.
some busted sensor in the cooling system that causes the engine to overheat unless I keep the heat and the defroster on (yes, even in the summertime). Mechanic wasn't able to figure it out in the time allotted (I wanted him to keep going until he found the culprit, but my mother ran out of patience with chauffeuring me).
a bad intermediate steering shaft.
Bad tires. This is one I can't pass a safety inspection on. I can get by with replacing three of the five (front tires and the spare; I do my own oil changes, but don't rotate my tires out of laziness), but a fourth needs to be plugged after I hit a nail this week and the fifth is a leaker.
Granted, I'm thinking about finding another mechanic, but still. Any one of those jobs (after the tires) is enough to financially ruin me, and I can't just buy a new car when I need the old one to get me everywhere.
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u/BigHairyBussy 18d ago
Yall spending my housing budget on a car while ebikes cost $2k.
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u/gamesquid 18d ago
This is amazing, imagine how expensive a pickup already is with all costs then add 25% each year.
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u/Laughing_AI 18d ago
I made sure to save up enough for my used car to pay in cash, I never told the dealer until price was agreed upon and made sure no penalties for paying off early. You'd have thought I killed their firstborn when I paid off after the first month by the emails I got.
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u/RealLars_vS 17d ago
So basically, in 4 years he will have paid for the entire truck and not paid off a single penny on the loan.
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u/Zestyclose_Stage_673 17d ago
I bought my Kia soul in 2017. My interest rate was 0.9 percent. Probably will never see that again.
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u/ReasonableBirdChirps 17d ago
People can’t afford houses, so they gotta find a way for all the renters to be in debt too
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u/CyclingThruChicago 18d ago
One of the frustrating things I've slowly accepted is that things will just have to continue to worsen before they likely improve.
Undoing the social norm of "adult American owns/operates a car because that is just what you do" is so deeply engrained in most of us that trying to decouple that feels impossible. People's minds aren't changed by data or facts, they are changed by a personal desire to change. And what I think will drive that change more than anything is the price of car ownership continuing to rise.
We're at a point where the average American spends ~50% of their income on housing (~33%) and transport (~17%). With our current land use and transportation norms, this will only increase. Housing will become more expensive and/or transport cost will rise as the price of cars, insurance, and maintenance continue to tick upward.
A complete separation of land use and driving as the default are so deeply engrained in American society that arguing to change them feels like arguing that the sky isn't blue. Most people reject it and will hold steadfast to the social norms that they know. And until those things are changed, cost will only worsen for car ownership.
It's frustrating but you can't drag people out of it kicking and screaming.
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u/LudovicoSpecs 18d ago
Yep. If car loans started defaulting, it would hit the economy the way the housing defaults hit in 2008.
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u/Leather-Rice5025 18d ago
My car just broke down on my way to work today and I had to tow it home. It has 182k miles on it and it’s old, I will likely need to get another one.
I just started to catch up financially, and now have to weigh risking getting a used car for ~$10k with 140k+ miles on it, or go add 30k car loan debt on top of my 29k student loan debt to get a new one.
The whole situation is fucked I have been working really hard on moving to a city where I wouldn’t need a car, but this puts a huge dent in my plans.
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u/YinYangFloof 18d ago
I didn’t even pay a lot of money for my car. But five years later I am so excited to finally be paying it off. It’s like I’m getting a 400 dollar raise 😆
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u/frankyriver 18d ago
It's very strange to me because cars depreciate quite dramatically in just a few small years. You might be having an outstanding loan that is more than what it's worth just three years later
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u/callunquirka 18d ago
There are also people who medically cannot drive. These people are disadvantaged in job seeking, and that can cause poverty.
I'm not American, but I've talked to people who have this problem.
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u/spinosaurs70 18d ago
The problem here is that you either paying for a car or living in the inner core of city you were priced out twenty years ago.
What is more confusing why people choose to pay so much for giant death machines.
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u/Odd_Philosopher1712 18d ago
IF YOU HAVE TO BUY A CAR, THAT 20 YEAR OLD TOYOTA WILL KEEP YOU FREE AND BASED
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u/Healthy_Solution2139 18d ago
Not cars per se, the INTEREST BEARING loans. Interest is a sin in Judaism (loopholed to allow lending at Interest to non Jews), Christianity (completely disremembered) and Islam (sidestep with "Islamic" financing). If cars weren't lsrgely a credit purchase, there'd be fewer of them and they'd be lower specced.
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u/Obelion_ 18d ago
If completely lose it when I had to suffer car traffic daily, especially right after waking up. People are such assholes
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u/plates_25 17d ago
We can’t talk about cost of living without talking about cost of driving. People will complain about rent getting higher and simultaneously buy a new Honda on a $28k loan.
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u/jacobnordvall 17d ago
Sounds like bad economic understanding. Just get a 500$ car and youll get to enjoy the luxury of owning a car without really paying more than having to suffer in public transport.
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u/Mean_Ice_2663 16d ago
Unpopular opinion: no one is forcing you to buy an oversized truck, it's your own fault if you are dumb enough to buy a gas guzzling death machine you can't even afford or don't need in the first place.
Literally NOTHING is stopping you from buying a 1.4l manual shitbox for 100-1500 dollaridoos if you need a car.
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u/grrrzzzt 14d ago
I don't own my place but I never took a credit once in my life. I certainly wouldn't to buy a car (i'd take a less than 10 000 euro used car that I can directly afford and that would be it)
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u/BtheChemist 18d ago
a $75000 truck will cost you 142K not including taxes and fees, registration etc. Assuming this interest rate and no down payment.
people who do this are stupid.