Have you bought a new car recently?

[nidena]

Car Loan Payments Are The Most Ever, Sometimes at Mortgage Levels

The average monthly payment on a new car loan hit a record high of $686 in June, according to new data from auto sales site Edmunds, up 4% from January and 13% year-over-year. With it the risk of delinquency has risen dramatically.

My mortgage payment is $621/mo.  I can't imagine paying more than that for a car each month.

[chiver78]

I haven't, but I hit 190k miles on mine this past week. is the elevated payments a result of the interest rates going up? I'm curious.

I've kicked around the idea of buying a new car, since Acura has brought back my beloved RSX. but, that's a 2dr. AND, I don't even know if it's available in manual. if it isnt, this discussion goes out the window bc im not interested. I'd be keeping my Mazda 3 as the "dog car" if I were to ever pull this trigger.

[TheOtherMe]

I bought my car last summer but I paid cash.  

I think it's because of the cost of cars that payments are so high.  I didn't go for a car with all of the bells and whistles.  It has many, many more than my 2012 Honda Fit.

[minnesotapaintlady]

The average new car price is now over 40K.  Even putting 10K down that's easily well over $600/month for a 5 year loan once tax, title and license are tacked on. 

Of course, the answer is stick with what you can pay cash for or put down enough to keep the payment low, but part of it might be people were just taking advantage of all the low interest rates that were abundant until recently.  

[taz157]

DH bought a new car in November and his payment is $500/mo. I bought a new van 2 months ago and my payment is $235/mo. With mine, I also traded in my 4 year old vehicle and put money down. With DH, there was no trade in but did put money down.

Price of cars are just crazy!

FWIW, both of ours are brand new cars. We do tend to keep cars until they die; however, the trade in on my 4 year old car was too good to pass up. With I got now will be better for our family over the long run we think.

[nidena]

My 2018 Honda cost $27,000ish in 2018.  The same make/model for 2023 is $29,000.  The only available APR is 5.9%, making the 72-month payment $499.  Getting the "promo" payment plan of 24-48 months reduces the APR to 3.9% but increases the payment to $681.  That's ridiculous.

My 72-month payment plan for the 2018 started at that rate but I refi'd six months later to 4.34% (for 70 months) and brought the payment down to just over $400.  I refi'd again last fall to .99% (for 60 months) and now my payment is $305/mo on an original balance of $18,000.  So, I extended the original loan by 24 months but I don't anticipate it taking me until 2026 to pay the car off.

And, since it's a Honda, I expect it to last quite awhile since I'm not hard on cars.

[Deleted]

Jul 10, 2022 19:52:08 GMT -5 TheOtherMe said:

I bought my car last summer but I paid cash.  

I think it's because of the cost of cars that payments are so high.  I didn't go for a car with all of the bells and whistles.  It has many, many more than my 2012 Honda Fit.

Other than 1979 when I was young and frivolous and bought a Ford Mustang, I've also gone for "basic transportation" and the shortest loan length possible. My Nissan died 2 years ago and this time I paid cash for a Honda Civic- $20,000. That was just before prices started going up. DH and I financed the Nissan with a HELOC.

There was an item in Linked In on the average cost of a new car- $47,000. And yes, people are financing for crazy-long times to afford it - many have to fold in a previous loan balance from their trade-in since they're upside-down longer. I commented that unless you need a truck for work, $47,000 is silly. Someone who worked for a major car seller said that that's what people were spending to buy the larger cars, which are :in vogue". I replied that if you need a 7-year loan to be "in vogue" maybe you need to re-think it. Yeah, I understand how hard it is to get 3 munchkins and their seats in a compact- been there, done that although 2 are now in boosters. Still a PITA but DS and DDIL manage it in their Nissan Versa as well.

It just bothers me how many people are buying more car than they need, tying up $600/month for 7 years, preventing them from saving for retirement or their kids' educations. My travel budget is most definitely over $600/month but at least I can cut back if needed.  Having an 8-year old paid-for Camry also meant I could put DS through the military boarding school that really changed him for the better.

[TheOtherMe]

I have never leased a car but that is what my niece and her husband do.  I am guessing they have two payments in the $600 range because she always drives a new SUV and he drives a new pickup that is large enough to haul their RV.  I have no idea how they financed the RV.

Their kids are now in high school.  One will be a senior this fall and he has his own car.  They have another car for their daughter (one that was originally my parents' car and has been through several teenagers).  That was a gift and she will not want it as soon as she can buy her own car.  

I don't see the need for the SUV but I am not them.  Family trips with the four of them and the 3 dogs are a thing of the past.

[giramomma]

I bought a used car in March of 21. Purchased outright. At that point, I needed a car that I could drive out of my city...with as many repairs that were needed, my mechanic told me my car was fine to drive in the city, but not much further.

I paid 13Kish for an 7 year old Subaru Legacy with 70K miles on it. (With taxes and title, it was more).

It should last me 10 years. KBB said it was a fair price.

Maybe in non-pandemic times I could have found the car for 10K. Sometimes, life can't wait for supply chain issues to settle down.

[tractor]

I'm currently waiting for the used car market to come down a little before I buy my next one. I don't mind the higher payment, as I usually only extend to a 36 month payment plan, not 60 or 72...paying $1,000/month is within my budget.

What I can't understand is having $2,500 take home, and paying $1,000/month for a vehicle. That's a whole new level of crazy. This also explains why repos are hitting an all time high.

[chiver78]

Jul 11, 2022 6:32:21 GMT -5 TheOtherMe said:

I have never leased a car but that is what my niece and her husband do.  I am guessing they have two payments in the $600 range because she always drives a new SUV and he drives a new pickup that is large enough to haul their RV.  I have no idea how they financed the RV.

Their kids are now in high school.  One will be a senior this fall and he has his own car.  They have another car for their daughter (one that was originally my parents' car and has been through several teenagers).  That was a gift and she will not want it as soon as she can buy her own car.  

I don't see the need for the SUV but I am not them.  Family trips with the four of them and the 3 dogs are a thing of the past.

leasing is an option that makes a lot of sense for me now, if I ever *had to* pull the trigger. I hardly drive anywhere these days, such a change from a 120mi RT commute. 

[bean29]

We bought my RAV4 Prime last fall.  It is financed through the Credit Union we use.  DH put `10,000 down, borrowed $40,000.  Interest rate is 2.29% payment is $674.45 term is 5 years. We are getting a 7500 rebate whenever I get my tax return filed because car is a PHEV.  As Tractor said, they payment is well within our budget.

I am worried about whenever DD has to replace her car.  She has about 180,000 miles on her Subaru Legacy.  Five year Interest rates on cars are now 3.54 so my payment would jump to 721 a difference of $46/month.  That would be an extra $2,760 over 5 years.  

My new car has been in the shop for 12 weeks waiting for parts to fix what I expected to be a minor issue.  The rear tailgate was not opening and closing properly.  They changed out a chip, then changed out a wiring harness and now are waiting for a different small chip they expect to have by tomorrow.  The Tech said I should get my car back tomorrow.  I hope so, b/c if this does not fix the issue I might need to put a deposit down on another new car and wait in line.  The Rav4 Prime is backordered into 2023.  The $7500 rebate expires at the end of September.  Then it goes to $3750 for one quarter then $1875.  You can not buy them at MSRP right now, many dealers have them marked up equivalent to the rebate amount.

I will look at other models if I have to start over.  Hyundai Tucson PHEV or Subaru Solterra Ev.  I just saw Subaru is only making 6500 Solterras for 2023 model year.  I expect there is a long backlog.  My neighbor is supposed to get one soon.  He also bought a RAV4 Prime last year, I guess they are retiring or giving their kids the older RAV4 she drives.  My dogs get in and out of my RAV4 daily.  I don't like how far the doors open, and my one dog seems to hesitate to jump in the car on his own.  The Solterra is more car-like.

[NomoreDramaQ1015]

Jul 11, 2022 7:47:56 GMT -5 giramomma said:

I bought a used car in March of 21. Purchased outright. At that point, I needed a car that I could drive out of my city...with as many repairs that were needed, my mechanic told me my car was fine to drive in the city, but not much further.

I paid 13Kish for an 7 year old Subaru Legacy with 70K miles on it. (With taxes and title, it was more).

It should last me 10 years. KBB said it was a fair price.

Maybe in non-pandemic times I could have found the car for 10K. Sometimes, life can't wait for supply chain issues to settle down.

Probably not.  Even here where everything is uber affordable according to Phil if I wanted a car that wasn't already over half way towards death I was looking at between $12k-$15k.  Used car prices have been going up for a long time now.

I am really glad I listened to my dad when we found my current car in 2019.  He said it I wasn't comfortable he could put the 2005 back together but there were no promises on how long it would last.  There were no assurances I was going to be able to find an affordable car in a year or two.  I bought my 2012 Impala for $12k.  My payment is $285 a month.

DH's unicorn Pontiac went belly up shortly there after.  We got his Nissan for $14k.  DH's payment is $215 a month.  He bought in Iowa which has less taxes and fees and shit so he got a slightly better deal.

We'd be hosed now if we needed to buy a car.  It's getting to the point where buying used is no longer automatically the cost effective choice.  If it even existed to begin with Phil's $5k Honda is now extinct.  You are looking at closer to $15k+ now if you want a car that is going to last you long enough to make it worth purchasing and not bleed you dry in repairs.

I keep my cars for 10-11 years so I am hoping things won't be quite so crazy by the time I need what will probably be my last one. 

[resolution]

Jul 11, 2022 9:30:47 GMT -5 NomoreDramaQ1015 said:

I keep my cars for 10-11 years so I am hoping things won't be quite so crazy by the time I need what will probably be my last one. 

So far my dad has bought his "last car" three times and I am encouraging him to get another one.

[resolution]

I bought my Subaru new in 2019 for 27k. When I first started looking, my husband was horrified by the idea of a new car, because he was concerned I might spend as much as 20k on one, so it was a bit of an eye opener when we saw the prices in the showrooms.

Now we are both glad I bought a new one because that gives us more breathing room before we have to replace it. His 2004 truck was in the shop for a couple of months out of the past year, but we have been making do and repairing it.

[saveinla]

We are buying the Acura RDX that we have been leasing for the past 4 years. 
We will be looking for a lease on another vehicle soon - I want a BMW X series, whereas by DH wants an Audi.

We have been prudent with our money, but my DH was saying that we need to enjoy some of it now and not have our DS be the one to enjoy his life after we are gone  .

[swamp]

I'm looking at buying a new car in the fall.   I have to order it soon as there is zero on the lots.  I want a Honda Pilot. 

I'm also looking at $45k easy, and that's not the top of the line model.  

I plan on paying about $30k down and finance the rest.  A 4 year loan with be about a $350/mo payment.     I'm assuming Honda is no longer doing the .9% financing.   If interest rates are around 6% now, I may just pay cash. 

[Deleted]

Jul 11, 2022 9:30:47 GMT -5 NomoreDramaQ1015 said:

DH's unicorn Pontiac went belly up shortly there after.  We got his Nissan for $14k.  DH's payment is $215 a month.  He bought in Iowa which has less taxes and fees and shit so he got a slightly better deal.

I bought in Iowa because my car died when I was visiting DS and DDIL. Then I had to take it home to MO, register it and pay MO sales taxes.

[steph08]

We have a 2021 SUV and 2022 truck in our driveway, and egads were they expensive.

However, I plan on keeping mine forever and DH probably will too. DH didn't need a new truck, but his 2014 had 140k miles on it, and we got 5k OVER what we paid for it in 2017 as trade-in because the market is insane. He drove that truck for almost 5 years and made money on it.

I'm planning on having my SUV paid off in two years, though the rate is only 1.9%. DH's truck is at 0%, so no rush there.

[Cookies Galore]

Jul 11, 2022 10:53:20 GMT -5 swamp said:

I'm looking at buying a new car in the fall.   I have to order it soon as there is zero on the lots.  I want a Honda Pilot. 

I'm also looking at $45k easy, and that's not the top of the line model.  

I plan on paying about $30k down and finance the rest.  A 4 year loan with be about a $350/mo payment.     I'm assuming Honda is no longer doing the .9% financing.   If interest rates are around 6% now, I may just pay cash. 

I looked up my closest Honda dealership's finance specials, and hahahaha, 0.9% has left the building. Boo.

I have a 2013 Fit with 47,000 miles. Husband has a 2018 Fit with around 30,000 miles. Both bought new with a couple grand put down, both with the 0.9% financing. My payment was $235/month (paid off in October 2018) and husband's payment is $285/month (will be paid off in April 2023). The plan has always been to have at least two years of no car payments and throw that money into savings; I might just have to hold onto my car beyond 2025. Good thing I still like it.
All the fingers crossed and wood knocked nothing happens to either of our vehicles to make that happen!

[pooks]

We went looking at midsize trucks in January.  The prices and salesman sent me right home without a truck.  I wasn't paying almost 40K for a barebones midsize truck, including a 3K markup, with the worst salesman I have ever encountered. He turned me off to the whole make of vehicles (Nissan), which is probably for the best.  

Next we are looking at buying a class B RV or converting a sprinter ourselves.  The local Mercedes dealer sells the Sprinters for MSRP, so that is about 67K.  Of course he never has inventory, so we need to make a decision soon.  The local Subaru dealer sells at MSRP as well, so they will have my future business.  We don't need a loan.

Usually we are basic transportation people.  Three current vehicles, nothing newer than 2011 and never paid more than 20K in our lives.  

[swamp]

Jul 11, 2022 12:22:24 GMT -5 Cookies Galore said:

Jul 11, 2022 10:53:20 GMT -5 swamp said:

I'm looking at buying a new car in the fall.   I have to order it soon as there is zero on the lots.  I want a Honda Pilot. 

I'm also looking at $45k easy, and that's not the top of the line model.  

I plan on paying about $30k down and finance the rest.  A 4 year loan with be about a $350/mo payment.     I'm assuming Honda is no longer doing the .9% financing.   If interest rates are around 6% now, I may just pay cash. 

I looked up my closest Honda dealership's finance specials, and hahahaha, 0.9% has left the building. Boo.

I have a 2013 Fit with 47,000 miles. Husband has a 2018 Fit with around 30,000 miles. Both bought new with a couple grand put down, both with the 0.9% financing. My payment was $235/month (paid off in October 2018) and husband's payment is $285/month (will be paid off in April 2023). The plan has always been to have at least two years of no car payments and throw that money into savings; I might just have to hold onto my car beyond 2025. Good thing I still like it.
All the fingers crossed and wood knocked nothing happens to either of our vehicles to make that happen!

[bean29]

Jul 11, 2022 12:56:42 GMT -5 pooks said:

We went looking at midsize trucks in January.  The prices and salesman sent me right home without a truck.  I wasn't paying almost 40K for a barebones midsize truck, including a 3K markup, with the worst salesman I have ever encountered. He turned me off to the whole make of vehicles (Nissan), which is probably for the best.  

Next we are looking at buying a class B RV or converting a sprinter ourselves.  The local Mercedes dealer sells the Sprinters for MSRP, so that is about 67K.  Of course he never has inventory, so we need to make a decision soon.  The local Subaru dealer sells at MSRP as well, so they will have my future business.  We don't need a loan.

Usually we are basic transportation people.  Three current vehicles, nothing newer than 2011 and never paid more than 20K in our lives.  

Retirement Goals!

[azucena]

Good article, nidena.  I had no idea of these stats.  Not surprising though as I look around and hardly ever see truly used cars driving around me.  Everything seems shiny and brand new.

My daughters notice that we don't drive new like their friends.  We've had several conversations about how I've only bought one car brand new and wouldn't do it again because it was too much work to be nervous about it getting dinged outside or dirty inside.  In my 2014 sienna, I can shrug off new bumps from the kids and laugh while feeding them tacos en route to activities.

With DD13, I've gone over specific numbers using a $30k price for new and how we haven't had car payments for a decade by staying within the $10k and now $15k range on used Toyotas and then driving them until they are too expensive to repair.

Currently have 2014 sienna with 155k miles.  Figure we have 3-4 more years.

DH drives 2018 Honda CRV with 50k miles.  It's a small CRV versions so I don't feel nearly as safe in it and am kicking myself for not talking up a replacement Highlander when he was shopping.  I won't feel comfortable having DD drive it in a few years.  Kind of head in the sand about what she might drive instead as I know finding something for 5k won't happen.

[bean29]

I had a 2012 CRV and I never felt unsafe in it.  Heck DS's first car was his grandpa's Scion XB.  That car was a tin can for sure, but I never worried about accidents in it.  I would think the CRV would be a great teen car.  Neighbors DD has a small Jeep SUV.  They did buy it new about a year ago before the car shortages got so acute.

DD started in a Hyundai Elantra and then moved over to the Subaru Legacy after she was rear ended and the insurance company totaled it.
I saw the new Highlander has Acoustic Glass on the high end models so the cabin noise is very quiet.  I don't want that size car, but I want the quiet cabin.  I hate road noise.

[raeoflyte]

I see payments this much and higher all day everyday. It's insane but anything under $500 a month is the anomaly now.

[Deleted]

Jul 11, 2022 10:53:20 GMT -5 swamp said:

I looked up my closest Honda dealership's finance specials, and hahahaha, 0.9% has left the building. Boo.

But didn't that come with its own cost? Would you have been able to negotiate a better price if you'd paid cash or financed elsewhere? I realize interest rates were pretty darn low a few years ago but someone has to pay for the float on zero-percent (or close to it) financing.

I've finally decided that the only way to get the best deal is to keep the purchase, the financing and the trade-in or re-sale separate from each other. That way you don't have a dealer giving you zero% financing with one hand and lowballing your trade-in and/or giving you less of a deal off the sticker price with the other.

I pretty much detest the whole process but that's one thing that keeps me from swapping out cars every few years.

[swamp]

Jul 11, 2022 14:41:41 GMT -5 @athena53 said:

Jul 11, 2022 10:53:20 GMT -5 swamp said:

I looked up my closest Honda dealership's finance specials, and hahahaha, 0.9% has left the building. Boo.

But didn't that come with its own cost? Would you have been able to negotiate a better price if you'd paid cash or financed elsewhere? I realize interest rates were pretty darn low a few years ago but someone has to pay for the float on zero-percent (or close to it) financing.

I've finally decided that the only way to get the best deal is to keep the purchase, the financing and the trade-in or re-sale separate from each other. That way you don't have a dealer giving you zero% financing with one hand and lowballing your trade-in and/or giving you less of a deal off the sticker price with the other.

I pretty much detest the whole process but that's one thing that keeps me from swapping out cars every few years.

The dealer told me it was the same price cash or loan, because I asked if I could get a discount for a paying all cash. 

[dannylion]

I've been trying to buy a new car for 2 years.  I want to replace my 2010 Cadillac SRX with a new XT5, which seems to be the current iteration of that model.  I'm too lazy to travel any distance to shop for a car, and the local dealership only has a few in stock at a time.  This week, I thought I had found just the car I wanted with all the features and even the color I wanted, but then it turned out to have the most hideous reddish-brown upholstery, so I continue to wait.  I've been reading that it will probably be next year before inventories are back to something like normal.  I've already got the money in my car account, so I'll probably just pay cash unless by some miracle they are offering an interest rate lower than the interest rate the money would earn by leaving it in the account.  

[Cookies Galore]

Jul 11, 2022 14:41:41 GMT -5 @athena53 said:

Jul 11, 2022 10:53:20 GMT -5 swamp said:

I looked up my closest Honda dealership's finance specials, and hahahaha, 0.9% has left the building. Boo.

But didn't that come with its own cost? Would you have been able to negotiate a better price if you'd paid cash or financed elsewhere? I realize interest rates were pretty darn low a few years ago but someone has to pay for the float on zero-percent (or close to it) financing.

I've finally decided that the only way to get the best deal is to keep the purchase, the financing and the trade-in or re-sale separate from each other. That way you don't have a dealer giving you zero% financing with one hand and lowballing your trade-in and/or giving you less of a deal off the sticker price with the other.

I pretty much detest the whole process but that's one thing that keeps me from swapping out cars every few years.

I must suck at negotiating, because I've always been able to come to a price that makes me happy, even when going with Honda financing. If I don't feel taken advantage of then I'm not being taken advantage, is how I see it. I'm also a purchaser of sub $20,000 cars, no one is making much money off of me. I don't care about an extra $500 discount to get my own 3% financing elsewhere. I have yet to have a vehicle to trade in; we've only ever junked the old cars.
I do live in an area with a lot of car dealerships, so if the place 3 miles down the road won't work with me, then the ones 6/12/20 miles away will get my business.