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“Cheapest since 1980 — Comerica Bank’s ‘Auto Affordability Index’ shows average American works 23.6 weeks to buy a car.”
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I find it curious that car’s are deemed more affordable, yet so many people are up their eyeballs in car loans. I have it on good authority from acquaintances in the auto industry that more and more people roll over their past car loan into a new auto purchase. The idea of actually owning the car free and clear is mythology to many people.
If cars are more affordable you wouldn’t know it by observing the habits of car buyers.
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I think that perhaps people are buying more frequently, though I don’t have any data to support this supposition. Anecdotally, I know that I have many friends (and a brother) who buy new cars every year or two. The cars may be more affordable, but it matters little if your actions defeat this affordability.
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My normal practice for buying a car is to buy as nice a (second hand) car as I can easily afford to pay cash for, then run it into the ground, dump it and “trade up”. My car buying history is:
1. Mitsubishi Sigma: $700. It had rust, a big dent and the boot (trunk for you americans) filled up with water when it rained. I kept it for four years
2. Nissan Skyline. $6000. This was after I got my first job out of college. I was feeling a bit flush at the time. Realistically it was too expensive for me though, plus I didn’t really look after it well. I traded it in for $1200 after four years.
3. My latest is a Subaru Legacy GT wagon. This is a nice nice car, in very tidy condition and quite low kms for its age (10 years). I bought this for cash for $7000 including the trade in. I intend to keep this one for at least 7 years, my plan being to look after it a bit better than the last one.
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