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Comment by rhizome | Hacker News Reader

Wow, this comes as great news for me. I felt terrible for years because I was paying 600/mo for a (special) car, that I paid off in exactly 5 years. I had a perfect storm of circumstances occur just as I was getting the loan, the banks no longer liked the risk, so it was financed by, like, the dealer's used car buddy a few cities over, and for a not-awesome rate. Long story short, all's well that ends well, still have the car, and I'm not as far off from the "average worst" as I thought.

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I don't understand how people spend so much on cars when their net worth is under $5 million.

Do people not remember the economy can go in the toilet really fast? Why aren't people constantly scared and thus saving as much as possible and acquiring good assets? Even if the economy stays strong, your own career or profession can go bad or get disrupted real fast.

Personally I drive a fairly crappy car that I paid cash for, but I can see why people spend more on cars. Like cell phones they are luxury items that provide daily benefit to you. This is especially true if you're commuting long distances. For others a car is an extension of their personality. I'm not saying I agree with this mentality, but I understand it.

I don't think this is really about cars as much as it is about saving, and I can't speak for everyone, but I can speak for myself: my job pays crap. My last job paid crap. When my current workplace folds (which is likely to happen, and within a year) my next job will also be crap. It's not that the companies are poor, it's not that they're making little off my labor, they're making a packet, they just have a "take it or leave it" attitude towards pay. If they paid better - even just a reasonable rate - I would be saving as much as I possibly could.

As far as why people buy high end cars when they're not very rich, going into significant debt, I suspect it's because a car is a status symbol for so many people. If I could do without a car, I would. I'd be saving about $200 a month on my current expenses if I didn't need one - it's just a crappy old Mazda wagon, certainly no status symbol there.

For one, poor people don't usually have any money left over to save after covering most immediate expenses. The average person sucks at saving, but it's tougher to do with weak or volatile income.

The unfortunate reality is that (most) subprime borrowers don't have the luxury to consider catastrophic events that can occur in the future because they are too busy worried about today.

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