Why is it we can spend 10k/year on our car, but not 10k/year on ourself. We have to ask our government/insurance to pay. Makes no sense.
Also - you can't really go buy this OTC anyway so it's not really a substitutable good.
A bit aside, I am bullish on these compounds. Tirzepatide is a discovery on the same order of magnitude as any - even potentially bigger than all the recent ML stuff. It's not even close to it's full potential. The data shows it's the only thing we have that really squashes diabetes and obesity with minimal side effects, but also has big positive effects on addiction, heart, bones, liver, brain, and immune system.
The addiction effects alone could change the world tremendously for the better if it's made easier to get and easier to ingest. I gave one of my Mounjaro shots I wasn't going to use to someone who had been trying to quit cigarettes for a decade and they were basically in tears a few days later telling me they went two full days without smoking, the first time they'd ever even gone a few hours since they were young.
https://www.coxautoinc.com/market-insights/kbb-atp-january-2...
So the actual average purchase price is closer to 34.
The average purchase price for a car is about $33.5k in the US. That BMW starts at 47.
You may need to recalibrate your intuition. Average payment on a new car purchase in the US is almost $9,000/year. Average used car payment is >$6,000/year. This is before taxes, insurance, gas, etc. It is common to spend $10,000/year on owning a car in the US.
The Americans who don't spend a lot of money on car-related expenses are the outliers. Despite this, the median American household still has $12,000 per year leftover after all of their ordinary expenses like paying for cars. Average Americans have high incomes, profligate spending patterns, and poor savings behavior.
There is a rule of thumb that the purchase price of the car is 1/3 of the cost over its lifetime. That's pretty generous in 2024 since cars now have better mileage, better reliability and cost more, but it's almost certainly more than half the cost.
That's over $10,000 a year
And new is appropriate, since used price is payment from one owner to another. IOW, if one side of the transaction gets a good deal the other gets a bad one, leaving average unchanged.
Average annual capital cost is new price divided by lifetime.
Second - every one of your numbers is rounded up quite a bit, especially mileage as the average mileage would be 135k by year 10.
Third - You left out selling your 50k car in year 10 given 135k miles.
Fourth - EAC, one way to get to the truth, not the only.
The average new car buyer. The average payment on a new car is now $726 per this source (some sources have even higher numbers). That's about $8700 per year. That plus insurance, fuel, and maintenance puts you well over $10k.
https://finance.yahoo.com/news/average-auto-loan-payments-ex...
The insurance, fuel and maintenance are correct though.
Seriously, I don't mean to be rude, but god damn this is out of touch for people who are struggling.
https://www.coxautoinc.com/market-insights/kbb-atp-january-2...
To clarify further, my response is primarily aimed at the idea that the op couldn't even understand why people would need the government to help pay for things and pre-supposes the idea that all of us can afford $10k per year on a car.
Not sure where you get "everyone" from, but look at the average car cost, plus insurance and fuel and maintenance; $800 is nothing.
The average monthly car payment is $738 for new cars and $532 for used. Several factors determine your payment.
The data source is Experian, so I give it some credence.
If you think it’s high, consider that all the low payments you know of need an ‘equivalently’ high payment to balance out the average. People spend huge amounts of money on cars.
The average amount of a car payment and the average amount an American pays in car payments in an average month are vastly different stats.
Contrived example: I buy a $20k car. $500/month payments, 0% interest for simplicity of the math. I keep it for 20 years.
It cost me $83/month on average to purchase. My car payment was $500.
https://www.nerdwallet.com/article/loans/auto-loans/average-...
That might not be wise from a personal finance standpoint but buyers seem to prefer longer loans now.
What $20k car are you talking about exactly?
A new Toyota Camry base model costs nearly $30k.
And that is basically the most sensible no-frills vehicle you can buy.
In my area a $20,000 example of a Camry already has 80,000 miles on it and is a full 5 years old.
You are not keeping a $20k car for 20 years for a total lifespan of 25 years. That isn’t realistic at all.
It’s a far more realistic example than the pricey BMW SUVs people are linking with five-year cost summaries here.
The point is “average monthly car payment” and “average money spent per month purchasing cars” aren’t the same stats, just like the cost of a heart transplant doesn’t translate to how much I pay this month for one.
If we just dive down the rabbit hole of cheaper economy cars all we are saying is that the standard of living is declining when we compare to the past.
A 1987 Dodge Caravan cost between $25k and $38k in today's money. You can't even get a base model Chrysler Pacifica for that much.
I agree on the fact that most people are buying used cars...but used car prices are based on the benchmark of new car prices, and they're higher APR loans as well. So really both categories are getting less and less affordable.
By getting in? It has five seats, just like the Camry. It's ~2" narrower.
It wouldn't be my primary car of choice for triplets, but plenty of families of five don't have three in the bulky kind of car seats simultaneously.
https://www.deserttoyota.com/toyota-camry-vs-toyota-corolla/ says the Camry is 72.4 inches wide, the Corolla 70.1 inches.
But even then, assuming they somehow capture every resale of every vehicle, most people who can barely afford a car are not buying another car as soon as their payments end. Many, such as myself, drive a car until it dies. We tend to also learn a good deal about vehicle mechanics/maintenance to keep it going 'on the cheap' until either the engine or the transmission fails catastrophically and it becomes cheaper to get another used vehicle.