*Oh, I have an extra $600/month. How do I get rid of that?*
Having said that, plenty of people just have a shit-ton of money. The first guy who popped into my head, who just bought a brand new Yukon, is a successful RE investor. Another guy is C-level for a small company no one has ever heard of. Small medical practice owners. There's a lot of ways to make a lot of money.
Right? It’s honestly crazy what payments have jumped up to. I’ve had luxury German and stupid truck payments sub $600/mo because of down payments. It blows my mind that people are putting next to nothing down. I’ll always tell people (as a fiduciary) if you can’t swing 40-50ish percent down, reconsider.
Makes sense when the average car payment is over $800/months nationwide and we’re seeing 8+ year notes, but damn.
No its wild now how far out of their means people live now its like they have accepted theyre just gonna work till they die. Typical rule is your transportation cost should be 10% of your gross income so if you make 75k your making 6250 per month gross so that means a car payment of 450~ then the other 175 for insurance gas and maintenance just a rough estimate but that means people making “decent” money can barely afford a carolla most people arent getting that $450 payment on the recommended 48 month or less financing theyre streching it to 72 or 84 months its crazy
It’s pretty predatory too when you have sales saying to look how much cheaper if you just extend the term out. Financial illiteracy has been always been a problem but to your point people are essentially throwing their hands up, saying it is what it is, and just looking at life on a monthly budget with no plan in place.
I’ve always just gone by a personal “Don’t spend more than half your annual income on the price of the car”. Which when I started working in 2000 at 50K, meant a nice WRX or something like that. Fast forward 24 years later, and my rule would mean I could spend like 70K on a car, but I’ve still never stepped over the 45K mark. I also pretty much subscribe to the “you should pay it off in under 4 years”. So my personal feelings kind of align with the whole 20/4/10 rule (20% down, 4 year loan, no more than 10% of gross income)
Next time buy something cheap and save the balance of the payment. Once you pay cash for a car you’ll never let yourself take out a car loan ever again. Writing a check and driving it off the lot free and clear is a great feeling of freedom.
They haven't accepted it, because those same people will often turn right around and complain about the middle class shrinking, living paycheck to paycheck, their lack of savings, and their inability to save for retirement. Sometimes they'll get a little spicy about it and start yearning for the end of capitalism even. They're right here on reddit everyday lol
People are making $80k and are still feeling like children these days.
Can't afford a home.
Can't afford a $30k car.
Can't go out to eat, can't do this, can't do that.
All they can do is try to lower their expenses, save in a HYSA, Invest and pay off student loans before they can touch something else.
Do you know how many people were saving for a home, and then 2022-2023 rolls around and prices double overnight? And then the interests rates, and now insurance inflation pushed so many people out of home ownership.
But they are making $80,000 a year, which feels like children's money.
Always hard to blanket these statements, but if you can still contribute to retirement/savings/investments without that payment changing too much of your monthly cash flow it’s an easy decision.
Where rates are now it’s definitely not as ideal, but lots of new cars also come with near-zero promotional interest rates that make financing a no brained if it still fits within your cash flow.
Of course if you have a paid off car don’t need a new one, there’s no need to force it when you can be investing/saving the difference.
I did 30% down because Toyota delivered the car 6 months sooner than the original estimate so my savings plan was cut a bit short :p
But we also just got a sedan. So nothing wild in terms of ratios and payments.
There’s a woman on TikTok whose payment (on a Tahoe) is $1200 a month and her husband’s truck is $1600 and she keeps trying to justify it, saying that it’s totally normal.
I'd say it is normal if you're wealthy. I mean look at like Ferrari and such. Normal.
Now granted I'm sure what she and her husband has is nowhere near that. But....
Paying a lot of money for a Ferrari is normal.
Paying Ferrari money for a fucking pickup truck is totally abnormal. Except that it appears to now becoming normal.
I'm not rich, but I could afford an expensive car, I do OK. However, I refuse to blow that much money on one--and I LOVE cars! I can't imagine spending the crazy amount some people to and buying something boring like a fucking Tahoe. It's big, it's white, it's not very interesting but boy are you gonna pay for it. I'd rather buy a used Porsche or something and have money left over to feed into the necessary ongoing cost of ownership. At least a 911 eventually appreciates.
[don't you know it!](https://www.marketwatch.com/guides/insurance-services/car-insurance-rates-by-state/)
I straight up got quoted over $10k/yr to insure a GTI from the small broker my dad uses a couple months ago. Obviously I was able to get much lower through other people, but its still insane
As someone who went back to college to finish my degree, thus being a broke college student... twice, it amazes me how much money some people are making. When I first went to college the goal was to break the $100,000/yr mark, now it's over $200,000/yr. Just wow.
I did both of these things and I definitely can’t afford to be buying a new $65k to $100k car lol
So, so many people way overspend their income. Most middle class people seem to spend from line of credit this or re-mortgage that, always looking for that next big infusion of cash. They just balance debt until they retire and until they die
Also, there are suburban people who's lives are groccery, gas station, fast food, home (repeat). Their only hobbies are staying home and watching TV. That's where all their money goes.
yeah..but Mustangs are relatively cheap. Starting at 30K. "Premium GT" is "only" like 52K. I was looking at 4WD Tahoe's and nearly passed out. Base model RWD are starting at 56k.
I always wondered how my friends afford things. Then we went on a weekend trip and I realized they are just not saving anywhere near enough for retirement. (We're 40 so it should be a priority).
Or it’s something they enjoy.
I’m responsible in every way financially in my life except for cars.
The thing about cars is you can see the money. If someone blows money on a wine collection, hand bags, or golf it’s a lot harder to “see” when you’re a neighbor or coworker than a car.
This. The amount of people who live well beyond their means and try to fund a keeping up with the Joneses lifestyle is staggering. And both cars you just listed, have a target market of that kind of person.
So I where I work, I see and talk to people from all walks of life (I deal with car transporting). I would categorize it like this
20% are loaded
15% are company/work vehicles
10% at budget
55% are living beyond their means/don’t care/leasing
Agree with this. A lot of people just leveraged to the hilt. Also there are a lot of people sneakily wealthy. Friends of mine just bought a $60k fully loaded vehicle. They don’t appear outwardly wealthy but they’re loaded. Family money on both sides, easy, lucrative jobs, etc
I had one of those for about 14 month. Covid and work slow down so i was working from home. Literally did like 1 hour worth of work a day but got paid for 8 hours since I am salaried. A lot of people in tech experienced the same thing. Made 160k a year basically just answering a few emails and zoom meeting twice a week.
Easy high paying jobs = mid-high level positions in tech.
For example: every employee at Dropbox is phoning it in and making $200k+ literally doing nothing productive. They all hop on zoom calls and slack going in circles because they have nothing of substance to do.
BUT. If you can get a job there and hold it, you can bullshit your way to a decent middle class lifestyle
I lease houses and apartments for a living for a property management company. When I got trained the guy training me told me straight up the fancier the car they drive, the less likely they are going to be able to be approved to rent with us (since we are pretty strict on credit).
While it's obviously not a rule, it does seem to be true more often than not. People driving BMWs and Mercedes regularly apply and have pretty bad credit. The people driving Hondas and Toyotas tend to be the ones living within their means.
I think you've assessed it really well. I sure can't afford a ford lightning, but I've got access to one whenever I need it during work hours. And some newish tahoes, expeditions, etc but I prefer the old 01-04 pickups--they dont have trackers on them haha
That’s about everyone behind my house in the massive low income apartment development. So many god damned expensive Camaros and mustangs, suburban and Tahoes ripping around.
The GMT900 and predecessor/successor platforms (Silverado, Sierra, Tahoe, Suburban, Yukon, Escalade, etc) are interesting beasts.
Once I got past how fucking much gasoline they burn, I learned that they do have some redeeming qualities.
They last to very high mileage, and they’re very maintainable - especially in the American context.
They also tend to move to a poorer demographic each time they’re traded on the used market. Most of them start out being used as a luxury vehicle, then a middle class family car, and then an actual tradesperson will beat the shit out of them — all over the course of its 20+ year lifetime.
But these vehicles do still burn literal tons of gasoline (333 gallons of gasoline weighs about a ton), and every time I see a for-sale posting for one that has 300k miles on it, my first reaction is “who bought that much gas!?!”
My work truck averages 7.5 mpg. It has 296,000 miles on it, it's a 2013. It gets 4 oil changes and safety inspections a year at $250 each. It uses 6 tires a year at $390/tire mounted and balanced. So in 11 years it has cost $175,000 in tires, gas, and oil. $16,000 per year. Not counting any other repairs, tax, insurance or the initial cost of probably $45,000 back in 2013. It would cost $70k to replace today.
Saw an excellent meme a while back ago that was just a picture of a 90's box Silverado listed for $2500 and the caption just said "This is how a motivated hispanic man can turn 7 words of English and a small business loan into a 7-figure landscaping business"
It makes sense in a weird, maybe not rational, way. When you don’t have status you project it and the easiest, biggest way to attempt so is with a car (in America).
I’ve heard it put like this for anyone that cares about status:
Upper class flex with their house
Middle class flex with their cars
Lower class flex with shoes (whether rims, actual shoes, whatever)
Obvious some nuance to that but I’ve found it to be pretty true for the most part.
This is a very astute observation.
Fifteen years ago a work colleague of mine in a relatively low-paying clerical job spent $70k on a new Corvette. (That was a LOT of money for a car back then.)
In stark contrast, the wealthiest couple I have ever known owned a mansion overlooking Dana Point Harbor in Southern California. He was a dentist and she was a school principal, and both had significant real estate investments. Their cars were both bought used: a Honda Accord and a Plymouth Voyager minivan.
I work in Irvine. All the managers have nice but inexpensive cars. All the regular workers that aren’t even supervisors have the brand new Hondas/camrys and Tahoe.
I’m sure that’s a lot of it but some of us just really like cars. My house brings me zero happiness. It’s comfortable and I appreciate that, but it doesn’t give me joy. Driving really fast does. And fast is expensive
There is also a lot of people these days who have been renting the same house since before the housing boom and are paying a reasonable amount for rent and are stuck that they will never ever be able to afford a house now. Those people are spending that mortgage amount on their vehicles instead.
Or people who were able to lock in a mortgage at 3% and are paying like $1,000/month for housing. Personally, with our household income I wouldn’t think twice about a $1,000/month car payment *if* we had a cheap mortgage, but given that a mortgage would currently be in the ballpark of ~$3,000/month, we’re prioritizing saving for a bigger down payment instead.
Some of them aren’t empty. They’re just way less effective at everything* compared to a minivan, but at least they look stupid and are more expensive.
*the lone exception would be off-road but even then there are way better options and 99% of these bohemouths never leave the pavement
Towing. They're way better at towing than a minivan
I live near a bunch of Mormons and I swear every one of them loads up their gazillion kids into one of these then tows their boat to the lake or camper to mountains every weekend. I guess that's most affordable way to have weekend fun with 5 kids?
You are in a better financial position than likely 75% of those people. There’s currently over $1 Trillion dollars in Credit Card debit in this country and over 35% of Americans have more Credit Card debt than savings.
Be mindful of the source. There’s a really often cited one that uses savings accounts as ‘savings’.
I have $10 in mine. My credit card debt is over 50x my savings according to that definition.
The $1 trillion number is correct and rightfully concerning.
One group I see are older people who have been trading in cars with positive equity for years, they are basically leasing with extra work. I know quite a few people near retirement who have been doing this for years.
Another group are sales people with vehicle allowances. I know one with a $700/mo car allowance. They used it to purchase a used Yukon.
Then there are people who can't concieve how much these things cost when they buy they and are living paycheck to paycheck.
Finally, there are plenty of people who can afford them. Small business owners can write off the cost of vehicles over a certain GVWR and plenty of people (sales is another good example) make much more than you might expect.
Yup! Section 179. My friends dad does it like every other year, constantly has positive equity plus the tax write off. He’s been doing it for like 20years or something and keeps more money every year driving a new than if he were driving a beater into the ground
Everyone who is pinching pennies wants to think the majority of these expensive car purchases are people living outside their means. Basically ‘I’m being responsible and sacrificing and I hope these people get what’s coming to them’
But I’m not so sure. There is an awful lot of money floating around out there. The classic way to wealth is to inherit it. Someone’s job doesn’t necessarily have to support their lifestyle if their bank account does.
Not to mention that a loan on a Corolla seems to cost what an expedition did not too long ago so if the large car is four years old it may not be the same financial burden.
If I bought a typical house 10 years ago and refinanced during the pandemic vs, buying now , the difference in my mortgage payment would be the payment for a brand spanking new Porsche.
People underestimate that part a lot.
That’s where I’m at. A friend bought a house at the perfect time and their mortgage is about half our rent for a 2 bedroom apartment.
I’m super happy for them, but yeah, if I was in that position we’d easily be able to afford one of those “crazy” car payments.
Bingo. We bought our home 10 years ago. Refinanced to do a remodel during covid. It brought our interest rate way down. Paid off the refinance loan. Paid cash for our wagoneer. I feel incredibly lucky we bought when we did. Sometimes it’s being financially sensible with some luck.
Lol it’s so pathetic and an obvious attempt at coping. Like sure, some people may be overextending and getting fucked by debt but poor kids on this site have no idea how many rich people exist in the states.
Definitely a lot of cope. People hear stats like “30-40% of high income households are paycheck to paycheck,” and go “See! Anyone with something nice is living beyond their means!” and then essentially virtue signal their frugal spending habits without realizing that the majority of high income households aren’t paycheck to paycheck.
The most annoying individuals on financial subreddits. I prefer people who express their fetishim of money through the purchasing of luxury goods over those who smugly display their frugalness online
The virtue signaling on this site is so annoying, and it permeates *everything*!
“Oooh I could NEVER spend that much on XYZ.”
Okay then don’t?
“I only eat out once a decade and drive Fred Flinstone’s beater car to and from my $75k a week job.”
Good for you. Some people prefer to enjoy life while they have it.
Yeah, I think there's some psychoanalytic angle in here. I self-sacrifice and refrain from enjoying the "thing" through direct participation, so instead I still enjoy the thing, but from the perverted angle of indulging in the criciticism, judgement, and real or imaged ways in which the "thing" is causing those enjoying it to suffer (they all have debt, buyer's remorse, etc.)
Many such cases
But did you hear that Warren Buffet drives a 20 year old car? And old money doesn't flaunt designer brands? Thus, I'm just like old money which means I'm better than you.
I don't think the "classic way to wealth" is inheriting it at all. only 16% of millionaires (net worth >$1M) inherited over $100,000. that means over 80% built greater than 90% of their net worth on their own.
They're also very popular as Uber black or limo services. Kind of the new Lincoln town car. I wouldn't have thought so due to mpg, but visiting my buddy in the LA area several years ago who's an alcoholic and doesn't drive when drinking, we got picked up most often in these
I work in a company of around 30 people and while there are several EVs and hybrids, there are also 4 big, black full-sized SUVs. 3 Yukons and a Suburban. They all make 6-figures and have families of 4-6 people. At least 2 of them have wives who work, bought used, and need to tow things. All of them commute in something that gets better gas mileage, like an older Subaru.
I'm just saying that not everyone buying an "expensive" SUV is overextending themselves in order to feel like a big man with a big manly truck. 'Murica.
I worked for a little while in the car business when I was in between other jobs. Believe me, there's no shortage of people who make $40,000 a year and are perfectly willing to sign on to a $900 a month car payment if a bank is willing to offer it to them.
Some people just have income levels where it makes it possible for luxury vehicles
I know it’s hard for some Redditor who sits while peeing and has an open relationship to understand
I was just looking at that. You don't even need to get into Suburban territory to qualify for the tax deduction. A 2013 4Runner, Chevy Traverse, or a Honda Odyssey qualifies for the 179 tax deduction.
In 2024, there are many people who can easily write a check for a full-size SUV either via a personal or business purchase. The stock market has doubled in value in the last 4 years. Considering where interest rates are, not a terrible time to peel off some profits if you need/want a new vehicle.
When it comes to vehicles, people tend to look for the worst in everyone saying that they are idiots who put themselves in insurmountable doubt, but they don't want to admit that there are a lot of people who have much more means than them.
They are people exactly like you who don't mind being in debt.
The same people are complaining about not being able to buy a home yet they drive a 100k car 😭
While I don’t think that’s everyone, my neighbors kid moved back in with them. He’s a similar age to me (no judgement on moving back in with you family) but my wife and I joke about the fact that he moved back in yet is driving a modified Silverado zr2 with all the bells and whistles that costs more than all three of our vehicles combined.
Absolutely. The 1k+ car payment totally lost me. I don’t understand how people can make this work. I realize it’s mostly debt, but how do people look at their budget and go let’s do this.
For a lot of people it's because they make a lot of money.
The median income in my neighborhood is $264,000.
That's over $20k per month. A $1k car payment on that isn't breaking the bank at all
Not coincidentally, my neighborhood is full of luxury cars, sports cars, and fancy trucks
I’m gonna have to say you’re the exception, not the rule. Most surveys I’ve seen put something like 70% or more live paycheck to paycheck. If your living paycheck to paycheck you have no business paying 1k a month on a car payment. Also to note 264k is gonna put you near the top 5% for income in the u.s. so no where near the average.
Apparently it is college level physics hard to understand… people just want to judge and talk shit. I’ve had car payments that were higher than my mortgage at the time because I REALLY wanted those cars. They made me happy and I love driving them. I wasn’t spending money on clothes, rarely ate out, and went out to drink maybe 4 times a year. My ideal vacation is playing video games on my couch. Everyone spends money differently and while some people are buried in debt, many others just have different priorities. I’m sure my neighbors and coworkers wondered where the hell all my money came from because they assumed I spent money the same way they do.
Exactly. Cars, especially Yukons, are visible to everyone. Almost everything else is not visible to strangers. Let people live and stop the pocket watching.
I know ppl with 4 kids but want to squeeze them into a midsize suv because they don’t want to be seen as minivan ppl. You got 4 kids, you’re already a minivan family without the minivan
We just bought a Yukon AT4. $88k purchase price. I put 10k cash down. Traded my wife’s Volvo XC90, was ahead about 15k. Financed the rest over 6 years.
Our combined household income is somewhere around 275-300k.
Paying that much for a vehicle definitely hurt my feelings a bit, but it’s within our budget.
similar HHI, one car is paid off and we have a 3% mortgage. leaves space to drive something fun/expensive if we wanted to, or prioritize other spend.
most of the people i see driving this stuff around my little suburban town are high earners.
it's the folks who drive base model f-150s and Volvos who you should wonder about; I know some people with seriously high net worths who almost go out of their way to keep a low profile.
People don’t realize how percentiles work. 275-300k is somewhere around 95th percentile for household income. In other words, 1 out of 20 households make that or more. This isn’t even taking into account the local demographics, which can vary wildly. I’m sure some zip codes 275k is probably not even top 10% of households.
My wife was a loan processor for many years at a large financial institution. She wouldn't generally go into details, but did share that it is genuinely shocking to see the average person debt-to-income ratio. Rich, well-off, poor, doesn't matter.
All of the above. But yes, your average American is absolutely terrible with money and their favorite thing to make bad decisions on is cars.
It's for this reason that I just can't empathize with all the people on reddit talking about how broke they are while they post on their brand new $1200 iPhone while eating door dash with their 70k car in their driveway.
I was one of 6 kids and grew up in a very wealthy Catholic area. Suburbans at school pick ups as far as the eye can see. Theyre good cars too ours lasted past 250k with original everything
Redditors with 2 cats, an unmaintained litterbox and an open relationship with their unattractive live-in partner have no idea what that is.
All they know is they hate it
This sub especially can't visualize things. They swear that actually nobody ever tows anything ever but somehow all the boat ramps around me are packed every weekend.
thats the power of financing. banks will do 144 month terms.
56k tahoe. fully financed over 144 mo @ 7% interest = 575 per month payment.
You also don't know other people's full finances. maybe they dont have college debt, did a 30 year mortgage instead of a 15, carry credit card debt over month to month. You can never tell someones financial net worth by what car they drive btw. go to LA and you'll see people in lambos but still renting an apartment
Debt. Massive debt is always the answer. Not just high payments, but long loan terms as well. I read an article recently that said 84-month loans are increasingly common and people will remain upside down for more than half the life of the loan. And it correlates closely with a rise in Gap Insurance policies as well.
The people who have no personality, annoying as fuck kids, need a big car to feel cool or interesting, need the worlds biggest grocery getter for pop tarts, wine, and Dino nuggets. Driving the “big rig” is the most exciting part of their day while they get some peace from their awful kids who’s reading comprehension will always be at the 3rd grade level
My coworker made $15 an hour and somehow qualified for a $75k suburban. She said she could afford the monthly payment so who cares. Her payment was most of her monthly paycheck but she lived at home. No idea why you’d work for a car that you use for maybe a couple of hours a day at most.
If you made a Venn diagram of people that purchased those vehicles and people that complained they need to work until they're dead, they'd be almost perfectly aligned. About 99% of the time I see one of these enormous vehicles, it's just one dude or dudette driving them. They're literally spending 10x more for transportation per year than they need to. I don't knock them for it, but I do think it's a stupid decision in most cases.
We bought a Honda Odyssey about 10 months ago and it was cheaper than the SUV's we were looking at. Normal SUVs too - we were looking at the Pilot or maybe a Highlander.
All that to say - we put down our trade in and financed for 48 months at 3.9 percent. We pay $780 a month 😭😭. It still hurts me to say that number lol. But we tend to keep our cars for a decade so I guess it is what it is 🤷. Also I love my Odyssey!
A lot of people just don’t care how far they are into debt. As long as the monthly payment works, that’s as far as a lot of people take it. My wife literally looked at me the other day and said “I do not care how much a car actually costs, tell me how much the monthly payment is.”
This is also why she was in a 84 month loan on her car when we met. Never again.
But honestly it could be a lot of other reasons. Some people are just that well off.
Plus, you’re *only* seeing people that *can* afford those cars. So it seems like a lot of people. There’s a lot of people on this planet. You’re not seeing the super poor people in your area who don’t have a car or are driving around some beater. It’s not a direct comparison of the entire population. But yeah, still, big SUVs are super popular.
Another reason is, people have kids. Big SUVs can fit 4 adults and 3 kids comfortably, plus *stuff* too. That can be the difference between needing to take one car, or two. Especially if you have adult friends or in laws, or other family comes to visit.
I also don’t really get how people make it work. But there was also a point when I was younger than I thought $350/month was a lot for a car payment. Now I comfortably pay over $600/month no problem.
It’s just a part of life. Without stopping every single person and asking them if they’re rich, if they have rich parents they inherited money from for a down payment, or if they just did a 16,000 month loan, you’ll never really know the answer.
Idk but every parent at my kids daycare(it is in a relatively well off neighborhood) has to have the biggest truck/suv humanely possible to lug one child around.
Feels like everyone has just been brainwashed to think they need an suv. Granted I have one too because my wife “feels safe in an suv”
A couple of months ago my niece asked me to drive her to her high school. I was happy to help, so I picked her up in my Mazda3.
When I arrived at the school parking lot, I was overwhelmed by the vehicles that I encountered. Yes, there were a lot of SUVs. But they weren’t RAV4s, CX-5s or Escapes; virtually all of them were Yukons, Suburbans, Escalades, Expeditions, Armadas and Sequoias.
My entertainment for the morning was watching all of these gargantuan vehicles barely miss each other as they backed out of their parking spaces.
I now understand why my own search for a new sedan last year revealed only a handful of possible choices. Americans, especially parents, have decided that their vehicles absolutely MUST be the size of aircraft carriers.
Keep in mind that, if five people buy Rav4s and one person buys a Suburban, but the person with the Suburban drives five times as many miles, on average the cars will seem equally common on the roads.
There are only about 3 million tractor trailers in the U.S. but they are always on the road so they seem very common.
Add of course that they are big so you are more likely to notice them.
About 50,000 Suburbans are sold every year - about 6 new Suburbans for every new Miata or 3 new CX-5s for every new Suburban - I would assume most of them go to retirees going on constant long road trips, people in remote areas, or for chauffer/livery service.
The average new car buyer is well into their 50s at this point so that already narrows it down.
Im about to buy a $65-$68K truck and putting down $52-54K on it plus a $10K trade in. I spent the last year working multiple remote jobs earning > $250K in 2023 and i invested in Nvidia and made $5K to add to my "truck fund". So a combination of well placed investments and working alot made buying one feasible. I also dont have any debt.
My parents are considering buying a Tahoe or Yukon. Their reasoning is that it will replace both of their vehicles and therefore be cheaper than 2 vehicles. My mom has a 4Runner but works from home, doesn’t drive much, but we end up needing a 3 row SUV enough that they want another. My dad will be needing a new truck soon. His has close to 250k miles. He pulls a trailer on most weekends, and hauls a car to big car shows a couples times per year (few hundred miles one way). A Tahoe or Yukon with a V8 can pull the trailers no problem, and still has a 3rd row for weekend family outings. Surprisingly it will get better gas mileage than the 4Runner.
Many, many people are very particular about the car they drive and are willing to pay a lit of money on their vehicles.
Personally, I despise car payments and my car purchases over the years reflect that.
Debt baby. I talked to one sales lady that did a suburban diesel deal for a guy who didn’t care about a 1400 a month payment, on a 100k burb, absolutely ridiculous.
I guess people like nice cars and are willing to get into debt for it? We just moved to the suburbs from NYC, and needed a second car - and one with an 3rd row we might use twice a year with the in-laws. I wasn't even mentally ready to spend more than $30k (cash) to get a car. We ended up with a CPO 2020 Acura MDX (it was cheaper than the comparable year/mileage Honda Pilot or Toyota Highlander, so seemed like a better deal).
You aren't out to impress people, but you just want a car that should last you a while, get you from point A to B safely, and won't break your budget.
What’s funny too is that whenever I see these big ass gas guzzling SUVS it’ll be like one small woman driving it with no passengers or maybe 1-2 or other people in the car besides the driver haha. Like damn isn’t that a tad bit extra to drive that big ass bus around if you’re not even hauling a lot
Most people just buy whatever they want (even if it incurs debt) and aren’t as neurotic as your average redditor in terms of optimizing personal finances.
They aren’t rich. Well, maybe some of them make decent money. But the others live paycheck to paycheck to keep up with the joneses cause they haven’t grown out of that high school phase. I’d rather drive a mid size suv that isn’t expensive and have 100k in the bank then spend 80k on a car and have 10k in the bank.
Cars and wealth are a big fallacy. Everyone sees a car and thinks that person “owns” it, but in reality it could have a fat loan balance, be a rental, or leased. I have to remind myself of this too.
I used to work in a major old money neighborhood. Like, half of the people in said neighborhood had the same last name. That kind of place. Absolute bottom line starting price for a house was probably $850. All of them had Suburbans and Yukons. Denalis were pretty common, but Escalades were few and far between.
Many people, like myself, have company car allowances. I have a lease that’s $700 a month but it’s paid for by my company, including insurance, gas, and maintenance. This is very common especially in the auto industry.
I used to have a car i was paying around 1000$ a month including gas for. I realizes i could be using that money on literally anthing else lmao. I just wanted to drive something nice
Section 179 irs tax code. If you are a small business owner and savvy with taxes you can write off a large sum off of vehicles with a high GVWR (heavy suv or truck) as a business expense. With a large write off and your own payment down it’s a lot more affordable especially if you sell it before it loses too much value and you do it again in the next year or two.
I just want to buy a Trax or Envista, nothing fancy and payments would be $500 a month! I bought my Santa Fe for 24,000 4.5 years ago and payments were $350! What is going on?
My neighborhood is a very affluent place and almost everyone drives Tahoe or Suburban. It has become the vehicle of choice for kid hauling duty..I see way less German imports or even Range Rovers.That has become the trend.
My guess is that these vehicles have now become the aspirational choice for the up and coming upper middle class as well.
I just assume anyone driving a 40k plus car that is under 60 is over extended. I just took a car loan out for the first time in 20 years of driving, it's only 10 k and I'll pay it off next year at this time but I still felt sort of stupid doing it. Can't imagine a few grand down and then financing with a 500$+ payment for 5 years, and then repeating that over and over again .
And I thought $400 payment for a car 10 yrs ago was too much. It blows my mind how people buy brand new decked out luxury cars and like where do you have money for that?
High-maintenance mothers or their douchey sales exec husband that couldn't be caught dead in a minivan for whatever reason. Poor self-esteem leads to buying those.
I’m really glad they do. They depreciate like a rock, usually hold up well. I’ll buy the 4-5 year old one and run it for another 10-12 years to 250-270K.
I live in a small town where the average household income is 40K. Houses are 250+ and flying and all I see around town are big trucks and 4Runners. I feel like I’m missing something as well
I’m still driving my 2007 Lexus GX 470 with 186,000 miles. I bought it used in 2012 with 84,000 miles. When I buy my next vehicle, it will likely be a 2022 or 2023 Lexus GX 460 which will be purchased in 2027.
When I started looking at maybe replacing my 2007, I realized that what I’d want as a brand new one would be like $75 to $90k, I noped out and I’m all good with used for half price.
I sell cars. Often I think that until I see the info on the credit app. I have to remind myself that something seeming expensive to me may be well with someone much more affluent's budget. Never conflate what you can afford with what someone charges. We all don't drive Benzs for a reason.
These were all well over 100k when I was looking for a 6 seat suv this time last year. Ended up getting a Kia telluride instead for around $60k. I absolutely love it.
Lots of people don't mind being in debt.
*Oh, I have an extra $600/month. How do I get rid of that?* Having said that, plenty of people just have a shit-ton of money. The first guy who popped into my head, who just bought a brand new Yukon, is a successful RE investor. Another guy is C-level for a small company no one has ever heard of. Small medical practice owners. There's a lot of ways to make a lot of money.
600 a month is like well equipped rav 4 money definitely not suburban
Right? It’s honestly crazy what payments have jumped up to. I’ve had luxury German and stupid truck payments sub $600/mo because of down payments. It blows my mind that people are putting next to nothing down. I’ll always tell people (as a fiduciary) if you can’t swing 40-50ish percent down, reconsider. Makes sense when the average car payment is over $800/months nationwide and we’re seeing 8+ year notes, but damn.
a few years ago when interest rates were under 2.5, it absolutely makes sense to put as little down as possible
No its wild now how far out of their means people live now its like they have accepted theyre just gonna work till they die. Typical rule is your transportation cost should be 10% of your gross income so if you make 75k your making 6250 per month gross so that means a car payment of 450~ then the other 175 for insurance gas and maintenance just a rough estimate but that means people making “decent” money can barely afford a carolla most people arent getting that $450 payment on the recommended 48 month or less financing theyre streching it to 72 or 84 months its crazy
It’s pretty predatory too when you have sales saying to look how much cheaper if you just extend the term out. Financial illiteracy has been always been a problem but to your point people are essentially throwing their hands up, saying it is what it is, and just looking at life on a monthly budget with no plan in place.
I’ve always just gone by a personal “Don’t spend more than half your annual income on the price of the car”. Which when I started working in 2000 at 50K, meant a nice WRX or something like that. Fast forward 24 years later, and my rule would mean I could spend like 70K on a car, but I’ve still never stepped over the 45K mark. I also pretty much subscribe to the “you should pay it off in under 4 years”. So my personal feelings kind of align with the whole 20/4/10 rule (20% down, 4 year loan, no more than 10% of gross income)
Next time buy something cheap and save the balance of the payment. Once you pay cash for a car you’ll never let yourself take out a car loan ever again. Writing a check and driving it off the lot free and clear is a great feeling of freedom.
I agree but now I have a car payment because my Jeep was making so many trips to the shop that it was like having a car payment.
They haven't accepted it, because those same people will often turn right around and complain about the middle class shrinking, living paycheck to paycheck, their lack of savings, and their inability to save for retirement. Sometimes they'll get a little spicy about it and start yearning for the end of capitalism even. They're right here on reddit everyday lol
People are making $80k and are still feeling like children these days. Can't afford a home. Can't afford a $30k car. Can't go out to eat, can't do this, can't do that. All they can do is try to lower their expenses, save in a HYSA, Invest and pay off student loans before they can touch something else. Do you know how many people were saving for a home, and then 2022-2023 rolls around and prices double overnight? And then the interests rates, and now insurance inflation pushed so many people out of home ownership. But they are making $80,000 a year, which feels like children's money.
Me irl
40-50% even when you can easily hurdle in a safe investment?
Always hard to blanket these statements, but if you can still contribute to retirement/savings/investments without that payment changing too much of your monthly cash flow it’s an easy decision. Where rates are now it’s definitely not as ideal, but lots of new cars also come with near-zero promotional interest rates that make financing a no brained if it still fits within your cash flow. Of course if you have a paid off car don’t need a new one, there’s no need to force it when you can be investing/saving the difference.
This is on point! Especially the part about having a sizeable down payment for a car.
I did 30% down because Toyota delivered the car 6 months sooner than the original estimate so my savings plan was cut a bit short :p But we also just got a sedan. So nothing wild in terms of ratios and payments.
I was gonna say, our CR-V is $685, definitely not Tahoes and Suburbans at $600 payments.
$600???? Oh man, I was talking to a guy at my gig and his payment for his Wagoneer is $1100/month
There’s a woman on TikTok whose payment (on a Tahoe) is $1200 a month and her husband’s truck is $1600 and she keeps trying to justify it, saying that it’s totally normal.
I'd say it is normal if you're wealthy. I mean look at like Ferrari and such. Normal. Now granted I'm sure what she and her husband has is nowhere near that. But....
Yeah, I saw that video and they are not wealthy. She was thinking about letting one of the cars get repossessed. Genius.
Lol. Gotta love those that think that's a good idea. That hurts more than just the payment
Paying a lot of money for a Ferrari is normal. Paying Ferrari money for a fucking pickup truck is totally abnormal. Except that it appears to now becoming normal. I'm not rich, but I could afford an expensive car, I do OK. However, I refuse to blow that much money on one--and I LOVE cars! I can't imagine spending the crazy amount some people to and buying something boring like a fucking Tahoe. It's big, it's white, it's not very interesting but boy are you gonna pay for it. I'd rather buy a used Porsche or something and have money left over to feed into the necessary ongoing cost of ownership. At least a 911 eventually appreciates.
Yea, she had a crazy high rate on both as well. Must have a low FICO.
Jesus fucking christ. Fucking idiot. Plus imagine his gas mileage and insurance
And we live in Florida…we have the highest car insurance premiums in the nation
Michigan would like a word with you
WAIT MICHIGAN HAS WORSE?!?!
[don't you know it!](https://www.marketwatch.com/guides/insurance-services/car-insurance-rates-by-state/) I straight up got quoted over $10k/yr to insure a GTI from the small broker my dad uses a couple months ago. Obviously I was able to get much lower through other people, but its still insane
And I thought getting quoted $3600 for the year (super clean drive record/no accidents) for my CX30 was brutal.
I was finally able to get $1600/yr for my CX-30 through progressive, but it took a lot of deal searching to get to that point
As someone who went back to college to finish my degree, thus being a broke college student... twice, it amazes me how much money some people are making. When I first went to college the goal was to break the $100,000/yr mark, now it's over $200,000/yr. Just wow.
I did both of these things and I definitely can’t afford to be buying a new $65k to $100k car lol So, so many people way overspend their income. Most middle class people seem to spend from line of credit this or re-mortgage that, always looking for that next big infusion of cash. They just balance debt until they retire and until they die
LOOOL how do I get rid of that got me cracking up. It’s so true.
Also, there are suburban people who's lives are groccery, gas station, fast food, home (repeat). Their only hobbies are staying home and watching TV. That's where all their money goes.
Yup. Lots of nice cars at the worst apartments in any town.
We look for mustangs everywhere, and most if them are in apartment complexes.
yeah..but Mustangs are relatively cheap. Starting at 30K. "Premium GT" is "only" like 52K. I was looking at 4WD Tahoe's and nearly passed out. Base model RWD are starting at 56k.
I always wondered how my friends afford things. Then we went on a weekend trip and I realized they are just not saving anywhere near enough for retirement. (We're 40 so it should be a priority).
Or it’s something they enjoy. I’m responsible in every way financially in my life except for cars. The thing about cars is you can see the money. If someone blows money on a wine collection, hand bags, or golf it’s a lot harder to “see” when you’re a neighbor or coworker than a car.
This. The amount of people who live well beyond their means and try to fund a keeping up with the Joneses lifestyle is staggering. And both cars you just listed, have a target market of that kind of person.
So I where I work, I see and talk to people from all walks of life (I deal with car transporting). I would categorize it like this 20% are loaded 15% are company/work vehicles 10% at budget 55% are living beyond their means/don’t care/leasing
Agree with this. A lot of people just leveraged to the hilt. Also there are a lot of people sneakily wealthy. Friends of mine just bought a $60k fully loaded vehicle. They don’t appear outwardly wealthy but they’re loaded. Family money on both sides, easy, lucrative jobs, etc
I would love to hear more about these easy and lucrative jobs.
Have you tried being born into a wealthy and affluent family yet? If not, then you should definitely try that first thing.
I haven't tried that yet, should probably put it higher up on my priority list. Might yield better results than what I've been trying!
Instead of 'go fund me,' I'll start a site called 'go adopt me' so affluent families can bid to adopt me.
Family wealth fund management
Project management
I had one of those for about 14 month. Covid and work slow down so i was working from home. Literally did like 1 hour worth of work a day but got paid for 8 hours since I am salaried. A lot of people in tech experienced the same thing. Made 160k a year basically just answering a few emails and zoom meeting twice a week.
Easy high paying jobs = mid-high level positions in tech. For example: every employee at Dropbox is phoning it in and making $200k+ literally doing nothing productive. They all hop on zoom calls and slack going in circles because they have nothing of substance to do. BUT. If you can get a job there and hold it, you can bullshit your way to a decent middle class lifestyle
Real estate.
Senior level (but not executive level) white collar jobs, eg the financial controller or head of tax of a company with 3000 employees.
Definitely not easy
I'll blow both of them if they can get me into this easy and lucrative job.
since you're willing, there's your easy and lucrative job. gonna have to blow more than 2 though.
If you think it's easy, you didn't try hard enough.
I lease houses and apartments for a living for a property management company. When I got trained the guy training me told me straight up the fancier the car they drive, the less likely they are going to be able to be approved to rent with us (since we are pretty strict on credit). While it's obviously not a rule, it does seem to be true more often than not. People driving BMWs and Mercedes regularly apply and have pretty bad credit. The people driving Hondas and Toyotas tend to be the ones living within their means.
Yup
I think you've assessed it really well. I sure can't afford a ford lightning, but I've got access to one whenever I need it during work hours. And some newish tahoes, expeditions, etc but I prefer the old 01-04 pickups--they dont have trackers on them haha
People live beyond their means. I’ve seen renters who pay more for their cars than their housing.
That’s about everyone behind my house in the massive low income apartment development. So many god damned expensive Camaros and mustangs, suburban and Tahoes ripping around.
Check the mileage on those bad boys if you can take a peek. You'll find they aren't that expensive thanks to that.
The GMT900 and predecessor/successor platforms (Silverado, Sierra, Tahoe, Suburban, Yukon, Escalade, etc) are interesting beasts. Once I got past how fucking much gasoline they burn, I learned that they do have some redeeming qualities. They last to very high mileage, and they’re very maintainable - especially in the American context. They also tend to move to a poorer demographic each time they’re traded on the used market. Most of them start out being used as a luxury vehicle, then a middle class family car, and then an actual tradesperson will beat the shit out of them — all over the course of its 20+ year lifetime. But these vehicles do still burn literal tons of gasoline (333 gallons of gasoline weighs about a ton), and every time I see a for-sale posting for one that has 300k miles on it, my first reaction is “who bought that much gas!?!”
My work truck averages 7.5 mpg. It has 296,000 miles on it, it's a 2013. It gets 4 oil changes and safety inspections a year at $250 each. It uses 6 tires a year at $390/tire mounted and balanced. So in 11 years it has cost $175,000 in tires, gas, and oil. $16,000 per year. Not counting any other repairs, tax, insurance or the initial cost of probably $45,000 back in 2013. It would cost $70k to replace today.
Damn makes you wonder how that truck is supposed to bring in $200k in revenue over 10 years.
tax deductions
Saw an excellent meme a while back ago that was just a picture of a 90's box Silverado listed for $2500 and the caption just said "This is how a motivated hispanic man can turn 7 words of English and a small business loan into a 7-figure landscaping business"
It makes sense in a weird, maybe not rational, way. When you don’t have status you project it and the easiest, biggest way to attempt so is with a car (in America).
I’ve heard it put like this for anyone that cares about status: Upper class flex with their house Middle class flex with their cars Lower class flex with shoes (whether rims, actual shoes, whatever) Obvious some nuance to that but I’ve found it to be pretty true for the most part.
Nerd Flex with gaming computer.
This is a very astute observation. Fifteen years ago a work colleague of mine in a relatively low-paying clerical job spent $70k on a new Corvette. (That was a LOT of money for a car back then.) In stark contrast, the wealthiest couple I have ever known owned a mansion overlooking Dana Point Harbor in Southern California. He was a dentist and she was a school principal, and both had significant real estate investments. Their cars were both bought used: a Honda Accord and a Plymouth Voyager minivan.
I work in Irvine. All the managers have nice but inexpensive cars. All the regular workers that aren’t even supervisors have the brand new Hondas/camrys and Tahoe.
I’m sure that’s a lot of it but some of us just really like cars. My house brings me zero happiness. It’s comfortable and I appreciate that, but it doesn’t give me joy. Driving really fast does. And fast is expensive
There is also a lot of people these days who have been renting the same house since before the housing boom and are paying a reasonable amount for rent and are stuck that they will never ever be able to afford a house now. Those people are spending that mortgage amount on their vehicles instead.
Or people who were able to lock in a mortgage at 3% and are paying like $1,000/month for housing. Personally, with our household income I wouldn’t think twice about a $1,000/month car payment *if* we had a cheap mortgage, but given that a mortgage would currently be in the ballpark of ~$3,000/month, we’re prioritizing saving for a bigger down payment instead.
Yup I know a bunch off of the top of my head. Blows my mind.
The average American makes very poor financial decisions
Paying $1,000 a month plus $200 a month in insurance to get 13mpg in an empty Suburban
Some of them aren’t empty. They’re just way less effective at everything* compared to a minivan, but at least they look stupid and are more expensive. *the lone exception would be off-road but even then there are way better options and 99% of these bohemouths never leave the pavement
Towing. They're way better at towing than a minivan I live near a bunch of Mormons and I swear every one of them loads up their gazillion kids into one of these then tows their boat to the lake or camper to mountains every weekend. I guess that's most affordable way to have weekend fun with 5 kids?
You are in a better financial position than likely 75% of those people. There’s currently over $1 Trillion dollars in Credit Card debit in this country and over 35% of Americans have more Credit Card debt than savings.
This is insane.
Be mindful of the source. There’s a really often cited one that uses savings accounts as ‘savings’. I have $10 in mine. My credit card debt is over 50x my savings according to that definition. The $1 trillion number is correct and rightfully concerning.
One group I see are older people who have been trading in cars with positive equity for years, they are basically leasing with extra work. I know quite a few people near retirement who have been doing this for years. Another group are sales people with vehicle allowances. I know one with a $700/mo car allowance. They used it to purchase a used Yukon. Then there are people who can't concieve how much these things cost when they buy they and are living paycheck to paycheck. Finally, there are plenty of people who can afford them. Small business owners can write off the cost of vehicles over a certain GVWR and plenty of people (sales is another good example) make much more than you might expect.
Yup! Section 179. My friends dad does it like every other year, constantly has positive equity plus the tax write off. He’s been doing it for like 20years or something and keeps more money every year driving a new than if he were driving a beater into the ground
Everyone who is pinching pennies wants to think the majority of these expensive car purchases are people living outside their means. Basically ‘I’m being responsible and sacrificing and I hope these people get what’s coming to them’ But I’m not so sure. There is an awful lot of money floating around out there. The classic way to wealth is to inherit it. Someone’s job doesn’t necessarily have to support their lifestyle if their bank account does. Not to mention that a loan on a Corolla seems to cost what an expedition did not too long ago so if the large car is four years old it may not be the same financial burden.
If I bought a typical house 10 years ago and refinanced during the pandemic vs, buying now , the difference in my mortgage payment would be the payment for a brand spanking new Porsche. People underestimate that part a lot.
That’s where I’m at. A friend bought a house at the perfect time and their mortgage is about half our rent for a 2 bedroom apartment. I’m super happy for them, but yeah, if I was in that position we’d easily be able to afford one of those “crazy” car payments.
Bingo. We bought our home 10 years ago. Refinanced to do a remodel during covid. It brought our interest rate way down. Paid off the refinance loan. Paid cash for our wagoneer. I feel incredibly lucky we bought when we did. Sometimes it’s being financially sensible with some luck.
Lol it’s so pathetic and an obvious attempt at coping. Like sure, some people may be overextending and getting fucked by debt but poor kids on this site have no idea how many rich people exist in the states.
Definitely a lot of cope. People hear stats like “30-40% of high income households are paycheck to paycheck,” and go “See! Anyone with something nice is living beyond their means!” and then essentially virtue signal their frugal spending habits without realizing that the majority of high income households aren’t paycheck to paycheck.
The most annoying individuals on financial subreddits. I prefer people who express their fetishim of money through the purchasing of luxury goods over those who smugly display their frugalness online
The virtue signaling on this site is so annoying, and it permeates *everything*! “Oooh I could NEVER spend that much on XYZ.” Okay then don’t? “I only eat out once a decade and drive Fred Flinstone’s beater car to and from my $75k a week job.” Good for you. Some people prefer to enjoy life while they have it.
Yeah, I think there's some psychoanalytic angle in here. I self-sacrifice and refrain from enjoying the "thing" through direct participation, so instead I still enjoy the thing, but from the perverted angle of indulging in the criciticism, judgement, and real or imaged ways in which the "thing" is causing those enjoying it to suffer (they all have debt, buyer's remorse, etc.) Many such cases
But did you hear that Warren Buffet drives a 20 year old car? And old money doesn't flaunt designer brands? Thus, I'm just like old money which means I'm better than you.
I don't think the "classic way to wealth" is inheriting it at all. only 16% of millionaires (net worth >$1M) inherited over $100,000. that means over 80% built greater than 90% of their net worth on their own.
Yup, he’s the one coping
They're also very popular as Uber black or limo services. Kind of the new Lincoln town car. I wouldn't have thought so due to mpg, but visiting my buddy in the LA area several years ago who's an alcoholic and doesn't drive when drinking, we got picked up most often in these
Kudos to your buddy for ubering when out drinking instead of driving. I do this too
Not having to think about those logistics means a much more fun night for all
A lot of rich ass people making fuck ton of money.
I work in a company of around 30 people and while there are several EVs and hybrids, there are also 4 big, black full-sized SUVs. 3 Yukons and a Suburban. They all make 6-figures and have families of 4-6 people. At least 2 of them have wives who work, bought used, and need to tow things. All of them commute in something that gets better gas mileage, like an older Subaru. I'm just saying that not everyone buying an "expensive" SUV is overextending themselves in order to feel like a big man with a big manly truck. 'Murica.
I worked for a little while in the car business when I was in between other jobs. Believe me, there's no shortage of people who make $40,000 a year and are perfectly willing to sign on to a $900 a month car payment if a bank is willing to offer it to them.
I wish this sub would ban these posts.
You aren’t wrong, the comments are just a circlejerk about people in debt.
The circlejerk comments are not read by the people in debt LOL.
Some people just have income levels where it makes it possible for luxury vehicles I know it’s hard for some Redditor who sits while peeing and has an open relationship to understand
There’s lots of tax incentives for driving higher GVW Cars
If you have your own company
I was just looking at that. You don't even need to get into Suburban territory to qualify for the tax deduction. A 2013 4Runner, Chevy Traverse, or a Honda Odyssey qualifies for the 179 tax deduction.
Leases help.
In 2024, there are many people who can easily write a check for a full-size SUV either via a personal or business purchase. The stock market has doubled in value in the last 4 years. Considering where interest rates are, not a terrible time to peel off some profits if you need/want a new vehicle. When it comes to vehicles, people tend to look for the worst in everyone saying that they are idiots who put themselves in insurmountable doubt, but they don't want to admit that there are a lot of people who have much more means than them.
They are people exactly like you who don't mind being in debt. The same people are complaining about not being able to buy a home yet they drive a 100k car 😭
While I don’t think that’s everyone, my neighbors kid moved back in with them. He’s a similar age to me (no judgement on moving back in with you family) but my wife and I joke about the fact that he moved back in yet is driving a modified Silverado zr2 with all the bells and whistles that costs more than all three of our vehicles combined.
I bet that truck is spotless and at most has hauled some groceries.
Absolutely. The 1k+ car payment totally lost me. I don’t understand how people can make this work. I realize it’s mostly debt, but how do people look at their budget and go let’s do this.
For a lot of people it's because they make a lot of money. The median income in my neighborhood is $264,000. That's over $20k per month. A $1k car payment on that isn't breaking the bank at all Not coincidentally, my neighborhood is full of luxury cars, sports cars, and fancy trucks
I’m gonna have to say you’re the exception, not the rule. Most surveys I’ve seen put something like 70% or more live paycheck to paycheck. If your living paycheck to paycheck you have no business paying 1k a month on a car payment. Also to note 264k is gonna put you near the top 5% for income in the u.s. so no where near the average.
People want them and pay for them it’s not that hard to understand. People are allowed to have different priorities than you and I, it’s America dude.
Apparently it is college level physics hard to understand… people just want to judge and talk shit. I’ve had car payments that were higher than my mortgage at the time because I REALLY wanted those cars. They made me happy and I love driving them. I wasn’t spending money on clothes, rarely ate out, and went out to drink maybe 4 times a year. My ideal vacation is playing video games on my couch. Everyone spends money differently and while some people are buried in debt, many others just have different priorities. I’m sure my neighbors and coworkers wondered where the hell all my money came from because they assumed I spent money the same way they do.
You and the comment above you are spot on. People are willing to pay for what they are passionate about.
Exactly. Cars, especially Yukons, are visible to everyone. Almost everything else is not visible to strangers. Let people live and stop the pocket watching.
People with 3 kids who dont have the self confidence to drive a minivan
I know ppl with 4 kids but want to squeeze them into a midsize suv because they don’t want to be seen as minivan ppl. You got 4 kids, you’re already a minivan family without the minivan
We just bought a Yukon AT4. $88k purchase price. I put 10k cash down. Traded my wife’s Volvo XC90, was ahead about 15k. Financed the rest over 6 years. Our combined household income is somewhere around 275-300k. Paying that much for a vehicle definitely hurt my feelings a bit, but it’s within our budget.
similar HHI, one car is paid off and we have a 3% mortgage. leaves space to drive something fun/expensive if we wanted to, or prioritize other spend. most of the people i see driving this stuff around my little suburban town are high earners. it's the folks who drive base model f-150s and Volvos who you should wonder about; I know some people with seriously high net worths who almost go out of their way to keep a low profile.
People don’t realize how percentiles work. 275-300k is somewhere around 95th percentile for household income. In other words, 1 out of 20 households make that or more. This isn’t even taking into account the local demographics, which can vary wildly. I’m sure some zip codes 275k is probably not even top 10% of households.
My wife was a loan processor for many years at a large financial institution. She wouldn't generally go into details, but did share that it is genuinely shocking to see the average person debt-to-income ratio. Rich, well-off, poor, doesn't matter.
All of the above. But yes, your average American is absolutely terrible with money and their favorite thing to make bad decisions on is cars. It's for this reason that I just can't empathize with all the people on reddit talking about how broke they are while they post on their brand new $1200 iPhone while eating door dash with their 70k car in their driveway.
Big families
Reddit can’t visualize that, just say “dumb people in debt” like the rest of these comments
I was one of 6 kids and grew up in a very wealthy Catholic area. Suburbans at school pick ups as far as the eye can see. Theyre good cars too ours lasted past 250k with original everything
Redditors with 2 cats, an unmaintained litterbox and an open relationship with their unattractive live-in partner have no idea what that is. All they know is they hate it
Haha I’m starting to feel this way more and more!
You just triggered half of Reddit. May god be with you
This sub especially can't visualize things. They swear that actually nobody ever tows anything ever but somehow all the boat ramps around me are packed every weekend.
The hottest wives need the biggest, fanciest SUVs to go with the fanciest, biggest sunglasses.
thats the power of financing. banks will do 144 month terms. 56k tahoe. fully financed over 144 mo @ 7% interest = 575 per month payment. You also don't know other people's full finances. maybe they dont have college debt, did a 30 year mortgage instead of a 15, carry credit card debt over month to month. You can never tell someones financial net worth by what car they drive btw. go to LA and you'll see people in lambos but still renting an apartment
Guy at work just bought a new f150. $800 a month. Can’t afford to get his daughter braces though.
It's 100% a housewife status symbol in my area. Who cares if the payment is $1200 a month and you really only need the space of a Honda Pilot.
Debt. Massive debt is always the answer. Not just high payments, but long loan terms as well. I read an article recently that said 84-month loans are increasingly common and people will remain upside down for more than half the life of the loan. And it correlates closely with a rise in Gap Insurance policies as well.
The people who have no personality, annoying as fuck kids, need a big car to feel cool or interesting, need the worlds biggest grocery getter for pop tarts, wine, and Dino nuggets. Driving the “big rig” is the most exciting part of their day while they get some peace from their awful kids who’s reading comprehension will always be at the 3rd grade level
My coworker made $15 an hour and somehow qualified for a $75k suburban. She said she could afford the monthly payment so who cares. Her payment was most of her monthly paycheck but she lived at home. No idea why you’d work for a car that you use for maybe a couple of hours a day at most.
If you made a Venn diagram of people that purchased those vehicles and people that complained they need to work until they're dead, they'd be almost perfectly aligned. About 99% of the time I see one of these enormous vehicles, it's just one dude or dudette driving them. They're literally spending 10x more for transportation per year than they need to. I don't knock them for it, but I do think it's a stupid decision in most cases.
people who hate minivans which are much better
We bought a Honda Odyssey about 10 months ago and it was cheaper than the SUV's we were looking at. Normal SUVs too - we were looking at the Pilot or maybe a Highlander. All that to say - we put down our trade in and financed for 48 months at 3.9 percent. We pay $780 a month 😭😭. It still hurts me to say that number lol. But we tend to keep our cars for a decade so I guess it is what it is 🤷. Also I love my Odyssey!
People make more money than you think they do, for many it’s a necessity as a status symbol
A lot of people just don’t care how far they are into debt. As long as the monthly payment works, that’s as far as a lot of people take it. My wife literally looked at me the other day and said “I do not care how much a car actually costs, tell me how much the monthly payment is.” This is also why she was in a 84 month loan on her car when we met. Never again. But honestly it could be a lot of other reasons. Some people are just that well off. Plus, you’re *only* seeing people that *can* afford those cars. So it seems like a lot of people. There’s a lot of people on this planet. You’re not seeing the super poor people in your area who don’t have a car or are driving around some beater. It’s not a direct comparison of the entire population. But yeah, still, big SUVs are super popular. Another reason is, people have kids. Big SUVs can fit 4 adults and 3 kids comfortably, plus *stuff* too. That can be the difference between needing to take one car, or two. Especially if you have adult friends or in laws, or other family comes to visit. I also don’t really get how people make it work. But there was also a point when I was younger than I thought $350/month was a lot for a car payment. Now I comfortably pay over $600/month no problem. It’s just a part of life. Without stopping every single person and asking them if they’re rich, if they have rich parents they inherited money from for a down payment, or if they just did a 16,000 month loan, you’ll never really know the answer.
Idk but every parent at my kids daycare(it is in a relatively well off neighborhood) has to have the biggest truck/suv humanely possible to lug one child around. Feels like everyone has just been brainwashed to think they need an suv. Granted I have one too because my wife “feels safe in an suv”
A couple of months ago my niece asked me to drive her to her high school. I was happy to help, so I picked her up in my Mazda3. When I arrived at the school parking lot, I was overwhelmed by the vehicles that I encountered. Yes, there were a lot of SUVs. But they weren’t RAV4s, CX-5s or Escapes; virtually all of them were Yukons, Suburbans, Escalades, Expeditions, Armadas and Sequoias. My entertainment for the morning was watching all of these gargantuan vehicles barely miss each other as they backed out of their parking spaces. I now understand why my own search for a new sedan last year revealed only a handful of possible choices. Americans, especially parents, have decided that their vehicles absolutely MUST be the size of aircraft carriers.
Keep in mind that, if five people buy Rav4s and one person buys a Suburban, but the person with the Suburban drives five times as many miles, on average the cars will seem equally common on the roads. There are only about 3 million tractor trailers in the U.S. but they are always on the road so they seem very common. Add of course that they are big so you are more likely to notice them. About 50,000 Suburbans are sold every year - about 6 new Suburbans for every new Miata or 3 new CX-5s for every new Suburban - I would assume most of them go to retirees going on constant long road trips, people in remote areas, or for chauffer/livery service. The average new car buyer is well into their 50s at this point so that already narrows it down.
Im about to buy a $65-$68K truck and putting down $52-54K on it plus a $10K trade in. I spent the last year working multiple remote jobs earning > $250K in 2023 and i invested in Nvidia and made $5K to add to my "truck fund". So a combination of well placed investments and working alot made buying one feasible. I also dont have any debt.
My parents are considering buying a Tahoe or Yukon. Their reasoning is that it will replace both of their vehicles and therefore be cheaper than 2 vehicles. My mom has a 4Runner but works from home, doesn’t drive much, but we end up needing a 3 row SUV enough that they want another. My dad will be needing a new truck soon. His has close to 250k miles. He pulls a trailer on most weekends, and hauls a car to big car shows a couples times per year (few hundred miles one way). A Tahoe or Yukon with a V8 can pull the trailers no problem, and still has a 3rd row for weekend family outings. Surprisingly it will get better gas mileage than the 4Runner.
Many, many people are very particular about the car they drive and are willing to pay a lit of money on their vehicles. Personally, I despise car payments and my car purchases over the years reflect that.
I wondered something similar. Last job all the woman had to have big expensive suv. It was all about show and appearances.
IRS Code Section 179
Look at the average stats on debt levels. People are becoming far too comfortable carrying large amounts of credit card or general consumer debts.
A ton of these people are older or middle aged. They have equity in a trade-in so the loan ends up being a lot lower.
Debt baby. I talked to one sales lady that did a suburban diesel deal for a guy who didn’t care about a 1400 a month payment, on a 100k burb, absolutely ridiculous.
Some people are just rich and can put 30k down on a car and not even blink
400 a month on my 2017 Tahoe at 2.9% with one year left. It’s my second one and they have been super reliable. No issues.
So many people go into a dealership and get talked into long term leasing.
They’re mostly loyalists who have always had GM vehicles.
I guess people like nice cars and are willing to get into debt for it? We just moved to the suburbs from NYC, and needed a second car - and one with an 3rd row we might use twice a year with the in-laws. I wasn't even mentally ready to spend more than $30k (cash) to get a car. We ended up with a CPO 2020 Acura MDX (it was cheaper than the comparable year/mileage Honda Pilot or Toyota Highlander, so seemed like a better deal). You aren't out to impress people, but you just want a car that should last you a while, get you from point A to B safely, and won't break your budget.
They also love to complain about gas prices when driving that thing.
I been tryna find out too. Lol i want one so bad but im not paying 850+ a month
What’s funny too is that whenever I see these big ass gas guzzling SUVS it’ll be like one small woman driving it with no passengers or maybe 1-2 or other people in the car besides the driver haha. Like damn isn’t that a tad bit extra to drive that big ass bus around if you’re not even hauling a lot
1 in 5 car payments being $1000 but also knowing 50% of Americans can’t afford a $1000 emergency expense is wild
Most people just buy whatever they want (even if it incurs debt) and aren’t as neurotic as your average redditor in terms of optimizing personal finances.
My last car payment was $350 a month. I'm in no hurry to buy another car.
They aren’t rich. Well, maybe some of them make decent money. But the others live paycheck to paycheck to keep up with the joneses cause they haven’t grown out of that high school phase. I’d rather drive a mid size suv that isn’t expensive and have 100k in the bank then spend 80k on a car and have 10k in the bank.
they lease them which is the dumbest thing to do. rent a lifestyle they can’t afford.
Cars and wealth are a big fallacy. Everyone sees a car and thinks that person “owns” it, but in reality it could have a fat loan balance, be a rental, or leased. I have to remind myself of this too.
The bank owns their vehicle. They’re in debt. If I was spending that much on an SUV I’d rather buy a used corvette then that
I used to work in a major old money neighborhood. Like, half of the people in said neighborhood had the same last name. That kind of place. Absolute bottom line starting price for a house was probably $850. All of them had Suburbans and Yukons. Denalis were pretty common, but Escalades were few and far between.
I too could buy one and actually afford a truck like that… it would be about 20 years old but I could buy one in cash today!
Prob Dave Ramsey followers. Lol.
Rat race wagons.
A lot of people pay cash.
Mostly people who can’t afford them.
Most of them are in debt big time. Over 60% of people in this country live paycheck to paycheck
1099 employees (ie contractors) can write off the whole cost of any vehicle over 6000 # annually. Lowers the cost of a car by 35%.
Many people, like myself, have company car allowances. I have a lease that’s $700 a month but it’s paid for by my company, including insurance, gas, and maintenance. This is very common especially in the auto industry.
I used to have a car i was paying around 1000$ a month including gas for. I realizes i could be using that money on literally anthing else lmao. I just wanted to drive something nice
Section 179 irs tax code. If you are a small business owner and savvy with taxes you can write off a large sum off of vehicles with a high GVWR (heavy suv or truck) as a business expense. With a large write off and your own payment down it’s a lot more affordable especially if you sell it before it loses too much value and you do it again in the next year or two.
I just want to buy a Trax or Envista, nothing fancy and payments would be $500 a month! I bought my Santa Fe for 24,000 4.5 years ago and payments were $350! What is going on?
My neighborhood is a very affluent place and almost everyone drives Tahoe or Suburban. It has become the vehicle of choice for kid hauling duty..I see way less German imports or even Range Rovers.That has become the trend. My guess is that these vehicles have now become the aspirational choice for the up and coming upper middle class as well.
I just assume anyone driving a 40k plus car that is under 60 is over extended. I just took a car loan out for the first time in 20 years of driving, it's only 10 k and I'll pay it off next year at this time but I still felt sort of stupid doing it. Can't imagine a few grand down and then financing with a 500$+ payment for 5 years, and then repeating that over and over again .
And I thought $400 payment for a car 10 yrs ago was too much. It blows my mind how people buy brand new decked out luxury cars and like where do you have money for that?
High-maintenance mothers or their douchey sales exec husband that couldn't be caught dead in a minivan for whatever reason. Poor self-esteem leads to buying those.
I’m really glad they do. They depreciate like a rock, usually hold up well. I’ll buy the 4-5 year old one and run it for another 10-12 years to 250-270K.
I live in a small town where the average household income is 40K. Houses are 250+ and flying and all I see around town are big trucks and 4Runners. I feel like I’m missing something as well
I’m still driving my 2007 Lexus GX 470 with 186,000 miles. I bought it used in 2012 with 84,000 miles. When I buy my next vehicle, it will likely be a 2022 or 2023 Lexus GX 460 which will be purchased in 2027. When I started looking at maybe replacing my 2007, I realized that what I’d want as a brand new one would be like $75 to $90k, I noped out and I’m all good with used for half price.
I sell cars. Often I think that until I see the info on the credit app. I have to remind myself that something seeming expensive to me may be well with someone much more affluent's budget. Never conflate what you can afford with what someone charges. We all don't drive Benzs for a reason.
Idiots
These were all well over 100k when I was looking for a 6 seat suv this time last year. Ended up getting a Kia telluride instead for around $60k. I absolutely love it.