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Discussion Starter · #1 ·
Does anyone have statistics on how the average american household income compares with the average car price? Seems to me that the average car has gotten much mroe expensive in comparison with incomes.
For 2001, the average househould income was $42,228, yet I believe the average price of a new car is something around $27k (thats 2/3rds of an average income, and a lot of people have 2 cars!).
 

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Re: average income vs. average car price (gtivr4)

Welcome to 2003 with 1985's wages.
 

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Re: average income vs. average car price (TabulaRasa)

I think our 1981 Chevette was around $6,200 new, as I remember being shocked that it cost 3k more than my father's 1962 Porsche...
 

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Re: average income vs. average car price (gtivr4)

A rule of thumb is that you can afford a car that is half or your annual gross income, including taxes. If you earn 60K$ a year, than you should limit yourself to a car paid 26-28K$ plus txs.
 

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Discussion Starter · #6 ·
Re: average income vs. average car price (USER)

Quote, originally posted by USER »
A rule of thumb is that you can afford a car that is half or your annual gross income, including taxes. If you earn 60K$ a year, than you should limit yourself to a car paid 26-28K$ plus txs.

Yet the average HOUSEHOLD buys a car that is 2/3rds their income! I assume this hasn't always been true.
 

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Discussion Starter · #7 ·
Re: average income vs. average car price (TabulaRasa)

Quote, originally posted by TabulaRasa »
I think in 1985, the average 4 door family sedan from GM cost around $5k.

And what was ther average income? I kinda doubt its 20% of what it is now!
 

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Re: average income vs. average car price (gtivr4)

Quote »
I think in 1985, the average 4 door family sedan from GM cost around $5k.

This is not true. It was probably in the range of 12-15K$.
 

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Re: average income vs. average car price (gtivr4)

I honestly don't remember.
I remember that the Audi 5000 turbo FWD was around $7-8k when it first came out. That was back before you could get quattro in an Audi sedan.
 

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One issue is the mean income may be $42k, but I think the median income - which would give less importance to those making ten and eleven figure incomes - is closer to about $18k or $20k. I read an article about 2 or 3 years ago saying the average car is just over the average years earnings. With certain limitations, of course. The lady the copied new floppy disks at my old work drove a Navigator and she couldn't have made more than $9/hour. And another guy, a friend of mine, that went to Houston when he became basically the head of all inside networking for a very large computer company bought a BMW Z3. Of course, he paid cash for it with his bonus but I doubt he'll buy another car in the next 3 or 4 years.
I also read where the brand most millionaires and higher drive is Lincoln. Most car guys would think Mercedes or Rolls Royce or Ferrari or something like that. While there are many folks that money has just fallen in their lap that I'm sure enjoy such cars, most folks that have earned their money over several years, want to keep ahold of it.
Truthfully, I've never owned or bought a car that was half of my annual income. When I bought my Civic (the most I've ever paid for a car) I was making about $48,000 (35% of my income). But I'm much more of a cars for cash kind of guy. It's good for fiscal conservatism but bad in that I'd really love to get a 911SC or 930 Turbo. I have enough money to buy the car, but then I'd have to finance the repairs which just doesn't seem right. On the other hand, I can't imagine financing a car that I know would need repairs or considerable maintenence almost immediately.
 

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Re: average income vs. average car price (cratz2)

And as far as a couple reference prices, my 1987 Sterling that I paid $4,500 for in 1993) was $22,9xx in 1987.
And my 1988 BMW 535is originally sold for $37,000 in 1988.
My mom needed a station wagon so she could haul planting/gardening stuff around without messing up her car so she a Ford Escort in about 1986. I think she paid $6,000 or very close to that.
 

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Re: average income vs. average car price (cratz2)

Quote, originally posted by cratz2 »
The lady the copied new floppy disks at my old work drove a Navigator and she couldn't have made more than $9/hour.

It's called leasing.
Our Jetta cost about 1/3rd of our combined annual income, yes, my wife has a crappy job.
 

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Re: average income vs. average car price (cratz2)

Quote, originally posted by cratz2 »

I also read where the brand most millionaires and higher drive is Lincoln. Most car guys would think Mercedes or Rolls Royce or Ferrari or something like that. While there are many folks that money has just fallen in their lap that I'm sure enjoy such cars, most folks that have earned their money over several years, want to keep ahold of it.

Find The Millionaire Next Door book in the library or bookstore (or your own bookshelf). It has a chapter discussing car buying habits of millionaires. In general, their preferences for make and model of car are not too different from non-millionaires (the average price of their cars is not that much greater than the average price non-millionaires pay). And may of them (especially the richest ones) prefer to buy used cars.
Of course, the book has plenty of anecdotes, such as the two brothers where the teacher with the Honda Accord and minivan has a higher net worth than the lawyer with the three expensive cars.
 

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Re: average income vs. average car price (gtivr4)

Quote, originally posted by gtivr4 »

For 2001, the average househould income was $42,228, yet I believe the average price of a new car is something around $27k (thats 2/3rds of an average income, and a lot of people have 2 cars!).

Remember that a lot of people buy used cars, and there are new cars that cost a lot less than that.
 

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Re: average income vs. average car price (Hostile)

Quote, originally posted by Hostile »
It's called leasing.

Or called a Husband or Boyfriend
 

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Re: average income vs. average car price (tjl)

Quote, originally posted by tjl »
Find The Millionaire Next Door book in the library or bookstore (or your own bookshelf). It has a chapter discussing car buying habits of millionaires. In general, their preferences for make and model of car are not too different from non-millionaires (the average price of their cars is not that much greater than the average price non-millionaires pay). And may of them (especially the richest ones) prefer to buy used cars.

I know a person (an accountant) who has a few rental properties. He live in a 30 years old very average looking house and drive a beater. According to him they are "just a house that you sleep in and a car that get you to work".
 

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Re: average income vs. average car price (USER)

Quote, originally posted by USER »
A rule of thumb is that you can afford a car that is half or your annual gross income, including taxes. If you earn 60K$ a year, than you should limit yourself to a car paid 26-28K$ plus txs.

This rule of thumb does not take into account other variables, such as your other expenses, or the amount of savings or debt you have.
Probably a better rule of thumb is that you can afford the car if you do not need to finance or lease it in order to acquire it. I.e. you can buy it without a lease or loan without big problems in your personal finances.
 

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Re: average income vs. average car price (tjl)

Quote, originally posted by tjl »
where the teacher with the Honda Accord and minivan has a higher net worth than the lawyer with the three expensive cars.

Well that is nothing unusual, lot of people are tightwads and don't spend a thing throughout their career. They laugh themselves to the bank at retirement, like my friends mother who is leaving for Florida in a few months. She made about $90k or so a year for a fairly long time, has a pension now and never spent a dime. So, she's content with that and is happy.
Too me that's boring and I would never do that, would rather enjoy life instead of waiting until I'm 60 (assuming I live that long). Obviously, I don't mean run out and spend money like a drunken sailor.....just enough where I am having fun.


Modified by Beltfed at 9:05 AM 6-30-2003
 

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Re: average income vs. average car price (Beltfed)

Quote, originally posted by Beltfed »

Or called a Husband or Boyfriend

http://****************.com/smile/emthup.gif Exactly. Or, to be fair, some of us chicks are pulling in a fair amount of $$ as well...
-Stacia
 

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Re: average income vs. average car price (srogan88)

Quote, originally posted by srogan88 »

http://****************.com/smile/emthup.gif Exactly. Or, to be fair, some of us chicks are pulling in a fair amount of $$ as well...
-Stacia


Absolutely, I won't argue with that
 
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