$30,000 is the new “affordable.”
If you have seen any kind of informational car or truck video on YouTube, you will have doubtless seen the likes of Kelly Blue Book, Consumer Reports, and Motor Trend, among many others. You’ve also probably seen the price tags of some of the newest cars, trucks, and SUVs that are being tested.
With the average price of a new car being over $36,000, $30,000 might not sound as bad as it did in the first sentence.
Every new car is compared to those in its class. Sometimes, they’re even compared to others with similar characteristics or features not in their own class. When this happens, you hear the word “affordable” thrown around a lot.
The Genesis G80, Genesis’ new full-size luxury car, has a starting MSRP of a little over $68,000. The Audi A8 starts around $84,000, the BMW 7 series starts around $83,500, and the Mercedes S Class starts upwards of $91,000.
Certainly, the Genesis a fantastic value compared to its competition, mentioned above. It may not offer quite as much in terms of tech and a few other things as the Audi, BMW, and Mercedes, but the G90 can hold its own. That doesn’t make the car cheap or affordable for most “average” car buyers.
$36,000 is about half of what you’d pay for the Genesis G90 in a real life buying situation. Does that make the average car affordable, and does it make anything under $30,000 cheap? I would argue that it definitely doesn’t.
Part of the problem has to do with the experts that produce and publish the information for the consumers. Testers and media often have a different view of cars than the average person.
Why would a company, built around testing vehicles, hire somebody who had no knowledge of or didn’t care about cars at all? It would be counter intuitive.
My own personal dream job would be to work for one of these places where I could be surrounded by cars all the time. I could get into a different one each day and experience everything that they had to offer.
The consequence to all of this is that the biases, ideas, and philosophies of those who love their jobs often play some small role in the information given to the public. Some organizations are better at giving objective information to the public, but it can be a genuine challenge for those testing the vehicles to slip into the mindset of the “average” person.
Price, perhaps more than anything, is skewed the most. I believe that there is a benefit of giving some degree of subjective information on a particular vehicle model when presenting information. Price is an objective piece of information. I also believe that it has been “subjectified” to flow evenly with all the other information being presented to the public.
The other part of the affordability problems is that car dealers have made it easier to “afford” a new car.
Because of the rising costs of vehicles, the financial aspect of buying a new car has had to evolve to keep up with everything. There are more people than ever before having to finance a new car with an average car payment of close to $500 per month. That’s certainly not cheap.
The flexibility of financing has created the perception of affordability. This, in tangent with disseminated consumer advice and information, has made $30,000 the new affordable.
For those few who make enough to call $30,000 cheap, the market is different. Most won’t buy a $30,000 vehicle, but will rather look at the Audis, Mercedes, and BMWs available.
Those who see $30,000 as affordable, most likely, are looking to buy a vehicle that isn’t genuinely “affordable.” The current crop of mid-size and full size SUVs and minvans fit perfectly within this price range. The SUV market is especially booming at the current time, and people want them. There is more variety in this segment, there is incentive to sell, and people end up buying more.
Because of demand and new car affordability issues for many, even used vehicles are priced much higher than they probably should be, especially for SUVs and trucks. Demand is driving prices up and out of reach of even those who need a used vehicle. The result is a crop of high-mileage used cars that have already had their fair share of heavy use. Only then, are many vehicles at the true point of being affordable.
Repair costs become an issue with high-mileage. Spending extra money beyond what a vehicle is worth just to make it run correctly has become a common theme for many families, recent college grads, and those who just see cars and trucks as a waste of money.
Not all this is bad news, though. It’s true that cars can be and are a waste of money, but it’s also true that you can find some truly good deals if you look hard enough.
Most anything can be achieved if you take the time to look, do, and succeed. There are plenty of vehicles out there that can be had at a great price.
Most car-buying websites have filters where you can search for specific criteria. Try using them. Enter some information you’d like to see that you’d never think would ever show up in a search.
Last week, I found a 2003 Subaru Legacy for sale with 7500 miles. It was priced below $10,000 and was a Carfax one-owner vehicle with a full service history. That’s a fantastic deal nowadays, and I would consider that to actually be an extremely affordable vehicle.
So if car prices have you down, just look again, and don’t be afraid to keep looking. There are thousands of cars for sale, both new and used. Chances are that you will find a pretty good cheap car that is actually cheap. You just need to find it. After you do, you may just have to get it!
And by the way, if you need a little extra help or don’t know where to start, just check out our Best Car-Buying Websites article or just go to our Car Buying Assistance Page.
