Uncle – his mandates and fatwas – have without doubt made new cars (and trucks) more expensive.
But then, so have we.
By choosing to sign up for more car than we can afford – made to seem affordable via the flim-flam of “low monthly payments” stretched over twice as many years as was formerly typical – we inadvertently inflate the cost of cars generally.
People – not all of us, but a working majority – elect to buy the optional gadgets, the extras and luxuries. This creates demand for them. We are not forced to buy these things, unlike air bags and back-up cameras and all the fatwa’d things – but because a working majority does buy them – finances them – they’ve become de facto fatwas.
Like a rip tide, this has had the effect of dragging us all along with the current – including those among us who would rather not live beyond our means for the sake of owning an increasingly expensive disposable appliance whose value will be half what we paid for it five or six years later.
It is almost impossible to find a new car – even an “economy” car – that doesn’t come standard loaded. Power windows, door locks, cruise control, intermittent wipers, air conditioning and alloy wheels – things which were rightly considered luxury options as recently as the ’90s, because they’re not necessaries. You can – and people did – get from A to B without such things and you used to be able to save a lot of money that way.
It’s very hard to save money that way today.
Its fair to say that almost everyone is buying a luxury car today – whether they can afford it or not.
The car industry – egged on by an effete car press, which in turn shame-nudges people to eschew the Basic Car – no longer makes many Basic Cars and the handful which they do still make them are abused for sins of perception and status.
Consider as a for-instance the 2018 Mitsubishi Mirage. This little car is one of perhaps two or three Basic Cars (by modern standards; the thing has power windows, locks and AC) which are still available. It stickers for just over $13k, brand new. This car gets 43 MPG on the highway – which is exceptional mileage for a new car, especially a non-hybrid new car and especially because it costs half what a new hybrid costs. It’s not un-roomy (41.7 inches of legroom up front, 34 in back – comparable to many mid-sized “family” sedans that cost too much for most families to comfortably afford – and has nearly 50 cubic feet of cargo capacity).
But it’s mocked for its 78 horsepower non-turbocharged engine; for being “slow” – which is puzzling given how slowly most people drive, regardless of how “fast” their car may potentially be.
So instead, most people buy “economy” cars that cost closer to $20k because they want more power, even if they don’t use it. Because they are peer-pressured into paying for it.
Plus the “nicer” interior (marginally, there is nothing new that recreates the cardboard door-paneling and Mattel plastic kid toy interior ambiance of yesterday’s Basic Cars). And for the not-yet-mandated saaaaaaaaaaaaaaaaaaaaaaaaaaaaaaafety extras – such as pedestrian detection systems and emergency automated braking and more air bags than are necessary to comply with Uncle’s fatwas – all of which the volk has been successfully conditioned, by and large, to regard as catastrophic to do without because the car press moans and wails if a car (like the Mirage) doesn’t come standard with such things.
And so, they buy (finance) all this stuff – which becomes in short order de facto standard equipment because “everyone” wants it and is willing to sign up for a seven-year loan in order to get it.
It is a big part of the reason why most American families haven’t got even $1,000 in cash savings available for an emergency, even though they are working full time. But they have a $35,000 new car parked in the garage.
Financed on an average family income of about $50,000 annually.
As obnoxious – and expensive – as the fatwas and the mandates are, people have it in their power to counterbalance them.
Imagine if the current dynamic reversed. If people – enough people – recovered the desire to live within their means. Bought cars like the Mirage (and Nissan Versa, which costs even less than the Mirage) instead of cars which cost a lot more. Cars which are certainly nicer but hardly necessary.
Shied away from accepting the bit of a seven-year indenture contract for a depreciating appliance and instead restricted their buying to cars they could afford to pay off within three or four years instead.
The fatwas and mandates are loathsome because forcing things on people is always loathsome. We have no choice, but there is some dignity in this, precisely because we are not free to choose. You can’t really fault someone when there is a bayonet pointed at his backside.
Debt, on the other hand, is a voluntary narcotic – a kind of economic heroin that, once “injected” becomes a habit which is extremely hard to kick.
. . .
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