Here’s the latest reader question, along with my reply!
Drew asks: I’ve been a very happy Toyota RAV4 (4 cylinder) which I have owned for ten years. The news about the Toyota Raize sounds great. Would love to hear your thoughts.
My reply: I think it sounds great, too – which makes me sad that Americans aren’t going to have the opportunity to buy this affordable, high-mileage little SUV. Can’t have that, eh?
There seems to be a concerted effort to deny Americans such cars – but Americans themselves bear some of the blame for this. They have chosen to embrace debt and live beyond their means, driving cars many of them can’t afford. The average price paid for a new car last year was more than $35,000 – which is more than half the average family income in this country. This does not factor in the cost of taxes and insurance on that $35k car.
To spend half one’s family income on a car (a depreciating appliance that is worth less and less the longer you own it) is moon-baying madness.
But people buy $35k (and more) cars because they are able to borrow – for seven or eight years. This somehow appeals to them more than an $18k car (like the Raize) which they could have paid off in four or five.
Put another way: If car loans were generally for four or five years, most people could not finance a $35k car.
And then there would be a market for economically sane $18k cars like the Raize.
. . .
Got a question about cars, Libertarian politics – or anything else? Click on the “ask Eric” link and send ’em in!
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Why do people pay interest on a DEPRECIATING asset? That IS madness!
How did we get here, anyway? I remember when A/C was a luxury, let alone power windows, power seats, and power door locks! I don’t know if it’s possible to get a car with roll-up windows nowadays. A/C, thanks to the changes in car design (no floor vents or flip-out windows), A/C is a necessity now. I don’t know…