Who spends 10k/year on a car, that seems incredibly high. Also I'd say most people spend more than 10k/year indirectly on upgrading their health, but I'd count things like "not eating cheap food all the time" as one of those, or for example, moving to a places in less crime-ridden areas. And people rationally will spend money like that before they try experimental drugs.
Also - you can't really go buy this OTC anyway so it's not really a substitutable good.
A bit aside, I am bullish on these compounds. Tirzepatide is a discovery on the same order of magnitude as any - even potentially bigger than all the recent ML stuff. It's not even close to it's full potential. The data shows it's the only thing we have that really squashes diabetes and obesity with minimal side effects, but also has big positive effects on addiction, heart, bones, liver, brain, and immune system.
The addiction effects alone could change the world tremendously for the better if it's made easier to get and easier to ingest. I gave one of my Mounjaro shots I wasn't going to use to someone who had been trying to quit cigarettes for a decade and they were basically in tears a few days later telling me they went two full days without smoking, the first time they'd ever even gone a few hours since they were young.
> Who spends 10k/year on a car, that seems incredibly high.
You may need to recalibrate your intuition. Average payment on a new car purchase in the US is almost $9,000/year. Average used car payment is >$6,000/year. This is before taxes, insurance, gas, etc. It is common to spend $10,000/year on owning a car in the US.
The Americans who don't spend a lot of money on car-related expenses are the outliers. Despite this, the median American household still has $12,000 per year leftover after all of their ordinary expenses like paying for cars. Average Americans have high incomes, profligate spending patterns, and poor savings behavior.
The average new car buyer. The average payment on a new car is now $726 per this source (some sources have even higher numbers). That's about $8700 per year. That plus insurance, fuel, and maintenance puts you well over $10k.
If you put 200,000 miles on a $50,000 40 mpg car over 10 years, that's $50,000 for the car, $15,000 for insurance, $25,000 for gas, and almost certainly more than $10,000 for tires, maintenance and repairs.
There is a rule of thumb that the purchase price of the car is 1/3 of the cost over its lifetime. That's pretty generous in 2024 since cars now have better mileage, better reliability and cost more, but it's almost certainly more than half the cost.
And new is appropriate, since used price is payment from one owner to another. IOW, if one side of the transaction gets a good deal the other gets a bad one, leaving average unchanged.
Average annual capital cost is new price divided by lifetime.
First - the average number there is according to Kelly Blue Books "proprietary editorial process", and I have doubts. Given it's spiked in recent years too we can assume that 90% of people today aren't at this new inflated price even if it's true and likely many more are holding out or buying used now.
Second - every one of your numbers is rounded up quite a bit, especially mileage as the average mileage would be 135k by year 10.
Third - You left out selling your 50k car in year 10 given 135k miles.
Fourth - EAC, one way to get to the truth, not the only.
I never claimed the numbers were average. The OP claimed that $10,000 a year on a car is uncommon. I'm saying that you don't have to go much above average to pay $10,000 a year on your car -- that spending $10,000 a year is common, even if a little less than 50% of people do so.
It's not far off. The average new car transaction price is now $47K. I can't understand how so many people are able to afford such expensive cars but somehow they're making it work.
It comes to buy price minus sell price. People buying 47k cars are not driving them to ground or totally writing off them outside rare cases. Not that it is not still significant sum of money, but there is also large second hand market involved.
"incredibly high". This means finding an amount that high strains believability. I don't own one but I see X3s every time I commute to work. Obviously I see far more expensive cars too but I wanted to keep it somewhat reasonable.
You clearly don't know a lot of people who aren't wealthy. The majority of people I know couldn't spend 10k on anything except absolute necessities, let alone a car. Of those who do have vehicles, none of them spend $10k/year and if they did it would damn near break them.
Seriously, I don't mean to be rude, but god damn this is out of touch for people who are struggling.
Before you accuse someone of being out of touch, take a look at the average new car transaction price. It's now up to $47K. When you factor in loan payments, insurance, maintenance, and fuel then a huge number of people are spending $1K/month or more on their vehicles. These are literally average people, not wealthy.
'New car' being the operative term there. Also note that I said out of touch with people who are struggling. No one who's truly struggling to get by is going to be buying a new car and certainly not at those prices.
To clarify further, my response is primarily aimed at the idea that the op couldn't even understand why people would need the government to help pay for things and pre-supposes the idea that all of us can afford $10k per year on a car.
They were clearly talking about the average American, not "people who are struggling". Ignoring whether or not it is wise, the majority of American households can technically afford to spend this much on a car and a large percentage do.
A car directly impacts the ability of many to work/live. Not having transportation can leave you cut off from society if you are in an area without alternatives.
OP said 'we'. Perhaps my psychic abilities are malfunctioning, but how do you see that this is a case for using clearly? The OP can't understand the inability for people to pay for things without government assistance, as if there aren't vast swaths of people who can't afford the very thing he is presupposing. People who are struggling should be considered and the very fact that the use of 'we' somehow excludes them in those considerations is kind of the point.
Show me the data with the average and median of all car purchases, not just new, and I'll show you that $800/mo is far from 'nothing'. Hell, my first 3 cars were under $4,000, with each lasting 5 years or better and I damnwell didn't spend anywhere close to enough on fuel and maintenance to bring my costs to even half that number. Maybe I'm an outlier, but in my bubble of poor folks, I'm certainly not.
The average monthly car payment is $738 for new cars and $532 for used. Several factors determine your payment.
The data source is Experian, so I give it some credence.
If you think it’s high, consider that all the low payments you know of need an ‘equivalently’ high payment to balance out the average. People spend huge amounts of money on cars.
On the one hand, I get what you’re saying and logically it makes sense. On the other hand, you’re seriously downplaying the increasing lack of affordability of modern vehicles.
What $20k car are you talking about exactly?
A new Toyota Camry base model costs nearly $30k.
And that is basically the most sensible no-frills vehicle you can buy.
In my area a $20,000 example of a Camry already has 80,000 miles on it and is a full 5 years old.
You are not keeping a $20k car for 20 years for a total lifespan of 25 years. That isn’t realistic at all.
I would bet that those numbers don't include a large number of private/p2p sales and cash sales, given that they're from a credit agency. Perhaps I'm wrong, but based on the number of sub-$3000 cash sales I've seen in my extended circle of acquaintances over my lifetime, I'm pretty sure there's a large chunk missing from the data.
But even then, assuming they somehow capture every resale of every vehicle, most people who can barely afford a car are not buying another car as soon as their payments end. Many, such as myself, drive a car until it dies. We tend to also learn a good deal about vehicle mechanics/maintenance to keep it going 'on the cheap' until either the engine or the transmission fails catastrophically and it becomes cheaper to get another used vehicle.
Also - you can't really go buy this OTC anyway so it's not really a substitutable good.
A bit aside, I am bullish on these compounds. Tirzepatide is a discovery on the same order of magnitude as any - even potentially bigger than all the recent ML stuff. It's not even close to it's full potential. The data shows it's the only thing we have that really squashes diabetes and obesity with minimal side effects, but also has big positive effects on addiction, heart, bones, liver, brain, and immune system.
The addiction effects alone could change the world tremendously for the better if it's made easier to get and easier to ingest. I gave one of my Mounjaro shots I wasn't going to use to someone who had been trying to quit cigarettes for a decade and they were basically in tears a few days later telling me they went two full days without smoking, the first time they'd ever even gone a few hours since they were young.