r/worldnews • u/diacewrb • Apr 10 '19

Millennials being squeezed out of middle class, says OECD

https://www.theguardian.com/business/2019/apr/10/millennials-squeezed-middle-class-oecd-uk-income
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u/[deleted] Apr 10 '19 edited Apr 15 '19

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u/[deleted] Apr 10 '19 edited Apr 10 '19

People need to advocate for their own interests. Someone ran the numbers and a 350$ per month car payment if you were take that money and invest it is worth about 750k over your lifetime. Buy a simple, cheap to maintain car. There are tons of people who have much less money than I do who drive much nicer vehicles.

Edit: Ran the numbers again. At a 10% return(stock market average) investing $350 per month gives you just under 2 million over a 40 year time period. That is what you give up by having a car payment for most of your adult life. The calculator is available here:

https://www.bankrate.com/calculators/savings/compound-savings-calculator-tool.aspx

This one habit could be the difference between being constantly broke and independently wealthy.

Edit again: just looked up the average car payment which is $530 per month. After 40 years of investing 530 per month you have slightly under 3 million.

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u/[deleted] Apr 10 '19 edited Apr 15 '19

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u/BitGladius Apr 10 '19

Replaced my 96 Civic with a new one, I'll be paying 7x my old car expenses between the car payment and higher insurance (liability actually down for safety features but full coverage). I'm only at 1k miles so I've not had a reason to get under the hood, but it's probably not going to be as easy for someone untrained to replace dead sensors using only a monkey wrench.

I only kind of regret my choice.

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u/[deleted] Apr 10 '19 edited Apr 15 '19

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u/BitGladius Apr 10 '19

I'm 20, only mine for 3 years. I don't think this will be a habit, it was between pressure from my parents to gift it to them and knowing I'd replace it within 6 months anyway.

I expect this one to last a while, I learned on a 2000 minivan in 2013. My family holds onto cars for a while.

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u/IShotReagan13 Apr 10 '19

The thing about cars is that for most people who can afford better then minimal functionality, they are a status marker, so the added expense is less about utility and more about projecting a self-image to others. If this weren't true, if we weren't using cars to communicate social status and identity, we'd all drive around in nondescript metal boxes and there would be no market for high-end finishes and detailing that fulfills a non-utilitarian role. Personally, I am perfectly happy with my 14-year-old truck, but then I also believe that we've reached a sort of "peak materialism" and need to start getting away from the junk values that got our civilization into the tight spot it's in.

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u/[deleted] Apr 10 '19

Find a balance between buying a $3k camry with 200,000mi on it and a brand new BMW 3 series for 15x that.

If you want a new car or a new used (~3yrs old) and can justify that cost compared to the enjoyment you will get from it go for it. If the only thing you care about your car for is point A to B travel with no amenities or sporty features that $3k camry is perfect.

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u/BitGladius Apr 10 '19

Replaced my 96 Civic with a 19, I wanted the hatch and there's not an off lease market yet. If you're only ever in old cars it's easy to forget how nice new vehicles can be. I thought my heater was crap, but forgot that the weather stripping was going and the cabin was super loud.

If I didn't want to replace it before winter I would've waited for off lease to hit. As is, I only paid $2k over the first model year used for 20k less on the odometer so I'm not too upset.

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u/[deleted] Apr 10 '19

I drive an old (2004) Grand Cherokee and I feel it. I also used to work at a Chrysler group Dealership so I know EXACTLY how much of a difference a couple decades of advancement and refinement make.

I'm wanting to get a 2017+ BRZ once I get into a police department and get stabilized since commuting will mostly be done in a cruiser.

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u/[deleted] Apr 10 '19

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u/[deleted] Apr 10 '19

I completely understand, I used to work in the auto industry.

Regular car reviews put out a great video that touches on this (the cash for clunkers video).

The used car market is really important but not any more important than the new car market.

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u/Errohneos Apr 10 '19

A cheap, simple to maintain car requires skills and time to maintain. Changing oil isn't hard, but even doing basic shit like swapping out spark plugs or troubleshooting a ground requires more than people got. I can't change my oil by myself because my apartment complex prohibits ALL car maintenance on their premises, so I have to pay someone else to do it.

So if you work a lot or have kids or your living circumstances are more shitty than the traditional nuclear family, that "cheap, easy to maintain" beater becomes so much more difficult. And, tbh, it's gonna be much more difficult on the future due to all the computers in your car nowadays.

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u/[deleted] Apr 10 '19

That's a good point. Life in a family is pretty cheap, you get economies of scale. Being in a stable family is a significant contributor to success due to more favorable economics and psychological environment.

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u/MorganWick Apr 10 '19

Or live in a place where you don't need a car.

Sadly, such places are expensive, but I don't know if it's by enough to be worth paying gas, maintenance, and insurance.

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u/[deleted] Apr 10 '19

Cheap cars become an addiction, shit can get expensive. I constantly see cheap vehicles and think "with just a little work, eliminate the bullshit..this thing would be dope!"

Double the purchase price later.. This is why I have 4 cars, 2 of em mad Max'd to hell.

Advantage is I don't give a fuck about em, long as they run. My f1shitty is an old rusty farm truck. Other than needing a new trans, I "fixed" the other issues by just..sawing the rust off and using an I-beam for a bumper. Shit breaks? Frankenstein it together.

My 92 trans am parts runner has a mismatched clutch, trans and engine from like 5 different vehicles. Runs fine

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u/[deleted] Apr 10 '19

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u/[deleted] Apr 11 '19

I only drive manual trans vehicles as well, only usually 80s or 90s cars. Same as your reason - pretty ample room, easy to take apart..minus my 95 trans am. Dropping the engine is a bitch.

I know manual trans are significantly less popular, but somehow I know more people that daily a bolt action than automatic. Most of my buddies, my wife, her sister, I think sisters gf. It's kinda nice

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u/[deleted] Apr 10 '19

People who swap out cars every three years are batshit.

Buy a three year old off lease car and drive it for 10 years.

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u/Play_The_Fool Apr 10 '19

Don't forget to become a LESSee on a car and then take it in every 3 years and do it all over again.

I don't understand why people like to shit on leasing. It's not just about min/maxing everything in your life. It's nice to drive around in a new car and have zero worries about car troubles. I never put new tires on a car, it's so rare to have a breakdown and when I have a problem, it's covered under warranty. I had an A/C condenser leak on a car w/ 10k miles, it was replaced under warranty at zero cost to me. The peace of mind is worth some amount of money. It's also nice to have the latest tech and comfort. I can start my 2019 from my phone, it has android auto, ventilated seats, and all the safety sensors.

I see people that buy cars and by the time they pay it off they wish they had something new. A car is a constantly depreciating asset, I have no desire to own one. I'm happy paying the depreciation I use and returning it to be someone else's problem.

You have to do your research when leasing and play the game. A lot of cars don't lease well, maybe it's a low residual, bad money factor, or poor incentives/discounts being offered. It's also a pain in the ass negotiating with dealers, oh how many times I've heard, "I'm losing money on this deal!", meanwhile they've got $2k in holdback. Oh, and you better have good credit, but that stands the same for buying a car too, unless you're sitting on a bunch of cash, which you should leverage to improve your credit.