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DETROIT — A couple of months ago, a woman paid a visit to Jeff Schrier’s used car lot in Omaha, Nebraska. She was on a tight budget, she said, and was desperate for a vehicle to commute to work.
She was shown three cars priced at her limit, roughly $7,500. Schrier said the woman was stunned.
“‘That’s what I get for $7,500? ‘” he recalled her saying. The vehicles had far more age or mileage on them than she had expected for something to replace a car that had been totaled in a crash.
The woman eventually settled on a 2013 Toyota Scion with a whopping 160,000 miles on it. Schrier isn’t sure he made any profit on the deal. “We just helped her out,” he said.
The days when just about anyone with a steady income could wander onto an auto lot and snag a reliable late-model car or buy their kid’s first vehicle for a few thousand dollars have essentially vanished.
“I’ve never seen anything remotely close to this — it’s craziness,” said Schrier, who has been selling autos for 35 years. “It’s quite frustrating for so many people right now.”
“What used to be a $5,000 car,” he said, “is now $8,000. What used to be $8,000 is now $11,000 or $12,000.”
Including taxes, fees, a 10% down payment, and an interest rate of around 7.5%, the average used vehicle now costs $520 a month, even when financed for the average of nearly six years, Edmunds calculated.
To make that payment and afford such other necessities as housing, food and utilities, a household would have to take home about $60,000 a year, or $75,000 before taxes, said Kimberly Palmer, a personal finance specialist at NerdWallet. In 2020, the U.S. median pretax household income was $67,521, the Census Bureau says.
“The average person,” Palmer said, “can’t afford the average used car right now.”
https://www.newsday.com/classifieds/cars/used-preowned-vehicles-price-expensive-1.50466463