Aethos Super Record Wireless

[AngryScientist]

Originally Posted by professerr

Very few (22%) of Americans can actually afford one new car:

https://www.msn.com/en-us/autos/news...ar/ar-AA1hOGwO

See also: https://en.wikipedia.org/wiki/Petite_bourgeoisie

I had personally never heard of this rule, and while it sounds reasonable, is probably not followed by practically anyone other then the very wealthy.

Taking TCs 200,000 club example, I would opine that most people who make 200k/year drive cars more expensive than 20k

A common guideline about how much to spend when buying a new car is the old 20/4/10 rule, where you put at least 20% of the purchase price for a down payment, take out a 4-year loan, and spend no more than 10% of your income on said car.

[Elefantino]

Specialized is not offering pro deal prices on the new SR Aethos. I put one in my cart. No dice.

Damn.

[Mark McM]

Originally Posted by AngryScientist

Taking TCs 200,000 club example, I would opine that most people who make 200k/year drive cars more expensive than 20k

Well, not quite - in the 20/4/10 rule, you would spend no more than 10% of your annual income per year on your car. Or in other words, if you add up the monthly payments over a year, that should be no more than 10% of your annual income. So for the people who make 200K per year, they could put 18K down on a 90K car (or 20% of income), and then pay the additional 78K over 4 years, paying 1,667 a month (20k per year, or 10% of income) at an interest rate of around 7%.

[tomato coupe]

Originally Posted by professerr

Very few (22%) of Americans can actually afford one new car:

https://www.msn.com/en-us/autos/news...ar/ar-AA1hOGwO

The article has a few obvious flaws:
1) It assumes auto loans are for 48 months, when most new car loans are 60, 72, or even 84 months.

2) It uses average individual earnings, but household earnings are more appropriate for this type of calculation.

3) It doesn’t consider that many new cars are leased, which significantly changes the affordability/financial landscape.

Clearly, if the average price of a new car is $48k, a lot of people can afford that.

[AngryScientist]

We're way off topic now, but it's an interesting conversation...

Does anyone have any data that shows the percentage split with new vehicles that are leased vs purchased?

To bring it back on topic - I wonder if leasing very high end bicycles will ever be a thing, similar to cars?

[tomato coupe]

Originally Posted by AngryScientist

We're way off topic now, but it's an interesting conversation...

Does anyone have any data that shows the percentage split with new vehicles that are leased vs purchased?

To bring it back on topic - I wonder if leasing very high end bicycles will ever be a thing, similar to cars?

I think roughly 20% of new cars are leased.

[Mark McM]

Originally Posted by tomato coupe

1) It assumes auto loans are for 48 months, when most new car loans are 60, 72, or even 84 months.

The article doesn't say that the most auto loans are 48 months, it says that the rule of thumb for affordability is that loans shouldn't be more than 48 months. Regarding longer load periods, the article says:

Buyers are also breaking the “4” part of the 20/4/10 rule to shrink their monthly payments. As per Edmunds, the average new car loan taken out during the second quarter of 2023 lasted 68.4 months. Despite this, longer loan terms did not help the fact that delinquencies for car loans rose from 6.88% in first quarter of 2023 to 7.28% in the second quarter, as per Moody’s.

Originally Posted by tomato coupe

2) It uses average individual earnings, but household earnings are more appropriate for this type of calculation.

I think it is more likely that they are assuming both total household income, and total household payments for cars. So it could apply to a dual income 2 car household as well as to a single income 1 car household (or a single income 2 car household or dual income 1 car household).

Originally Posted by tomato coupe

3) It doesn’t consider that many new cars are leased, which significantly changes the affordability/financial landscape.

Leases, just like extended loan periods, are just schemes the dealers use to get people into cars more expensive than they can actually afford. In both situations, people end up paying more in the end then if they financed the car over a shorter period (or paid cash).

[rice rocket]

Originally Posted by tomato coupe

The article has a few obvious flaws:
1) It assumes auto loans are for 48 months, when most new car loans are 60, 72, or even 84 months.

2) It uses average individual earnings, but household earnings are more appropriate for this type of calculation.

3) It doesn’t consider that many new cars are leased, which significantly changes the affordability/financial landscape.

Clearly, if the average price of a new car is $48k, a lot of people can afford that.

The whole analysis is stupid clickbait.

Lower income households aren't buying/leasing the "average" car, they are shopping something that costs less than the average.

[Baron Blubba]

The question of what people 'can afford' and what bicycle they will therefore purchase is often not a mathematical one. It's a question of priorities.

When we opened our shop 12, 13 years ago, we'd see a person roll up in a super crazy posh car and assume 'oh, here comes a big sale.' And very often, the driver of that car would ask for the least expensive bike that would let them accomplish what they wanted to do. Entry level hybrid bike or road bike or something. They'd sometimes leave with a $400 bike (this was 2012) inside of a $100,000 car.
Didn't take long to realize that these people had $100k cars because, for reasons of performance, aesthetics, vanity, making certain professional impressions, or any combination of those factors, cars were important to them.

Then you have me. I co-own a bike shop with my dad. Trust me, I'm not getting rich off of it. I would reckon that I'm in the bottom 10% of income of this forum's frequenters. However, at most times, I own 3-4 'main bikes' that are worth between $8k and $12k. Even at industry prices, that stable is expensive. (Contrary to popular belief, margins on bikes are not good. Especially high end bikes. And employee discounts from bike companies are usually not very generous.)
So why do I spend a very large percentage of my income on bikes/bike accessories/bike maintenance every year? Because bikes are important to me. Riding bikes is the single thing I enjoy most in the world, out of a very very wide range of hobbies and recreational activities, and it's not even close. So I spend on bikes, and drive a car with a $280 monthly lease, and purchase most of my clothes at Target, and eat the store brand Grape Nuts and greek yogurt, and make the most of every section of paper towel on the roll.

The market for $8k+ bikes is more blue collar than a lot of folks would assume, and while we do help/seduce (juuuust kidding!) customers to finance a fair amount of them at our shop, the majority of people seem to have saved for what they really want, and treat themselves gladly.

[Mark McM]

Originally Posted by rice rocket

The whole analysis is stupid clickbait.

Lower income households aren't buying/leasing the "average" car, they are shopping something that costs less than the average.

The point of the article can be summed up in this single sentence paragraph from the article:

The fact of new cars' lack of affordability does not stop people from biting the bullet to get behind the wheel.

The price of the average new car is not affordable to the average American - but that isn't stopping people from buying cars they can't afford. Many Americans are living from paycheck-to-paycheck, and it's not just lower income households, many households with higher than average incomes are also living paycheck-to-paycheck, due to excess spending habits (like fancy cars).

[Mark McM]

Originally Posted by Baron Blubba

The question of what people 'can afford' and what bicycle they will therefore purchase is often not a mathematical one. It's a question of priorities.

When we opened our shop 12, 13 years ago, we'd see a person roll up in a super crazy posh car and assume 'oh, here comes a big sale.' And very often, the driver of that car would ask for the least expensive bike that would let them accomplish what they wanted to do. Entry level hybrid bike or road bike or something. They'd sometimes leave with a $400 bike (this was 2012) inside of a $100,000 car.
Didn't take long to realize that these people had $100k cars because, for reasons of performance, aesthetics, vanity, making certain professional impressions, or any combination of those factors, cars were important to them.

Then you have me. I co-own a bike shop with my dad. Trust me, I'm not getting rich off of it. I would reckon that I'm in the bottom 10% of income of this forum's frequenters. However, at most times, I own 3-4 'main bikes' that are worth between $8k and $12k. Even at industry prices, that stable is expensive. (Contrary to popular belief, margins on bikes are not good. Especially high end bikes. And employee discounts from bike companies are usually not very generous.)
So why do I spend a very large percentage of my income on bikes/bike accessories/bike maintenance every year? Because bikes are important to me. Riding bikes is the single thing I enjoy most in the world, out of a very very wide range of hobbies and recreational activities, and it's not even close. So I spend on bikes, and drive a car with a $280 monthly lease, and purchase most of my clothes at Target, and eat the store brand Grape Nuts and greek yogurt, and make the most of every section of paper towel on the roll.

The market for $8k+ bikes is more blue collar than a lot of folks would assume, and while we do help/seduce (juuuust kidding!) customers to finance a fair amount of them at our shop, the majority of people seem to have saved for what they really want, and treat themselves gladly.

Or in the words of Marie Kondo:

"Keep only those things that speak to your heart. Then take the plunge and discard all the rest. By doing this, you can reset your life and embark on a new lifestyle."

[laupsi]

Originally Posted by AngryScientist

To bring it back on topic - I wonder if leasing very high end bicycles will ever be a thing, similar to cars?

Pros Closet is the closest thing…

[rice rocket]

Originally Posted by Mark McM

The price of the average new car is not affordable to the average American - but that isn't stopping people from buying cars they can't afford. Many Americans are living from paycheck-to-paycheck, and it's not just lower income households, many households with higher than average incomes are also living paycheck-to-paycheck, due to excess spending habits (like fancy cars).

No, the only conclusion you can draw from the article is 22% of households cannot afford a $48,000 car. Everything else is just misusing the facts.

Low income households are not buying $48k cars, they are buying $20k Civics. To say that they cannot afford to buy a $48k car may be true, but that not the same as not being able to afford a car.

[Baron Blubba]

@MarkMcM: That's a really nice quote. I try to live by something similar: Identify what makes you happy and do it often. Identify what makes you unhappy and don't do it.

More to the point of the Marie Kondo quote, it is amazing to me how many people go through life doing the same things over and over again, feeling the same --bad-- way over and over again, and never identifying the correlation between the doing and the feeling. Owning every POP figurine is not the answer!

[Mark McM]

Originally Posted by rice rocket

No, the only conclusion you can draw from the article is 22% of households cannot afford a $48,000 car. Everything else is just misusing the facts.

Low income households are not buying $48k cars, they are buying $20k Civics. To say that they cannot afford to buy a $48k car may be true, but that not the same as not being able to afford a car.

A middle class (about 50% of Americans) household of 4 has an income of between $60,000 and $180,000, according to the Pew Research Center, so a lower class (about 30% of Americans) household of the same size would have an income of less $60,000. According to the 20/4/10 rule, an income of $60,000 can afford to buy a car of about $30,000. As a household of 4 is likely to have 2 cars, that would be about $15,000 per car. So a two car low income household probably can't afford the $20k Civic, either.