My husband was scrolling through our local Facebook Marketplace buy-and-sell a few days ago when he came across a listing for a 2023 Ford F350 truck for sale. The seller wanted $73,000 for it. Our adult daughter was shocked at the asking price. “That’s the down payment for a house!” she exclaimed.
Needless to say, the truck had all the bells and whistles: Heated this and automatic that …
The average cost of a new car is around $48,000 – near a record high. With a “used” price of $73,000, we speculated the new price for this truck was a truly staggering $80,000 or so.
But here’s the thing: The seller had to go out of his way to get a truck this expensive. We live in a rural area near a small town not known for its upscale residents. Regionally, wages are modest and industry is limited. To purchase this $80,000 truck, the buyer had to travel quite a distance to the nearest city, since the only cars sold locally are second-hand. In other words, buying a truck this pricey was clearly planned, not impulsive.
What are the payments on an $80,000 truck? Likely they’re on the order of $1,000/month for at least seven years. That’s quite a financial obligation for something that loses a huge part of its value the moment it’s driven off the car lot. Did the buyer have a change of heart? Face a job loss? Encounter budgetary reality? We have no idea why this person was selling, of course, but we speculated there was a lot of buyer’s remorse involved. As our daughter remarked, this Facebook Marketplace listing had an air of desperation about it.
It’s probably cold comfort for the seller, but he’s not alone in parting with a vehicle. In fact, you might say this is a sign of the times. Consider this recent article, “Subprime Auto Loan Delinquency Erupts, Reaching Highest Rate on Record,” which discusses the “crushing” auto loan crisis: “What has been widely known is the consumer has been funding car purchases with even more debt to afford record-high prices, with many monthly payments exceeding $1,000.”
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According to a Twitter post by “CarDealershipGuy,” “People are swimming in debt: two out of every three consumers who agreed to a $1,000+ monthly payment in Q2 signed up for an average APR between 8.5% and 9.6%.”
Ivan Drury, the Director of Insights at the car-buying website Edmunds.com, notes: “Consumers who are paying large amounts of finance charges could be in jeopardy of falling into a negative equity trap” (paying more for the vehicle than it’s worth).
Maybe it’s because I have no particular interest in motor vehicles behind their usefulness as a tool to get me from Point A to Point B, but I’ve never understood why anyone would purchase a high-end vehicle to begin with. Is it ego? Pride? Keeping up with the Joneses? Seriously, why would anyone of presumably modest means have bought a vehicle this expensive to begin with? Why?
The trouble with voluntarily assuming massive debt (as opposed to involuntary debt such as medical expenses) is one never knows what the future might bring. Over the last three years, the winds of change have shifted dramatically. We’ve had lockdowns, economic turmoil, demographic alterations, inflation, jacked-up interest rates, ballooning national debt, and now we’re facing what might turn into another world war. And yet, despite this, someone bought a brand-new $80,000 vehicle.
Right now, America is facing a lot of uncertainty in the future. We have wars and rumors of wars. We have rampant inflation and a runaway national debt. We have rising housing costs (high mortgage interest rates and rental costs climbing through the roof). We have a stunning 80% of the population living paycheck to paycheck. A lot of people are getting by through their credit cards, an expensive and ultimately unsustainable option. In short, we have endless reasons why being in excessive personal debt isn’t a good idea. Financing a brand-new $80,000 truck is not in the same category as going into debt to purchase groceries or finance medical expenses or even pay rent. Vehicles of this caliber are not “necessities.”
Officially, the inflation rate for 2023 is 3.7% (this simply means that things are, on average, 3.7% more expensive than last year). But this number needs to be seen in relation to previous years. In 2022, things were 6.5% more expensive that they were in 2021; and in 2021 things were 7% more expensive that they were in 2020. (In other words, inflation is compounded.) In the same period, real wages have dropped nearly 4%.
On an individual level, peoples’ financial foundations can alter at a moment’s notice. We can only cope as best we can with whatever is thrown at us. Inflation rates and government spending is far beyond the control of the average American. All we can do is address our own personal financial vulnerabilities, which include not digging any deeper if you’re in a hole. Now is not the time to spend beyond your means; let alone adding to your debt by buying $80,000 trucks. Now is the time to invest in things which increase in value or dare I say it, lowering your financial liabilities.
I give the seller of this truck kudos for doing his best to get out from under his financial burden. Clearly, he dug himself into a hole, but at least (I presume) he’s no longer digging, as evidenced by his truck being placed on the market. I sincerely hope he’s able to offload his vehicle onto someone else … though, frankly, I would question the sanity of anyone who would buy a used pickup for $73,000.
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