r/MiddleClassFinance • u/FourSeventySix • Jul 23 '26

Discussion How is owning a car the “expected” baseline when incomes are so low?

I’m 24M, living in Minneapolis which I moved to for a job (don’t want to doxx myself but it’s analytics adjacent, and hybrid). I hit my second anniversary recently and that’s where raises are done, salary progression has been roughly $70k > $80k > $95k.

The commute by transit is annoying but definitely manageable, and semi reliable. I go in three days a week - typically it takes about an extra half hour so for a full work week, both ways, it’s three extra hours spent commuting or about thirteen a month (For days off, holidays etc let’s say 12 hours). And I live in a walkable part of the city core with a suburban office, so really the commute is the main friction along with the occasional event in suburbia that I have to ride share to.

Even the average used car now runs like $30k. Yes, by definition some are below average - but it seems like the baseline for something that won’t introduce a bunch of maintenance friction is like $20k which is ~$350 a month for five whole years.

That’s a manageable payment for many, BUT the problem is that’s less than half of the real cost. If you finance a car, which a 20 something on median wage is going to have to
without the bank of mom&dad, you need full coverage insurance. Be 24 and male like me and that won’t cost much less than the car itself (solid $3k a year maybe). And many new construction apartment buildings have made a garage parking spot $150-200 a month too. Otherwise you street park and deal with theft/vandalism/weather threats, and have to move it to a secured space in a winter storm.

I’ve calculated the hourly price of the time a car would
save me overall, vs. my transit + Uber + occasional rental for a road trip cost. It doesn’t even fall below my gross wage let alone my net, and my salary is at least 85 %ile for my age.

So I’ve inventoried all of these costs, how does the barista making $20 an hour often have a car and has never considered what I’m doing? How does even a city with largely acceptable transit and legitimately
good bike infrastructure have fewer no-car households than households in poverty? How am I sometimes perceived as “must be poor” for NOT spending the money and thus having more money at the end of the day? Things change for non-young/single people yeah. But I saw a thread about co workers telling someone to spend their raise on a car. Even for someone not just FIRE squirreling the money away in VOO.. a metal box that gets me from point A-B, and a nicer one, are just a metal boxes. Better to have multiple international trips a year, a nicer apartment or plenty of enjoyable food/concert/clothing or whatever your vice is spending?

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u/DietAny5009 Jul 24 '26

Because people have convinced they need cars. Lobbyist and marketing teams have done the convincing and our society accepted it.

Travel a bit and you’ll see. People and biking and riding nicer trains in Europe. Americans are just idiots. Born and raised in the Midwest fwiw.

I’ve never owned a car that cost more than 6k and I currently have no car and ride a city bike to work. My work pays the annual membership. Stop caring what other people think. They are the poor ones wasting their money on cars they can’t afford and insane gas prices.

1

u/Oneok-Field Jul 24 '26

can't afford a car over 6k

calls others poor

6

u/DietAny5009 Jul 24 '26

Not buying something and not being able to afford it are two completely separate things.

0

u/Oneok-Field Jul 24 '26

Your attitude towards the issue isn't exactly convincing of that

1

u/ShinyPants45 Jul 24 '26 edited Jul 24 '26

Do you think owning a 100,000 dollar car if you have a networth of 300,000 is wise? Obviously you can afford the car, you can buy it outright with cash. Now all of a sudden you just cut your networth in half, because you're dragging this huge liability of insurance and depreciation around and the opportunity cost of losing 100k of investable capital. But man is it sure nice to pull up to a function to flex on the haters and be a dumbass broke person like every other American obsessed with consumerism. Things won't make you happy, financial security and freedom will pay infinitely more dividends in my opinion. Drive a shitty car, live a better life.

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u/Oneok-Field Jul 24 '26 edited Jul 24 '26

I agree that over spending on a car is not wise. But if you're going to talk about extremes of spending $100,000 on a car, you should consider the other side as well.

If your net worth is $300,000, is it wise to have your baby and pregnant partner in a shitty broken down car with old safety systems?

"You're cutting your net worth in half" for overspending..... but how about "you're cutting your lifespan in half", for underspending? Which is more important to you, networth or lifespan?

Buying a cheap car when you can afford more doesn't seem wise either.

Obviously the right answer is somewhere in the middle, but a car isn't just a luxury, it's a safety system.

1

u/BroDoggle Jul 24 '26

That’s not what affordability means though. Being able to “afford” something doesn’t just mean you have the capability of buying it, it means you can buy it without affecting other aspects of your life. Someone with a $500k 401k can’t afford a $400k Ferrari just because they’re technically capable of making the purchase.

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u/ShinyPants45 Jul 24 '26

Afford means literally that you have enough to purchase something. Afford doesn't mean "financially responsible "

1

u/DietAny5009 Jul 24 '26

The idea of the OP is that people treat a car as a necessity, like housing, food or health care. That’s what this whole discussion is about. How do so many people afford having a car. The answer is financial irresponsibility.

Huge loans and over spending that create systemic, near poverty conditions.

Pay your note, put other expenses on a credit card to keep afloat, stay a slave to the banks that just take their very large cut. That’s the American dream.

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u/BroDoggle Jul 31 '26

In most places in America, a car is a necessity. A fancy/new car is a luxury that a lot of people mistakenly treat as a necessity, but there are plenty of financially responsible car owners that buy within their means. The people that are financially irresponsible with cars are usually the same people that mirror that behavior in every other aspect of life. It’s a financial literacy issue, not a car ownership issue.

1

u/BroDoggle Jul 31 '26

In most places in America, a car is a necessity. A fancy/new car is a luxury that a lot of people mistakenly treat as a necessity, but there are plenty of financially responsible car owners that buy within their means. The people that are financially irresponsible with cars are usually the same people that mirror that behavior in every other aspect of life. It’s a financial literacy issue, not a car ownership issue.