Originally Posted by
Idaho45guy
Was going over the remaining financial obligation for my 2019 Toyota 4Runner. I love it, and it will be a great vehicle for at least another ten years if I keep it. But, I would like a 1/2-ton pickup to tow a 22' RV camper, or a half cord of firewood, or whatever you need a 1/2-ton pickup for. So, naturally I looked at Toyota Tundras. The cheapest I could find within 100 miles was $48,000. For a pretty basic 1/2-ton pickup. The "fancy" ones were $52,000 and up.
So, since i have $6,000 worth of equity in my current vehicle, I would need to finance $42,000 in order to buy a new pickup. To keep the payments to where I could afford them, I would have to get an 84 month loan at 2.5% interest, even with my excellent credit score.
That's seven years of payments at $536 a month to buy a modest 1/2-ton pickup truck! That is insane! My house payment on a 3-bedroom home in a nice neighborhood is $575 a month.
I called my dad to discuss the dilemma, and he pointed out that in a couple of years, when my 4Runner is paid off, that interest rates may be up around 8-10% on new vehicles. And prices for new pickups may be nearly twice what they are today due to inflation.
He lived through the 70's and Jimmy Carter and idiotic economic policies. He thinks Joe Biden is leading us directly into historically high interest rates and crippling inflation.
He advised me to keep my 4Runner and pay it off and put extra money aside. He said he thinks economic end times are about to hit and a $400 car payment and a $575 house payment are extremely valuable and to not jeopardize either. He thinks the days of Americans moving slowly up the ladder of economic prosperity are over. That the dream of having a nicer vehicle and bigger home with just a bit more hard work and a promotion is gone. We are about to enter a winter of inflation and devaluation of the dollar.
Seems like now is the time to lock in a $48,000 pickup at 2% finance rate if in a couple of years, the same pickup will cost me $60,000 at 5% interest, right?
Whatever happens, I just can't believe that a pickup costs a year's wages or more these days.
My grandpa made $32,000 a year in 1979 as a union carpenter. He bought a brand new 1979 F150 XLT pickup regular cab 2wd for $5,500.
That brand new pickup cost him 1/5 of his year's wages. Today, a new F150 like my Grandpa's would cost $35,000.
In 2021, union carpenter wages are about twice what my grandpa made, or $28 an hour. That equals about $56,000 a year.
So today, a new F150 costs more than half of a year's wages in today's wages. Used to cost a fifth of a year's wages.
This is why the middle class is disappearing and why people are struggling. Nobody wants to talk about it or acknowledge it. But the facts are the facts.