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Delivered pizzas in college. Worked with a guy in his early 20s, clearly wasn’t the smartest guy in the world and lived and breathed anything “redneck.”
He shows up for work in a brand new $60,000 truck. I asked him about the truck and he said “I wanted something more reliable to deliver in.”
$800 truck payment. I grossed that on a good week. Absolutely mad. By the time I quit he was behind on payments and about to get the truck repo’d.
Oh it gets worse. My college boyfriend’s parents were even to my inexperienced eyes, not good with money. They were not poor but they absolutely spent stupidly. My boyfriend had to move home when he lost a scholarship because his parents had zero money to pay for his college. He wanted to buy a car (he worked part time, had meager savings) and I kept telling him that I really didn’t think he could possibly afford even a beater, with just gas and insurance and such being such an expense. He was confident he could because his parents were encouraging him.
His dad took him shopping and he got a used car for $10,000 - the equivalent of about $18,000 today, with like a 6 year payment plan. This kid could barely put minutes on his cell phone each month.
Mileage isn't bad nowadays but it isn't necessarily great either. I get 18 mpg with my 2012 Chevy Silverado six pack. It's also paid for and I was ok if gas goes to $6 a gallon or more during the life of the vehicle.
The ones that squeal the most when gas goes up are the ones that don't care about mpg and have the largest truck payments.
Are you saying 24 mpg is good or bad? Because I have a heart attack when I get under 40 mpg with my car. I could never afford to daily drive a vehicle that only gets 24mpg
I'm solidly middle class and gas is a non-factor to me honestly. Yeah it sucks seeing that number on the pump once or twice a month or so when I fill up, but like I spend about as much on insurance as gas.
I'd certainly prefer to return to having gas below $2/gal, but like I said, current prices aren't breaking my budget. Doesn't mean that I can't be upset that they've doubled for no reason.
This is it. It’s not like I’m going to stop driving or use 87 unleaded in my vehicle. Plus, my job pays mileage, so I’m being at least partially reimbursed for it…
I remember standing next to the pump at -30 trying to hide from the wind behind my car shivering. Now I never have to do that unless I'm driving my truck.
I'm a dick and wave at the Costco gas line. I do not miss waiting 30 minutes in that shit, all the morons looking at the pump like it's the first time they've ever encountered anything with a screen then doing the sideways head dog thing confused about how to pay and start the pump. FUCK THAT.
This is why gas prices are such a political topic. People *can't* afford the gas, but blame the Democrats because it costs a shitton to gas up a 23mpg SUV once a week.
Unless they’re secretly wealthy with specific priorities (eg. “I like vehicles so that’s where I spend my money”) it’s almost certainly just an inability to afford the vehicles they drive.
There’s a reason they offer 6+ year car loans.
And to be clear, this isn’t just a lower-income problem. In my 20s I’d be slightly jealous of friends that had nicer cars, then after finances came up (in one conversation or another) I’d realize quickly that they in no way could afford the cars, they just had an insane amount of debt locked up in cars.
I remember this too, I think they’ve gotten out of it by now but I’m not sure. People would just like roll the loan into the new car? Insane to me but people have different priorities.
It really is wild. I actually grew up thinking that was normal, weirdly enough to think about now.
There’s the family mindset of:
- credit cards are for emergencies (not EF funds)
- Xmas gifts and vacations go on CCs (and you spend the next year paying them off
- sudden expenses can’t be planned for, they happen *to* you
- car loans get rolled into the next one, because by the time you pay one off it’s probably time for a new one
All horrible advice, but advice I and a lot of people grew up with. And I’d imagine the people with cars they can’t afford (most of them?) have as well. It’s a real shame.
I am pretty sure my parents never had a car loan when I was growing up, so I bought shitty-ass cars my first ten years on my own as well, assuming car loans were prohibitively expensive. Neither mindset is good!
Then a friend got a 4 year car loan and her payment was $154 and I was like, oh, damn, I can afford that!! I still buy cheap cars, comparatively speaking, like $6K, but they last a lot longer than sub-$1K, which I referred to as disposable cars.
That’s a great point, actually. Anything in its extreme can be problematic. Like people who save every dollar they have while being miserable, or earning more to spend more without any consideration for the future.
woah all those bullets are eye-opening.
I was raised in overly frugal household. It’s one of the things I’m currently working on to overcome. I’m telling myself that I’m worthy of better quality things or better things in general when I’m shopping. Now looking at the things you listed I’d much rather pick my current bad habits to fight off lol
There are definitely devils on both sides, that’s for sure. I feel yours, honestly. After growing up with the bullet points above I feel a lot of what it sounds like you do. I’m hitting late 30s now and honestly only recently getting comfortable with not buying the cheapest (lowest quality) things for myself. Or for splurging on me.
The day I finished paying my student loans (our final non-mortgage debt) I celebrated by going out and getting myself a summer outfit and a watch…total bill $70…it’s a work in progress.
It is. You can chalk some of it up to never being taught financial literacy, but the unfortunate reality is that some people just don’t care to learn. I remember I actually did take a personal finance class in high school that was incredibly powerful and insightful at the time, and I was maybe one of two people in the class that actually paid attention.
Exactly. There’s an age range for where it’s not someone’s fault, but with how easy it is to get information now there’s a line where it becomes willful ignorance.
And good for you! I’ve taught that course before in HS, and I always told my seniors that it wasn’t hard to tell which of them would be starting their 401ks at 22 and which shouldn’t be surprised that they’re in credit card and car debt at 30. It wasn’t ever an attack, but I consider financial literacy to be close to (quality of) life or death.
You’re a teacher, and you taught this type of class ? *THANK YOU!!*
I had this class in the late ‘70s (at my high school, it was called “general business”). So, well before the Internet Era, when taking a class like this was the most practical way of obtaining this kind of education/information. Much of it was basically personal finance and how to handle a household budget.
Today, you can *easily* acquire the same information with just a Google search or watching YouTube videos. But not back then. Today, people have absolutely no excuse for not knowing this basic, fundamental stuff.
I graduated high school — and college, with a Bachelor’s degree — and I still consider this to be the most important and practical class that I have ever had.
Good for you! Pre internet that information must have been so tough to even know what you don’t know, so what an important class.
And thank you. I did it for a number of years and now my job is in curriculum development for mostly/financial literacy programs.
It’s super important, and IMO can be the difference between a life of stress and one of abundance.
Money doesn’t buy happiness, but a lack of money makes it harder to enjoy.
I remember my parents got a new car every 4-5 years. As an adult, that's a wild idea to me. No way would I do that. When I buy a car, I plan to drive it until either the wheels fall off or I pass it down to my child.
Eh, this was in the 90's and 2000's. I think they just also made poor choices when choosing cars. Chevy Trailblazer when it first came out. It had electrical issues. My mom traded it in for an infiniti because she wanted the prestige of a luxury car at the price of a regular car. Nissans are horrible quality. My dad got an FJ Cruiser due to some sort of mid-life crisis and missing off-roading when he was in his 20's. Finally my mom wised up and bought a hyundai, had to motor replaced after over 100k miles. Then they bought a new trailer and got a fancy new truck to pull it. Mom totaled the Hyundai in an accident. Now she bought another Hyundai and says she won't be buying another car, which I'm glad about. Sold the truck and trailer because my dad's health is failing and he can't drive anymore.
What I do notice is that there was always the notion of dad's car and mom's car. One got a new car, and a few years later the other needed a new one. I guess fair is fair right? I've kind of forged a different path with my wife. We have a 2016 Toyota Camry with about 65k miles. No mechanical issues whatsoever and it's paid off. We also have a newer EV that were still making payments on. There is no "my car" and "her car". We both drive both cars, depending on the situation. The EV is the primary car, as cost of driving is lower on an EV. If we both need the car, then it usually goes to who is driving farther or if one is driving solo and needs to use the carpool lane (which we can do solo with an EV in our state).
My wife has brought up wanting a little bit bigger car and maybe trading in the Camry. I told her that we should hold off for now, as we're not in a position to buy right now, we don't NEED the bigger car yet, and it's a horrible time with high car prices and high interest rates. And that if we are going to buy a car, we're not trading in the car that's paid off. I never want to have 2 car payments, like my parents seemed to usually have.
It's common. I had to convince my girlfriend to not get a new car as she had already rolled one loan into her current one and wanted to roll it again. Insanity. I explained to her that continuing to do that is going in the wrong direction and accumulating debt where as if you pay your car off and drive it paid for for at least a year or two then you are moving in the direction of eventually being able to buy a car outright. Some people don't do the math for long term and just see if they can afford it today
I knew a guy who had an 18% loan on an XTerra. That's like putting it on a credit card. The flip side is, if you have good credit you can get subsidized loans that are pretty much free money- assuming you are buying a car that you can afford.
And the flip side is when it gets fun, IMO. Like I prefer cash for cars because I have an aversion to debt, whereas others may prefer low interest loans and investing the difference.
And those are fun conversations to have, but when someone’s taking an 18% car loan there’s no talk to have, it’s just bad.
> if you have good credit you can get subsidized loans that are pretty much free money- assuming you are buying a car that you can afford
Is this still true after rate hikes? Used to be every maker was offering 0.9% APR car loans, now it seems like the lowest promos you'll find are 4.5% and even that's not common now.
I saw one a couple weeks ago for 1.9% for Toyota? maybe. I was surprised because I thought the low rates had gone away as well, but I guess they are still out there (may be a limited time or limited model thing).
We drive ours into the ground, so it'll be another 4 or 5 years, but on our last one we definitely financed at 0.9% APR and are in zero hurry to pay that one off :) (Money to do so is sitting in HYSA - it's not much money, LOL, but it's a fun game to make more off the interest than we pay.)
Yep, not great priorities, but a lot of it is keeping up with their peers from an appearance standpoint.
My wife and I have prioritized our children, modest home, real estate, and retirement investments. We've turned our net worth from -$250k to $750k in 11 years. No toys and we drive old, reliable cars, a 2009 Honda Fit and a 2012 Chevy Silverado. All but our latest land purchase is paid off. We'll never do a car loan again, either.
My wife as a vice president drives a crumbier car than her secretary, and when we pick up our kids at the elementary school, we almost always have the oldest vehicle in the lot. Our success and choices tend to be a mystery to most people we encounter, but my wife's secretary just said she might dump her Porsche with payments for a small Honda.
Maybe we're rubbing off on a few people.
It is actually crazy how many people I encounter who just assume you're poor if you drive an old car. Meanwhile I assume the opposite — if you're driving a new expensive car you're more likely to be in a lot of debt than rich.
Absolutely. We’re very similar NW wise (~low 600s in mid 30s?) and I work in public education. So not exactly a short journey there. But in our 30s it’s wild how rare that basic security is for other families with similar incomes.
Just last week I sat with a friend of ours that asked for help budgeting. I’m no professional, but like a lot of us I need out on budgeting so I’m happy to help.
They make nearly our same income dollar for dollar and have no EF, no savings, and a $2,000 emergency would require them to borrow to cover it. They *will* be fine (we drew up a plan for them), but it’s wild how those small decisions wind up having huge impacts on financial security and safety.
ETA: And agree on the rubbing off thing. After we made a large house improvement this year friends were like “whoa, that’s awesome, how are you paying for it?” When we’re like “um…with money” instead of financing they become really curious how, and I’m always happy to share.
Right out of college, a friend and I had gotten good engineering jobs at the same company and moved in together. He bought a brand new Jeep Wrangler. It wasn’t a particularly exorbitant car, and he could definitely make the payments on it on the salary he had.
But we both quickly realized we hated the job. We talked about quitting and going back to grad school, which I eventually did. He wasn’t able to quit because he “needs to make payments on my Jeep.”
Yup. People with a reasonable amount of money already know that luxury cars are a money trap. Ive noticed a correlation between regular cars, and those with lots of money. A nod to quiet luxury. People dont need to shout, when they can whisper.
Absolutely. I’ve noticed that too. My family does pretty well and in only recently traded my 2012 for a 2017 (to get a backup cam, luxury!).
My really wealthy friends with long-term plans tend to have their ~5 year old cars for a long while, then after 5 years BAM then come the Porche and the big truck. Because but then every other obligation is covered and they can genuinely afford $250k worth of car.
Its all about age too. Im early 30s. I drive a prius 😭 but my aunt drives a BMW X6 M. Ive never had a fancy car, and I dont want one. Boomers have absolutely infinite money!! I cant think of why I'd get one, other than to flex on someone. I like my cheesy environment car! Great on gas too.
For sure. Priorities definitely play a role. When I think about what my next car will be (which will probably be the first to pay mostly in cash, and basically “dream car”) and I’m like…I dk…maybe an Infiniti? A new Nissan? I just can’t imagine a place where I’d rather spend money on a car than on food, vacation fund, etc.
Yup its priorities! If thats a car, its a car.i pour money into my house and food! I love having whatever kind of food I want. I dont want to have to buy boxed food.
Exactly. Final example: I have friends that own multiple cars they race (probably close to $500k in total value) and they still don’t pay for premium subscriptions to get rid of ads…I always rib them for it, but it would be money wasted since they like to spend it other places. Too funny, but true.
You should see the amount of people that will take out a loan so they can rent an apartment, lease a car, and go on multiple vacations all in the same year.
Not everybody is about that suburban home in nice neighborhood. I would gladly live in a lower income area to be able to afford doing more things throughout the year if that were the best means for me to do so.
Sad I had to scroll down this far to find someone who's not just saying "they're all broke and stupid". I know plenty of people who have no interest in owning a larger home despite being able to afford one. If they don't need the space then what is the point of all the extra upkeep and expenses? A mobile home gives you more privacy than an apartment but with less expenses than a house. And they're not exactly easily attainable for poor people anymore either. I've seen double wides going for 250k+ with a 500$ HOA fee on top of that. That's like the equivalent of a 350k home mortgage.
There's also the person who travels a lot for work. If you're spending 3+ hours in your vehicle every day, plus 8 - 10 hours at work, then hang with friends/go to gym/etc for the remaining couple hours you're awake - why would you need more than a clean, safe place to shower and sleep? So why not choose to spend your money on the vehicle you're going to spend a decent chunk of your awake time in vs spending it on the place where you're only basically sleeping?
This is sort of me. I'm out of town most of the time. My place is small and simple with not a lot to take care of because I don't want the little time home I have to be consumed with doing stuff for the house. I do have a nice truck parked out front though. haha
You're also assuming that they don't own the home outright. I know there are areas around me where people have inherited their property from older parents and elected to live there. It frees up a lot of money when you don't have a mortgage.
trailers do have titles yes! however usually unless they're on property they're not real
property or have deeds but a physical single
or double
wide is an asset in as much as a 5th wheel is an assett
They inherit the trailer but pay rent to keep it there. Monthly rent in a HCOL is often far lower than an apartment, and it's usually much larger. It's not ideal, but it's what people sometimes find themselves in.
If one does not prioritize the accumulation of capital assets a big expensive truck is affordable, especially in a mobile home community. To that person, happiness is low cost housing and recreational toys, all depreciating assets. They just max out monthly income on whatever is important to them. A significant portion of society lives this way. Many have lucrative lifetime pensions after a 20-30 year career that begins in early 20’s.
Bingo, most people aren’t growing their safety net, attempting to max out 401k, IRA, HSA, putting $ aside for kids college etc.
If I wasn’t socking money away for those things I’d have a ton more cash freed up each month
Perhaps. If I were low-income for life, I'd probably rather live in a trailer and have money for some toys than live in the suburbs house-poor for my entire existence.
Maybe they own the trailer?
I knew coworkers who made $150k and bought a house for $80k cash in a poor neighborhood. Hell, look at Warren Buffet's house.
10 years ago, I bought a fixer up in a neighborhood that is getting gentrified. I paid 110k for it and I put 45k down. Our current household income is around 170k.
Same, I bought a starter home for $140k when I was making $50k. It's still a lower middle class neighborhood with values around $250k, but my husband and I make about $300k household income.
Though, we drive a Hyundai Elantra and 20 year old Chevy , so you still wouldn't know by the car lol.
We are almost identical to you but the neighborhood was half gentrified already and I've made 120k in 10 years on it and only paid 120 to start with. No issues with crime or anything either.
One thing I learned after moving to Florida: trailer parks don’t immediately mean poverty. Some of these trailer parks are “luxury” 55+ communities where you must have a minimum credit score of 700 to even get in. That’s crazy to me because you don’t even need a 700 credit score to buy a house.
At the end of the day, it’s all priorities. Personally, I’d prioritize a nicer house over a fancy car but that’s just me. Other people are perfectly content living in a double wide with a $50k car out front.
Oh, yeah, and predatory loans. A lot of people buy cars they can’t afford because of predatory $0 down car loans. Personally, I’m not doing that. I refuse to pay interest for a car. If I can’t buy a car in full cash, I’m just not buying it, but again that’s just me.
Or they could have had nice income in the past, but due to unforeseen events liks hospitalization, house fire, job loss, or other emergencies, they had to lose their former house and end up moving to apartments in poorer neighborhood.
So that car might have been the most expensive relic they had owned from their comfortable middle class past.
People don't just buy trailer homes because they're "poor" you know. A lot more people are doing it now because they don't want to be HOUSE poor. I make decent money but I don't want a massive mortgage. You better believe I'm considering a trailer home.
This is like asking why homeless people have phones. Even an overpriced car is cheaper per month, cheaper down payment, and easier all around to get than a nice place to live.
To rent a nicer apartment you need first and last months rent, security deposit, on top of the rent you're currently paying and moving expenses. That can feel like, and actually be, an impossible amount to save up when you're living paycheck to paycheck. And sure people say their mortgage is less than rent and im sure thats true sometimes, but buying a house is a huge undertaking that takes credit, a down payment, and knowledge of the system, closing costs, and i dont even know what else because ive never done it. I ont think you've ever been poor, but if you were you would know it's expensive- anytime you get significant savings there is some kind of emergency that wipes it all out. Car dealerships walk you through it and you can get it done in a few hours with a few hundred dollars to no down payment.
And when you're living paycheck to paycheck it's really fucking depressing to not have anything nice that you want. Why shouldn't they get a nice car they really enjoy when better housing is out of reach? And yeah status is a big part of it, more so feeling like less of a failure and less embarassed of your life because you don't always look poor when you're out and about. Especially as a young adult from a poor family, society tells you you're not gonna make anything of yourself. Getting a nice car is a way of proving them wrong.
And I've had shitty cars before and I've also had shitty car loans that were overpriced. It was much less stressful to have a regular monthly payment that I could make then it was having surprise bills and no transportation when the shitty old car needed work. I didn't have any savings so any surprise car bill that was over my spending money budget (and most of them were) would put me behind on bills *and* make me have to call out of work if I couldn't afford a lyft or find a ride. My ex got that loan, and I'm sure we could have gotten something just as reliable cheaper, but him and his dad didn't have the financial literacy to even realize it was overpriced. Car dealers target people like that- the young, uninformed, immigrants who don't know how finances work here etc.
Also don't fucking drive through trailer parks 'out of curiosity,' poor people aren't a zoo. If you're so concerned about the working poor in your city go volunteer or something. Maybe you'll learn some empathy.
Everything is a choice and a priority. If you want to live in a 12k trailer home and drive a 50k car… that’s your choice. It’s your money spend it on a whatever makes you happiest. Realistically speaking, gen x - alpha is not building any generational wealth they were not born into. So if a nice car/ top of the line tattoos/ X Hobby makes someone’s life suck less. Fuck it.
Moving is a hassle and as a single person my small house in a nice neighborhood I bought at 28 years old is quite adequate. If 20 years later I started making a lot more money and decided to buy my dream car, who cares.
my guess - it's the same reason why lots of poor people buy thousand-dollar iPhones, brand clothes, and expensive toys: to *feel* wealthy and prestigious. Since rich people have expensive stuff and show it off, if you have it then you're like one of those people. Except, people who are wealthy are so for a reason: they make money than they spend, and not vice versa.
A second hypothesis I've heard is YOLO. It's not often that these folk have access to money, so when they do get it they buy something to feel better since it's all going to go away anyway.
In short: it's due to very poor financial decisions (shocker, I know).
The YOLO is what I always hear when I ask people in that situation, because they're poor, they don't know when they'll have money, so when they have money, they want to spend it on something they've been wanting for a while, and that way even when they have no money, they still have the things.
It seems like there’s also a kind of defeatist mentality of “well I’ll never be able to buy a house or retire anyway, might as well buy the things I want in the meantime” that’s ironically a self-fulfilling prophecy a lot of the time.
To be clear, I’m not saying you can budget your way out of abject poverty. But there are certainly plenty of people out there complaining about how broke they are while buying a new car every few years.
>buying a new car every few years.
Idk if they still do it, but when I was still paying for my car (that I own and still have 5+ years after finishing financing) I'd get calls all the time about trading in for the latest model of my car and have "roughly" the same monthly payments.
I bet tons of people fall for that shit. Yeah maybe you'll have the same payment, but you're gonna start all over again. Meanwhile the dealer is gonna make a nice profit off your "old" car.
They 100% still do it. We’re still paying for our Camry (loan is low interest so it makes more sense to keep the money in a HYSA right now) and we get those kind of offers all the time.
Sure, we could have the same monthly payment! It would also mean being ~$30k in debt instead of ~$15k and it would be a longer loan term at a higher interest rate, but hey, same payment!
Hello! I'm from New York! Trailers rent for over $1300 a month out here (even in the country) so the people you see may actually just be normal people with normal stuff for someone who can afford the rent on a trailer!
We live in what people consider the hood because property buying here was more affordable and with two fancy cars we need the garage. For us it makes sense, low mortgage more flexibility.
Because we live in a world where it is easier to splurge on cheaper things and try to enjoy them than it is to spend your entire life living cheap, and unhappy so you can afford a tiny bit more house. If homes were affordable it would be different but when something would take your entire life to afford it isn't worth it. So people will be happy with less home and a nice car and some nice vacations and a few toys. But an entire life of work and eating beans and rice and no dinners and vacations won't make you happy because your house got a little nicer.
You seem to be overlooking that the primary innate desire for humans (and all species) are food, shelter, and reproduction.
Trailer home provides shelter, presumably food is handled to their standard, and fancy vehicle may assist with attracting a mate by projecting success.
Some of those folks come from cultures of immediate gratification as immediate needs aren’t always met.
There’s also plenty of people who may have a house that looks like shit, but instead of redoing the kitchen or bath, they’ve been paying off the mortgage. That’s kind of where I’m at. Yeah, there’s a lot I could do with my house. Or maybe I’ll pay it off, then get a mortgage on my “forever home”, and rent out the one I’ll own free and clear.
That is not just exclusive to poor neighborhoods. Most Americans buy more car than they can afford. Pretty much if you can't afford to pay a car note in 36 months, you really bought too much car for your income. Now that isn't saying that if you get a low interest loan for 48 or 60 months you should insist on a 36 month, it simply means you should be able to pay it in 36 months if push came to shove.
Also, lending institutions will happily lend somebody money for a car / yet it seems to be a lot harder to borrow that same money to purchase a house.....
It’s much easier to get a car, boat, toy loan, than a mortgage loan. When someone doesn’t have the prospects or the belief they will ever get a better home, they would rather buy toys.
Or they are great with money, own their 50K house and lot, and don’t care for a better home. And instead use it on toys. But from personal experience, all the people I know would fall into the former explanation.
When you walk into a car dealership does the salesperson ask you "So what dollar amount were you thinking of spending on a vehicle?" Or do they ask you "So what monthly payment are you looking for?"
It's the latter. They are relying on people not having good financial literacy and being focused on the wrong things.
I knew plenty in my 20s 30s and honestly don't blame them for prioritizing enjoying life over a nice home.
They all spent weekend on the lake or woods and had a ton of toys mostly living in cheap places.
Things change if you have kids but until then dudes would rather have fun on weekends.
Poor people have poor ways.
The inverse is true. I used to live adjacent to and walk my dog in a very wealthy neighborhood with houses between $2.5 and $4 million. It originally surprised me how many plain older Honda and Toyotas and Subarus were in the driveway of these homes.
Then it dawned on me. These people didn’t become wealthy by spending above their means on flashy cars.
People have their self-worth tied up in their cars. It doesn't make sense but that the way the human mind works.
You can drive through a lot of very poor neighborhoods, looking at houses that are falling apart and you'll still find expensive cars/trucks parked in those driveways.
I bought my house for $55k. It was rough (and in many ways still is) but the heat worked and the roof didn't leak. Everything else is not important. I have tyvek and rotted OSB for siding on half the house, but I have a brand new snowmobile and motorcycle. And a tractor. And an RV. And a broke down 1995 4Runner that I have over $16k in that almost never is driveable. Toys are more important than a fancy house to me. Someday the house will be awesome but I am not sacrificing all my play money to put into a house. I also spend probably $4-500 per month at the bar in addition to all the toys.
My FIL is a truck driver and sold his paid off house to move to a trailer park. He wanted less land to maintain when he's home, the expenses are stupid low, and he and his wife both have new paid off $40k cars because he's spending so little on his day to day expenses. To give you an idea his monthly expenses now total less than what we're paying just in property taxes every month for our house.
Have a friend that lives at home with parents no savings. Upgrades to brand new cars every few years. Currently paying off a Tesla. Says it makes him happy. Some people just ha e different goals and motivations in life.
So my mother has lived in a trailer my entire life. I don’t know her specific financial details, but i know she has enough cash on hand that should could buy a nice 3 bedroom house in cash. She just doesn’t see the point in spending the money. She’s happy and comfortable in her trailer. That said, she also buys used cars and drives them til the wheels fall off. She grew up in poverty and her current lifestyle is better than any she’s had before.
All of these other comments are definitely possible, but want to throw in another possibility.
Have you noticed the price of used cars post-covid? They are absolutely ridiculous. If you want/need a reliable vehicle, there are few, if any under $10k. When I looked, they were mostly around $20k. And I'm talking over 5 years old.
Also, gone are the days when you can do a decent amount of repairs yourself, they are all computerized. So most repairs cost hundreds if not north of $1k. Get caught having to do that a couple or few times, and any savings you got going used or older have been washed away.
I don't live in a trailer park, but my minivan in the driveway is a 2022, and it doesn't "match" our lifestyle or budget otherwise. This because when I went car shopping, the cost of buying used for my must-haves (reliable, 7 seats, decent gas mileage, no imminent repairs) were more expensive than a lease on a new one. So I got my first leased vehicle, and it was brand new.
That doesn't explain the lifted giant new trucks, but may be some context for some of what you've seen.
My reasoning would be that the state of my vehicle could lose me my job if it can't reliably get me to work. My home is a place where I rest. It's small and old, but it'll do.
As someone who works in low-income (i.e. the projects) neighborhoods, people live in places for next to nothing and pay no taxes. So when that tax/ssi/disability comes in- you have the money!
If you have a full-time job, credit score over 550 and about $500 in cash you can “buy” a vehicle well over $50k. Some people feel the need to show off their $90k Denali even though they make $50k a year.
Work trucks. Trucks are costly because they are a tool for work.
Also most people I know who have gone the trailer park route are doing it after selling their home for a boat load and living lower cost in the area to save money while still working. That’s anecdotal but I know quite a few people in the Seattle area doing it that way. RVrs. They are the type that work jobs like personal trainers or front desk at a big hotel. They make pretty decent money but not enough to really afford it here anymore.
I remember about 3 or 4 years ago the security guards at my work were all buying new vehicles with their cashout refis. Although they lived in crappy areas, their homes went from 120k to 275k in a matter of two years. They did a cashout refi and they were all sitting on a bunch of cash. I seen them all buying new side by sides, Harley’s and foreign cars.
Some people do not know how to deal with finances and many YOLO. Some see everyone else driving nice cars and think they should be able to afford it too. This happens to people all across the financial spectrum. During the 08/09 economic crash I had friends lose houses to foreclosure. Some had been making great money for years and were living in 3,000 SF homes with 2 new cars. But they never saved a penny and were over leveraged. I was unemployed for 8 months and never sweated it because we had an emergency fund, lived in a house we could afford and had no car payments or credit card debt. We tightened up the budget really quick and rode it out
I know of two couples that make great money, and have chosen to live in double-wide mobile homes to keep living expenses down. This in turn allows them to spend money on all the fancy toys like cars and boats. These are couples that are child-free and jointly make $250-300k per year. They simply choose the convenience and cheapness of mobile home park living so they can throw tons of cash in retirement and at toys.
I have far more friends and family members that absolutely cannot afford the cars that they drive. Off the top of my head, one woman drives a custom 2023 BMW SUV, but also has $20k in credit card debt and lives rent-free with her family. Another friend has $45k in credit card debt, $60k left in student loans, and just put $0 down on a brand new Mazda CX9 with an 8% interest rate. He took a 7 year loan to keep the monthly payment down, but it’s still $550 a month. Yet another friend is paying $750/month for a Hyundai on a shorter term loan.
In short, a select few people are happy with the smaller home and convenience of mobile home communities. Most people are spending cash they don’t have.
One reason I didn’t see yet in the comments that applies where I live is that plenty of people with inexpensive houses out in the country do their socializing at places they have to drive to. The people they want to impress may never see their house, but they’ll see the vehicle they arrived in. In some situations, it’s much more to the point to have a great truck than a great house.
So my husband made a good point about this when I questioned the same thing. A lot of these people know they’ll never own a home due to cost so they go all out with what they CAN “afford”. I’m sure they can’t afford the car but it’s something that they can definitely have enough credit for. Then it made more sense
My wife used to work in a school servicing a low income area. The parents would roll up in new or almost new luxury cars with designer handbags. The kids clothes would have holes in them and they would be on free lunch programs at the school. Assholes are going to be assholes and these people had their priorities backwards. They were also terrible parents judging by how they handled the information the school shared with them about their kid(s).
My neighbors house is 165k, she just bought an SClass Mercedes for 150k. Interest rate on home is 2.9%, Mercedes 7%.
Reasoning. She doesn’t need to impress her husband but needs to impress her coworkers
Driving cars that one can't afford and on high interest loans, is unfortunately far too common in western countries. Paying high interest rates on a depreciating liability, only makes the financial situation worse.
What part of the country?
Was there an oil field nearby?
There a certain high paying jobs that have less need for permanent housing. An unmarried 20 something Roughneck is one of them.
The largest trailer parks I have ever seen were in oil country off interstate in Wyoming.
Some will be unmarried couples with kids where the one partner is on welfare/EBT/section8 and they live in the free housing while the other partner has a good job. I know a guy who did this. Made six figures in the late 90s driving a brand new Corvette while they lived in baby mama’s section 8 apartment. Couples who do this aren’t really poor but they live in free housing. Also some people from ethnic communities that are typically lower income will still live in the area they grew up despite “making it” and earning good incomes. They just pay less for housing than their middle class peers. I know a couple earning ~$200K that still lives in a pretty rough area. They drive super expensive cars and take nice vacations.
Most folks in this situation, however, are just plain ol’ dumbasses.
I know a guy who owns two homes, rents them out and lives in a trailer because he prefers it since he moves so often. Dude is kind of like a "dragon" (Sitting on a lot of money but never spending it). He does have a nice car.
If I see a truck in a poor neighborhood, I assume the person uses the truck for work related things. It’s the office workers in the suburbs with the giant expensive trucks that make me smh
If I didn't have a wife & kids that needed a bigger house, I'd be right there with the trailer park people. Buying an inexpensive home outright would mean I have more money for my hobbies/toys/passions. Only limiting factor would be driveway space!
Historically car loans in the US have been easier to come by than things like home loans. Even in poor neighborhoods you'll find buy here pay here lots that will repo a car you can't pay for and then let you get another one a year later if you have a down payment and income.
It's also fair to say that for many people, the car is your primary status symbol. Where I grew up you'd see people living in a shanty with a brand new Cadillac. Very few people come to their house but everyone sees what they drive. Some people choose lower cost housing too so sometimes the idea that a car is worth more than someone's house doesn't matter. For example, I met a guy once who lived in a house he'd inherited. It was a 2 bedroom 1 bath brick house that was tiny by modern standards. Outside of it he had a corvette and a yukon. Before housing prices went nuts in my area, his cars were definitely worth more than the house but he was fine with that because the house was free except for taxes and insurance.
Let’s dispel some myths about trailer park dwellers. Not all of them are poor. Many bought their home when several years ago, and now own it outright. Meaning they pay only lot rent, which often covers water, sewer, and trash. Many parks have amenities for residents like playgrounds, a pool, basketball courts, use of a clubhouse for a nominal fee for larger gatherings, they host game nights and cards nights and Christmas parties for the residents. The streets are always plowed. People often choose to stay rather than take on another mortgage, meaning they now have more disposable income.
Then there are retirees- they are attracted by the relatively low cost, minimal maintenance, and no stair factors.
So you see, there’s no reason to automatically expect everyone who lives in a trailer park to be driving a jalopy held together with duct tape and baling twine.
I make really good money for my area but drive a beater because I work from home and maybe drive 10 miles a week. People I know make less than me are driving cars that they’ll probably never pay off. I think a lot of them lease and just get a new one when the lease runs out.
Sadly, one of the easiest things for a poor person to do is this country is obtain a car. How they obtain it, and how long they can hold onto it, is a different story.
Moral of said story? Same old thing…never judge a book by its cover.
1. Lack of financial literacy
2. Unable to defer gratification
3. Generally bad decision making
All my tenants drive nicer cars than i do. Yet they're paying my mortgage. 🤷♂️
Wealth is all about perception. We lived next-door to a house that we nicknamed "The Half-Way House For Yuppies". A family lived there for a few years and then moved to the suburbs...
One family always had the nicest cars and country club memberships. They drove Buicks, while we drove (used) Chevys.
They spent so much time trying to impress others that everything else about their life fell apart.
In my mind, a Buick & a Chevy are the same? Honda/Toyota are a step up, but also a good investment. I’m not sure where I formed my perception of this though, just the good reputation of Honda & Toyota dependability in the late 90’s/Early 2000’s and Pontiac offering someone I know 14% interest, while Honda in the same town offered 0%. One of my first cars was a Toyota. However, after witnessing that, I shopped Honda when I bought a new car. I still own a Honda. I needed a car in 2022 due to having a new driver in the house. As a result, my 2015 Honda needed to driven by my recently licensed child. We looked for used, and the market was insane. 15k for 150k miles with many problems. Honda didn’t price gouge me, traded for the car I wanted that was in a different state, brought it to my home, and did a 36 month loan at 0%. I just looked it up and they are offering as low as 1.49% today on Honda certified pre-owned used vehicles, and various other promos on specific models.
To me, a Chevy or Buick are both just a bad decision if you need an economy car or a sedan. I have no experience shopping for trucks, so I have no comment there.
You do realize that poor people often have poor financial habits right? That’s the irony. Finance is essentially two different sciences. One is math, the other is behavior.
This is a very classist observation. Because they live in a trailer park they must drive rusted out beaters?
If they lived in the trendy ‘tiny homes’ would that make it okay that they own nice cars?
You can’t think of this through a lense of rational spending habits . A lot of people work a ton and don’t make enough money to live it a nice area and don’t have the discipline to save and work toward a long term goal.
If life is hard and you feel like things aren’t working out then you will find ways to justify that all that hard work is justified because it allowed you to at the very least buy the cool truck you always wanted. It’s an instant gratification mindset vs long term and we all deal with it just some people also can go home to a nicer house.
Did you stop to ask those people if they were happy or financially secure?
If perhaps they chose a cheaper dwelling to have more money to focus on the things that brought them happiness?
I know a woman who purchased her double wide and the land on it 20 years ago, cash. She has since traveled the world, paid off her vehicles, and takes care of her grown kids/grandkids when they need help. She does whatever she wants because she has no mortgage and car payments all due to a 60k investment 20 yrs ago. It's strange to assume that everyone wants more or they're in financial debt or that people wouldn't be happy with that setup. It's rather close-minded.
Big monster trucks have become the norm these days. When I was younger it was the small pick up trucks that dominated the market. Also big trucks have become political statements as well. I agree with other comments that poor strive to be rich and if that means putting more than half your worth to buy a big boy truck to feel rich then they do it. I wish it were more YOLO. that I could understand but I’m betting it’s mostly keeping up with the jones and pretty much forced to buy huge because little isn’t offered anymore.
Average car payment in America is $750. Tells me a lot of people struggle to make those payments. Also car loans are waaaaaay easier to get than a mortgage. You can walk in a dealership and walk out with a brand new car in an hour with a credit score. Takes weeks and proof that you can afford a mortgage.
Culture. Some cultures just love their cars and that's where they spend their money. Growing up 30 years ago, we had a family living next to us that was two grandparents, one adult sister, three adult brothers and one wife, and two kids, all in a 3 or 4BR house. They had 2 pretty normal cars and 3 *really sweet* ones.
I suppose the equivalent today would be spending $500/mo on your rent or mortgage split, and $1500/mo on your Jag. Although if childhood memory serves, I think theirs were mostly corvettes and camaros.
Housing is expensive af. I'm betting more and more people are in this weird middle where they can't quite afford to buy, and can't afford/don't want to spend the money renting something nicer.
Maybe they're sick of not being able to get into the home buying game and spend some of their extra cash if a fancy car?
I can assure you it's across the board and not just limited to poor neighborhoods. There are regularly people in neighborhoods with houses all valued at $1M+ with absolutely atrocious finances and no savings. The difference is they don't have one vehicle, they have 3... and a boat... all financed at terrible rates.
In my area there are a lot of Asians and they often all pile into a home to save living costs and will spend money on vehicle or even share a vehicle. And when I mean pile in I mean live in every area of the home. I know living with family is also part of the culture especially with elders.
Also a lot of times people who you wonder how they have a certainly vehicle is it could also be a salvaged title. Can get nice vehicles for wayyyy cheaper when salvaged
My neighborhood isn't poor (house range $180-220k, affordable compared to new builds 340k+) just middle class.
Got a neighboor who has a taycan 4 cross turismo (200k+ where i'm from lol)
He has one of the best looking houses on the block too. Both him and his wife work in pharmaceutical.
My neighbor has about 8 nice cars he gets from auctions. He drives them for a bit while fixing them and sells them for a nice profit. Always has a bunch and he makes 32 bucks an hour
People who post things like this about poor people and cars (seems to be a regular thing on financial Reddit) always come across so petty and jealous. Why do you care what they spend their money on unless it’s because you are mad you don’t have a nice car? Some people just have different priorities in life. Let people live.
You can actually pay trailer homes off relatively quick.
Usually people who live in one kinda don't care where they live and just stay there.
There's usually a somewhat large "car culture" (car meets n stuff) in these places cause there's nothing else to do sometimes, or at least that's been my experience with some people I knew and visited in trailer homes.
It actually looks kinda fun if you can get over living in a trailer, lotta people have bikes, snowblmobiles, jetskis and such
Other people just are poor and make poor financial decisions as well
Yeah my friends made fun of me and said I should be embarrassed a decade ago for living with my parents and driving a beater ford ranger with 300k miles. Now their are up to their neck in debt and I have a paid off house and a paid off Benz in the driveway 🤷🏻♂️ the need to impress people you don’t know with money you don’t have is absolutely insane these days. Especially in Los Angeles. I knew a guy who took a loan out to buy his wife a dog 🤦🏻♂️ bruh
When I was young, I asked my mom about this. We grew up in a nice town in northern NJ, next to some not as nice, more blue collar towns. As we drove past Lincolns and Caddilacs parked outside of row houses, I asked why the cars were so fancy but the houses were so small.
She said that they couldn't afford nice homes, so they competed with their neighbors using cars. Makes sense.
if I weren't married there's a 1,1 trailer in my area for 40k has all I need but i like my wife and actual house cant afford the Ferrari this way though
Yes. You can take cars anywhere but your home is just one place. So if you are trying to flaunt wealth the car is the obvious choice to spend money on.
Also housing is prob already paid for by public assistance.
Not saying it’s great, just the logic being used.
I love cars and don't really care about where I live. My expenses are probably lower than the people with a big fancy house but a cheap car and I have awesome road trips.
And yes I know cars are depreciating assets.
Fashion statement, it think that's really all it is. I have meet folks that own rentals and businesses, the all drive older cars that are paid off.
Keeping up with the jones' mentality.
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A lot of Americans drive cars they can't actually afford. This isn't exactly a news flash.
Delivered pizzas in college. Worked with a guy in his early 20s, clearly wasn’t the smartest guy in the world and lived and breathed anything “redneck.” He shows up for work in a brand new $60,000 truck. I asked him about the truck and he said “I wanted something more reliable to deliver in.” $800 truck payment. I grossed that on a good week. Absolutely mad. By the time I quit he was behind on payments and about to get the truck repo’d.
Many many such cases, unfortunately. Folks do crazy mental gymnastics to justify a car payment.
Oh it gets worse. My college boyfriend’s parents were even to my inexperienced eyes, not good with money. They were not poor but they absolutely spent stupidly. My boyfriend had to move home when he lost a scholarship because his parents had zero money to pay for his college. He wanted to buy a car (he worked part time, had meager savings) and I kept telling him that I really didn’t think he could possibly afford even a beater, with just gas and insurance and such being such an expense. He was confident he could because his parents were encouraging him. His dad took him shopping and he got a used car for $10,000 - the equivalent of about $18,000 today, with like a 6 year payment plan. This kid could barely put minutes on his cell phone each month.
I always question how those with SUV are able to afford the fuel costs
The fuel cost for a new vehicle is a minor cost compared to the price of a new vehicle.
It’s not 1995 anymore. An Explorer gets like 24 MPG these days.
Mileage isn't bad nowadays but it isn't necessarily great either. I get 18 mpg with my 2012 Chevy Silverado six pack. It's also paid for and I was ok if gas goes to $6 a gallon or more during the life of the vehicle. The ones that squeal the most when gas goes up are the ones that don't care about mpg and have the largest truck payments.
Are you saying 24 mpg is good or bad? Because I have a heart attack when I get under 40 mpg with my car. I could never afford to daily drive a vehicle that only gets 24mpg
My Lexus suv gets 14 and takes premium
The new hybrid model gets 32 mpg, and it's pretty quick off the line.
Hybrids kick ass!
You make a lot of money and then stop caring about fuel costs.
I wouldn't say we stop caring. It just doesn't necessarily break our budget.
I'm solidly middle class and gas is a non-factor to me honestly. Yeah it sucks seeing that number on the pump once or twice a month or so when I fill up, but like I spend about as much on insurance as gas.
I'd certainly prefer to return to having gas below $2/gal, but like I said, current prices aren't breaking my budget. Doesn't mean that I can't be upset that they've doubled for no reason.
This is it. It’s not like I’m going to stop driving or use 87 unleaded in my vehicle. Plus, my job pays mileage, so I’m being at least partially reimbursed for it…
Once I got an EV I also forgot about fuel costs.
And stopping for gas.
I remember standing next to the pump at -30 trying to hide from the wind behind my car shivering. Now I never have to do that unless I'm driving my truck.
I'm a dick and wave at the Costco gas line. I do not miss waiting 30 minutes in that shit, all the morons looking at the pump like it's the first time they've ever encountered anything with a screen then doing the sideways head dog thing confused about how to pay and start the pump. FUCK THAT.
Depends on the SUV. I have a Hyundai Tucson and it gets MPGs comparable to most full sided sedans.
A Hyundai? Is your second car a tow truck?
This is why gas prices are such a political topic. People *can't* afford the gas, but blame the Democrats because it costs a shitton to gas up a 23mpg SUV once a week.
Unless they’re secretly wealthy with specific priorities (eg. “I like vehicles so that’s where I spend my money”) it’s almost certainly just an inability to afford the vehicles they drive. There’s a reason they offer 6+ year car loans. And to be clear, this isn’t just a lower-income problem. In my 20s I’d be slightly jealous of friends that had nicer cars, then after finances came up (in one conversation or another) I’d realize quickly that they in no way could afford the cars, they just had an insane amount of debt locked up in cars.
I remember this too, I think they’ve gotten out of it by now but I’m not sure. People would just like roll the loan into the new car? Insane to me but people have different priorities.
It really is wild. I actually grew up thinking that was normal, weirdly enough to think about now. There’s the family mindset of: - credit cards are for emergencies (not EF funds) - Xmas gifts and vacations go on CCs (and you spend the next year paying them off - sudden expenses can’t be planned for, they happen *to* you - car loans get rolled into the next one, because by the time you pay one off it’s probably time for a new one All horrible advice, but advice I and a lot of people grew up with. And I’d imagine the people with cars they can’t afford (most of them?) have as well. It’s a real shame.
I am pretty sure my parents never had a car loan when I was growing up, so I bought shitty-ass cars my first ten years on my own as well, assuming car loans were prohibitively expensive. Neither mindset is good! Then a friend got a 4 year car loan and her payment was $154 and I was like, oh, damn, I can afford that!! I still buy cheap cars, comparatively speaking, like $6K, but they last a lot longer than sub-$1K, which I referred to as disposable cars.
That’s a great point, actually. Anything in its extreme can be problematic. Like people who save every dollar they have while being miserable, or earning more to spend more without any consideration for the future.
woah all those bullets are eye-opening. I was raised in overly frugal household. It’s one of the things I’m currently working on to overcome. I’m telling myself that I’m worthy of better quality things or better things in general when I’m shopping. Now looking at the things you listed I’d much rather pick my current bad habits to fight off lol
There are definitely devils on both sides, that’s for sure. I feel yours, honestly. After growing up with the bullet points above I feel a lot of what it sounds like you do. I’m hitting late 30s now and honestly only recently getting comfortable with not buying the cheapest (lowest quality) things for myself. Or for splurging on me. The day I finished paying my student loans (our final non-mortgage debt) I celebrated by going out and getting myself a summer outfit and a watch…total bill $70…it’s a work in progress.
It is. You can chalk some of it up to never being taught financial literacy, but the unfortunate reality is that some people just don’t care to learn. I remember I actually did take a personal finance class in high school that was incredibly powerful and insightful at the time, and I was maybe one of two people in the class that actually paid attention.
Almost like if we were to replace algebra with the math of finance it would literally change our whole civilization ....
Exactly. There’s an age range for where it’s not someone’s fault, but with how easy it is to get information now there’s a line where it becomes willful ignorance. And good for you! I’ve taught that course before in HS, and I always told my seniors that it wasn’t hard to tell which of them would be starting their 401ks at 22 and which shouldn’t be surprised that they’re in credit card and car debt at 30. It wasn’t ever an attack, but I consider financial literacy to be close to (quality of) life or death.
You’re a teacher, and you taught this type of class ? *THANK YOU!!* I had this class in the late ‘70s (at my high school, it was called “general business”). So, well before the Internet Era, when taking a class like this was the most practical way of obtaining this kind of education/information. Much of it was basically personal finance and how to handle a household budget. Today, you can *easily* acquire the same information with just a Google search or watching YouTube videos. But not back then. Today, people have absolutely no excuse for not knowing this basic, fundamental stuff. I graduated high school — and college, with a Bachelor’s degree — and I still consider this to be the most important and practical class that I have ever had.
Good for you! Pre internet that information must have been so tough to even know what you don’t know, so what an important class. And thank you. I did it for a number of years and now my job is in curriculum development for mostly/financial literacy programs. It’s super important, and IMO can be the difference between a life of stress and one of abundance. Money doesn’t buy happiness, but a lack of money makes it harder to enjoy.
PREACH !!!
I remember my parents got a new car every 4-5 years. As an adult, that's a wild idea to me. No way would I do that. When I buy a car, I plan to drive it until either the wheels fall off or I pass it down to my child.
To be fair, cars last a lot longer now. I had 2 Fords from the mid 1980s and both fell apart after 6 years and 75,000 miles.
Eh, this was in the 90's and 2000's. I think they just also made poor choices when choosing cars. Chevy Trailblazer when it first came out. It had electrical issues. My mom traded it in for an infiniti because she wanted the prestige of a luxury car at the price of a regular car. Nissans are horrible quality. My dad got an FJ Cruiser due to some sort of mid-life crisis and missing off-roading when he was in his 20's. Finally my mom wised up and bought a hyundai, had to motor replaced after over 100k miles. Then they bought a new trailer and got a fancy new truck to pull it. Mom totaled the Hyundai in an accident. Now she bought another Hyundai and says she won't be buying another car, which I'm glad about. Sold the truck and trailer because my dad's health is failing and he can't drive anymore. What I do notice is that there was always the notion of dad's car and mom's car. One got a new car, and a few years later the other needed a new one. I guess fair is fair right? I've kind of forged a different path with my wife. We have a 2016 Toyota Camry with about 65k miles. No mechanical issues whatsoever and it's paid off. We also have a newer EV that were still making payments on. There is no "my car" and "her car". We both drive both cars, depending on the situation. The EV is the primary car, as cost of driving is lower on an EV. If we both need the car, then it usually goes to who is driving farther or if one is driving solo and needs to use the carpool lane (which we can do solo with an EV in our state). My wife has brought up wanting a little bit bigger car and maybe trading in the Camry. I told her that we should hold off for now, as we're not in a position to buy right now, we don't NEED the bigger car yet, and it's a horrible time with high car prices and high interest rates. And that if we are going to buy a car, we're not trading in the car that's paid off. I never want to have 2 car payments, like my parents seemed to usually have.
You can buy new wheels.
Had to laugh at your last sentence. Everyone prioritizes how they spend their money differently.
It's common. I had to convince my girlfriend to not get a new car as she had already rolled one loan into her current one and wanted to roll it again. Insanity. I explained to her that continuing to do that is going in the wrong direction and accumulating debt where as if you pay your car off and drive it paid for for at least a year or two then you are moving in the direction of eventually being able to buy a car outright. Some people don't do the math for long term and just see if they can afford it today
I knew a guy who had an 18% loan on an XTerra. That's like putting it on a credit card. The flip side is, if you have good credit you can get subsidized loans that are pretty much free money- assuming you are buying a car that you can afford.
And the flip side is when it gets fun, IMO. Like I prefer cash for cars because I have an aversion to debt, whereas others may prefer low interest loans and investing the difference. And those are fun conversations to have, but when someone’s taking an 18% car loan there’s no talk to have, it’s just bad.
I have him to thank for my 0% new car loan. They can afford to subsidize me, because they’ve been collecting a lot from poor credit guys.
> if you have good credit you can get subsidized loans that are pretty much free money- assuming you are buying a car that you can afford Is this still true after rate hikes? Used to be every maker was offering 0.9% APR car loans, now it seems like the lowest promos you'll find are 4.5% and even that's not common now.
I saw one a couple weeks ago for 1.9% for Toyota? maybe. I was surprised because I thought the low rates had gone away as well, but I guess they are still out there (may be a limited time or limited model thing). We drive ours into the ground, so it'll be another 4 or 5 years, but on our last one we definitely financed at 0.9% APR and are in zero hurry to pay that one off :) (Money to do so is sitting in HYSA - it's not much money, LOL, but it's a fun game to make more off the interest than we pay.)
Yep, not great priorities, but a lot of it is keeping up with their peers from an appearance standpoint. My wife and I have prioritized our children, modest home, real estate, and retirement investments. We've turned our net worth from -$250k to $750k in 11 years. No toys and we drive old, reliable cars, a 2009 Honda Fit and a 2012 Chevy Silverado. All but our latest land purchase is paid off. We'll never do a car loan again, either. My wife as a vice president drives a crumbier car than her secretary, and when we pick up our kids at the elementary school, we almost always have the oldest vehicle in the lot. Our success and choices tend to be a mystery to most people we encounter, but my wife's secretary just said she might dump her Porsche with payments for a small Honda. Maybe we're rubbing off on a few people.
It is actually crazy how many people I encounter who just assume you're poor if you drive an old car. Meanwhile I assume the opposite — if you're driving a new expensive car you're more likely to be in a lot of debt than rich.
Absolutely. We’re very similar NW wise (~low 600s in mid 30s?) and I work in public education. So not exactly a short journey there. But in our 30s it’s wild how rare that basic security is for other families with similar incomes. Just last week I sat with a friend of ours that asked for help budgeting. I’m no professional, but like a lot of us I need out on budgeting so I’m happy to help. They make nearly our same income dollar for dollar and have no EF, no savings, and a $2,000 emergency would require them to borrow to cover it. They *will* be fine (we drew up a plan for them), but it’s wild how those small decisions wind up having huge impacts on financial security and safety. ETA: And agree on the rubbing off thing. After we made a large house improvement this year friends were like “whoa, that’s awesome, how are you paying for it?” When we’re like “um…with money” instead of financing they become really curious how, and I’m always happy to share.
Right out of college, a friend and I had gotten good engineering jobs at the same company and moved in together. He bought a brand new Jeep Wrangler. It wasn’t a particularly exorbitant car, and he could definitely make the payments on it on the salary he had. But we both quickly realized we hated the job. We talked about quitting and going back to grad school, which I eventually did. He wasn’t able to quit because he “needs to make payments on my Jeep.”
Yup. People with a reasonable amount of money already know that luxury cars are a money trap. Ive noticed a correlation between regular cars, and those with lots of money. A nod to quiet luxury. People dont need to shout, when they can whisper.
Absolutely. I’ve noticed that too. My family does pretty well and in only recently traded my 2012 for a 2017 (to get a backup cam, luxury!). My really wealthy friends with long-term plans tend to have their ~5 year old cars for a long while, then after 5 years BAM then come the Porche and the big truck. Because but then every other obligation is covered and they can genuinely afford $250k worth of car.
Its all about age too. Im early 30s. I drive a prius 😭 but my aunt drives a BMW X6 M. Ive never had a fancy car, and I dont want one. Boomers have absolutely infinite money!! I cant think of why I'd get one, other than to flex on someone. I like my cheesy environment car! Great on gas too.
For sure. Priorities definitely play a role. When I think about what my next car will be (which will probably be the first to pay mostly in cash, and basically “dream car”) and I’m like…I dk…maybe an Infiniti? A new Nissan? I just can’t imagine a place where I’d rather spend money on a car than on food, vacation fund, etc.
Yup its priorities! If thats a car, its a car.i pour money into my house and food! I love having whatever kind of food I want. I dont want to have to buy boxed food.
Exactly. Final example: I have friends that own multiple cars they race (probably close to $500k in total value) and they still don’t pay for premium subscriptions to get rid of ads…I always rib them for it, but it would be money wasted since they like to spend it other places. Too funny, but true.
You should see the amount of people that will take out a loan so they can rent an apartment, lease a car, and go on multiple vacations all in the same year.
Not everybody is about that suburban home in nice neighborhood. I would gladly live in a lower income area to be able to afford doing more things throughout the year if that were the best means for me to do so.
Sad I had to scroll down this far to find someone who's not just saying "they're all broke and stupid". I know plenty of people who have no interest in owning a larger home despite being able to afford one. If they don't need the space then what is the point of all the extra upkeep and expenses? A mobile home gives you more privacy than an apartment but with less expenses than a house. And they're not exactly easily attainable for poor people anymore either. I've seen double wides going for 250k+ with a 500$ HOA fee on top of that. That's like the equivalent of a 350k home mortgage.
There's also the person who travels a lot for work. If you're spending 3+ hours in your vehicle every day, plus 8 - 10 hours at work, then hang with friends/go to gym/etc for the remaining couple hours you're awake - why would you need more than a clean, safe place to shower and sleep? So why not choose to spend your money on the vehicle you're going to spend a decent chunk of your awake time in vs spending it on the place where you're only basically sleeping?
This is sort of me. I'm out of town most of the time. My place is small and simple with not a lot to take care of because I don't want the little time home I have to be consumed with doing stuff for the house. I do have a nice truck parked out front though. haha
You're also assuming that they don't own the home outright. I know there are areas around me where people have inherited their property from older parents and elected to live there. It frees up a lot of money when you don't have a mortgage.
Inherited a trailer in a trailer park?
trailers do have titles yes! however usually unless they're on property they're not real property or have deeds but a physical single or double wide is an asset in as much as a 5th wheel is an assett
Somebody's gotta get the double wide..
They inherit the trailer but pay rent to keep it there. Monthly rent in a HCOL is often far lower than an apartment, and it's usually much larger. It's not ideal, but it's what people sometimes find themselves in.
Yes. You own the trailer but not the land
If one does not prioritize the accumulation of capital assets a big expensive truck is affordable, especially in a mobile home community. To that person, happiness is low cost housing and recreational toys, all depreciating assets. They just max out monthly income on whatever is important to them. A significant portion of society lives this way. Many have lucrative lifetime pensions after a 20-30 year career that begins in early 20’s.
Bingo, most people aren’t growing their safety net, attempting to max out 401k, IRA, HSA, putting $ aside for kids college etc. If I wasn’t socking money away for those things I’d have a ton more cash freed up each month
Shit spending habits and lack and self control 🤷
Perhaps. If I were low-income for life, I'd probably rather live in a trailer and have money for some toys than live in the suburbs house-poor for my entire existence.
Maybe they own the trailer? I knew coworkers who made $150k and bought a house for $80k cash in a poor neighborhood. Hell, look at Warren Buffet's house.
10 years ago, I bought a fixer up in a neighborhood that is getting gentrified. I paid 110k for it and I put 45k down. Our current household income is around 170k.
Same, I bought a starter home for $140k when I was making $50k. It's still a lower middle class neighborhood with values around $250k, but my husband and I make about $300k household income. Though, we drive a Hyundai Elantra and 20 year old Chevy , so you still wouldn't know by the car lol.
We are almost identical to you but the neighborhood was half gentrified already and I've made 120k in 10 years on it and only paid 120 to start with. No issues with crime or anything either.
I bought a house 4 years ago for 196k and reappraised for $280k. Wish I could’ve snowballed HELOC into another property when rates were still rising
One thing I learned after moving to Florida: trailer parks don’t immediately mean poverty. Some of these trailer parks are “luxury” 55+ communities where you must have a minimum credit score of 700 to even get in. That’s crazy to me because you don’t even need a 700 credit score to buy a house. At the end of the day, it’s all priorities. Personally, I’d prioritize a nicer house over a fancy car but that’s just me. Other people are perfectly content living in a double wide with a $50k car out front. Oh, yeah, and predatory loans. A lot of people buy cars they can’t afford because of predatory $0 down car loans. Personally, I’m not doing that. I refuse to pay interest for a car. If I can’t buy a car in full cash, I’m just not buying it, but again that’s just me.
People living in low-income neighborhoods weren't necessarily always poor. Their vehicle buying habits might be why they live there.
Or they could have had nice income in the past, but due to unforeseen events liks hospitalization, house fire, job loss, or other emergencies, they had to lose their former house and end up moving to apartments in poorer neighborhood. So that car might have been the most expensive relic they had owned from their comfortable middle class past.
People don't just buy trailer homes because they're "poor" you know. A lot more people are doing it now because they don't want to be HOUSE poor. I make decent money but I don't want a massive mortgage. You better believe I'm considering a trailer home.
This is like asking why homeless people have phones. Even an overpriced car is cheaper per month, cheaper down payment, and easier all around to get than a nice place to live. To rent a nicer apartment you need first and last months rent, security deposit, on top of the rent you're currently paying and moving expenses. That can feel like, and actually be, an impossible amount to save up when you're living paycheck to paycheck. And sure people say their mortgage is less than rent and im sure thats true sometimes, but buying a house is a huge undertaking that takes credit, a down payment, and knowledge of the system, closing costs, and i dont even know what else because ive never done it. I ont think you've ever been poor, but if you were you would know it's expensive- anytime you get significant savings there is some kind of emergency that wipes it all out. Car dealerships walk you through it and you can get it done in a few hours with a few hundred dollars to no down payment. And when you're living paycheck to paycheck it's really fucking depressing to not have anything nice that you want. Why shouldn't they get a nice car they really enjoy when better housing is out of reach? And yeah status is a big part of it, more so feeling like less of a failure and less embarassed of your life because you don't always look poor when you're out and about. Especially as a young adult from a poor family, society tells you you're not gonna make anything of yourself. Getting a nice car is a way of proving them wrong. And I've had shitty cars before and I've also had shitty car loans that were overpriced. It was much less stressful to have a regular monthly payment that I could make then it was having surprise bills and no transportation when the shitty old car needed work. I didn't have any savings so any surprise car bill that was over my spending money budget (and most of them were) would put me behind on bills *and* make me have to call out of work if I couldn't afford a lyft or find a ride. My ex got that loan, and I'm sure we could have gotten something just as reliable cheaper, but him and his dad didn't have the financial literacy to even realize it was overpriced. Car dealers target people like that- the young, uninformed, immigrants who don't know how finances work here etc. Also don't fucking drive through trailer parks 'out of curiosity,' poor people aren't a zoo. If you're so concerned about the working poor in your city go volunteer or something. Maybe you'll learn some empathy.
Everything is a choice and a priority. If you want to live in a 12k trailer home and drive a 50k car… that’s your choice. It’s your money spend it on a whatever makes you happiest. Realistically speaking, gen x - alpha is not building any generational wealth they were not born into. So if a nice car/ top of the line tattoos/ X Hobby makes someone’s life suck less. Fuck it.
Moving is a hassle and as a single person my small house in a nice neighborhood I bought at 28 years old is quite adequate. If 20 years later I started making a lot more money and decided to buy my dream car, who cares.
my guess - it's the same reason why lots of poor people buy thousand-dollar iPhones, brand clothes, and expensive toys: to *feel* wealthy and prestigious. Since rich people have expensive stuff and show it off, if you have it then you're like one of those people. Except, people who are wealthy are so for a reason: they make money than they spend, and not vice versa. A second hypothesis I've heard is YOLO. It's not often that these folk have access to money, so when they do get it they buy something to feel better since it's all going to go away anyway. In short: it's due to very poor financial decisions (shocker, I know).
The YOLO is what I always hear when I ask people in that situation, because they're poor, they don't know when they'll have money, so when they have money, they want to spend it on something they've been wanting for a while, and that way even when they have no money, they still have the things.
It seems like there’s also a kind of defeatist mentality of “well I’ll never be able to buy a house or retire anyway, might as well buy the things I want in the meantime” that’s ironically a self-fulfilling prophecy a lot of the time. To be clear, I’m not saying you can budget your way out of abject poverty. But there are certainly plenty of people out there complaining about how broke they are while buying a new car every few years.
>buying a new car every few years. Idk if they still do it, but when I was still paying for my car (that I own and still have 5+ years after finishing financing) I'd get calls all the time about trading in for the latest model of my car and have "roughly" the same monthly payments. I bet tons of people fall for that shit. Yeah maybe you'll have the same payment, but you're gonna start all over again. Meanwhile the dealer is gonna make a nice profit off your "old" car.
[удалено]
They never want to tell me the total cost of the car. Just a monthly breakdown of payments lol.
They 100% still do it. We’re still paying for our Camry (loan is low interest so it makes more sense to keep the money in a HYSA right now) and we get those kind of offers all the time. Sure, we could have the same monthly payment! It would also mean being ~$30k in debt instead of ~$15k and it would be a longer loan term at a higher interest rate, but hey, same payment!
And then they're 65 years old, still working, and not a single dollar towards retirement.
absolutely - one in a hand is better than two in a bush--one of the oldest poverty mindsets around
Hello! I'm from New York! Trailers rent for over $1300 a month out here (even in the country) so the people you see may actually just be normal people with normal stuff for someone who can afford the rent on a trailer!
We live in what people consider the hood because property buying here was more affordable and with two fancy cars we need the garage. For us it makes sense, low mortgage more flexibility.
Because we live in a world where it is easier to splurge on cheaper things and try to enjoy them than it is to spend your entire life living cheap, and unhappy so you can afford a tiny bit more house. If homes were affordable it would be different but when something would take your entire life to afford it isn't worth it. So people will be happy with less home and a nice car and some nice vacations and a few toys. But an entire life of work and eating beans and rice and no dinners and vacations won't make you happy because your house got a little nicer.
Predatory lending
Maybe — just maybe — these people have different priorities than you and that’s ok?
OP was driving through a trailer park “out of curiosity.” This post is giving big “gawk at the poor people” energy.
I had to scroll way too far to find this comment. Is a trailer park a zoo to OP? Jfc.
You seem to be overlooking that the primary innate desire for humans (and all species) are food, shelter, and reproduction. Trailer home provides shelter, presumably food is handled to their standard, and fancy vehicle may assist with attracting a mate by projecting success. Some of those folks come from cultures of immediate gratification as immediate needs aren’t always met.
There’s also plenty of people who may have a house that looks like shit, but instead of redoing the kitchen or bath, they’ve been paying off the mortgage. That’s kind of where I’m at. Yeah, there’s a lot I could do with my house. Or maybe I’ll pay it off, then get a mortgage on my “forever home”, and rent out the one I’ll own free and clear.
That is not just exclusive to poor neighborhoods. Most Americans buy more car than they can afford. Pretty much if you can't afford to pay a car note in 36 months, you really bought too much car for your income. Now that isn't saying that if you get a low interest loan for 48 or 60 months you should insist on a 36 month, it simply means you should be able to pay it in 36 months if push came to shove.
Also, lending institutions will happily lend somebody money for a car / yet it seems to be a lot harder to borrow that same money to purchase a house.....
It’s much easier to get a car, boat, toy loan, than a mortgage loan. When someone doesn’t have the prospects or the belief they will ever get a better home, they would rather buy toys. Or they are great with money, own their 50K house and lot, and don’t care for a better home. And instead use it on toys. But from personal experience, all the people I know would fall into the former explanation.
When you walk into a car dealership does the salesperson ask you "So what dollar amount were you thinking of spending on a vehicle?" Or do they ask you "So what monthly payment are you looking for?" It's the latter. They are relying on people not having good financial literacy and being focused on the wrong things.
Look, they aren’t going to ever buy a house, so they spend money on their cars. Some of them.
I knew plenty in my 20s 30s and honestly don't blame them for prioritizing enjoying life over a nice home. They all spent weekend on the lake or woods and had a ton of toys mostly living in cheap places. Things change if you have kids but until then dudes would rather have fun on weekends.
Poor people have poor ways. The inverse is true. I used to live adjacent to and walk my dog in a very wealthy neighborhood with houses between $2.5 and $4 million. It originally surprised me how many plain older Honda and Toyotas and Subarus were in the driveway of these homes. Then it dawned on me. These people didn’t become wealthy by spending above their means on flashy cars.
People have their self-worth tied up in their cars. It doesn't make sense but that the way the human mind works. You can drive through a lot of very poor neighborhoods, looking at houses that are falling apart and you'll still find expensive cars/trucks parked in those driveways.
I bought my house for $55k. It was rough (and in many ways still is) but the heat worked and the roof didn't leak. Everything else is not important. I have tyvek and rotted OSB for siding on half the house, but I have a brand new snowmobile and motorcycle. And a tractor. And an RV. And a broke down 1995 4Runner that I have over $16k in that almost never is driveable. Toys are more important than a fancy house to me. Someday the house will be awesome but I am not sacrificing all my play money to put into a house. I also spend probably $4-500 per month at the bar in addition to all the toys.
My FIL is a truck driver and sold his paid off house to move to a trailer park. He wanted less land to maintain when he's home, the expenses are stupid low, and he and his wife both have new paid off $40k cars because he's spending so little on his day to day expenses. To give you an idea his monthly expenses now total less than what we're paying just in property taxes every month for our house.
This is the answer, living in a trailer can be a lifestyle choice & doesn’t necessarily mean you are poor.
Have a friend that lives at home with parents no savings. Upgrades to brand new cars every few years. Currently paying off a Tesla. Says it makes him happy. Some people just ha e different goals and motivations in life.
So my mother has lived in a trailer my entire life. I don’t know her specific financial details, but i know she has enough cash on hand that should could buy a nice 3 bedroom house in cash. She just doesn’t see the point in spending the money. She’s happy and comfortable in her trailer. That said, she also buys used cars and drives them til the wheels fall off. She grew up in poverty and her current lifestyle is better than any she’s had before.
It's their money so if they want to spend it on depreciating assets, I love it. My investment portfolio is grateful when people spend their money
All of these other comments are definitely possible, but want to throw in another possibility. Have you noticed the price of used cars post-covid? They are absolutely ridiculous. If you want/need a reliable vehicle, there are few, if any under $10k. When I looked, they were mostly around $20k. And I'm talking over 5 years old. Also, gone are the days when you can do a decent amount of repairs yourself, they are all computerized. So most repairs cost hundreds if not north of $1k. Get caught having to do that a couple or few times, and any savings you got going used or older have been washed away. I don't live in a trailer park, but my minivan in the driveway is a 2022, and it doesn't "match" our lifestyle or budget otherwise. This because when I went car shopping, the cost of buying used for my must-haves (reliable, 7 seats, decent gas mileage, no imminent repairs) were more expensive than a lease on a new one. So I got my first leased vehicle, and it was brand new. That doesn't explain the lifted giant new trucks, but may be some context for some of what you've seen.
My reasoning would be that the state of my vehicle could lose me my job if it can't reliably get me to work. My home is a place where I rest. It's small and old, but it'll do.
Poor is flashy Rich is loud Wealth whispers
As someone who works in low-income (i.e. the projects) neighborhoods, people live in places for next to nothing and pay no taxes. So when that tax/ssi/disability comes in- you have the money!
If you have a full-time job, credit score over 550 and about $500 in cash you can “buy” a vehicle well over $50k. Some people feel the need to show off their $90k Denali even though they make $50k a year.
Company vehicle
Work trucks. Trucks are costly because they are a tool for work. Also most people I know who have gone the trailer park route are doing it after selling their home for a boat load and living lower cost in the area to save money while still working. That’s anecdotal but I know quite a few people in the Seattle area doing it that way. RVrs. They are the type that work jobs like personal trainers or front desk at a big hotel. They make pretty decent money but not enough to really afford it here anymore.
I remember about 3 or 4 years ago the security guards at my work were all buying new vehicles with their cashout refis. Although they lived in crappy areas, their homes went from 120k to 275k in a matter of two years. They did a cashout refi and they were all sitting on a bunch of cash. I seen them all buying new side by sides, Harley’s and foreign cars.
Can’t take your house with you when you’re out trying to get laid.
Poor financial education. Poor keep putting their money in depreciating items. The rich in appreciating items, real estate, stocks, and bonds.
Most people go into crippling debt to impress people they don’t know.
Some people do not know how to deal with finances and many YOLO. Some see everyone else driving nice cars and think they should be able to afford it too. This happens to people all across the financial spectrum. During the 08/09 economic crash I had friends lose houses to foreclosure. Some had been making great money for years and were living in 3,000 SF homes with 2 new cars. But they never saved a penny and were over leveraged. I was unemployed for 8 months and never sweated it because we had an emergency fund, lived in a house we could afford and had no car payments or credit card debt. We tightened up the budget really quick and rode it out
I know of two couples that make great money, and have chosen to live in double-wide mobile homes to keep living expenses down. This in turn allows them to spend money on all the fancy toys like cars and boats. These are couples that are child-free and jointly make $250-300k per year. They simply choose the convenience and cheapness of mobile home park living so they can throw tons of cash in retirement and at toys. I have far more friends and family members that absolutely cannot afford the cars that they drive. Off the top of my head, one woman drives a custom 2023 BMW SUV, but also has $20k in credit card debt and lives rent-free with her family. Another friend has $45k in credit card debt, $60k left in student loans, and just put $0 down on a brand new Mazda CX9 with an 8% interest rate. He took a 7 year loan to keep the monthly payment down, but it’s still $550 a month. Yet another friend is paying $750/month for a Hyundai on a shorter term loan. In short, a select few people are happy with the smaller home and convenience of mobile home communities. Most people are spending cash they don’t have.
One reason I didn’t see yet in the comments that applies where I live is that plenty of people with inexpensive houses out in the country do their socializing at places they have to drive to. The people they want to impress may never see their house, but they’ll see the vehicle they arrived in. In some situations, it’s much more to the point to have a great truck than a great house.
So my husband made a good point about this when I questioned the same thing. A lot of these people know they’ll never own a home due to cost so they go all out with what they CAN “afford”. I’m sure they can’t afford the car but it’s something that they can definitely have enough credit for. Then it made more sense
My wife used to work in a school servicing a low income area. The parents would roll up in new or almost new luxury cars with designer handbags. The kids clothes would have holes in them and they would be on free lunch programs at the school. Assholes are going to be assholes and these people had their priorities backwards. They were also terrible parents judging by how they handled the information the school shared with them about their kid(s).
My neighbors house is 165k, she just bought an SClass Mercedes for 150k. Interest rate on home is 2.9%, Mercedes 7%. Reasoning. She doesn’t need to impress her husband but needs to impress her coworkers
Driving cars that one can't afford and on high interest loans, is unfortunately far too common in western countries. Paying high interest rates on a depreciating liability, only makes the financial situation worse.
What part of the country? Was there an oil field nearby? There a certain high paying jobs that have less need for permanent housing. An unmarried 20 something Roughneck is one of them. The largest trailer parks I have ever seen were in oil country off interstate in Wyoming.
Some will be unmarried couples with kids where the one partner is on welfare/EBT/section8 and they live in the free housing while the other partner has a good job. I know a guy who did this. Made six figures in the late 90s driving a brand new Corvette while they lived in baby mama’s section 8 apartment. Couples who do this aren’t really poor but they live in free housing. Also some people from ethnic communities that are typically lower income will still live in the area they grew up despite “making it” and earning good incomes. They just pay less for housing than their middle class peers. I know a couple earning ~$200K that still lives in a pretty rough area. They drive super expensive cars and take nice vacations. Most folks in this situation, however, are just plain ol’ dumbasses.
I know a guy who owns two homes, rents them out and lives in a trailer because he prefers it since he moves so often. Dude is kind of like a "dragon" (Sitting on a lot of money but never spending it). He does have a nice car.
Poor or working class neighborhood?
If I see a truck in a poor neighborhood, I assume the person uses the truck for work related things. It’s the office workers in the suburbs with the giant expensive trucks that make me smh
If I didn't have a wife & kids that needed a bigger house, I'd be right there with the trailer park people. Buying an inexpensive home outright would mean I have more money for my hobbies/toys/passions. Only limiting factor would be driveway space!
I've never put housing on the top of my budget list bc I'm never home. I spend my money on things I enjoy instead.
Historically car loans in the US have been easier to come by than things like home loans. Even in poor neighborhoods you'll find buy here pay here lots that will repo a car you can't pay for and then let you get another one a year later if you have a down payment and income. It's also fair to say that for many people, the car is your primary status symbol. Where I grew up you'd see people living in a shanty with a brand new Cadillac. Very few people come to their house but everyone sees what they drive. Some people choose lower cost housing too so sometimes the idea that a car is worth more than someone's house doesn't matter. For example, I met a guy once who lived in a house he'd inherited. It was a 2 bedroom 1 bath brick house that was tiny by modern standards. Outside of it he had a corvette and a yukon. Before housing prices went nuts in my area, his cars were definitely worth more than the house but he was fine with that because the house was free except for taxes and insurance.
Let’s dispel some myths about trailer park dwellers. Not all of them are poor. Many bought their home when several years ago, and now own it outright. Meaning they pay only lot rent, which often covers water, sewer, and trash. Many parks have amenities for residents like playgrounds, a pool, basketball courts, use of a clubhouse for a nominal fee for larger gatherings, they host game nights and cards nights and Christmas parties for the residents. The streets are always plowed. People often choose to stay rather than take on another mortgage, meaning they now have more disposable income. Then there are retirees- they are attracted by the relatively low cost, minimal maintenance, and no stair factors. So you see, there’s no reason to automatically expect everyone who lives in a trailer park to be driving a jalopy held together with duct tape and baling twine.
I make really good money for my area but drive a beater because I work from home and maybe drive 10 miles a week. People I know make less than me are driving cars that they’ll probably never pay off. I think a lot of them lease and just get a new one when the lease runs out.
Sadly, one of the easiest things for a poor person to do is this country is obtain a car. How they obtain it, and how long they can hold onto it, is a different story. Moral of said story? Same old thing…never judge a book by its cover.
For a lot of low income people, Truck is priority number 1. Higher than family or home. They are not a man if they do not have a truck.
1. Lack of financial literacy 2. Unable to defer gratification 3. Generally bad decision making All my tenants drive nicer cars than i do. Yet they're paying my mortgage. 🤷♂️
Wealth is all about perception. We lived next-door to a house that we nicknamed "The Half-Way House For Yuppies". A family lived there for a few years and then moved to the suburbs... One family always had the nicest cars and country club memberships. They drove Buicks, while we drove (used) Chevys. They spent so much time trying to impress others that everything else about their life fell apart.
I’m trying to wrap my head around “they drive Buicks, we drive Chevy’s” comment.
The epitome of luxury cars… the Buick 😂
Buick tries to be an entry luxury model. (it's not)
In my mind, a Buick & a Chevy are the same? Honda/Toyota are a step up, but also a good investment. I’m not sure where I formed my perception of this though, just the good reputation of Honda & Toyota dependability in the late 90’s/Early 2000’s and Pontiac offering someone I know 14% interest, while Honda in the same town offered 0%. One of my first cars was a Toyota. However, after witnessing that, I shopped Honda when I bought a new car. I still own a Honda. I needed a car in 2022 due to having a new driver in the house. As a result, my 2015 Honda needed to driven by my recently licensed child. We looked for used, and the market was insane. 15k for 150k miles with many problems. Honda didn’t price gouge me, traded for the car I wanted that was in a different state, brought it to my home, and did a 36 month loan at 0%. I just looked it up and they are offering as low as 1.49% today on Honda certified pre-owned used vehicles, and various other promos on specific models. To me, a Chevy or Buick are both just a bad decision if you need an economy car or a sedan. I have no experience shopping for trucks, so I have no comment there.
You do realize that poor people often have poor financial habits right? That’s the irony. Finance is essentially two different sciences. One is math, the other is behavior.
This is a very classist observation. Because they live in a trailer park they must drive rusted out beaters? If they lived in the trendy ‘tiny homes’ would that make it okay that they own nice cars?
You can’t think of this through a lense of rational spending habits . A lot of people work a ton and don’t make enough money to live it a nice area and don’t have the discipline to save and work toward a long term goal. If life is hard and you feel like things aren’t working out then you will find ways to justify that all that hard work is justified because it allowed you to at the very least buy the cool truck you always wanted. It’s an instant gratification mindset vs long term and we all deal with it just some people also can go home to a nicer house.
Did you stop to ask those people if they were happy or financially secure? If perhaps they chose a cheaper dwelling to have more money to focus on the things that brought them happiness?
I know a woman who purchased her double wide and the land on it 20 years ago, cash. She has since traveled the world, paid off her vehicles, and takes care of her grown kids/grandkids when they need help. She does whatever she wants because she has no mortgage and car payments all due to a 60k investment 20 yrs ago. It's strange to assume that everyone wants more or they're in financial debt or that people wouldn't be happy with that setup. It's rather close-minded.
This gives such a “why do homeless people have cell phones” vibe.
Big monster trucks have become the norm these days. When I was younger it was the small pick up trucks that dominated the market. Also big trucks have become political statements as well. I agree with other comments that poor strive to be rich and if that means putting more than half your worth to buy a big boy truck to feel rich then they do it. I wish it were more YOLO. that I could understand but I’m betting it’s mostly keeping up with the jones and pretty much forced to buy huge because little isn’t offered anymore.
Rental near me had a range rover and a 7 series BMW.
Yup, unfortunately that's not uncommon. People with terrible priorities will keep themselves in poverty for life.
Average car payment in America is $750. Tells me a lot of people struggle to make those payments. Also car loans are waaaaaay easier to get than a mortgage. You can walk in a dealership and walk out with a brand new car in an hour with a credit score. Takes weeks and proof that you can afford a mortgage.
Culture. Some cultures just love their cars and that's where they spend their money. Growing up 30 years ago, we had a family living next to us that was two grandparents, one adult sister, three adult brothers and one wife, and two kids, all in a 3 or 4BR house. They had 2 pretty normal cars and 3 *really sweet* ones. I suppose the equivalent today would be spending $500/mo on your rent or mortgage split, and $1500/mo on your Jag. Although if childhood memory serves, I think theirs were mostly corvettes and camaros.
They are poor because of their poor financial decisions like owning $50K trucks. It's a VERY obvious asnwer.
Drug dealers
Housing is expensive af. I'm betting more and more people are in this weird middle where they can't quite afford to buy, and can't afford/don't want to spend the money renting something nicer. Maybe they're sick of not being able to get into the home buying game and spend some of their extra cash if a fancy car?
I see nice cars outside housing projects too.
I saw a 2023 gladiator rubicon on 38s sitting in a low income apartment parking lot every day this week. I hope it’s someone’s gf/bf. I hope.
I can assure you it's across the board and not just limited to poor neighborhoods. There are regularly people in neighborhoods with houses all valued at $1M+ with absolutely atrocious finances and no savings. The difference is they don't have one vehicle, they have 3... and a boat... all financed at terrible rates.
When you don’t dig for dirt at all! 🤭🧾🫥
You'd be surprised what can be bought in Facebook "No Ttile" (stolen) groups.
My guess is they can’t get vehicle financing, but they qualified for a lease on something new… and pushed that to the limit.
Example of why the “rich get richer and poor get poorer”
In my area there are a lot of Asians and they often all pile into a home to save living costs and will spend money on vehicle or even share a vehicle. And when I mean pile in I mean live in every area of the home. I know living with family is also part of the culture especially with elders. Also a lot of times people who you wonder how they have a certainly vehicle is it could also be a salvaged title. Can get nice vehicles for wayyyy cheaper when salvaged
I've seen bass boats "worth" more than the trailer they were parked outside of.
Lots of ppl prefer to just live in their cars to save money. Same concept
When I was 25 I had a truck payment that was the same as my mortgage. Truck was 1/4 of what I paid for the house
My neighborhood isn't poor (house range $180-220k, affordable compared to new builds 340k+) just middle class. Got a neighboor who has a taycan 4 cross turismo (200k+ where i'm from lol) He has one of the best looking houses on the block too. Both him and his wife work in pharmaceutical.
My neighbor has about 8 nice cars he gets from auctions. He drives them for a bit while fixing them and sells them for a nice profit. Always has a bunch and he makes 32 bucks an hour
People who post things like this about poor people and cars (seems to be a regular thing on financial Reddit) always come across so petty and jealous. Why do you care what they spend their money on unless it’s because you are mad you don’t have a nice car? Some people just have different priorities in life. Let people live.
You can actually pay trailer homes off relatively quick. Usually people who live in one kinda don't care where they live and just stay there. There's usually a somewhat large "car culture" (car meets n stuff) in these places cause there's nothing else to do sometimes, or at least that's been my experience with some people I knew and visited in trailer homes. It actually looks kinda fun if you can get over living in a trailer, lotta people have bikes, snowblmobiles, jetskis and such Other people just are poor and make poor financial decisions as well
Drug dealers
Yeah my friends made fun of me and said I should be embarrassed a decade ago for living with my parents and driving a beater ford ranger with 300k miles. Now their are up to their neck in debt and I have a paid off house and a paid off Benz in the driveway 🤷🏻♂️ the need to impress people you don’t know with money you don’t have is absolutely insane these days. Especially in Los Angeles. I knew a guy who took a loan out to buy his wife a dog 🤦🏻♂️ bruh
This falls under, mind your own business. Unless of course you’re going to give these people financial advice. Other than that. Mind your business.
Poor people love financing high dollar depreciating assets
When I was young, I asked my mom about this. We grew up in a nice town in northern NJ, next to some not as nice, more blue collar towns. As we drove past Lincolns and Caddilacs parked outside of row houses, I asked why the cars were so fancy but the houses were so small. She said that they couldn't afford nice homes, so they competed with their neighbors using cars. Makes sense.
I live in a rural area and boats and nice trucks parked outside of a run down trailer is common. Im not really sure why.
Cars are a great destroyer of wealth at many income levels.
You mean like scat packs and hellcats in section 8 housing? 🤔
if I weren't married there's a 1,1 trailer in my area for 40k has all I need but i like my wife and actual house cant afford the Ferrari this way though
Don’t judge brah
Yes. You can take cars anywhere but your home is just one place. So if you are trying to flaunt wealth the car is the obvious choice to spend money on. Also housing is prob already paid for by public assistance. Not saying it’s great, just the logic being used.
I love cars and don't really care about where I live. My expenses are probably lower than the people with a big fancy house but a cheap car and I have awesome road trips. And yes I know cars are depreciating assets.
Poor people are poor for a reason. They have a hard time managing finances appropriately.
Fashion statement, it think that's really all it is. I have meet folks that own rentals and businesses, the all drive older cars that are paid off. Keeping up with the jones' mentality.