How can you afford the cost of a new SUV?

[DuraYuk]

Let's be real. No one is buying these because they are affordable. I need capability (towing) and space. I also want efficiency (diesel). The sequoia 3rd row is crap as is cargo area so moved to the diesel GM. Wife loves it. Probably get a face-lift XL diesel.

It's safe. It's reliable. It has the tech we want. It's efficient. So no sense in being cheap. We work. We play. We enjoy life. Life isn't forever. So we live for today.

 

[todayusay]

One question I havent seen asked - what is the price point on the used Tahoe? If you're going to spend that much, have you looked at comparable new ones? $80k for a used Tahoe would be a tough one for me

Everybody has different perspectives most likely ingrained in them by their surroundings. My father in law takes pride in never having bought a new vehicle; even now when used is essentially the same price as a new one and in some cases, actually more. They bought a 2yr old Envoy last year for more than what new ones were selling for.

As far as affording what we drive, we don't take extravagant vacations and with a couple teenagers, pretty much live on the road putting 75k+ miles on 2.5 vehicles annually (Tahoe, accord and dually for hauling) Dually is the half because it may not move for 2 weeks and then we'll put 800-1k miles on it in a weekend.

We've always had the mindset that we were going to spend $500/month on a car payment and that payment would always be there. Just a fixed amount that is always budgeted to be there.

We've tried to keep a few of our vehicles to 200k plus and the next thing we knew, transmission needed to be replaced. Different times call for different approaches, used to be we'd trade every two years and we werent racking up the miles back then. Would usually come out pretty decent with little to nothing down when we trade and would keep the term manageable.

These days you will want to really do your homework on pricing as paying "too much" for one is a lot easier than it used to be.

Don't envy anyone starting out in this market, if you haven't bought anything since covid, the price shock is real.

 

[blackelky]

Personally, I'd rather put that liquid into a rental property or business that makes money(ethereum stocks etc.) I plan to work hard in my late 20s and early 30s (33 now) to chill in my 40s and 50s, but then again you never know when your ticket is going to get punched so i splurge on experiences here and there.

 

[MrMonte]

I bought my 2018 Yukon Denali Ultimate used with low mileage, complete service records & clean title in perfect condition for $40K under sticker but I looked for awhile.

When I bought my 1999 Suburban it was cheaper to buy new than a low miles used one. Got $10,000 off MSRP.

Helps to buy when you want but don't need. Easy to walk away if money isn't right.

 

[martinajm]

And at 60-70k they are still overpriced in my book. They probably cost GM 20k to build, or less. I WON'T make a CEO rich if I can help it. A company doesn't make BILLIONS, with a B, in profits without naming 2,3,4,5,6x their investment on each vehicle.

When the jeep Cherokee finally ended production, it cost Chrysler about $500-750 per vehicle to produce. It had such a long run, costs were fixed, etc. Think about them apples.......GM is no different

Cany you clarify the $500 - $750 per vehicle cost. What does that number include? I am struggling with that one...

 

[Marky Dissod]

When the jeep Cherokee finally ended production, it cost Chrysler about $500-750 per vehicle to produce.
It had such a long run, costs were fixed, etc.

Can you clarify the $500 - $750 per vehicle cost. What does that number include? I am struggling with that one...

The Jeep Cherokee XJ lasted from 1984 through 2001 in America without any major design changes, so no R&D for new parts was needed.

 

[Doubeleive]

One question I havent seen asked - what is the price point on the used Tahoe? If you're going to spend that much, have you looked at comparable new ones? $80k for a used Tahoe would be a tough one for me

Everybody has different perspectives most likely ingrained in them by their surroundings. My father in law takes pride in never having bought a new vehicle; even now when used is essentially the same price as a new one and in some cases, actually more. They bought a 2yr old Envoy last year for more than what new ones were selling for.

As far as affording what we drive, we don't take extravagant vacations and with a couple teenagers, pretty much live on the road putting 75k+ miles on 2.5 vehicles annually (Tahoe, accord and dually for hauling) Dually is the half because it may not move for 2 weeks and then we'll put 800-1k miles on it in a weekend.

We've always had the mindset that we were going to spend over $500/month on a car payment and that payment would always be there. Just a fixed amount that is always budgeted to be there.

We've tried to keep a few of our vehicles to 200k plus and the next thing we knew, transmission needed to be replaced. Different times call for different approaches, used to be we'd trade every two years and we werent racking up the miles back then. Would usually come out pretty decent with little to nothing down when we trade and would keep the term manageable.

These days you will want to really do your homework on pricing as paying "too much" for one is a lot easier than it used to be.

Don't envy anyone starting out in this market, if you haven't bought anything since covid, the price shock is real.

the difference you are seeming showing here is (need versus want), if the vehicle is required for specific use, business etc, then of course it is usually justified as a "need" and there is a financial purpose applied to it.
my need for a SUV is for room inside the vehicle, I am not going to cram 5 people or sometimes more in a small car if I can help it, used is fine because I am not putting 40k+ miles on it per year either were extra maintenance or excessive wear may drive up the cost.

 

[B-train]

Cany you clarify the $500 - $750 per vehicle cost. What does that number include? I am struggling

Cany you clarify the $500 - $750 per vehicle cost. What does that number include? I am struggling with that one...

It's economies of scale. After you get done with R&D, then amatorize that over each vehicle. Figure in your fixed costs, and the discount of buying I'm bulk, that's the cost.

For a comparison: through a friend of a manager at the GM plant in Janesville years back (90's), the average cost of a SUV was $4500 to produce. Even back then when they sold for high 20'2 to almost 40k, the profit margin was enormous.

Another fact: BRP sells Evinrude boat motors to dealers for double the cost of manufacturing them. Standard procedure to make 100% profit minimum- circa 2014

 

[mountie]

From what I heard, some years ago, the UAW strike.... They won their retirement agreements:

A GM - Ford - Chrysler employee, ( tenured ), when retires or laid off, their pension package is a life-long amount, equal to their salary when laid off or retired. ( Add that to the manufacturer's price of "assembly"..... forever.

 

[Sparksalot]

The Jeep Cherokee XJ lasted from 1984 through 2001 in America without any major design changes, so no R&D for new parts was needed.

So basically it cost Chrysler $500 in labor to build one.