If you can’t afford a new car now, it won’t get easier.
Supposedly the average new car price in America is “about” $30,000, according to ftc.gov. Be wary of the preposition “about.” It gets tougher all the time to walk out of a dealership with a new car that has very many bells and whistles for under $35,000. The average payment for a new car is $700, according to bankrate.com. A more reasonable car payment means you have to have a sizable downpayment or receive a lot of credit on your trade-in.
Many Americans are financing their cars for 72 months, and they are often worn out when traded. Often there is still some balance owed that is refinanced in the new deal. This creates an ongoing financial hardship for millions of Americans.
Millions of Americans struggle with bad credit ratings, impacting their car loan deal.
In most parts of America, you have to have a car. There are some locations in our country where you can make it with buses and trains, but that is a small section of America. If you live on the East Coast between NYC and Washington, then you might be able to survive without a car. If you live in Tomahawk, Kentucky, you must have a car.
The United Auto Workers are striking for better pay and benefits. Many plant employees make over $30 an hour, but lower-tier employees make less than $20 an hour for the same kind of work. The UAW is asking to end a tier system that pays employees less for doing the same work. UAW wants their pay increased by 36% over the next four years.
They also are tired of working 60-to-80-hour weeks just to survive. UAW are asking for a four-day or 32-hour workweek but paid for 40 hours. They also want the defined benefit pension reinstated for all employees.
General Motors ended its defined benefit pension Jan. 1, 2007. They are also asking for better medical insurance for the lower-tier employees. The UAW says the big three gave up cost of living adjustments during the 2008 financial crisis when GM and Chrysler went bankrupt. The UAW says this has resulted in a tremendous pay decrease for the autoworkers.
The 401(k) retirement plan is going to be the best that American companies are going to offer going forward. In the old days many companies offered defined benefit plans. If you worked 30 years, you got a promise of a certain retirement wage. The big three automakers once had such benefits, but they will never go back to that because they know it’s unsustainable. If a company will match or pay even half of what you pay into your 401(k), then you are doing well.
We all surely hope for the best for all concerned. Everybody has to make money. I hope they can get the best deal possible.
In the meantime, most of us will be shopping around to see what we can afford. Paying an extra 36% percent or whatever it might be for a new car will be difficult for most Americans.
Check out Dr. Glenn Mollette’s “My New Normal” and “Inflation Nation” on YouTube. Visit GlennMollette.com to subscribe, learn about his books and more. Mollette is a graduate of numerous schools, including Georgetown College, Southern and Lexington Seminaries in Kentucky. He is the author of 13 books, including “Uncommon Sense,” the “Spiritual Chocolate” series, “Grandpa’s Store,” “Minister’s Guidebook Insights From a Fellow Minister.” His column is published weekly in over 600 publications in all 50 states.