Affordability of cars in USA?

[Leepee]

Ok...I have no USA living experience. I admit I am only a 'bottom well frog' in Singapore.

After reading the many news(in newspaper and magazines) about pricing and affordability of things in USA, especially motorvehicles.

I cannot understand why a difference of US$2,000 can be an Affordability issue for car buyers in USA.

Just $2k cheaper can suddenly attract New Buyer to the marketplace? Just $2k difference many people cannot afford to buy the more expensive Prius?

 

Anyone who has US or UK or overseas living experience care to help me understand the financial considerations when it comes to buying cars in these countries?

 

 

 

 

http://motoring.asiaone.com/Motoring/News/...311-127577.html

'Prius-killer'

 

DETROIT, March 10 (Reuters) - Honda Motor Co on Tuesday set the base price for its Insight hybrid at 10 percent below the market-leading Prius hybrid made by larger rival Toyota Motor Corp.

 

Honda said the 2010 Insight would start at $19,800 (S$30,626), making it the first hybrid to sell in the U.S. market below $20,000. The 2009 model Prius starts at $22,000.

 

Honda has positioned the five-door Insight as an economical alternative to the Prius, which has come to dominate the hybrid market with its distinctive styling and fuel economy.

 

'I think what they are looking to do is to bring a new buyer to the marketplace for hybrids, people who are interested but maybe couldn't afford the Prius,' said Jack Nerad, analyst at Kelley Blue Book, a leading vehicle pricing guide.

 

Honda launched the first hybrid in the U.S. market with its three-door hatchback Insight a decade ago but its early launch was eclipsed by the commercial success of the larger Prius.

 

The all-new Insight revives the name of the earlier hybrid and represents Honda's attempt to engineer a 'Prius-killer,' a more affordable hybrid that chips away at the price premium such vehicles require to offset the cost of additional batteries and an electric-drive system, analysts have said.

 

'I think it's clear that they want to make this seem like a more attainable vehicle,' said Karl Brauer, editor of auto tracking Web site Edmunds.com. 'I think they're doing what it takes to make hybrids seem more real world and less niche.'

 

Toyota sold almost 159,000 Prius hybrids in the United States in 2008. Sales were constrained at one point during the summer spike in gas prices by difficulty importing enough of the cars from Japan.

 

Toyota has not announced pricing for its all-new 2010 model Prius that is expected to hit U.S. showrooms later this year.

 

The Prius leads the Insight in fuel economy with an estimate of 46 miles-per-gallon in city-and-highway combined driving, compared with 41 miles per gallon for the Honda model.

 

The Insight debuted in February in Japan, outselling the Prius there in its first month of availability. The new Honda hybrid is set to go on sale in the United States this month.

Edited March 11, 2009 by Leepee

[Starengine]

IMHO, it has nothing to do with oversea living experience, bro...

2K over 20K, it's 10%, just imagine 10% change, no matter up or down, no matter in petrol, taxi fare, or even rice, it may not affect everyone, but it do affect total sales, coz there are a group of ppl will re-consider if price changes.

[Kb27]

Sgporean are too used to the ridiculous price you pay for car here. What's a $100k bread and butter car? Just take another 10 yrs loan.

 

In US or many countries, cars are sold at their real value. When you are living and making money there, you wouldn't want to pay $500 more. It's a big thing.

[Rickster]

Imagine if S$20K can get u a honda civic in Singapore. Can u imagine the magnitude of the jam?

 

Cars will be practically useless coz everywhere jam like hell.

[Arowana1]

Imagine if S$20K can get u a honda civic in Singapore. Can u imagine the magnitude of the jam?

 

Cars will be practically useless coz everywhere jam like hell.

 

jam will hit a threshold, where (a) people will stop driving cos jam too bad or (b) everyone has a car or © more erp or (d) bigger roads.

 

we juz dun dare to push it to the limit to see wat happens. science is one frontier where things are pushed to the limit to study the results. we dun need to do real changes to see wat happens cos it will be suicide but how about a simulation model? wat will actually happen?

[KapitanE]

jam will hit a threshold, where (a) people will stop driving cos jam too bad or (b) everyone has a car or

[Silverkris]

Imagine if S$20K can get u a honda civic in Singapore. Can u imagine the magnitude of the jam?

 

Cars will be practically useless coz everywhere jam like hell.

 

Dun think so since Singapore cars are artifically controlled by the Govt. You still need to get the COE.

S20K for Hinda Civic will not jam the road as the number of new cars still controlled.

But either of this will happen:

1. The queue for new cars will be so long that it will take 2 years before you get your new car.

2. Those who cannot wait will bid higher for the COE, finally resulting extreme high prices for COE of $30,000 - $40,000. Add this to the cost of the car and all will be back to square one.

 

[Quirky_ster]

There is no need for a simulation model,..... if you have spend enough days in Manila and Bangkok, or even Kuala Lumpur, you will know....

 

===

 

Experienced all 3 traffic jams... Manila tops the list! I need to spend 3 hours to get from hotel to the company in the morning. so need to start at 5am to reach by 8am. The return trip from company to hotel, same route, at 3pm, that is before peak hours starts, it only takes only 40 minutes drive!

 

Go on.. scrap the 120% tax and the COE... but be preapared for a 24 hour ERP charges!!..

 

As for US, it's about relative cost... $2K will mean a different level of interest charges and in some cases could mean requiring a different credit ratings to get it approve!

[KapitanE]

How can I forget Jakarta.... oh well, I have not been there for years,... understand the situation has worsen....

 

 

[Triple2onroad]

It's not hard to understand when people over there are living paycheck to paycheck. Some even have to rely on paycheck advance facility just to get the cash to live for 2 weeks before getting the next paycheck. Not to mention that some have a wallet full of cards which are maxed out from cash advances. Interest on it alone can consume half of your pay.

 

FYI, one can easily get a 5 year used car for a few k, and 2-3k cars are everywhere on the road. But of course, there are less shiny, spanking new cars around too.

[Sky61]

when ur car cost 20k...2k is a lot of difference..

 

but when ur car in singapore cost 80k...2k is not much effect..just like a cost of tinting n leather upholstery thrown in...

[Chevycavy]

When I was working in the US ard '02-'04, my colleagues' jaws dropped when I told them I paid SGD 80+k for a Corolla back home. In my small office of 20+ staff, there was 1 NSX, 2 S2000, 1 Porsche and 2 BMWs parked at the car park plus a few huge pickups; and those are just their summer cars. They switch to a cheaper car for winter use. That's how cheap cars are in US.

[Rosschang]

Can't really compare. You're living in a country where if you pay 9% income tax, you are consider earning a fair bit more than the average... where in the US/AUS/EUR/UK/JP, income tax top 20-49%... thou one might argue that the salary in those country are usually more, enuf to compensate, but think for a bit, in Sg u pay high car price coz of taxes, if you don't drive, you do not bare those taxes... *Margin of distributors, another story.. haha*

[Bentwy]

$2K?

 

That's the price of my brother's 1st car in the US.

 

In fact, he is now driving a $1K car. His snow blower is more ex than his car.

 

Think you need to see the world a little more sis. And you do sound like you've not started to earn your own keep yet. To me, 2K is still money.