What Happened to the Affordable Car?

Josiah Johnson (0:11)

My truck's name is Chachi, and it's a very simple truck. It's a Toyota from the 90s.

Jessica Mendoza (0:18)

That's Josiah Johnson. He drives a 1993 Toyota T100.

Our producer Pierce interviewed him.

SPEAKER_3 (0:25)

And what are the types of things that you use your truck for at work?

Josiah Johnson (0:29)

I have a trailer that I pull with all my tools in it, and then I use it to move materials, going to lumber yards, picking up whatever I need, and driving it to the job site.

Jessica Mendoza (0:41)

Josiah lives in Southern California, and he's a carpenter. So his truck is more than just transportation. It's one of his tools.

The truck itself is red, and it has an eight-foot bed, which is useful for hauling wood.

Josiah Johnson (0:54)

I do a lot of cabinet making, and this is the first year that Toyota made a full-size truck that could fit a sheet of plywood between the wheel wells.

Jessica Mendoza (1:02)

Chachi is an old truck, over 30 years old. It has manual locks and crank windows.

Josiah Johnson (1:10)

One thing I hate is the rolled down windows. That, that's a bummer.

If someone comes up to your passenger side window and is like, hey, can I talk to you quick? And then you have to lean over and roll down a window. That's a downside.

Jessica Mendoza (1:22)

And by modern truck standards, it's pretty small.

Josiah Johnson (1:25)

It's a small truck compared to a lot of American trucks.

Now, people would look at it and say, oh my gosh, that's so much smaller than a, you know, some massive F-150, F-250. But it is big enough to move around everything I need to. Have you ever thought about buying a new truck? But I could never really convince myself to consider, in a serious way, buying a new truck.

Jessica Mendoza (1:46)

That's because new trucks are pretty expensive. Today, the average price of a new vehicle is around $50,000.

And trucks tend to cost even more.

Josiah Johnson (1:56)

Yeah, I would never want to spend the better part of a year's salary on a vehicle that's only going to last me a decade. And throughout that decade, it's going to need a lot of maintenance. That would feel unwise.

Jessica Mendoza (2:13)

Many people in the US are like Josiah and holding on to old cars. That includes me.

I drive a 2014 Subaru Forester. It's a far cry from Josiah's 93 model, but my car is about the average age of cars on the road right now, which is about 13 years old.

Sharon Terlep (2:30)

People are holding on to their cars longer and fewer people are buying new cars.

Jessica Mendoza (2:36)

That's our colleague, Sharon Terlep. She covers the automotive industry.

Sharon Terlep (2:40)

There are a lot of market factors that are preventing people from buying new cars. New cars are increasingly expensive, and it's not just the car, it's the insurance, the loans, the repairs. It's tougher for people to swing these payments now than it used to be.

The affordable new car has, I would say it's harder to find. They're harder and harder to find and fewer and far between.

Jessica Mendoza (3:07)

Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Thursday, September 10th.

Coming up on the show, what happened to the affordable...

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Jessica Mendoza (4:08)

When Sharon says new cars have gotten pretty expensive, she means that the average price for them has doubled in the past 25 years.

Sharon Terlep (4:18)

The average car is selling for around $50,000 now.

Back at the beginning of 2000, that was closer to $25,000. Now, of course, there's been inflation, and everything's gotten more expensive, but the idea that you can spend $50,000 on average on a car, I think, is a big deal and pretty impactful. Part of what compounds it is that there are so many things you have to spend money on in order to own your car. You have to fix it, you have to finance it, you have to insure it, and all those costs have gotten expensive as well. So, you know, it kind of combines to make this a much more expensive proposition than it was a decade ago.