I was driving around the crime-infested, low-income area of my city (which had the unfortunate distinction of being the “Murder Capital” of my state) … and I’m looking at all these broken down houses that look like dumpsters with roofs, and yet parked on the street and the grass driveways are BMWs and the such.
It’s not just one or two houses, it’s a good 50-60% of them with some pretty nice cars. And now that I think of it, I rarely see any cars that I would consider clunkers.
Where do these people get the money to buy nice cars from?
I’ve pondered this also. There’s some low income apartment complexes near me and I’ve never seen a larger collection of Cadillac Escalades.
The only thing I can guess is Escalades depreciate really fast and they’re all used? Or they’re leased? Or they’ve taken 6 year loans on the things?
Who knows, maybe they save so much money on rent and shopping at Walmart that they can afford them?
In most of america a car is a need, not a luxury as public transport is often laughable. So people prioritize their cars over buying a house in a better area.
I’ve seen this same phenomenon. I teach in a school where a large percentage of the students live in poverty.
Generalizations ahead!
It is not uncommon behavior among people living in relative poverty to spend money on “unnecessary” things, like expensive cars instead of more affordable vehicles. Cars are a status symbol. Many poor people will have very nice, big-screen televisions that less impoverished people would balk at purchasing. They also may buy fast food for every meal, which is a good bit more expensive than making your own meals. They own the latest video game consoles. They may pay hundreds of dollars a month for cell phone service with all the bells and whistles, rather than just a “dumb” phone with a basic voice plan.
Keep in mind that most of them are not putting any of their earnings into retirement funds, savings accounts, investments, etc. They may not have health insurance. Everything they earn, they spend in short order on things that bring them immediate gratification.
And I’m not trying to imply that poor people should be living completely spartan lifestyles. I’m just saying they tend to live in the “now” and have different priorities than a lot of middle class folks.
I remember an article in the local paper a couple of years ago about property and vehicles being vandalized at a local trailer park. One of the vehicles vandalized was a woman’s Cadillac Escalade.
Apparently, John Cheese of Cracked.com was poor for a while in his life.
He wrote an article about it. (In fact, he wrote a whole series of serio-comic articles about it that together form a fascinating autobiographical study of a particular point in the history of a specific social group in America in list form.)
Here’s one of the things he says:
So, yes, it’s anecdotal, and I do hope that someone out there commissioned a major study that focused on this issue. But I’m not holding my breath.
I’m not convinced this phenomena is as ubiquitous as you paint it.
But in any case, you can get high-mileage used luxury cars fairly cheap. Luxury cars tend to keep running even as they go to pieces. My best friend growing up drove on that had one window that didn’t go up, one that didn’t go down, two doors that did not open, a permanently activated windshield wipers, and a tendency to overheat if you drive more than ten miles at a time. Realistically, nobody would buy this car at any price and she picked it up for a few hundred bucks It got her to work and never broke to the point where it did not run. So she drove that thing for years.
Often in less well odd families, houses are passed down through the generations rather than being sold to buy a larger house or finance a comfortable retirement. So a lot of people outright own downscale but entirely adequate housing. Not having rent or a mortgage frees up a lot of income, and if your housing is working and your social circle doesn’t do the whole real estate upgrade thing, you may be financially reasonably well off despite having a somewhat shoddy house.
Property ownership has a lot to do with it as well. They own their cars; their houses (or apartments, etc.) are owned by basically-absentee landlords. So they feel no ties or incentives to repair or keep up appearances for their homes. Plus, many in low-income areas move frequently so their homes are often changing. Cars are often the most stable element in their lives.
Just because a person can afford a $60,000 car doesn’t mean they can afford a $600,000 house. And if they decide not to buy the $60,000 car they still won’t have the $600,000 house. Same thing with a guy that can’t afford to buy a new car but can afford to buy a new HD TV. Or a guy who can’t afford a new TV but can afford to go out and buy a fancy steak dinner.
People want to buy luxuries and they buy the ones that are in their price range.
Yeah, y’all are seriously overestimating the price of used luxury cars. I found a used Escalade for $24k, only 6 years old with 75k miles. And I found plenty of Beemers of similar vintage for $15k. Those prices are pretty equivalent to comparable non-luxury new cars. Even older luxury cars can be had for $5k-$10k, no problem. I’m a fucking broke-ass grad student, and if my priority was a “status” car, I would have no trouble affording one used. (Instead I have practical cheap compact cars that I pay off in a year or two, since that’s the more rational dollars-per-mile choice.)
You’re probably thinking, on some subconscious level, “Why, that ghetto-dweller is driving the exact same luxury car as my rich uncle!” Your uncle paid $75k, new, ten years ago, and still drives it. The poor guy bought it used for $7k last year.
Around here, the preference seems to be for Escalades and something that’s high-waisted and looks like it was chopped - might be a Chrysler 300 or Dodge Magnum? Either way, it will most likely be black or pearl with black windows and a smoke-gray cover over the license plate. (And what are you up to with your hidden license plate?)
Yes, but Uncle probably got it for 0% dealer financing, but the poor guy bought it at a “Buy here, pay here” lot for 20%
And you know this how? I grew up in a pretty poor place, and most people I know bought cars for-sale-by-owner (from The Pennysaver in those days, probably Craig’s List now), using money orders to make the payment.
This would often happen after tax refunds, when people have a little chunk of cash. It’d also be common to work out special arrangements with friends and neighbors.
Your neighbors grandma, for example, may have passed away and left her old Cadillac (it’s no coincidence that you see a lot of old-people luxury cars and not sports cars and SUVs- a lot of luxury cars are first purchased by more prosperous grandparents and handed down and circulated within a family). She already has a car and needs cash to make rent, so she sells it to you for a few thousand dollars cash plus an agreement to babysit for her over next summer break.
When you finally land a decent job and want to buy a more reliable new car (most of the poor are poor for a very limited time, and move into the middle class after a few years) you pass the car down to someone else, perhaps under a similar arrangement.
In my experience, used caddys and lincolns are excellent cars-they are reliable, and cost much less to maintain (than BMWs or Audis). They depreciate fairly swiftly, so you can buy an 8-10 year old one for cheap money. My dad’s Sedan DeVille has jsut passed 140,000 miles-the “Northstar” V-8 runs smoothly, and gets 29 MPG on the highway.
And again, consider product life cycles. A non luxury car tends to be fairly reliable, until one day it just breaks completely and stops working. So if you are buying used, your options are a reliable but relatively pricey car, or a very cheap car that just doesn’t work.
Luxury cars tend to fall apart slowly, and have a period where they have lost major functionality (and value) while still technically running. My friend’s car, for example, could only run 10 miles at a time, rendering it monetarily worthless. But it got her to her job five miles away for years.
So a dirt cheap non luxury car either has 90% or 0% usability, while a dirt cheap luxury car may have 10-30% usability, which may be enough.
It’s probably been 15 years ago or so, but I spent a lot of time one day talking with a customer in my shop that had traveled around the country quite a bit (may have been in a military family) and lived in a lot of “less affluent” neighborhoods during that time.
He said a lot of places had rows and rows of run down houses, shacks really, that looked like they hadn’t been maintained for many years.
But inside was a different matter. Inside the houses were clean and well furnished. You would easily think you were in a nice middle-income family house if all you saw was the inside. Many of these houses had quality furnishings and appliances.
He said it had something to do with keeping property values and taxes low, as well as radiating a look of poverty while actually having a nice living enviroment.
People like this would probably have a nice car to drive, even if the home it was occasionally parked at looked like a dump.
I suspect an element of practicality too. “Boom boxes” became “ghetto blasters” because if you had a home stereo system, it would get stolen. Keep it with you most of the time, it’s safer. Then it became a penile comparison game, whose is bigger and more powerful?
Similarly, you won’t be inviting people into your place regularly (especially if you do have a giant TV) and you won’t be fixing up Mister Uptown’s slum housing for him, so the next most obvious prestige item is to pimp your ride. (the next most obvious is to wear expensive, although not necessarily tasteful, clothes and shoes) Plus, a vehicle is something difficult for anyone to steal and use or resell) in the normal environment. Is it any surprise that the flashiest, biggest, baddest vehicles are chosen? Then if possible, they add window tint, paint jobs, and custom parts if possible? Bling. It’s penile comparison display all over again.
But yes, a used vehicle is cheap, and Detroit-mobiles are far cheaper and simpler to maintain than a BMW or Mercedes.
I’m not suggesting this is the case for the OP, but sometimes people from outside of an area tend to overestimate the level of poverty and crime in an area with which they are not familiar.
My relatives from outside of the city think that my street is some kind of urban hellscape, largely because it is unfamiliar to them. There are a lot of expensive cars on the street (plus our Kia Soul) because there are a lot of affluent people who live here. But my relatives are accustomed to the more orderly world of norther VA, so it all just looks like ghetto to them.
I have (a mortgage on) a pretty nice house and a 1998 Saturn SC1 as my one and only car (I bought it new). So, you know, the opposite paradigm exists too.
It depends on the area you live in but, while not a necessity, in a lot of areas does make life a lot easier. But what I believe what the OP is talking about is not people spending a little more to get a reliable car. The OP is talking about people who live in very poor areas yet drive cars that seem to be much more expensive than someone in a much nicer neighborhood would drive.
While the low resale value of used luxury cars may explain some of this there are also plenty of instances where there are really expensive cars in genuinely bad neighborhoods. Not to mention cars with several thousand dollars worth of chrome rims and other parts on them.
If I copied the link correctly this is a public housing project that is generally agreed to be a dump and a pretty new looking hummer parked there. If I cut through this neighborhood I will get pulled over because it is assumed I am there to buy drugs. While expensive cars in this neighborhood are nowhere near 50% they are not all that uncommon either.