If you are rich the payment might be $500. The poor are buying used cars for $5000 and keeping it for a few years, so lets knock that down to $250/month (including maintenance). Their insurance is cheaper as well (if they even bother with it...). You can get your monthly costs even lower if you know how to buy a reliable car that you maintain yourself (or for free by friends/family) - which the poor are likely to do.
I went without a car for a year a few years ago (personal challenge / to save some money), and had a spreadsheet detailing the cost of ownership for a $10k car. Costs:
* Insurance: $640
* Registration: $51
* Repairs: $200
* Depreciation: $300
* Opportunity cost (assuming a 6% ROI on the $10k): $600
All in cost (excluding gas): $1790
At the time, I was comparing the cost of owning a car vs using car2go, uber, etc for a few trips a month. In the end, it basically just showed that owning a car wasn't all that expensive, and the convenience was WELL worth it.
My current car is worth ~$5k, and these numbers are actually a fairly good representation of my costs over the past few years. I take it in once a year to get the oil changed, and do other small repairs, but otherwise it just kinda.. works. Parking and other costs from living in a city might swing this calculus a bit more, but at the end of the day, you don't need a brand new car, and a modest 10 year old car can drive well, without costing you very much.
Until you're poor you don't realize how cheaply you can keep a vehicle running, nor how many people are just driving around without insurance, license, and various other "necessities".
This is the secret underbelly to the car-centric design of the US. People drive illegally all the time. They drive over legal BAC limits, they drive without insurance, they drive unlicensed, they don't pay parking tickets, they drive looking down at their phones and not at the road.
When you're poor and you live in an area completely unserved by public transit and you lose your license because you can't afford to pay parking tickets, are you really going to stop driving and lose your job and become homeless?
We have statistics to show what unlicensed and uninsured driver crash and fatality rates are like and they're a lot higher than the rest of the cohort, but there's still a sizable part of the US population that does all of these things and still uses the same public road infrastructure as everyone else, often out of lack of alternatives.
And to get your car registered in most states, you usually only have to pass an emissions test, have a valid license, and have proof of insurance at the time that you register the car.
This means that 11 out of 12 months, you get to drive around without insurance.
Pretty much illegal everywhere in the US except for a few weird outliers. I think there’s one southern state that lets you have a bond instead of insurance?
Let's not. Average car payments and loan duration continue to rise. NerdWallet is putting the average new car loan at $700/mo for 70 months and the average used car loan at $525 for 68 months. About half of all Americans can't afford a $1,000 emergency, so it's pretty damn unlikely they'll be paying for even a $5,000 car without a loan. If you're poor not only are you taking out a loan you're getting socked with a high interest rate subprime loan that's going to cost you more than a loan to a wealthier person.
Seems like an obvious case of selection bias. Used car loans are going to be a lot higher than average prices people actually pay for cars, because people who take out loans to buy cars are buying more expensive cars than people who don't.
So, no, rich people aren't driving these ballooning loans they're going to the working poor. The excruciatingly poor don't own cars. Defaults were ticking up leading into the pandemic, people are simply living beyond their means at this point. Cars are expensive and have been getting more and more expensive.
