First, households have more than one car. If you assume on average cars last 15 years and the average household has 2 cars that's.
116,211,092 * 2 / 15 ~= 15.5 million new cars per year which is within the ballpark of 17.5 million new cars.
Next, averages tend to be well above median. One BMW might bring the average up relative to 20 Honda Civics. Further, the low end of the market is more likely to buy used than new. So ~1/3 of the market is buying new cars, 15% of that is buying the expensive new cars and your looking at top 5% income earners at $167,000+k/year.
Granted, not everyone making 150k is buying a 50k car, and some people making less than 150k are buying 50k cars. But, if you think in terms of that kind of income then a 50k car is less ridiculous than you might think.
My wife and I each have a car. Most married people I know each have a car, so to me that's not ridiculous at all.
My new neighbors, though, are ridiculous in their car ownership (in my opinion). They are a married couple with only a new baby, but for some reason they have three cars. I've never seen them drive the third car, it's just in their garage and they park the two cars they do drive in the driveway.
In rural and low-density suburban areas, it's expected (and basically required) that everyone in the house who has a job also has a car.
Take a look at the size of high school and commuter college student parking lots on Google Earth, and then consider that every single one of those cars probably belongs to a household with 3+ cars (mom, dad, teenager).
Very common for parents to upgrade and pass their old car down to their 16-year-old instead of trading in.
Plenty, it's often a work vehicle or for teenage children, sometimes it's a commuter car. RV's are also fairly common as are motorcycles which might not count. Other times, it's just a car waiting to be sold / repaired.
PS: Don't forget all those Verizon van's are part of that 2 average.
I own three cars. One is my dad's old Vanagon. I haven't had the heart to sell it, and it is useful a few times a year for camping, scuba diving, or hauling. I probably should replace it with a trailer for those needs, but I haven't yet. It cost me $0, registration for it is about $120/yr, and it doesn't bump up my insurance all that much. Could I save money by just renting a van when I needed one, sure, but not all that much, and it has sentimental value.
Besides, there have been a couple of times where simply due to bad luck both of our newer cars were in the shop at once. Having the backup of the CVCC for a few days was genuinely useful.
I have three cars (and two motorcycles), and there's just my wife and I; no kids, but two dogs that have to be planned for. Why three cars? Well, the Scion xB (DogMobile) was purchased new 12 years ago, it's paid off, and it can carry dogs and bicycles. The Nissan Leaf was pre-ordered the day we were able, someone has to kick start that electric car thing. And since a nylon tent isn't going to contain an 80lb. pit bull terrier when it hears a raccoon at 3 a. m., we bought an '81 VW camper van.
Now, we could get rid of the Scion and use the VW as the new DogMobile. But the Scion is long paid off, reliable as a hammer, and we don't put miles on a temperamental old VW that wasn't that reliable to begin with (in comparison to a Toyota-made Scion). The resale value on Leafs is horrible, and we like the car. Long since paid off, too, and since it's our "nice car": no dogs allowed.
Oh, and my Dad just texted me this weekend asking if I wanted his 1963 Austin-Healey 3000. As much as it pains me, I'm probably going to turn him down and let him sell it. Too many vehicles the way it is, and nowhere to put the Healey except a storage unit. But until I give a definitive "no", there's the possibility that we could be a four car family.
Ridiculous, yes. But for some the vehicles just kind of pile up.
I'd wager there are even more 3+ car less-affluent families.
Having multiple, older vehicles that are 1. fully paid off, 2. dirt cheap to insure, and 3. old enough that you can actually work on them yourself is a good way to make sure you have something usable at any one time, even if the general maintenance needs are higher than average.
A household across the street from me has five residents: mother, father, employed daughter, twin sons in high school. They have at least three cars now, and I'm pretty sure I've seen four (one, to be pedantic, a pickup truck).
A household next to me has within the last five years had three residents: mother, father, son then about twenty. They had three cars.
A household down the street: mother, father, employed daughter, employed son (the last there part time). All have their own vehicles:sports ute, truck, sedan, truck.
It is possible that a household at the end of the block, mother, father, daughter in high school, has three cars; but I'm not sure whether father and daughter use the same car or a different one.
We are in a city, close to public transportation. I suspect that as one gets farther out into the suburbs, one finds more households with three or more cars.
3 person household with 2 drivers. 3 cars, FMV totalling about $5000. I keep an extra car to get to work when one of the others is broken down. One of the vehicles is a compact pickup with a canopy for diversifying utility, if needed.
We're well below median household income; but we must have transportation at all times.
I have found the sweet spot for used cars to be about $4000. Won't need too much work for a couple years, and I refuse to take the depreciation on more expensive cars. Cash-and-carry, I will not have a car loan, either - not paying interest.
What is the average household exactly? One of my neighbors are baby boomers whose 30-year-old daughter still lives with them. They have four cars (two for the dad, one for the mom, one for the daughter). Across the street is some kind of flophouse -- a 2-bed 1-bath house, whose occupants have no less than 7 cars. It causes no end of consternation for my wife and I who have merely one car each, and we often can't park in front of our own house because the neighbors are taking up all the spots.
For the people I know, it seems more of an overabundance of caution vibe. A bit more like "Let's have a third SUV, in case one breaks down and we suddenly both need to drive multiple people to different hospitals across snow covered rocky terrain."
We have four, one of my neighbors has at least six (family of three), another about four or five. The guy across the street probably has at least four.
Pretty much all the families I've known have at least two cars.
Good analysis. The used car sales aren't captured by this metric so it automatically pushes the mean up. However, it still accounts for an exceptionally high sales year, since none of the used car sales are included in that 17.5 million figure.
Maybe car sales are highly variable from year to year?
116,211,092 * 2 / 15 ~= 15.5 million new cars per year which is within the ballpark of 17.5 million new cars.
Next, averages tend to be well above median. One BMW might bring the average up relative to 20 Honda Civics. Further, the low end of the market is more likely to buy used than new. So ~1/3 of the market is buying new cars, 15% of that is buying the expensive new cars and your looking at top 5% income earners at $167,000+k/year.
Granted, not everyone making 150k is buying a 50k car, and some people making less than 150k are buying 50k cars. But, if you think in terms of that kind of income then a 50k car is less ridiculous than you might think.