Did ye  – the term seems apropos – know that in the early colonial period, the typical indenture contract ran for seven years? People too po’ to be able to pay for their passage to the new world would instead agree to be bound to service for a term of seven years, during which time they worked off what they owed.

Well, history has this habit of repeating. Probably because people forget and so need to relearn. How about a seven-year indenture to pay off a vehicle you’re too po’ to afford?

It’s becoming the new normal – for just that reason. People increasingly can only afford a new vehicle if the cost of paying for it is spread out over 84 months – seven years. It’s understandable. As of early May, 2026 the average price paid for a new vehicle is just shy of $52,000 (up from about $50,000 just two years ago). The reasons why are several and include inflation as well as the folded-in costs of Trump’s tariffs, which are just taxes paid by the vehicle manufacturer that are then folded into the cost of the vehicle. (Some think these tariff-taxes only make imported vehicles cost more; this thinking assumes the not-tariff-taxed domestic manufacturers will lower the cost of their vehicles. They don’t, of course. All the tariff-taxes do is eliminate the less costly, imported alternatives to the higher-cost, domestically manufactured vehicles. Voila! Now everything costs more.)

What does $52k work out to monthly – not including interest? Just shy of $600 per month. That’s pretty hefty. But what would it cost to pay off this same $52k vehicle in five years? About $800 per month. Too hefty for most. Now let’s use the Way Back machine to see what it would have cost to pay off this vehicle in three years – which was pretty common back when new vehicles were available for $5k.

It’d be about $1,400 per month – and that explains why almost no one is able to pay off a new vehicle in three or four years anymore.

There are a number of interesting aspects to all of this that go beyond the indenture contract. The first that comes to mind is that at the end of the indenture, the vehicle is likely not going to be worth even half what it cost originally. This depreciation is an additional cost of the indenture contract. Half of $52,000 is $26,000 – the latter figure being what it cost you in depreciation to make payments on the vehicle for 84 months. Add that to the cost of the indenture. The total cost comes to $78k – not counting interest on the original indenture, of course. That’s how much you’ll be out-of-pocket after you’ve – finally – paid off the indenture. At which point you will be the owner of a seven-year-old vehicle that’s now probably out of warranty and for that reason will cost you whatever it costs to have it fixed when it breaks. You will probably need a new indenture contract to pay for that, too – given that you probably won’t have the cash on hand to pay for it, having just spent the past 84 months paying $78k.

Not counting interest, insurance – and gas.

In the Before Time, when people routinely paid off a new vehicle in three or four years, it is true the vehicle also lost value – but not as much because the vehicle didn’t cost as much to begin with. Yes, inflation. But it’s not all inflation. More specifically, it is not just that it takes more dollars to buy similar things today; it is that most of us have fewer dollars to buy things with today. If wages had kept pace with inflation then inflation would be an irrelevance. One hundred dollars would buy the same ten dollars’ worth of whatever you bought in the past. The problem is it takes $200 to buy the same ten dollars’ worth, which is why it doesn’t seem that things cost more.

They actually do.

It is also true that, in the Before Time, a vehicle that was paid-off after three or four years was likely beginning to show its age – because 100,000 miles on the clock back then as analogous to 250,000 on the clock today. And yet, there was a difference. The Before Times vehicle was probably still fixable, both practically as well as economically. Even just fifteen years ago – a blink of the eye – you could still buy a brand-new GM TH350 automatic transmission (a common transmission used in millions of Before Time GM vehicles) for about $600. A new/rebuilt engine was maybe $1,500. That same transmission costs closer to $2,000 today and a modern automatic for a current-times GM vehicle costs three-plus times as much. A new engine is $10k.

Most people could afford $600 for a new/rebuilt transmission in the Before Time. Very few can afford one in our time. The difference between then and now was that you could generally keep that aging vehicle going for many years after it was paid off. It’s why almost every teenage kid had a car before the early 2000s. It may have have been a beater. But it was a car. Many people well into their 20s today do not have a car – because beaters are out of their price range and when a beater breaks down, it’s not worth fixing it.

So people sign up for a new indenture.

And – unlike their colonial forbears – they may never get to freedom.

. . .

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