To make it more meaning what is the Average weekly wage (AWW)? With that info we could now start comparing vehicle prices across the world, especially with global cars, i.e. Jeep, Chysler, variuos flavours of Chevrolet (Daewo) etc.. I would personnally like to think that when we purchase a Jeep Grand Cherokee 3.6 V6 Auto laredo for approximately $45,000 AUS and you guys can buy one for about $30,215 US that it takes us both the same amount of AWW.
Because $45,000 AUS = $45,158 US and $30,215 US = $30,116 AUS
So we are getting ripped off by about $AUS15,000 to ship a car from the States to Oz, or the distributer in Oz is charging what the market can bear.
Have no idea whether cars or other goods in Oz are priced plus taxes or included. North Americans are bombarded by additional federal, state, and local taxes, so prices are quoted with no tax included. It's a rotten system, since these can add a great deal to the price, and are a direct throwaway -- you get no credit for them at resale time.
The system also allows government to collect the same percentage of tax from the second and subsequent purchasers, so it's a never-ending treadmill. You gotta register that vehicle you bought used, correct.
In the UK, used cars are not subject to more tax. I presume the same is true wherever sane tax policies are in force. The item is taxed once when it's new, and that's it.
So. I went to Ford Netherlands and found that a 1.6 litre Ecoboost Focus is 24K Euros including the 19% VAT, or about $32K US. This becomes the value of the vehicle and is how it is depreciated from then on.
A much better system than we enjoy in Canada, and probably most of the US. Imagine, the value of the goods you buy actually being worth the total price you paid. What a concept.
I am too lazy to argue or offer rebuttal but invite those who care and interpret as they desire the many graphs and charts the Web can offer that display other economic indicators that show or suggest that income/costs/other economic arenas have altered over time in areas that result in declining purchasing abilities, especially for folks in the lower income demographics.
Interpretations vary and, as always, question the source since preconceived notions can and will affect how data is displayed.
obbop, the lower demographics are not what they used to be, either. One of my kids makes $90K a year, his wife makes less than $60K. You would think that with a gross of $150K combined they could live a reasonably comfortable life. Not so! They are in the lower demographic for their area. Their mortgage is $3490 a month since buying in 2006, their utilities and food for a family of two adults and one young child is ginormous which leaves very little money left over for gas and transportation. So what do they drive? He, a 2004 Toyota Tacoma standard cab 4-banger stick shift. She, a 2008 Hyundai Elantra automatic. Affordability perceptions may be in the eye of the beholder, but all of us have to live in the real world regardless of what the perceptions of others tell us what is affordable.
...and there is the best evidence of what got us into this mess to begin with. That with a mere $150k of combined income the banks will loan you the cash for a $3,500 monthly payment. When buying my first house last year I was absolutely shocked at how much they were still willing to loan at prime terms (no points, bankrate low rates).
There's only so much leftover for the cars after these numbers. Highdesertcat, be glad your kids are bright enough to live within their means as far as the cars go, and aren't complete knuckleheads who are leasing the 335i just because they can 'afford' the $500 lease payment.
vbofw, sometimes we all are victims of circumstance. By that I mean that if you live in an area where $250K+ is the median income, and the prices of homes START at $300K for a two-bedroom fixer-upper, you have little choice but to stick yourself in debt for $345K for a 2600 sq-ft used home, if you don't want to rent. But the point of the article is that cars today are more affordable. To that I take exception since the author fails to take in consideration that the cost of living has risen dramatically in America, just within the last decade. If there ever was a trend to affordable cars, this is the reason why the base models of the Yaris, Accent, Elantra, Fit, etc sell out every year, and why losers like the Aveo et al, mostly marketed by the American car manufacturers continue to languish on the lots of dealers and distributors. I have read elsewhere that Americans in droves prefer to buy the worst from Toyota over the best from Detroit. And the reason is clear: the cheapos from the foreigners run better and last longer than anything Detroit has to offer us. If we are trending to disposable cars where we buy them new and run the pi ss out of them and then recycle them, the foreigners have the market cornered. What we really need is for Detroit to offer us affordable cars equal to or better than what the foreigners offer us. That may happen in the future, but we can look back over the past 40 years or so and see absolutely no indication that Detroit is able to do that, what with union demands for ever higher wages and benefits, and job banks, all the while cranking out the same trash they have been for decades. Does anyone remember the sales hype of the Cobalt, or the Fiesta, etc? Does anyone remember the quality assembly of the same? Gaps that ran from 1/16th to 1/2"? How about pieces falling of? Loose nuts and bolts. I had them on ALL my domestic cars of the past. What held up was the Corolla, the Civic, etc. Americans are not stupid. They are looking for affordable transportation, and they have been finding it in foreign-brand offerings.
I don't think there are any areas where median income is $250k. There are 20 places with median income >$200k, which are some of the smallest (between 100 and 3,000 people), most isolated places in the US.
Perhaps it just seems like the median income is higher since their neighbors are living well beyond their means!
In any event, cars are more affordable when put in the context of income. Just because you point out housing costs are going up (even though we're actually reaching historic lows for housing costs - see today's Case Shiller report), doesn't mean cars aren't taking-up a smaller percentage of the average Joe's take home pay. Others above have also pointed out today's cars last much longer (like the 2004 Tacoma - which I'd be proud of!), making the effective purchase price less.
I guess the point is we can squabble on the details, but cars are a much smaller portion of the average family's budget than in the past.
Back in the early 1960's, we needed a different car, because the 1953 Dodge my parents owned at the time was shot. My dad wanted a nice 1956 Dodge 4 dr. sedan, blue and white, but could not get a loan for - are you ready? - $600.00!!! Imagine that and my mom and dad's disappointment and embarassment that they could only afford a $400.00 loan. I overheard some of that conversation at the bank, too, and sensed that it wasn't pretty and saw the shame in my dad's face. They had to settle for a 1955 Dodge Royal Lancer, 2 dr. hardtop - beautiful three-tone paint, but a piece of garbage as it was in the shop seemingly every 6 months with something wrong. So, what is an "affordable" car? Depends on income, bottom line. A new car? Never for my parents, just a pipe dream. It still hurts to relate that experience some 50 years later, too. We were a "working-poor" family, if you had to categorize where we were on the food chain.
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Here's the whole article, with some perspective: http://comerica.mediaroom.com/index.php?s=122&item=1034 The chart shown above omits the earlier part of the curve, which goes back to 1979 and 23 weeks, respectively: http://i.bnet.com/blogs/bmp_affordability.bmp?tag=content;drawer-container Here's a mystery: Cars seem to become more affordable during a recession. Is this due to mfrs cutting their own throats to move the metal?
To make it more meaning what is the Average weekly wage (AWW)? With that info we could now start comparing vehicle prices across the world, especially with global cars, i.e. Jeep, Chysler, variuos flavours of Chevrolet (Daewo) etc.. I would personnally like to think that when we purchase a Jeep Grand Cherokee 3.6 V6 Auto laredo for approximately $45,000 AUS and you guys can buy one for about $30,215 US that it takes us both the same amount of AWW. Because $45,000 AUS = $45,158 US and $30,215 US = $30,116 AUS So we are getting ripped off by about $AUS15,000 to ship a car from the States to Oz, or the distributer in Oz is charging what the market can bear.
I am too lazy to argue or offer rebuttal but invite those who care and interpret as they desire the many graphs and charts the Web can offer that display other economic indicators that show or suggest that income/costs/other economic arenas have altered over time in areas that result in declining purchasing abilities, especially for folks in the lower income demographics. Interpretations vary and, as always, question the source since preconceived notions can and will affect how data is displayed.
Back in the early 1960's, we needed a different car, because the 1953 Dodge my parents owned at the time was shot. My dad wanted a nice 1956 Dodge 4 dr. sedan, blue and white, but could not get a loan for - are you ready? - $600.00!!! Imagine that and my mom and dad's disappointment and embarassment that they could only afford a $400.00 loan. I overheard some of that conversation at the bank, too, and sensed that it wasn't pretty and saw the shame in my dad's face. They had to settle for a 1955 Dodge Royal Lancer, 2 dr. hardtop - beautiful three-tone paint, but a piece of garbage as it was in the shop seemingly every 6 months with something wrong. So, what is an "affordable" car? Depends on income, bottom line. A new car? Never for my parents, just a pipe dream. It still hurts to relate that experience some 50 years later, too. We were a "working-poor" family, if you had to categorize where we were on the food chain.