By on April 4, 2019

Image: GM

As new vehicle prices continue to climb, many wonder how high MSRPs can go before the public decides to take a pass — assuming they haven’t already. Sales growth is slowing, even in seemingly bulletproof markets like China. Even before this ominous backdrop unfurled, dealers were making noise about new car prices that had grown overly ambitious, claiming they couldn’t endure another period of sustained economic hardship.

Edmunds estimates that the average transaction price of a new vehicles reached $36,495 in December 2018 — a 3 percent increase compared to December of 2016 and a 13 percent increase compared to December of 2012. Taking that knowledge, Road & Track compiled a broader picture of the new-car market and where it might be going.

Spoilers ahead if you don’t want the unpleasant non-surprise ruined. 

From Road & Track:

It’s not just in our heads, either. Cars have actually gotten more expensive over the past 10 years, and not just by a little bit. Edmunds says that, on average, new cars sold for more than $36,000 in February, up 29 percent from the same month in 2009. Meanwhile, median household income in the U.S. has only risen to around $62,000, an increase of about six percent over the past decade. Even more cringeworthy? Interest rates have also risen in that time period, from an average of five percent to around 6.26 percent. Not only are cars more expensive, but your auto loan will now cost you more money.

While 2009 was a peak recession year, the fact of the matter is that new cars aren’t keeping pace with inflation and certainly haven’t matched median incomes. The Detroit News reports that this will ultimately push more customers into the secondhand market. However, those vehicles only represent a comparative bargain, as the average transaction price of a used vehicle rose by a hefty 36 percent between 2009 and 2018.

“Vehicle prices have been rising all year but really hit a crescendo in December. Even though holiday bonus checks likely played a role in boosting down payments to record levels, when buyers are willing to put down more than $4,000 for a new car, it says something,” explained Jessica Caldwell, executive director of industry analysis at Edmunds. “There are fewer buyers in the market right now, but those who are there are not only feeling confident, they’re willing to shell out the extra cash to get a larger vehicle with all the bells and whistles. They know what they want and they are willing to accept the higher costs.”

That’s great for them, but what will the plebeian masses eat drive when there isn’t enough money? Extra-crappy used cars or, perhaps, they’re supposed to just embrace mobility and take scooters or cabs everywhere? How is this going to be sustainable for an industry that’s predominantly comprised of businesses that need to sell a substantial amount of product every year to stay in the black?

It might not be. Road & Track speculates that the automotive industry could be heading toward a collapse reminiscent of the mortgage industry crisis that kicked off in 2007. If you’ll recall, that economic setback didn’t pan out particularly well for automakers, either, forcing the U.S. government to intervene. To their credit, carmakers seem to be more cautious this time around. Warning signs of a possible recession are being heeded. Unfortunately, major price reductions don’t appear to be a large part of any automaker’s plan.

While there may be a little room left before the walls come crashing down around our collective head, the Federal Reserve Bank reported that roughly seven million Americans were 90 days or more past due on their car loans at the end of last year. That’s one million more people than in 2017.

[Images: General Motors]

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89 Comments on “Attention, Plebs: New Cars Are Becoming Prohibitively Expensive...”


  • avatar
    namesakeone

    How many are actually surprised by this?

    • 0 avatar
      Peter Gazis

      namesake one

      Not surprising. This is the home of “Ace of base” and “Junk yard find” Articles that bitch about the price of vehicles seem fitting.

    • 0 avatar
      jkross22

      There are A LOT of new cars for sale between 9-12k, mostly Chevy Sparks, Versas, some POS Mitsubishi and Ford Fiestas.

      Go to cars.com, list new cars and sort by lowest price first.

      They’re not great, but they have warranties, the new car smell and are affordable.

  • avatar
    sportyaccordy

    TIL: Automotive journalists don’t understand the difference between price increases and customer choices.

    People are choosing to buy more expensive vehicles, largely because of cheap financing. “Plebs” are free to buy any of the wide array of dirt cheap new cars for sale (subcompacts, pretty much anything domestic), or, as they have always done, buy used. I think 3 out of every 4 car sales is used. Used cars have never been more reliable. This is a stupid article

    • 0 avatar
      28-Cars-Later

      “Edmunds says that, on average, new cars sold for more than $36,000 in February, up 29 percent from the same month in 2009. Meanwhile, median household income in the U.S. has only risen to around $62,000, an increase of about six percent over the past decade.”

      But Sporty, even a subcompact is up some multiple between say 10% and the stated 29% while incomes have only risen 6%.

      “Used cars have never been more reliable.”

      I think this was true for used cars five years ago, I’m not so sure now. I don’t have any links but I know since about 2012 there has been a lot of new technology being used and the first generations of new tech can sometimes be wonky depending on the mfg or technology itself.

      • 0 avatar
        ajla

        I won’t comment too much on the reliability front as I assume someone buying into a used Corolla or Lucerne V6 will probably be okay (yes, there’s exceptions) and someone buying into a used twin-charged Volvo may not be (yes, there are exceptions).

        However this seems like a pretty big deal:
        “the average transaction price of a used vehicle rose by a hefty 36 percent between 2009 and 2018.”

        So for a used car buyer their shopping dollars aren’t going nearly as far as they used to. That means they are likely needing to move into an older or higher-mileage vehicle, which is a riskier transaction.

        The very low end (like sub $4500) of the used car market seems to have been devastated over the last decade. Finding a clean-ish, well-functioning ‘bargain’ is much harder than it used to be. I expect that’s causing people on very tight budgets into either unroadworthy scrap heaps or into the arms of a 35% BHPH/title pawn loan.

        • 0 avatar
          28-Cars-Later

          “very low end (like sub $4500)”

          I had to do a double take at that one; forty five bucks is very low end? Jeebus.

          But you’re very right on this:

          “I expect that’s causing people on very tight budgets into either unroadworthy scrap heaps or into the arms of a 35% BHPH/title pawn loan.”

          Its expensive to be poor in Amerika.

          • 0 avatar
            theBrandler

            This is so true. Every “requirement”, inspection, registration, etc levied on cars makes being poor more and more expensive.

            I remember 10 years ago, all I would even consider for a car was <$5k and over 100k miles and I never had any problems.

            Now having just gotten a new-to-me GTI I had to consider above $15k and less than 60k miles to ensure I got a vehicle that wasn't junk.

            This wasn't just due to price increase or "reliability" though. People don't take care of their cars anymore. A lot of the cars on the market for even $10k are trashed by their previous owners.

            Yes, it's getting pretty damn expensive to be poor in America.

          • 0 avatar
            ahintofpepperjack

            I agree that the very low end has taken the biggest hit. Only 10 years ago I was buying clean and cool cars regularly for under that price. I purchased a B5 Audi A4, E39 BMW, W124 Mercedes, Jeep Comanche, Jeep Grand Cherokee, Etc. All of these cars were clean and good runners and most of them were actually under $3k.

            Today looking around it seems that most cars under $3k are rusted out pieces of junk here in the midwest.

          • 0 avatar
            28-Cars-Later

            Jeep Comanche? Very nice.

        • 0 avatar
          Whatnext

          Regarding reliability and new technology: I was surprised that the fuel injectors on my 3 year old VW needed to a carbon cleaning, when the warranty work to replace a leaking one was done. Thinkign this might be a dealer scam, I went online and found out that this is a common problem on direct injection engines! The various “cleaners” in fuel don’t work the way they did in a port injection system.

        • 0 avatar
          d4rksabre

          This is the major thing, that used cars aren’t a good deal anymore. Dealers know it too, but there are a lot of shoppers out there still sticking to the old adages.

          I spend A LOT of time shopping around and crunching numbers. I’ve been trying to solve the dilemma of the used car I purchased a few years ago that immediately had a number of expensive electronics break (that I can’t afford to fix because I’m paying for that “more reliable” used car).

          I probably wont ever buy another used car. I’ll lease or pay cash. But used cars just look like a ripoff now. There is tangible VALUE to getting that warranty and knowing where the car has been and that it has been maintained that I think is going to become a lot more important than it used to be.

      • 0 avatar
        Lorenzo

        The average price was quotes for new “vehicles”, but now it’s “cars”? The former includes expensive trucks and full size SUV’s. The Cruze didn’t sell for as much as $36k, that’s why it was discontinued – GM couldn’t make a big enough profit to make it worth their while.

        The big problem seems to be the saturated market for $55k-$65K trucks now that interest rates are rising, and the unwillingness of automakers to build midsize and compact cars in the $22k-$26k range in volume with small margins.

        • 0 avatar
          JDG1980

          “the unwillingness of automakers to build midsize and compact cars in the $22k-$26k range in volume with small margins”

          You can easily buy a new small crossover like an Escape or CR-V in that range. At $26k you won’t even have to settle for the lowest trim level.

  • avatar
    Stumpaster

    Buying a used car instead of leasing is not financially prudent. As soon as you buy one, you are up for fluid changes, tires and brakes. By the time your lease would have run out, you are up for second fluid flush, timing belts, tires, brakes and suspension bushings. And all you are left then with is your 6% loan and a car that lost half its value. New cars that are not SUVs are brilliant. Everyone should drive a Mercury Topaz before splurging for a leather-clad CRV instead of Corolla.

  • avatar
    Arthur Dailey

    @Sportyaccordy, has identified the problem that the press has ignored/overlooked.

    Now consumers ‘must have’ power everything, sat nav, heated/cooled everything, a plethora of safety nannies, etc.

    Plus they are buying CUV/SUV’s that are inherently overpriced and produce bigger margins for the automakers.

    And the manufacturers need this, because vehicles are lasting longer.

    I do recognize that some mandated requirements (fuel/safety) have also added costs to the development/manufacturing process.

    Those of us willing to purchase a ‘base model’ or ‘value package’ can still find the occasional bargain.

    Or we have the option of buying a base model Dodge Journey. ;-)

    • 0 avatar
      PrincipalDan

      I chuckled knowingly Arthur, because my impending car purchase has me looking hard at price points, interest rates, loan terms, and seeing if I can actually LOWER my monthly payment on my next purchase.

      It makes you think “what do I really NEED” v. “What do I WANT”.

      • 0 avatar
        R Henry

        Whenever I ask myself those questions, I remain in what I am already driving.

        • 0 avatar
          Lorenzo

          I did that for 20 years, and a normal repair for the age of the vehicle, which would have been under 5% of the car’s value five years ago, is now 25% of the car’s value.

          My last repair, a new radiator and hoses, ran $700, and the car was worth under $3,000 retail, about $1800 at trade-in.

          It needed other work and I sold it shortly after to a private party only because I was able to buy a 10 year old cream puff from an elderly friend who could no longer drive.

          • 0 avatar
            R Henry

            I get it. There is a difference however between the “value” of a car on the open market, and the “value” of a car to you, the owner. A car that may only bring $3000 on the open market may easily provide $10,000 of transportation.

        • 0 avatar
          d4rksabre

          R Henry, I’m in the same boat. I keep crunching numbers and going “yep, nope.” I’m waiting for something to come along that looks like an offer I can’t refuse.

      • 0 avatar
        SilverCoupe

        PrincipalDan

        “It makes you think “what do I really NEED” v. “What do I WANT”.”

        When I think this, I get the car that I WANT. Just about any vehicle out there will get me to the supermarket or out to dinner, or on a weekend getaway. A car I WANT will keep me happy for a decade, and I can put away quite a bit of money for the next car purchase in a decade, so I don’t have to deal with payments and interest and all.

    • 0 avatar
      ajla

      “Plus they are buying CUV/SUV’s that are inherently overpriced and produce bigger margins for the automakers.”

      Motor Trend recently tested a Blazer against an Impala and this line jumped out at me: “Yet, as comparably equipped as possible, the Blazer would be about $8,500 dearer.” My Lord, $8,500 mutha-truckin’ more dollars for the CUV! You can buy a lot of mulch deliveries for that much money. People *really* must want to sit up high.

      • 0 avatar
        PrincipalDan

        @ajla, hit the nail on the head.

        Still tempted to find me an Impala Premiere and enjoy all the features that cost a Blazer driver thousands more.

        • 0 avatar
          d4rksabre

          @PrincipalDan

          Do it. I think I got burned on my Impala because it was the first model year of the new ones, but a new one should be pretty much bulletproof. I keep looking at other cars then coming back to my Imapala and going “well, this car’s build quality makes me angry, but it’s comfy, big, quiet, drives well soooo I guess I’ll keep looking..”

      • 0 avatar
        JMII

        “People *really* must want to sit up high.”

        My theory on this: The commanding view of the road you get in an SUV makes people FEEL safer. Despite the fact that the higher center of gravity makes SUVs less safe handling wise. Now they are safer in terms of pure bulk, so bigger = better in minds of worried commuters and housewives shuttling little ones around all day. As trucks became the #1 selling vehicles on the road all normal cars started feeling way too small and thus less safe. This created a feedback loop in the market: in order to survive on roads full of SUVs that you can’t see over or around you too need a high riding SUV yourself.

        The fact they these vehicles are cash cows is just icing on the cake, so they keep raising prices and gaining profits.

        The question is what is going to reverse the trends? The last time drivers downsized was when fuel prices went thru the roof. However today’s SUVs and really CUVs only get marginally worse mileage then a similarly equipped car. The only thing that will slow this is – as this article points out – the price of these things becoming unsustainable. If prices continue to climb faster then salaries there will be glut of trinkets sitting on dealer lots. Sadly a correction in the market seems to be on the horizon.

        I keep buying used cars so I’m not directly effected by this madness.

        • 0 avatar
          Pete Zaitcev

          I think it might be more productive to ask an SUV driver instead of coming up with bogus theories of feeling safer and all that jazz.

          Sitting higher has a significant effect on how much light you’re getting from headlights, and how much spray from cars ahead. In addition, one does not have to be an acrobat in order to enter and exit an appropriately proportioned vehicle.

          • 0 avatar
            JMII

            My theory comes from talking to people at work that bought SUVs. They always cite feeling safer. My parents bought a CUV due to the easier entry & exit. I had an SUV years ago and being above the spray is about the only thing I miss. Driving in the rain was like – rain? what rain? Didn’t even notice it.

        • 0 avatar

          Toss in crappy roads that make you regret sport suspension

    • 0 avatar
      28-Cars-Later

      All of this is because of one thing:

      Greed is good.

      Gordon Gekko is back yo.

    • 0 avatar
      Flipper35

      The only option we would really want is leather seats, they clean up so much easier with kids and they are generally more comfy. Hard to get in a base model.

      • 0 avatar
        jh26036

        Really not that hard at all, most dealers will install leather on any car you buy via a local upholstery shop. These are highly negotiable and you can basically get it at the dealer’s cost, ~$1,000 for a sedan is from my own experience and they felt fantastic.

  • avatar

    Be interesting to compare the average car price/equipment/practical longevity in 2009 and do the same in 2018.

    If the car costs more but it lasts longer, sort of evens out.

    • 0 avatar
      Pete Zaitcev

      There’s a lot of truth in that. I make final calculations for every car I sell, and these days the amortization is about half of the running cost (for cars that aren’t money pits with repairs).

  • avatar
    cimarron typeR

    Every now and then I’ll cruise autotrader/cars.com.I’d be satisfied with alot of basic offerings out there now. A 6spd Mazda 6 Sport can be had for 22k. The new Corolla is about the same price , an MQB Jetta 1.4t 6m also fits. Agree with Arthur , a Dodge Journey would work well for family duty. How about a Veloster 1.4T for about the same coin? Truck lovers can have a Ram classic or Colorado for under 30k all day long.v6 or 4cyl Camarostang can be had in mid 20s
    ACE of Base options are available for pretty much all vehicle classes

    • 0 avatar
      Maymar

      Going to the absolute extreme, a $12k Nissan Versa is perfectly functional transportation. It has A/C and plenty of space for a small car, and should pose no real issues for 10-20 years of ownership. But no one wants to be that sort of hairshirt owner, and would rather buy used or take an extra year or two of payments to upgrade.

      • 0 avatar
        Pete Zaitcev

        Modern Versa Note is rather dreadful, as it turned out. And I’m saying this as a big enthusiast of cars like old (pre-Mazda) Yaris, and the Mitsubishi Mirage. Back when we had the original Versa and the Note-based Versa was being phased in, I had big hopes for the new model. I actually have a photo with the two of them side-by side, and the Note was a handsome car. So, where did it go wrong? The A/C is notionally present, but is unable to cool the car (tested on several rentals). Maybe it uses an environmentally friendly refrigerant, but I can only tell of the result. The ride is very uncomfortable. I mean… Yaris is better. BTW, both the old Yaris and Mazda Yaris are. And seats are stupid uncomfortable, although I’m sure it depends on the body type. The handling is really… weird. I found that in many cars I became lax and finished braking while already turning in. This works even in a Wranger, within reason, of course. In Versa it’s downright scary, the car rolls onto the outside corner so much. Of course I know that it’s proper to finish braking before the corner and let the car to release the set that it took under braking, then start cornering. But still! Other cars can do, why can’t Versa? Overall, it is truly a penalty car now. SAD.

        • 0 avatar
          vvk

          Old Versa IS much better, especially the sedan. It is a truly usable family car. Very spacious, good seats, enormous trunk. Yes, it is slow but it drives pretty well and is surprisingly comfortable — well damped ride and relatively quiet, too. I am extremely sensitive to noise because I am used to very quiet cars I drive daily and my in-laws’ Versa strikes me as relatively quiet. The new Versa, especially the Note, is just not as good. The sedan is, once again, better than the hatch (Note) — roomier, bigger trunk. But the CVT is nowhere near as pleasant as the old reliable 4-speed AT. And the car just does not feel as substantial, feels much more “built to a price” than the old one. The old one is a real car that feels vaguely European.

    • 0 avatar

      You can buy almost new BMW for that price, no kidding!

  • avatar
    IBx1

    It’s ok, they’re all automatic garbage anyway. I think every car I’ll ever own has already been built and registered.

    • 0 avatar
      Tele Vision

      That’s where I’m at, too.

    • 0 avatar
      slavuta

      I seriously thinking to buy and store couple 2013 Mazda3 for the future

      • 0 avatar
        Pete Zaitcev

        What are going to do when gasoline cars are declared illegal?

        • 0 avatar
          ToolGuy

          Pete,

          They won’t be illegal (think of tobacco). If it works out, price of gasoline will be lower than today even factoring in higher taxes. (Less demand for gasoline because many ‘heavy users’ will have switched energy sources.)

          • 0 avatar
            mcs

            I think gas will get tougher and tougher to find. Especially in urban areas. A combination of regulations and decreased demand will introduce the concept of range anxiety to ICE owners. Especially in California and the Northeast. Also in larger cities everywhere. Unlike EVs, you won’t have the luxury of plugging in at home. When chargers become more profitable than pumps, the pumps will get yanked. It’s already beginning. Even if it results in cheaper gas from the refineries, don’t expect the remaining gas retailers to be generous and pass on the savings. Get used to 8 to $10 a gallon.

            You won’t see it happen for a while. Advances in EVs are needed. But, it’s coming. You’ll notice when you pull into a station and find nothing but chargers. Then frantically searching for another station and hoping they haven’t pulled their pumps too. My best guess is the second half of the 2020s in major cities is when and where this scenario will start playing out.

            https://www.greencarreports.com/news/1121244_shell-acquisition-of-charging-network-greenlots-points-to-juice-as-the-new-gas

            https://www.reuters.com/article/us-newmotion-m-a-shell/shell-buys-newmotion-charging-network-in-first-electric-vehicle-deal-idUSKBN1CH1QV

            https://www.ogj.com/articles/print/volume-96/issue-18/in-this-issue/general-interest/shell-withdraws-from-global-climate-coalition.html

          • 0 avatar
            jkross22

            @mcs,

            This might be reality in 20-30 years. Next 10-20? Nope.

    • 0 avatar
      Flipper35

      I am OK with an auto in a minivan.

  • avatar
    Kendahl

    Are prices rising because manufacturers are charging more for equivalent vehicles or are they rising because vehicles are bigger and better in response to customer demand and government regulation?

    • 0 avatar
      ToolGuy

      Kendahl,

      These are transaction prices, so some of the increase is due to lower incentives.

      Some of the increase is mandatory safety equipment/etc. In the old days this was done on a cost pass-through basis.

      Some (a lot?) of the increase is Model Mix – e.g., purchased a luxury SUV instead of an economy car.

      Some of the increase is Trim/Option Mix – e.g., sprang for the Triple-Ultimate-Platinium-Big-Sky-Edition instead of the Base-Basic-Stripper-Edition.

      Some of the increase is pure pricing – i.e., price increase on the exact same model from one month to the next or with the new model year introduction just because we can.

  • avatar
    SCE to AUX

    This same article could have been written about smart phones, TVs, and the data plans which feed them.

    • 0 avatar
      vvk

      Phones maybe but TVs have gone down in price dramatically in the last two years. The 77″ OLED LG was $20k down to $4k today.

      Data plans are also getting cheaper, I think. I have been on free unlimited Sprint plan for two years and there are so many free or cheap prepaid options now.

    • 0 avatar
      chuckrs

      My 3G flip phone finally had a terminal stroke and I had to get a new phone quickly. My wife’s 3G iphone was also not doing too well either and after procrastinating, we found a buy one, get one free on iphone XRs. @$750 each not so hot a deal, but Ok at $375 each. Thank you, price resistance. Car manufacturers can’t do 50% off but will eventually face the consequences of over-pricing, too. Different markets, as Moore’s Law doesn’t seem to apply to cars and trucks like it does to smartphones, but the consequences are similarly painful.

    • 0 avatar
      krhodes1

      Smart phones that aren’t Apple products can be had for dirt cheap. I paid $125 for my LG and it is entirely adequate, if in no way exciting. Does more than I need it to do. TVs are stupidly cheap – I just got a 70″ for $800 with all the bells and whistles. I paid that for a 29″ CRT back in the day. You can get a 32″ LCD for $99. That is cheaper than any CRT I ever bought.

      And you can get data for silly cheap too. I pay $12/gb shared by three phones. 80% of the time my bill is $12+tax, it’s never been over $24+tx, because we don’t waste data (and thus money. No other charges beyond buying the phones in the first place. On Verizon’s network via Xfinity.

      Ultimately, new cars are expensive because most new car buyers don’t buy cheap hairshirt new cars. I do agree with whoever said that the poor are getting shafted due to used car prices, but the poor always get shafted.

  • avatar
    Jerome10

    things going up in price? oh no way.

    hold zero interest rates for a decade and this is the result. I’m so shocked.

    I honestly can’t believe it either when I think about how much housing (plus the higher property taxes) and college and health care has gone up the last decade as well. Who has money left over for a car?!

    Whenever the blow up comes its gonna be epic.

  • avatar
    Lichtronamo

    “While 2009 was a peak recession year, the fact of the matter is that new cars aren’t keeping pace with inflation and certainly haven’t matched median incomes.”

    This should read as “…the fact of the matter is that the increase in new car pricing has outpaced inflation and increases in median income.”

  • avatar
    ajla

    The paywall for many higher output engines has gotten rough.

    Back in 2009 a 375hp 14.0 second quarter mile Genesis V8 started at $38K (adjusts to $44,500). Now the (slower) G80 3.8L starts at $43K and the V8 version is $57K. A $23K Camry LE V6 was a thing that existed in 2009, now the V6 starts at $34K. The 6.2L V8 was available on a 2WD LT trim of the Silverado, now it starts at 4WD LTZ. GM’s base mid-size SUV had 291hp instead of 195hp. Nearly every premium car had a standard 6-cylinder and you could get a V8 for less than ALL THE MONEY. Now a 6-cylinder is about $60K and the mega-hyper Enzo-speed V8 is dancing around $100K.

    I know a common refrain on here is “well, mainstream buyers don’t care about power or engines” but I do think this is a factor in driving up these average prices.

    • 0 avatar
      SPPPP

      Those are good examples of a trend that has definitely gotten more noticeable. It’s getting harder to find an affordable car with a strong engine. Maybe consumers got hooked on horsepower and they don’t want to go back to 1980s levels!

      • 0 avatar
        tedward

        That’s only true on the large engine side of things, sedans and small cars have gotten a major performance boost out of the new engine families. The fact that companies can’t really sell their bigger engines overseas has gradually caught up to us, anything over 3.0l can petty much be considered a North American special.

        At the same time cars have made a jump to around 40mpg, so the common claim that cuv’s have caught up in that regard rings hollow, despite the closing epa numbers. They’re using similar engines to the cars but are universally penalized by awd and wind resistance, so any drive over say 45 minutes starts to show a real car advantage.

    • 0 avatar
      ahintofpepperjack

      That is true for some cars. But small engines have also caught up to the big old engines in some cases. The 2009 Mustang GT made 300HP and 320Ft-Lb. The 2019 Mustang Ecoboost makes 310HP and 350Ft-Lb.

  • avatar
    deanst

    According to the St. Louis fed, new car prices are up less than 10% over the last 10 years, or less than 1% per year. The rest of the observed increase is due to changing consumer preferences – I.e. bigger and better.

    • 0 avatar
      28-Cars-Later

      But official inflation is at least 15-20% in the period, so new car prices deflated?

      I’ve got a bridge to sell you…

      https://www.usinflationcalculator.com/inflation/current-inflation-rates/

      • 0 avatar
        rpn453

        I think they may have. My 2004 Mazda3 GT hatch was CDN$27000 OTD when I bought it new. When my ex bought her 2016 Mazda3 GS hatch, it was CDN$25000 OTD. Both were straight MSRP, though she got a sunroof and tint thrown in for taking one off the lot. I got neither of those things.

        Quality level appears to be similar (hopefully with better rust-proofing), and hers has more features.

        I have some concerns about the direct injection engine, and instructed her to run nothing but Top Tier fuel. Hopefully that prevents any issues.

      • 0 avatar
        jkross22

        28, I would not be at all surprised if auto inflation varied dramatically from make to make.

        H/K, Mazda and Honda look like they’ve kept in check, but for the luxury market, BMW/Merc/Audi prices are ridiculous. Could be because no one is buying them new and choosing to lease.

  • avatar
    NiceCar

    Most buyers can avoid or minimize the increase by simply buying less car. There’s a lot of levels of “less” – vehicle type, size, trim level. But, today’s available long-term financing often gives people an excuse to not do “less.”

    • 0 avatar
      28-Cars-Later

      I agree to a point, but what is less? You can’t get a sedan which fits humans (or car seats) very well so by default you’re pushed to the CUV and 20% margin. If you actually need a truck for work etc you’re pushed into trims you may not want for 4×4 or certain engines you may need.

      • 0 avatar
        tedward

        That’s really not true man. There’s a large selection of compact sedans that fit car seats behind 6 footers, never the case before. Mid sizers are now ginormous as a rule, 4 basketball players big.

      • 0 avatar
        jkross22

        28, There are reasonably priced cars that are large enough to fit most/all families. Accord, Camry, Passat – all have plenty of space.

        The issue is twofold – People have difficulty separating wants from needs (how many people need a CUV/SUV vs a nice sedan) and people are easily suckered into brand snobbery.

  • avatar
    deanst

    P.S. You can call it the Fed, the Federal Reserve, or even the Federal Reserve System, but if you reference a Federal Reserve Bank, you have to specify which one. The last data I saw on auto defaults was from the Federal Reserve Bank of Kansas City. (12 Banks constitute the system, but I’ve probably already told you more than you want to know.)

    • 0 avatar
      SaulTigh

      I’ve taken the KC Fed tour. Very cool, but I’ll warn you up front, the wall of money is fake. All the real money is secured in the vault area (they do let you look in, however, though a thick wall of glass).

      Liberty Memorial/National WWI museum is right next door, and well worth a stop as well.

  • avatar
    DenverMike

    Right it couldn’t POSSIBLY be US consumers just aren’t into what you’re selling. It’s always “You can’t AFFORD it… ’cause you on the WELFARE…”

    What’s so compelling, enough to ditch a perfectly good running auto, meets all needs, for what amounts to a lateral move? Your neighbors can’t really tell you’ve upgraded to a 2019, from the car you just paid off, except you’ve got a slightly more hideous version of the same boring car, plus a $900 monthly car note.

    Yippee?

  • avatar
    danio3834

    Transaction prices of new cars must rise to account for tech required to meet emissions and fuel economy regs. Models that don’t support higher transaction prices are being culled.

  • avatar
    kenwood

    “Prohibitively expensive?” For who? Seems like a lot of lazy kids who went to college and got fluff liberal arts degrees are having trouble capitalizing on that and making a decent wage. Oh, ok! So lets move towards socialism!

  • avatar
    jimmyy

    For years, I have driven Honda and Toyota products. Recently, I was given a F150 V8 4X4 XLT for a rental. It was nearly brand new and I loved it. So, when I got back to California, I decided to buy one of those. Out the door, the price tag was well onto the 40s. Forget that. I am wealthy and not stupid. Ford is not lining their pockets with my money. Now, I am shopping for a new Toyota 4Runner. A dealer way out in the San Fernando valley is offering me a deal … in the low 30s. If I can’t find a similar deal in Orange County, I will be doing the drive soon. So, for you auto guys that think I should just whip out the money for a F150 because I have it … are you that stupid? Ford, you lost your chance to get a customer.

    • 0 avatar
      CKNSLS Sierra SLT

      jimmyy-

      While the 4Runner is great off-road, it’s miserable for a long distance hauler. It’s one of the few BOF vehicles, and Toyota hasn’t put any substantial dollars refining this vehicle what so ever-since it’s one of the few vehicles of this type. The seats are rock hard-the dash layout looks like something out of the 70’s.

      While you would enjoy good resale on either vehicle-you would be so much better off with the F-150.

      IMHO.

    • 0 avatar
      DenverMike

      @Wall Street – Ask me if I’d trade my F-150 for a 4Runner? Hint: Life’s too short. But thanks for reminding us of your alleged “wealth” and whatnot, again.

      With Rebates (yes a strange foreign concept at Toyota and Honda dealers), the 4X4 F-150 V8 XLT would’ve cost no more than your 4Runner, so enjoy.

      • 0 avatar
        jimmyy

        F150, XLT, 4WD, Crew Cab, V8, in the low 30s? Not here in Southern California. FYI … I own homes in Newport Beach, Wellesley ( Boston ), and NYC ( Manhattan ). I am beginning to see high end pick up trucks in all three cities that are replacing foreign vehicles. These guys are paying more than low 30K for them … they tell me.

        • 0 avatar
          DenverMike

          The 4Runner, Part-Time 4wd starts at $36.4K. The F-150 4wd Crew Cab XLT V8 starts at $45.7K MSRP and $10K off this specific pickup isn’t a problem, even in California.

          If by “foreign vehicles” you mean Mercedes and BMW, I’d say yeah smart move switching from those turkeys, financially (resale value) and otherwise. And I really sorta like those cars actually, they’re especially pleasing to the eyes, compared to Japanese luxury, but yeah.

          I really like Newport Beach, but I’d rather have the worst house in La Jolla. Now that you mention it, I’m gonna start looking.

    • 0 avatar
      James Charles

      jimmyy,
      Many people think as you do. Pickups are great, but in many instances you can buy a better SUV or even CUV which offers better off road capability, comfort and vehicle dynamics.

      As is evident by vehicle purchases the majority of vehicle purchases come down to how much utility you want.

      The majority of pickups are not used for towing and the bed might tote a kayak, bike or bag of mulch. Pickups are used as SUVs, daily drivers.

  • avatar
    ponchoman49

    I bought my 2017 Impala LT 2.5 with convenience package a year ago with only 13k miles for 18K. It still looked and smelled like new and drove flawlessly and I was the first registered owner. It now has 28K miles and is still perfect. I couldn’t touch a new Impala LT at the time for under 28K. This is the way I have bought my last 3 cars. One year old low mileage models that dealers eventually run specials on. I do a search for the lowest priced cars and try and find the cleanest lowest mileage one that hasn’t had body work and go from there. This practice has served me quite well and my last 3 Impala’s have been great reliable cars. Buying new is a waste of money for me.


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