It should be noted that a significant reason that the average selling price (in constant dollars) is so much higher now ($50000 according to the article) than it was many years ago is that people are buying a higher percentage of large cars and/or luxury cars.
If today you are buying something equivalent to what you would have bought in the past there is a good chance you will be paying a similar amount in constant dollars.
The article links to a site that gives a list of the cheapest new cars right now. Here they are. These all include the destination charge.
I bought a Honda Civic in 1989. According to the bls.gov inflation calculator the $25890 for a 2026 Civic LX would have been $9600 in 1989. The MSRP for an 89 Civic LX was ~$10200.
Guess what the average selling price of a new car was in 1989? $12000, which using the bls.gov calculator would be around $32000 today. In 1989 a car like the Civic was a lot closer to what the average car buyer bought than it is today.
Note: the bls.gov inflation calculator is based on the consumer price index. It might be better to compare using the Social Security index factors, which is what the Social Security Administration uses to normalize earnings from different years when calculation benefits. Using SS index factors $25890 today would be $7450 in 1989.
I've done similar calculations for my 2006 Honda CR-V with similar results. Same for the Sentra I had before the Civic.
Considering how much more safety and driver assist features are in these cars compared to the same models from even only 10 years ago, the price being nearly the same in constant dollars is actually great remarkable.
For those of us who prefer cars that are just big enough for our actual passenger/cargo carrying needs or big enough to not feel cramped (whichever is larger) the last 40+ years have been great. We pay about the same in constant dollars or a little less each time we get a new car, and it has better fuel efficiency, better safety, and better driver assist.
You are comparing new car to new car, which is fair to you, but you probably aren't in the class getting squeezed yet.
At least my country, the issue is with used car prices. The first car i bought, i bought for 300€ (+200€ of repair i knew about beforehand), in a garage, around 2010. If i want to buy a car in a garage (not using the craiglist equivalent), the minimum i have to pay is 4k, and 1k of repairs. The inflation in europe is _not_ close to x10 in 15 year. Even if i use the local craiglist, the first option i have is a car that can't start at 1.3k (it's a nice model though, easily 12k if it worked).
I can easily afford to buy a 22k new car, so i'm not the one who really suffer from it (i need cargo space for my windurf, and i got it), but for those who are still working minimum wage jobs, and need a car to go to that job, you can't bet on a 5k car. You will either have to go to a very basic new car (9-10k) or a 6-7k used car that you're sure don't need any work for the next 15 months (so that you will have finished paying your car before you have to pay for fixing stuff).
> Considering how much more safety and driver assist features are in these cars compared to the same models from even only 10 years ago, the price being nearly the same in constant dollars is actually great remarkable.
There is more technology in modern cars, but the cost of tech always trends down in constant dollars. (See cost per megabyte/megahertz/whatever for example)
And while there is more size in modern cars, the build quality is worse.
So those are two downward forces combining on car prices.
It’s surprising to me how expensive cars are. There was the Covid spike, but prices have stayed high. I suppose the manufacturers understand demand enough, but I’ve had friends buy cars recently and they didn’t even consider new cars.
$30k for a new Honda Covic seems off. $25k for a 10 year old civic seems even crazier.
That’s part of it but most of it is the push to huge vehicles loaded with luxury features. The Subaru Outback we bought twenty years ago barely changed price despite gaining all of those safety features until they made it bigger and moved premium features into the new base model. Car companies were saved by cheap loan rates and normalizing previously unheard-of loan durations, and they realized that a lot of people won’t see the difference between financing $20k and $30k if they can keep the monthly payment plausible. Safety features are a popular excuse because it lets people disclaim responsibility for choosing to buy luxury features or perceived image.
It had more margin and manufacturer squeezed it to keep prices. If you want to see real prices look at cheapest cars. Those are no-margin. And that is why their prices are up.
This is not “an excuse”. I literally was in meetings where these cameras and extra compute were priced out in $pastJob. More cameras means more wires. More power supplies. More compute means higher end MCUs which are already very not cheap when it comes to automotive parts. More power supplies for the higher-end compute. Per-unit licensing costs for vendors’ algos to implement EAB and the like. Etc…
> It had more margin and manufacturer squeezed it to keep prices. If you want to see real prices look at cheapest cars. Those are no-margin. And that is why their prices are up.
At $25k total it had less margin than most of the domestic SUV market. People talked about safety or extra (i.e. less) cargo space or off-road capacity but that was the rationalization for all of the other frills built in to the trendy models. No-frills cars still exist, still pass safety tests, and cost literally half of the average MSRP. Safety features aren’t free but they’re not driving prices anywhere near as much as people claim: it’s just convenient to say that you’re broke because the big bad safety regulators forced you to buy the leather seats, integrated TVs, etc.
The case they gave us to consider is a guy thinking of replacing a 2020 model?
Jeez, and here I am thinking my 2012 still does everything I need it to do.
Yeah exactly, I'm in construction as well. I drive a 2016 f150 I'm only looking at used f2/350s for more towing.
Sides you show up on my site in a brand new truck, I expect your prices to reflect that, and I'll be looking at your competition. Other equipment is a different story, but a truck yeah no.
> Many new models come with parking sensors, forward-looking radar and cameras, and blind-spot monitoring.
> While those devices make driving safer, they also raise the cost of repairing cars.
I love the passive tense, as if all those things just happened, in a vacuum, not as if politicians we voted for mandated all of that, despite warnings of costs it would incur
In the long run, fewer accidents will lower lifetime ownership costs. Unfortunately in the short term, cars without those safety features cause much more expensive accidents.
And that may be true, but the point remains: it is illegal to make cheap cars due to regulations requiring a lot of features that cost a lot of money to implement.
Very true, but you're a decade or two late for that. IIRC Cash4Clunkers put like a $3k floor on used car value (~$5-7k in today's dollars) meaning you'd never sell your old car for $2k to an individual when you could sell it to the government for $3k.
Per google it was started in 2009, which means any car worth less than $5k around 17 years ago isn't materially impacting new or used car prices today.
Cars are not expensive. A $60,000 car, when calculated for inflation, costs the same as a $30,000 care did in 2000. What's not kept up is wages, including the minimum wage, for most of America. Had the Epstein class allowed wages to grow alongside inflation, as had been done since 1950, nobody would be complaining about affordability.
Total employee compensation has increased a lot during that period but most of that has gone towards employer contributions to group health insurance rather than cash wages.
Maybe everyone shouldn't have a car anyway. Turn on the satellite layer in Google maps sometime, and you'll see how it's affected everything about how we organize society. Life for most humans is just sitting in various boxes only accessible by car, interspersed by car rides between them.
We're a species of motile organisms. Not only do we have legs, to not use them is actively unhealthy. If we're going to just sit in chairs all the time, we might as well get rid of all this useless leg biomass and redesign our houses and offices accordingly.
It's worse than this though, because that's just the physical dimension to our existence. The car is a mediating apparatus that alienates man from his social field. Man is a social animal, and needs sociality to maintain mental stability. If there's always a car between you and members of your own species, intersubjective experiences will simply occur less, which is exactly what happened when everyone got one.
>Life for most humans is just sitting in various boxes only accessible by car, interspersed by car rides between them
And a hundred years ago life for most humans was just sitting in various boxes only accessible by walking, or horse if they were rich enough, and there were far fewer boxes to choose from.
There isn't always a car between members of our species and intersubjective experiences happen more often than they did prior to mass transit because cars allow for greater range and more efficient travel, and thus access to more people and more experiences.
There are entire cultures that have developed around cars and car ownership that facilitate bonding and community between individuals.
I'm all for reducing automobile usage and creating more walkable environments but the premise that cars primarily serve to alienate and isolate people seems wrong on its face.
All this is only true in the singular relation sense. The car has had a scattering effect. It's made the suburb possible. Most of our family members and past friends are scattered all over due to the car's existence in the first place. If not for the car, most of them would be right in your village. Not only would they be clustered in your immediate vicinity, but they would be inextricably integrated into your village life, creating a deeper social connection with your community.
The car casts every social group that temporarily forms to the wind. When you go visit your distant relative 3 hrs away, you only have that genetic connection left. You've lost the multiplicity that would've existed otherwise. The car gives, sure. That's why we ended up with them. But it also took away, and some of those costs were secondary, transitive, or hidden.
It should be noted that a significant reason that the average selling price (in constant dollars) is so much higher now ($50000 according to the article) than it was many years ago is that people are buying a higher percentage of large cars and/or luxury cars.
If today you are buying something equivalent to what you would have bought in the past there is a good chance you will be paying a similar amount in constant dollars.
The article links to a site that gives a list of the cheapest new cars right now. Here they are. These all include the destination charge.
I bought a Honda Civic in 1989. According to the bls.gov inflation calculator the $25890 for a 2026 Civic LX would have been $9600 in 1989. The MSRP for an 89 Civic LX was ~$10200.Guess what the average selling price of a new car was in 1989? $12000, which using the bls.gov calculator would be around $32000 today. In 1989 a car like the Civic was a lot closer to what the average car buyer bought than it is today.
Note: the bls.gov inflation calculator is based on the consumer price index. It might be better to compare using the Social Security index factors, which is what the Social Security Administration uses to normalize earnings from different years when calculation benefits. Using SS index factors $25890 today would be $7450 in 1989.
I've done similar calculations for my 2006 Honda CR-V with similar results. Same for the Sentra I had before the Civic.
Considering how much more safety and driver assist features are in these cars compared to the same models from even only 10 years ago, the price being nearly the same in constant dollars is actually great remarkable.
For those of us who prefer cars that are just big enough for our actual passenger/cargo carrying needs or big enough to not feel cramped (whichever is larger) the last 40+ years have been great. We pay about the same in constant dollars or a little less each time we get a new car, and it has better fuel efficiency, better safety, and better driver assist.
You are comparing new car to new car, which is fair to you, but you probably aren't in the class getting squeezed yet.
At least my country, the issue is with used car prices. The first car i bought, i bought for 300€ (+200€ of repair i knew about beforehand), in a garage, around 2010. If i want to buy a car in a garage (not using the craiglist equivalent), the minimum i have to pay is 4k, and 1k of repairs. The inflation in europe is _not_ close to x10 in 15 year. Even if i use the local craiglist, the first option i have is a car that can't start at 1.3k (it's a nice model though, easily 12k if it worked).
I can easily afford to buy a 22k new car, so i'm not the one who really suffer from it (i need cargo space for my windurf, and i got it), but for those who are still working minimum wage jobs, and need a car to go to that job, you can't bet on a 5k car. You will either have to go to a very basic new car (9-10k) or a 6-7k used car that you're sure don't need any work for the next 15 months (so that you will have finished paying your car before you have to pay for fixing stuff).
> Guess what the average selling price of a new car was in 1989? $12000
I bought my first new car in 1989, a Camaro with T-Tops and it cost me, $12,250.
> Considering how much more safety and driver assist features are in these cars compared to the same models from even only 10 years ago, the price being nearly the same in constant dollars is actually great remarkable.
There is more technology in modern cars, but the cost of tech always trends down in constant dollars. (See cost per megabyte/megahertz/whatever for example)
And while there is more size in modern cars, the build quality is worse.
So those are two downward forces combining on car prices.
It’s surprising to me how expensive cars are. There was the Covid spike, but prices have stayed high. I suppose the manufacturers understand demand enough, but I’ve had friends buy cars recently and they didn’t even consider new cars.
$30k for a new Honda Covic seems off. $25k for a 10 year old civic seems even crazier.
it is all the new cameras and processing required by things like FMVSS127 and its predecessors
That’s part of it but most of it is the push to huge vehicles loaded with luxury features. The Subaru Outback we bought twenty years ago barely changed price despite gaining all of those safety features until they made it bigger and moved premium features into the new base model. Car companies were saved by cheap loan rates and normalizing previously unheard-of loan durations, and they realized that a lot of people won’t see the difference between financing $20k and $30k if they can keep the monthly payment plausible. Safety features are a popular excuse because it lets people disclaim responsibility for choosing to buy luxury features or perceived image.
> Subaru Outback
It had more margin and manufacturer squeezed it to keep prices. If you want to see real prices look at cheapest cars. Those are no-margin. And that is why their prices are up.
This is not “an excuse”. I literally was in meetings where these cameras and extra compute were priced out in $pastJob. More cameras means more wires. More power supplies. More compute means higher end MCUs which are already very not cheap when it comes to automotive parts. More power supplies for the higher-end compute. Per-unit licensing costs for vendors’ algos to implement EAB and the like. Etc…
> It had more margin and manufacturer squeezed it to keep prices. If you want to see real prices look at cheapest cars. Those are no-margin. And that is why their prices are up.
At $25k total it had less margin than most of the domestic SUV market. People talked about safety or extra (i.e. less) cargo space or off-road capacity but that was the rationalization for all of the other frills built in to the trendy models. No-frills cars still exist, still pass safety tests, and cost literally half of the average MSRP. Safety features aren’t free but they’re not driving prices anywhere near as much as people claim: it’s just convenient to say that you’re broke because the big bad safety regulators forced you to buy the leather seats, integrated TVs, etc.
The same Toyota Corolla spec is 6000 euro more expensive now.
No one has any money. Expect more articles like this
The case they gave us to consider is a guy thinking of replacing a 2020 model? Jeez, and here I am thinking my 2012 still does everything I need it to do.
Yeah exactly, I'm in construction as well. I drive a 2016 f150 I'm only looking at used f2/350s for more towing.
Sides you show up on my site in a brand new truck, I expect your prices to reflect that, and I'll be looking at your competition. Other equipment is a different story, but a truck yeah no.
https://archive.fo/TmUWf
> Many new models come with parking sensors, forward-looking radar and cameras, and blind-spot monitoring.
> While those devices make driving safer, they also raise the cost of repairing cars.
I love the passive tense, as if all those things just happened, in a vacuum, not as if politicians we voted for mandated all of that, despite warnings of costs it would incur
In the long run, fewer accidents will lower lifetime ownership costs. Unfortunately in the short term, cars without those safety features cause much more expensive accidents.
And that may be true, but the point remains: it is illegal to make cheap cars due to regulations requiring a lot of features that cost a lot of money to implement.
Why have cars become so expensive?
My understanding is that the used car market was gutted by "cash for clunkers" style government programs
Used to be more used cars on lots, so used cars were more affordable
May not be the whole story but it seems likely it played a part
Very true, but you're a decade or two late for that. IIRC Cash4Clunkers put like a $3k floor on used car value (~$5-7k in today's dollars) meaning you'd never sell your old car for $2k to an individual when you could sell it to the government for $3k.
Per google it was started in 2009, which means any car worth less than $5k around 17 years ago isn't materially impacting new or used car prices today.
Huh
I could have sworn the cash for clunkers thing was much more recent. Thank you for the correction
It was like 700,000 vehicles. Enough to have an impact, but we buy like 15 million cars a year, it's gonna smooth out fairly quickly.
Also, people not having money.
Cars are not expensive. A $60,000 car, when calculated for inflation, costs the same as a $30,000 care did in 2000. What's not kept up is wages, including the minimum wage, for most of America. Had the Epstein class allowed wages to grow alongside inflation, as had been done since 1950, nobody would be complaining about affordability.
Total employee compensation has increased a lot during that period but most of that has gone towards employer contributions to group health insurance rather than cash wages.
Such a shame too
Maybe everyone shouldn't have a car anyway. Turn on the satellite layer in Google maps sometime, and you'll see how it's affected everything about how we organize society. Life for most humans is just sitting in various boxes only accessible by car, interspersed by car rides between them.
We're a species of motile organisms. Not only do we have legs, to not use them is actively unhealthy. If we're going to just sit in chairs all the time, we might as well get rid of all this useless leg biomass and redesign our houses and offices accordingly.
It's worse than this though, because that's just the physical dimension to our existence. The car is a mediating apparatus that alienates man from his social field. Man is a social animal, and needs sociality to maintain mental stability. If there's always a car between you and members of your own species, intersubjective experiences will simply occur less, which is exactly what happened when everyone got one.
Do you have a vehicle?
>Life for most humans is just sitting in various boxes only accessible by car, interspersed by car rides between them
And a hundred years ago life for most humans was just sitting in various boxes only accessible by walking, or horse if they were rich enough, and there were far fewer boxes to choose from.
There isn't always a car between members of our species and intersubjective experiences happen more often than they did prior to mass transit because cars allow for greater range and more efficient travel, and thus access to more people and more experiences.
There are entire cultures that have developed around cars and car ownership that facilitate bonding and community between individuals.
I'm all for reducing automobile usage and creating more walkable environments but the premise that cars primarily serve to alienate and isolate people seems wrong on its face.
All this is only true in the singular relation sense. The car has had a scattering effect. It's made the suburb possible. Most of our family members and past friends are scattered all over due to the car's existence in the first place. If not for the car, most of them would be right in your village. Not only would they be clustered in your immediate vicinity, but they would be inextricably integrated into your village life, creating a deeper social connection with your community.
The car casts every social group that temporarily forms to the wind. When you go visit your distant relative 3 hrs away, you only have that genetic connection left. You've lost the multiplicity that would've existed otherwise. The car gives, sure. That's why we ended up with them. But it also took away, and some of those costs were secondary, transitive, or hidden.
That isn't the cars fault in that sense. Compare a lot of Europe with a lot of America.
Both locations have cars.
Exceptions in both locations prove some rules.