The impact of inflation on car prices

For most of us who don't live in New York, cars are essential. Although it is widely believed that auto spending has traditionally been able to compete with housing expenditures in the standard household budget, the price of cars has increased accordingly over the years. Is this true?

Henry Ford gained commercial immortality by democratizing the car. Among his achievements, one of his iconic ones is to make the T-car in the range of ordinary people. Two speeds, open wheels and an actual driver's side door (on a later model) are enough to attract horse owners, and their car choices are not fully adequate. In addition, you can't exceed the price of the T-car. In 1909, it was priced at only $850, so you don't have to worry about salespeople selling rust or fabric protection packaging to you. This choice does not exist yet.

T type success

For decades, the T-type car has occupied an overwhelming market share, which is largely the only car for the average working class. Of course, the automotive industry is not static. With each model year and every technological advancement, more features become available. For decades, the market has stratified and cars have started from luxury to entry-level.
In the 1960s and early 1970s, with the explosion of the historic oil crisis, natural gas was sold at unprecedented prices, and small fuel-efficient cars were more popular in North America than ever before. The ubiquitous Volkswagen Beetle is one of the most popular cars in continental Europe, and its bare bone model sold for $2,000 in 1972. Cars like AMC Pacer compete with beetles to keep prices low and offer consumers more choices.

Today and the past

In terms of price, what is the difference between today's car and yesterday's and yesterday's cars? We will check the answer, but we must have conditions. Since there is no limit to the functionality that manufacturers can add, the minimum requirements for a new car are drivable, so it makes sense to focus on the cheapest road vehicles for years. Only one Maybach Landoret can distort today's numbers.
Every car manufacturer offers a starter car for young drivers and other budget-conscious drivers. Their names are familiar, and the car itself is ubiquitous according to supply and demand. For example, Ford Fiesta, Chevrolet Sonic, Chrysler 200 and Honda Fit. However, the cheapest new car to be sold in the US today is Nissan. The price for this sedan (and vice versa) starts at $10,990. Although these decisions are always subjective, it is not difficult to prove that the opposite decision seems to be stronger than the hyped smart car – the latter is priced at $1,500 more than the former.

For $10,990, you can get a car, and the previous driver of a generation will be amazed at how much extra stuff it has. Front and side airbags, child restraint system, air conditioning, rear window defroster and auxiliary audio input jack. These may not be enough to discourage Lexus drivers today, but they certainly far exceed the four wheels and chassis. Just a decade ago, an automatic parking system was just an engineering fantasy, and a voice-activated iPhone Dock was just a series of irrelevant words. For ordinary car buyers, the button start sounds as exotic as vertical takeoffs and lifts. Today, it's hard to imagine an electric window or cup holder that is “optional” and safe to assume that the car will be more plentiful in the near future.

Back to the T-car before World War I, it was priced at $850. In 2012, the value of the dollar was adjusted using the Consumer Price Index (CPI), which is equivalent to approximately $22,000. As efficiency increases, the synthesis of cheaper, more durable materials, and economies of scale, the actual price of an economic car should decline over time. The Vogue of the Vietnam era sold for $10,500 for $2012. Giving or accepting a monthly payment is approximately equal to a new monthly payment. However, since the heyday of the Beetle, real income has increased slightly, and since the advent of the T-car, real income has increased significantly. Henry Ford once boasted that ordinary workers can own Ford cars for less than a year.