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#191196 - 10/02/03 06:04 PM Cost of new cars sky rocking!
jvojr Offline
Member
Registered: 07/31/03
Posts: 583
Loc: Catskills, NY
Speeking of cars that are out of reach for the average buyer(just about everything that you would want), I think that the car companies are way out of control. Just about anything that anyone would want to own is now over(well over) $30k. Downpayments on these cars and SUV's are about the same as a downpayment for a house. Car loans are no longer 3,4,or 5 years, they are now 6,7, and 8 years. 30 years ago the cost of a Vette was about five or six thousand dollars. A fully loaded Caddy went for around 5 grand. It took 70 years for the price of a car to increase 6 grand and 30 years to go up another 40 thousand(in the case of the Vette and Caddy). That's less than 100 dollars per year versus over a thousand dollars per year. What is wrong here? If prices contiued to increase by 100 dollars per year, then you would be buying a $10,000.00 Vette or Caddy as opposed to $50,000.00. I think we the people are getting violently ripped off. Not to mention that nearly every American car is being made every but America and more and more foreign cars are being made in America. The prices of these foreign cars made here are becoming cheaper and the American cars made abroad(supossedly to cut costs) are getting more expensive. For example, the American made Honda Accord has a base price of $15,900.00. The Canadian made Impala has a base price of $21,240.00. Something to think about.
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#191197 - 10/02/03 07:10 PM Re: Cost of new cars sky rocking!
BryantGTP Offline
Member
Registered: 03/26/03
Posts: 2481
Loc: Franklin, MA
I finally get to use all this crap I learn at school.

1) American cars overseas (even Canada) are not very popular. Since the demand is (really) low, prices have to be jacked up so the dealers can break even. It's hard enough to break even, nevermind make a profit selling American cars overseas.

2) Foreign cars are made in the US so they can compete with American cars. For example, one of the things that lowers the price of the Mercedes SUV is that they are made in North Carolina. There are many other examples like this.

3) Here's the deal with the drastic change in prices. These are all generalizations. In 1970, the average car buyer bought a car that would take most of their yearly income (usually more) to pay off. Today, people don't even consider a car that is anywhere near their yearly income. The cost of living has dramatically increased also, but if you compare the price of cars with the average annual income using a CPI chart, the cost of cars actually inflated at a lower rate than the average annual income. Why did this happen? The cost of auotmobiles changed mostly because of the fact people make more money. Labor expenses are the highest portion of most cars total production cost. Also, cars have become more involved to make. More technology in every single part of the car. This raises the costs of engineers, designers/builders, suppliers, and even assembley line workers. The same kind of inflation happened on gasoline. In 1980, the average price of gasoline was $1.18. Gas prices, now one of the most bitched about topics, actually aren't that high when divided into disposable, or even discretionary income.

4) The fact that car prices are so high is the reason there is so much competition at the sub-$25,000 level. WRX's, Neon SRT's, and Protege whatever they call it are still only that cheap because of the higher prices. It's giving the low-end buyers more bang-for-the-buck and the high-end buyers lose out more.

Enough of that. I'M WITH JVOJR - IT SUCKS.
But unless we all take a pay cut, deal with it.

-Andrew
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