Car prices have risen much faster than inflation

[corn18]

My Tundra new in 2008 was $27,500 dealer invoice - $3,000 rebate, so $24,500. Was curious so I priced the same truck new on kbb.com and it came out to $34,500 dealer invoice. So the dealer invoice price increased $7,000 in 7 years. That's a 4.2% annual increase, which far outpaces inflation. The good news is the truck I paid $24,500 for 7 years ago is still worth $16,000 private sale. So it has depreciated 35%, which isn't terrible.

All this means I will keep the truck. It only has 62,000 miles, so it still works fine. I just get the new car fever every year and still keep the truck.

Tom

[bjl584]

The sticker on my 2011 GMC Sierra was $42,000. Today it's $47,000. That's about a 12% increase in 4 years.

I didn't pay anywhere near $42,000 btw. I traded in a fully paid off truck, had some money down, and had about $7000 in rebates.

[rennigade]

Ive also noticed a trend in trucks now that so many now come with 4 doors. Only a few years ago it was rare to see a full 4 door truck. Even the full 2 door ones with the half doors are now being phased out. Its an interesting trend. I guess the main benefit is now trucks can be considered family vehicles.

$1000/year increase is pretty shocking.

[Spiffster]

Cars are a lot more reliable and much safer these days, and a lot more bells and whistles come standard too. Smart shoppers can still find really, really good deals, but buying a car new has never been about saving money... then there are the recalls, Im sure those arent cheap. Im not trying to justify aggressive price increases, just car companies seem to be focused on making better cars as opposed to cheaper cars lately.

[feh]

Be careful not to extrapolate the increase in one vehicle to "cars" in general.

[disneysteve]

Cars are a lot more reliable and much safer these days, and a lot more bells and whistles come standard too.

That's what I was going to say. Comparing a 2015 model with a 2008 model isn't really an apples to apples comparison. They probably aren't identically equipped. With ABS, traction control, bluetooth, USB ports, navigation systems, MP3 players, and various other doodads, it's hard to do an accurate comparison. I'm willing to be there are at least a few standard features on the 2015 that were either options on the 2008 or didn't even exist in 2008.

[corn18]

That's what I was going to say. Comparing a 2015 model with a 2008 model isn't really an apples to apples comparison. They probably aren't identically equipped. With ABS, traction control, bluetooth, USB ports, navigation systems, MP3 players, and various other doodads, it's hard to do an accurate comparison. I'm willing to be there are at least a few standard features on the 2015 that were either options on the 2008 or didn't even exist in 2008.

I priced both with the same options. The Tundra hasn't changed a lot over the past 7 years. Just got a lot more expensive.

I also priced a loaded 2015 Honda Accord V6 Touring at $32,400. At this point in my life, with nothing to tow and little to haul around, it's tempting to give up the bone jarring truck ride and 14 mpg for the luxurious comfort and gas mileage of a nice Honda. Or just trade it straight up for a Civic. Those are very nice these days. Or a Tesla.

[greenskeeper]

Doesn't effect me directly. Always paid cash for used vehicles. Don't plan on buying anytime soon. Last vehicle purchase was back in 2003.

[disneysteve]

Doesn't effect me directly. Always paid cash for used vehicles.

Whether you buy your cars new or used, price inflation still affects you. If used car prices rise at a similar rate as OP has found for new cars, that means it's going to cost you more the next time you go to buy a used car.

[ua_guy]

This is really only a 'thing' in the truck segment.

I did a comparison on another forum of how many cars are a better value today than they were 20 years ago. An example is the Jeep Wrangler. MSRP to MSRP over the span of 20 years, the MSRP has kept pace with inflation per the Bureau of Labor Statistics calculator, yet today's Wrangler is a much larger, safer, comfortable, more powerful, better-optioned, and more capable vehicle, even in base model configuration.

There are a lot of other vehicles that have followed the same path, sedans, economy cars -- they really aren't any more expensive than they were in yesterday's dollars, but they are much more vehicle compared to their predecessors.

[corn18]

This is really only a 'thing' in the truck segment.

I did a comparison on another forum of how many cars are a better value today than they were 20 years ago. An example is the Jeep Wrangler. MSRP to MSRP over the span of 20 years, the MSRP has kept pace with inflation per the Bureau of Labor Statistics calculator, yet today's Wrangler is a much larger, safer, comfortable, more powerful, better-optioned, and more capable vehicle, even in base model configuration.

There are a lot of other vehicles that have followed the same path, sedans, economy cars -- they really aren't any more expensive than they were in yesterday's dollars, but they are much more vehicle compared to their predecessors.

I think you are right about this. I remember looking at Honda Accord LX's 20 years ago and the standard LX was around $19,000. I just priced out a standard LX and it was right around $20,000. That's pretty awesome considering the features the new Accord has vs. 20 years ago.

I hadn't looked at truck prices for many years and was quite surprised when I saw a basic truck cost $35,000 invoice. A nicely equipped on can top $45,000 or even $50,000. That is just silly.

So you and disneysteve are spot on. Cars prices are probably right in line with inflation if not better and you get a lot more capability for your $$$. Truck prices are crazy.

[greenskeeper]

Whether you buy your cars new or used, price inflation still affects you. If used car prices rise at a similar rate as OP has found for new cars, that means it's going to cost you more the next time you go to buy a used car.

not true as the price of a used car varies so I can pick and choose how much I want to spend. Don't worry about me, it'll be about another 15 years or so before I'd even consider a vehicle purchase. Even so, all the new BS on vehicles these days makes me want to hold on to my "old-fashioned" vehicles that much more.

[disneysteve]

all the new BS on vehicles these days makes me want to hold on to my "old-fashioned" vehicles that much more.

I'm with you on that. I wish it was possible to still get a car without all of the electronic nonsense. I don't need onboard navigation. I have an iPhone for that. I don't need the car's computer to track everything for me. On my car (2006), changing the clock for daylight saving time took about 2 seconds - push the "hour" button on the clock. On my wife's car (2011), it took about 5 minutes to work through all of the menus and touchscreens and figure out how to get to what she needed. Is that progress?

I will admit I like having bluetooth, not to talk on my phone because I don't do that while driving, but to play podcasts from my iPhone. On my car, I play them with an adaptor through the cassette player (yes, I still have one of those) but wireless is easier.

[HappySaver]

We had a similar conversation about this maybe about a year ago but I can't find the thread.

I would agree this is not universally true, very model-specific, and probably a truck and maybe larger/luxury SUV thing.

We bought a new car two years ago. I just re-priced it today with the same options package and it's actually being sold for $1000 less.

[Fishindude77]

A friend told me his kid just ordered a new Ford F-150 4x4 four door with all the bells and whistles, price tag $62,000. INSANE ! It will likely be worth $10-15,000 less a month after purchase.