You may have noticed a subtle but significant shift in verbiage that tells us a great deal about the state of the new car marketplace (which is hardly that anymore given it’s mostly crossovers and SUVs now and there is more government than market behind all that).
There was once a thing called the economy car. It does not exist anymore – at least in the United States. It has been replaced by the entry level car, which is a crossover now. And these keep getting progressively more expensive. Most of them start around $30,000 now. A current example being the 2025 Subaru Forester I just spent a week test driving (the review is here if you’re interested).
This small, nothing special (not that there’s anything wrong with that) crossover’s base price is $29,995 – just $5 shy of $30k, no doubt to give it a better mouth feel. Last year, the Forester’s base price was $27,095. It is true the ’25 is “all new” – at least in terms of how it looks, the body having been restyled. But it is mechanically pretty much the same, having the same drivetrain as last year. The main difference is the price has gone up by just-shy of $3,000 – which is not small change when a couple of plastic bags of groceries costs now $100.
Digging a little deeper – into the recent past – we find that a Forester used to sticker for $24,495 as recently as five years ago. That’s a $6,000 difference then vs. now – and it’s actually more than that when you take into account the higher taxes and insurance costs that attend a $30,000 vehicle vs. a $24,000 vehicle.
People sometimes forget these peripheral costs because they are encouraged not to think about them. This does not relieve them from having to pay them, of course. A vehicle that would cost the insurance mafia $30,000 to replace if totaled – and more to repair, because of the features it has that are the chief reason why it costs $30,000 (more on this in a moment) if it is damaged will naturally prompt an increase in the cost of coverage. And if you live in a state that applies property taxes to vehicles (these are like the property taxes everyone who lies to believe they “own” their home is forced to pay to avoid being evicted) you will pay more because those taxes are based upon the government’s estimation of the value of what isn’t really your vehicle, either. It being ridiculous to speak of owning a thing you are required to continuously pay the government to be allowed to use. 
Insurance and property taxes alone can add hundreds annually to the cost of owning a $30,000 car rather than a $24,000 one.
So why has the Forester – and it is not just the Forester – gotten so pricey? Inflation – the devaluation of the buying power of the currency we’re forced to use – is of course a factor. But it is not the only factor. The main one is the elimination of the economy car and the Forester is a prime example of this. It has become an entry-level crossover that comes standard with – among other things – a system called Eyesight, which you cannot opt out of. It is a bundled package of “driver assistance technology” – elements of which are housed in a black plastic box that is fused with the windshield and integrated with the rearview mirror.
Once upon a time, economy cars had rearview mirrors only and these added maybe $20 to the cost of the car and cost about the same to replace if that became necessary.
Now even entry level models like the Forester have “technology” embedded in the windshield and that is why it now costs $1,000 (or more) to replace a cracked windshield that used to cost $150 to replace. This potential cost is of course also reflected in the cost of insurance coverage. The insurance mafia is despicable – because it uses the government to force use to buy “coverage” and can force us to pay more even if we haven’t bought a $30,000 entry level crossover, to offset the actual and potential costs that might be incurred if we hit one of these things – but this is understandable in that it is not unreasonable to increase the cost to insure something that costs more to replace, in the event replacing is necessary. 
The ’25 also comes standard with fancy alloy wheels now (the ’20 came standard with steel wheels) and LED headlights, dual zone climate control as well as power windows and locks and electric power steering. A vehicle so equipped would have qualified as an entry-luxury vehicle 20 years ago.
And that’s just the point. Five years ago, entry-level cars did not come standard with the features you used to have to spent entry-luxury money to get; i.e., something along the lines of an entry-luxury BMW or Mercedes. To get a sense of what I mean, as recently as 2015, an entry-level BMW luxury-sport sedan – the 320i – stickered for just over $32,000. That same money today buys an entry-level Subaru or Toyota or Honda or Hyundai crossover.
Back in 1997, you could have bought a brand-new economy car such as the Ford Aspire for $8,700 – about $17,000 in today’s watered-down currency – but you see the point.
Ten years later – in 2007 – a new Honda Civic stickered for $14,810.
Yes (again) inflation.
But it’s another kind of inflation, too. Effectively, everything that’s on the “market” today is entry-luxury, in terms of what it costs. Especially relative to what economy cars used to cost.
It’s a shame we’re no longer allowed to choose to live within (let alone below) our means.
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My dad had a 1986 Renault Alliance that he paid a little over $4,500 for brand new! It was so economy car that it did not feature a passenger side mirror.
Yes, in the 1980’s the government didn’t require a passenger side mirror, just a drivers side and rear view mirror.
How much of this price creep is due to companies selling upmarket, versus expensive technologies being mandated? That old Rabbit didn’t have 10 airbags, cameras, TPMS, ASS, pedestrian collision mitigation, auto-braking, rear seat passenger sensors, automatic climate control, heated seats, steering wheel controls, etc.
Modern cars are made to be disposed of and replaced, not fixed. This makes them expensive, but is also a factor in the rising cost of insurance and repairs being uneconomical.
‘How much of this price creep is due to companies selling upmarket’ — OppositeLock
Fifteen (15) years of unrelenting economic expansion, except for two brief months of recession (Mar-Apr 2020), created the scintillating illusion that auto makers can just keep selling upmarket until every buyer is a complacent millionaire toff.
The bigger and longer the boom, the harder the bust. As we speak, the Orange Emperor is systematically dismantling the underpinnings of America’s current economic niche, as the uniquely privileged emitter of the preferred global reserve currency. This meant we got to import boatloads of tangible goods, for nothing but borrowed and printed keystroke dollars — such a deal!
No more. The Orange Emperor’s 50 percent tariffs on steel and aluminum — plus reciprocal tariffs — are a self-administered shotgun blast to both feet, just before running a marathon.
And it’s a hard way to fall
And this ain’t the easy way down
And it’s a hard thing to shove anyone, anyhow
— Ryan Adams, Hard Way to Fall (2005)
Morning, Jim –
Yup. I play this game with myself sometimes: As I drive around, I try to imagine what the scene would look like if everyone lived within or even below their means. Almost all the 5,000-plus square foot McMansions vanish; only the genuinely affluent have large homes again – as was once the case. Almost all the $40,000-plus vehicles vanish. In their place, the kind of vehicles that were once typical when most people limited their buying to what they could afford to pay off in 3-4 years. This was before a Hyundai cost what a Mercedes used to, of course.
There’s a potential upside to the shell game we’ve played for 80 years in the value of all the real things that were made during the run up phase. Not that the McMansions or new cars are durable per se but at least they exist as a something with a fundamental value. The dollar number of a house is meaningless when the inflation explosion occurs but it’s still a roof over your head. Every other one might be torn apart as raw material sources to cook on a makeshift wood stove on the patio, though.
I wonder if social sentiment will eventually catch up. The reason things were the way they were has as much as anything that people shared common values, which was a result of experiences by generations before ours. There was similar period in the 1920s that saw irrational spending, which resulted in a depression and war. Yet that created the boom of the 50s, social change in the 60s, frugal 70s. It’s a cycle we humans are doomed to repeat it seems endlessly.
I can’t imagine that social sentiment ever will. We are far too divided of a country. Its not a racial divide, nor even an economic, as things may get leveled. Who knows what that looks like. The divide is a political or an ideological one.
There have been differences among the population as long as I have been alive, probably longer, but said differences were never weaponized by the government as much as they are today. It started becoming apparent to me in the 1980s at first when Reagan’s (really the Democrats) budget “cuts” started while the size and scope of the federal government continued to grow. Interesting how that works out. As government grows, so does the ideological divide.
I’m not sure a government collapse will occur with an economic or even a societal colllapse.
I just… don’t… know.
What say you?
“It’s a shame we’re no longer allowed to choose to live within (let alone below) our means.”
You can still choose to live this way, but to do so, one must refuse the programmed need to drive the latest shiny spying debt appliance. It’s not easy. The correct path in life rarely is.
I love old cars (pre-1980 for me). A lot of people don’t. A lot of people think they were junk then and don’t hold a candle to newer technology. I get that.
Although, when is that last time you were sitting at work late in the afternoon and realized in a couple of hours you’d be slamming gears on the twisty roads towards home, and got a little flutter in your chest just thinking about it?
Does your new Subaru do that to you? No, it can’t. It was not made to do that. It’s as exciting as your new smart refrigerator.
By the way, it just sent you a text reminding you to pick up some more soy milk on your way home. You’re running low.
Same here, Philo, but by 1980 the rot of cheap plastic and thin unibody steel had already set in. I prefer stuff from pre-65 for a variety of reasons- two of which are the technology wasn’t out of control and anything needed can be made by a smart guy with a good shop. Sort of like Cuban cars…
I like technology- as long it is a tool I’m using and its not using me as a tool….
I remember reading an article not too long ago, Philo, of a man who went all-the-way, and had a “Smart Home”. Got locked out of his smart home for over a week when the house “thought” (and “claimed”) he had made a racist comment, and got locked out. I found a link with the story. Even more creepy? One video I watched, several users asked their Alexa/ Echo devices to “open their third eye” before asking it questions, and talk about next-level weird. It just makes me want to go dumb and stay there. https://www.newsweek.com/amazon-smart-home-brandon-jackson-echo-racial-slur-allegation-1806947
My original comment was David Copperfielded, but the jist of it was 90% of price increases are due to govt printing press running at full speed. Any loss of purchasing power involves the Bank and Government. It won’t be long now. Inflation doesn’t just disappear and our overlords haven’t given up on our demise just yet.
‘So why has the Forester – and it is not just the Forester – gotten so pricey?’ — eric
MarketWatch offers a theory:
‘Sales of new cars and trucks in the U.S. dropped almost 10% in May to a 15.6 million annual rate, according to Wards Intelligence.
‘Buyers piled into dealerships in March and April to buy new cars and trucks before the Trump administration’s auto and steel tariffs raised prices. Now comes the flip side of the coin: dwindling sales.
‘Dealers have begun running out of vehicles they obtained before the tariffs kicked in, while the rising costs of imported goods and domestic steel have pushed some carmakers to raise prices.
‘Ryan Sweet, chief economist at Oxford Economics, said auto sales in March are likely to be the high point of the year.’
https://tinyurl.com/y6cmdd6b
So the Pooch Screwer in Chief applied his signature reverse Midas touch. Now auto makers are roadkill. Sic transit gloria fabricator.
Entry level creep, I thought it was a direct reference to Trump the Chump.
Also the mission creep creep? Could be.
The emperor has no brain.
The Chump isn’t going to drive or ride in a Rabbit.
It ain’t the car, it’s the driver
Donald ain’t the driver, Trump is the bozo on the bus.
39,000 feet in the air, he’s the bozo on Air Force One.
I recently went with a friend to see what was left of the “entry level” Nissan Versa that his daughter bought, and subsequently totaled by tangling with a javelina. Now don’t get me wrong, those pigs will do some damage…..but not that much. That little car looked like one of the targets from an Air Force gunnery range. She spent 3 days in the hospital with a host of injuries. In comparison, the last one I hit with my old ‘K20 managed to…..bend the front license plate and crack the 40 year old plastic grille.
The more I see of these “entry level” cars, the more I am convinced that they are trying to remove the lower income bracket folks from society…..by any means necessary. In any decently run universe, we could go back to the old Sears Roebuck based system of “good, better, best” and all be a quality car.
In 1971 my cousin bought her 1st new car, a 1971 Monte Carlo fully decked out with every option including cruise control and the 300HP 350 V-8. Sticker price was $5,100.00.
Ten years and 150K miles later I bought it from her for $500.00, did a motor rebuild myself for about $300.00 and was off to the races, so to speak.
You can’t do anything of the sort nowadays. Most modern cars are just disposable junk after 10-15 years and impossible to repair, let alone overhaul.
Eric, just got back from the East, with some time spent in Beijing- man if you want to see cars – that is the place. I wasnt able to drive unfortunately but the variety of cars was off the carts! From ofcourse the high end germans you get in the west, to so many of their own brands, with more tech than you can imagine. While tech in cars isnt really my thing, but the choice to me was amazing…. And the prices they were telling me for the cars will have you shocked. One Uber I got was a minivan, with massaging captain chairs and screens everywhere. Every surface was covered in leather. looking into it, the car (on conversion) was only about 40k USD !!!
Sure, the country has its issues – but it does seem the direction of travel is definitely better than ours….
Morning, Nasir!
Yup. So I gather. I know how it is in Mexico because I have friends/family there. Most Americans have no idea just how limited their choices are…
Thankfully, in these parts, we all drive with windshields that would never fly in other states, simply due to the long Winters, and the subsequent graveling that takes place when it is icy and snowy. Rare is the vehicle that does not have lines and rock chips. Unless you really lip off to the state trooper, or he is in a bad mood, one rarely earns himself a “fix-it” ticket for his windshield, because most of the borough is running around with the same cracked, lined type. And now reading this, Eric, I may never replace the one on my newer vehicle. For never mind the just-not-worth-it aspects: The price alone is enough to make one cry. The Big Brother crap enough to make one want to throw up.
Yeah, this is a real problem. In a Ford Maverick was $19,995. That was the most I had ever spent on any car. Now a base Maverick is $27,000.
WTF…
The dealers don’t want to sell you a $20k Maverick. Even if they did, the employees at the dealership certainly wouldn’t want to ignore the opportunity to pick up an extra few grand.
Bought a 2017 Forester brand new. MSRP was $22,595 and the final total sticker was $23,470 with dealer fees. It’s the most base model (stick shift and no roof rack, it’s really a basic configuration) and has minimal technology, just the mandated stuff like a rear view camera, and power windows were standard.
The dealer had four of them (3 white, one black, the only options for the base model) at the end of the model year so was able to pay less because they wanted to move them. I think part of the thesis Eric doesn’t touch on is that people don’t demand economy cars anymore, not at least in the volume it was prior to about 2000 or so.
Looking at Subaru in other countries, such as Australia and the UK, it doesn’t look like Subaru still makes a Forester like mine with steel wheels, manual and no features. In the UK the car seems to have the 2.0L engine, not the 2.5L, too. I don’t read Japanese so not sure about the home market, though.
Point would be that inflation factors in, demand and appearances (OMG, who would be seen in a econobox now?), cheap debt, all the regulations and advertising. It’s a social phenomenon that people don’t want to look poor even though we all are when measured against the same criteria you’d use a few decades ago. People used to worry about living within budgets, carrying and paying off loans, growing their savings, etc. Now we’re all high rolling Wall Street finance bros.
Hi Gary,
I think what you say is true – but it is also true that people no longer have a choice. The manufacturers decided to sell nothing but (essentially) loaded models and no longer offer much in the way of individual options. Instead, you are stuck having to buy a bundled package of items to get the one thing you do want.
That’s a good point Eric. I can’t think of a time in my life where there is practically no economy choice. It’s a crazy world we’re living in. I’m also seeing cars pile up on lots here too. Houses are starting to sit for longer too so maybe people really are at the breaking point.
A friend told his wife years ago that they would buy what ever car she liked but that she would be driving it for the next ten years, a Ford Windstar as it turned out. They did drive it for over 10 years. But now with taxes and car prices going higher I can see people trying to drive their cars longer but I doubt they can be affordably repaired to last the 15 years the higher costs require.
Even our pending World War III is suffering entry-level creep:
‘Why Russia left its strategic bombers unprotected in the tarmac? Because that’s a New START Treaty requirement – signed in 2010 and extended until February next year (when it may go six feet under, considering what just happened).
‘The New START Treaty stipulates that strategic bombers should be visible to “national technical means (NTM) of verification, such as satellite imagery, to allow monitoring by the other party.”
‘[Ukraine’s] operation single-handedly blew up what was, up to now, a decent Cold War relic preventing the start of WW III via a simple mechanism. The recklessness involved is off the charts. So there’s no surprise that the highest echelons of power in Russia – from the Kremlin to the security apparatus – are feverishly working to ascertain whether Trump was in the loop or not. And if he was not, who gave the final green light?
‘Even if it’s true that POTUS was not informed – and that’s what the Kremlin and the security services want to be absolutely sure of before unleashing Hell from Above on Kiev – still the contours will be clear of a NATO op – US/UK – directly conducted by the CIA/MI6 intel combo, with Trump being offered plausible deniability and Ukraine breaking the START protocol big time.
‘If the response is lukewarm, domestic blowback will be massive. There’s a near universal consensus on “Release the Oreshniks”. Russian public opinion is becoming seriously fed up with being the target of serial terror attacks. The hour of fateful decision is getting late.’
https://www.unz.com/pescobar/waiting-for-the-oreshniks-while-the-istanbul-kabuki-proceeds-not-negatively/
Our predicament is as old as human civilization: when things go south at home, release the dogs of war against the foreign devils.
I wondered why those planes weren’t under cover. I think that treaty might not be renewed now.
Might I suggest crazy gluing M4s to Senators Lindsey Graham and Richard Blumenthal hands and parachuting them onto the front lines in the Ukraine. War whore’s should be willing to serve in the conflicts that they insist on inflicting on the serfs and peasants.
Absolutely Landru, all the chickenhawk warmongers need to be shipped to the front lines of every war they push on us.
A humble suggestion: since no mere civilian needs an assault weapon, perhaps superglue a matchlock or a pike to them. They are, after all, ostensibly civilians.
Double Plus Good suggestion Ernie. Although those are also weapons of war and could be considered the assault weapons of their time.
Same with Halberds, so perhaps a rounded butter knife should be all they can carry into battle.
Have to believe some of these price hikes related to the continued softening of the bogus EV market.
How much did the Soltera cost them? How much development money will have to be recovered for the upcoming Trailseeker?
Gotta claw back the wasted money somehow.
‘the economy car does not exist anymore – at least in the United States.’ — eric
Three or four generations ago — when cars were still a new technology — populist politicians realized that cheap cars were a vote winner. ‘A chicken in every pot; a car in every garage [1928].’ Even real estate developers glommed onto it. ‘A town for the motor age’ was the slogan of the planned suburb [launched in 1928] of NYC where I lived.
Likewise overseas, where the Volkswagen designed at the instigation of a man with a toothbrush mustache became the People’s Car.
Now politics have become overtly elitist. If you can’t afford a $30,000 car, you can take the bus. Or get on your bike and ride. Or hunker down in your trailer and cook meth. ‘They’ don’t care. Five hours ago, a new ukase from the Orange Emperor took effect:
‘U.S. tariffs on steel and aluminum imports rose to 50 percent from 25 percent just after midnight.
‘The U.S. International Trade Commission suggested that while the steel and aluminum tariffs levied in Mr. Trump’s first term helped producers, they hurt the broader economy by raising prices for many other industries, including automaking.
‘Steel tariffs at this level will create mass disruption and negative consequences across our highly integrated steel supply chains and customers on both sides of the border,’ the Canadian Steel Producers Association said.
‘The Aluminium Association of Canada said that the expanded tariff “makes Canadian exports to the U.S. economically unviable” and that “the industry may be forced to diversify trade toward the European Union.” — NYT
https://archive.ph/0iNkP#selection-2269.0-2273.234
Tariff Man — wearing his faux-populist red baseball cap — cares not that entry-luxury cars will cost $50,000 before his reign of error ends. He’s got interests to serve. And they ain’t us.
How is Boeing going to make competitive airliners in the US with 50-percent-tariffed aluminum? Economic illiteracy kills industries.
Me, I’m seeing red because aluminum priced like titanium is gonna make muh suds more expensive.
Persuaded, paraded, inebriated, and down
Still aware of everything life carries on without
‘Cause there’s one too many faces with dollar-sign smiles
Got to find the shortest path to the bar for a while
— Uncle Tupelo, Whiskey Bottle
>Volkswagen designed at the instigation of a man with a toothbrush mustache became the People’s Car.
Who also realized it was necessary to have highways on which to drive dieses Auto.
https://www.youtube.com/watch?v=iukUMRlaBBE
Wer fahren will, der Autobahn brauchen.
So then, there was an American of Germen heritage who visited Germany and decided it would be really cool if we USsians had one of them Autobahn thingies.
>aluminum priced like titanium is gonna make muh suds more expensive.
and Chilean copper priced like gold will definitely make all that “electric infrastructure” more expensive.
https://investingnews.com/daily/resource-investing/base-metals-investing/copper-investing/copper-production-country/
[vox Bart Simpson] “Well, duh.” [/Simpson]
Perhaps those tightly integrated supply chains need to fall apart? They are, after all, another instance of globalists bringing all wealth and income in house (but definitely not your house or mine!).
Also, the suds are tastier and healthier in glass anyway, and the Estados Unidos del Norte has plentiful soda ash.