It’s becoming clear that vehicle ownership – new vehicle ownership, at any rate – will be for the rich only in the near future. You could say that future has already arrived. The news has just been flashed that the average price paid for a new vehicle has just crested $50,000.
That’s on the low end, as regards trucks and SUVs. The least expensive new half-ton trucks start around $40k and good luck finding one of those at a dealership. You are much more likely to find row after row of high-trim versions with sticker prices of $60k-plus. Many “transact” – the industry term for sell – for more than $75,000.
But wait – there’s more.
Currently, there are more than 60 models of various types on sale for more than $75,000. This week, I am test driving a Lexus LX700h. Sticker price? $120,450. You could, of course, also buy its less-prestigious Toyota-badged analog, the Sequoia – and pay “only” about half as much.
As recently as about 20 years ago, you could have bought a decent townhouse in some parts of the country for that sum – or put down half the asking price of a decent single family home. Now, of course, a townhouse costs $300k – and a modest single family house twice that.
“It is important to remember that the new-vehicle market is inflationary,” says Cox Automotive analyst Erin Keating. “Prices go up over time, and today’s market is certainly reminding us of that. While there are many affordable options out there, many price-conscious buyers are choosing to stay on the sidelines or cruising in the used-vehicle market.”
How droll.
“Today’s auto market is being driven by wealthier households,” she adds. Meaning, we’re all being carried along by a kind of rip tide generated by the buying habuts of the relative few who can afford to spend $50k-plus on a vehicle.
Now, it’s useful to put the cresting of $50k into context. One way is via comparing what it costs to buy a vehicle today vs. what it used to cost to buy a similar vehicle in the past. I will use as an example of what it used to cost an old car I own – my 1976 Pontiac Trans-Am. I have the original paperwork for the car, including what the guy paid for it when it was brand-new, which was $5,700 in 1976 dollars. This was well above the MSRP – the base price – of about $4,800 for the car, before options were added. My Trans-Am is a heavily optioned car; it has AC (a luxury item in ’76) as well as power windows, locks and electric rear defrost. The point being it was a loaded car when it was new – and a Trans-Am was a top-of-the-line Firebird back then.
I plugged what the original buyer paid for my Trans-Am into an inflation calculator to get a feel for what $5,700 in 1976 dollars would buy today. The calculator says $33,213. Okay. So what would it cost – today – to buy something new that’s similar? Well, the only thing that’s still available that’s similar is a new Mustang GT, which is a top-of-the Mustang. It lists for $48,555 to start. Granted, it does come loaded. Features my TA has that were optional back in the day such as AC, power windows and locks are standard equipment today – and the new Mustang GT has a great audio system and its V8 engine is twice as powerful as the V8 in my Trans-Am (when it was new).
But what good are such things if you can’t afford them?
A new Mustang GT costs about $15k more (in real-money terms) than my Trans-Am did when it was new. Put another way, you could have put a 50 percent down payment on my ’76 with the difference. That’s a big difference. It’s the difference – for most people – between being able to afford a car like my ’76 TA when it was new and being able to afford a new Mustang GT.
It is very interesting to note in this context that Pontiac sold literally hundreds of thousands of Trans-Ams in the mid-late 1970s whereas Ford has sold about 37,000 Mustangs in 2024 – and the bulk of those were not GTs. The reason why is obvious. The current Mustang GT is an appealing car – just as a mid-late ’70s Trans-Am was back then. The difference is that most of the people who’d like such a car – and most of those people are under 40 – can’t afford one today. When my TA was new, it was common for people in their 30s to own one. Today, the typical buyer of a new Mustang GT is a gray-haired guy in his 50s.
If current trends continue, a new Mustang will be a car for a handful of mostly rich old men, who will be the only ones (for the most part) who are in a position to be able to afford such a car.
Any car. The entry price point – what it costs to buy a new car, period – approaches $30k. The least-expensive compact crossovers start around $25k now. A base trim 2025 Camry is $28,700. You cannot buy a new truck for less than $34,495 – the base price of a new Chevy Colorado. These are all mid-sized trucks.
If you want a full-size truck. . . .
Meanwhile, there is an alarming increase in delinquencies on vehicle loans, especially “sub-prime” loans (i.e., loans issued to people with less than stellar credit) which is not surprising given the typical interest rate on a sub-prime loan is 20 percent. According to the sub-prime lender Tricolor, “there are concerns that the entire financial sector could be exposed to a potential collapse.”
How very droll.
. . .
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1. Inflation
2. Regulatory overkill safety
3. Fuel regs that make no sense
4. Manufacturers that bundle unneeded stuff to save money manufacturing
And it goes on
Since the start of the deadliest sniffle season on record five years ago, inflation has ramped beyond what I would have imagined. I always imagined it like in the story Full Faith and Credit, by James Cook. The book documents the money power coming unhinged in a fictional backdrop. Back to reality. The good news is Americans are finally waking up to the possibility of losing our once in a lifetime privilege, along with many losing their life savings. TPTB have been wanting this forever. They’ve been telling us, what is coming, just as they are required to do by the universe, now their endgame of CBDC and marking the low IQ. goy like feed lot cattle approaches. If you don’t know who they are by now, go take a nap.
In a shouting indictment of incompetence the markets are no longer under the control of London/New York. Two witnesses are preparing to testify. Gold, and to a greater degree Silver are warming up backstage, stretching their vocal cords to shout forth the truth of honest weights and measures once again. Even if only for a short time. The corrupt Babylonian system will try like hell to kill the witnesses. For their efforts thy will fail, as the dream of globalism craters into tears, sadness, wailing, and lamentations for everyone.
They did this to them selves. They did this to all of us. Where we are now should make everyone swear off any allegiance or trust in the institutions of GovCo. It’s a fourth turning where previously respected institutions vanish. What deserves to vanish more than our corrupt to the core system run by tyrants and Kings? When it’s all said and done. With a little luck and some help from divine providence, may our old ways of life (Freedom) rise from the ashes once more.
When the Lügenpresse finally wakes up to a trend, it is late in the game:
Gold Bars, Gold Necklaces, Gold Earrings: The Rush to Cash In
‘Gold prices are soaring to historic levels, drawing newcomers and regulars alike to New York’s diamond district.’ — NYT, October 19
This doesn’t mean the fiat dollar is getting off its death bed. But when the popular press takes notice of preciousssss metals, usually a pause ensues in prices, until the frayed-collar stenographers turn their attention back to their usual hobby horses of socialism, war and ‘antisemitism.’
The truly sad part is…and let this sink in…these inlfationary trends, whether for new cars or for houses, are NEVER going to reverse. The only way for prices to go is UP. That pickup truck that seems ludicrously priced at 100K now is on its way to $120K…then to $150K….then to $200K…and on and on. The only question will be how fast will it go up. These prices are NEVER going to come back down.
It kind of seems opposite. It’s cheaper to get produce and ingredients than pre-packaged processed food. Meat is getting expensive but even that, if you’re willing to do the work it’s cheaper to feed your family by cooking a meal than microwaving it.
I’d guess rather than hitting “real” food from a price perspective it’s going to be difficult or explicitly illegal to use farmer’s markets and your own garden. It’ll be framed as Unsafe! to not use USDA inspectors.
First, houses became unaffordable for many, now, same
story for vehicles. What’s next?
Hi,
Another thing that has become unaffordable for many is health care, though my guess that the next thing to become unaffordable is REAL FOOD as opposed to the garbage sold as “food” at grocery stores.
Meant to say that my guess is that the next thing to become unaffordable is REAL FOOD as opposed to garbage sold as “food”.
Groceries. Have you been to the store lately? One time I left the store $160 bucks poorer, and had only four bags. Heaven forbid you have to buy cleaning supplies. That is fifty bucks down the drain right there easily. Coffee is up to $25 a canister. That jumped up five bucks a few weeks ago. If the prices do not get you, the shrink-flation will. Meats? One could cry at the prices there, as well. I saw some rib eye steaks (three) for $75 dollars. Never mind the heating fuel bills that are starting up again, and after the usual Summer hiatus. The beloved electric company (which has a monopoly in these parts) is set to raise rates another 8%, and they want to raise them even more during “peak usage hours”. It reminds me of that saying that “I am so broke I cannot afford to pay attention”! For even that is getting expensive.
Yes, I have been to the store lately, and given that a lot of the food you get at the grocery store is little more than a medley of all sorts of toxic ingredients, if you try looking for REAL or ORGANIC FOOD to avoid toxic ingredients, it’s crazy expensive compared to the toxic ingredients in what is called “food”. But don’t worry, the billionaires who wish to control EVERYTHING & EVERYONE have an answer: bugs and frankenfood!
It’s just your imagination, goy! There is no inflation (conveniently, food and energy are left out of the official statistics, LOL) so the Fed is going to LOWER INTEREST RATES AGAIN to keep the “Wall Shtreet” shtock Ponzi going… LOL
Cresting $4,333/oz …
Gold, that is … a/k/a the ‘pet rock.’ Some affectionately call it ‘the old yellow dawg.’
https://www.apmex.com/gold-price
What does gold know that we don’t? Its rocket launch into the ionosphere is screaming danger. Seems like something is about to break in the financial system … or someone’s about to launch some nuuuuukes. :-0
Bloomberg’s Simon White comments:
‘One of the biggest misconceptions is that gold is solely an inflation hedge and a protection against currency debasement. But it’s much more than that: it’s a hedge against the financial system. Gold is no one’s liability, and a source of unimpeachable collateral when government debt and on- and off-market credit become, as they are now, increasingly risk-laden prospects.
‘The hunt for safer collateral was sparked off by emerging central banks in the wake of the Ukraine war. The dollar could no longer be deemed a reliable reserve in a world where the US was willing to brandish it as a weapon. What began with central banks has widened to the market in general, seeking safer collateral in a financial system rife with mounting risks.
‘The risk that the largest fiscal deficits seen outside of war or recession are eventually monetized would eviscerate the real value of fiat money. It may be that in response to a private or public debt crisis QE is back on the table alarmingly soon after QT ends, as Federal Reserve Chair Jerome Powell this week hinted would soon be the case.’
https://archive.ph/X1Brf#selection-883.62-883.405
Stealing Russia’s $300 billion of foreign exchange reserves held in Europe and US was incredibly stupid. Now the rest of the world is fleeing from politicized US dollars, which can be seized at any time. No one entrusts their funds to a pirate regime like the USA.
There is a very misused word that is often used (and abused) that actually fits this:
Unsustainable
This way of doing “business” cannot go on for very long. At some point, the music stops and there aren’t any chairs left to sit in anymore. They have been stolen or they just wore out. And no one is making new ones anymore, or if they do, you sit in it and it falls apart under you because they made it too cheap.
There are several business models over the years.
One of them is the Model T and Wal-Mart model. It’s the be affordable to the general population and make your money in volume. Yes, you have to sell a lot to make money, but you are cheap enough you get those sales and more. You end up big and everywhere. I say model T rather than Ford, because Ford no longer works on this model. Wal-Mart in my opinion is slipping away from it too.
The second is basically a slightly more expensive version of the first one. Think Oldsmobile and old line department stores. This model is very endangered and is vanishing quickly. Between people not have the income anymore and massive mismanagement of these businesses its almost gone.
Another is the boutique model. Expensive, but you don’t have to sell much to make money. Think Ferrari or one of those ultra expensive shops you never see people in. You make a sale, you are making money. You never get very big, and are in few places. Of course if rich people don’t want what you’re selling anymore you are screwed. The biggest problem with this model is there aren’t many rich people, and those rich people have lots of choices.
A mass market auto industry cannot work on the boutique model, and it’s quickly turning into that. If you told people twenty years ago that there would be 80k Fords, they would laugh at you.
It doesn’t seem to be getting in dealers heads yet that they at minimum need to stock more base models of what they have now. You can’t sell when you base price is already too high, and then double that with options…….
From the chart, new vehicles became unaffordable for me long before 2012. I would say sometime in the early 2000’s. 2005 at the latest.
A thing tyrants dearly love to do is beat down their victims, without them realizing it, It’s getting harder to hide.
Hi John,
The ironic thing is, many of these tyrants who are beating down their victims claim they’re doing so to “Saaaaaaaaaaave Democracy from authoritarianism”.
“So, yes – there’s. more “content”? But is it better? Maybe – in some ways. In others, debatable.”
Here’s the thing Eric – and this isn’t meant as an offense toward you.
As humans we are very prone to intermingling wants and needs and valuing things like ease of maintenance vs higher reliability. We mix apples vs oranges comparisons. We are subjective in our nature – you may value one thing more than I value it. You may value cost and ease of maintenance. I may value not having to do that maintenance at all.
I have a 30 year old Fuel Injection system on my 92’ B2600. It has never needed maintenance to that fuel system beyond filter changes. I also have other cars/motorcycles/tractors with carbs that require regular maintenance cleanings and tuning. By my metrics, fuel injection is clearly “better”. Your metrics are likely different than mine.
As has already been commented, car “cost” has not gone up. Rather, the dollars have been devalued. 10 -20 ounces or so of gold has always bought a nice car. This has been true from its invention right on up to today. The simple fact is that today’s car offers a whole lot more features, content, and durability vs what that gold would buy in the past.
It’s great that you love your TA and vintage stuff. I do to. I refuse to own anything newer than about 2012 or so. But let’s not kid ourselves – not everyone can maintain vintage vehicles and not everyone values vintage vehicles like we do. Not everyone is content to ride around on solid axles and leaf springs.
There was a time when I didn’t value ABS. My perspective and value of it has changed. For me it has value vs 70s vintage vehicles that were prone to rear wheel lock and stability issues.
The bottom line is that we all choose what we value. No one is forcing us to buy modern cars and all the geegaws that come with that . . . . Yet.
Doh – misplaced response to Eric’s questioning of modern content vs “better”.
Told my wife 20 years ago the country was moving to one of “Haves” and “Have Nots” and we need to plan accordingly. It is abundantly clear I was right.
This is but more proof that our fiat currency is going down the tubes…
The same amount of gold that would buy a car in the 1930s will buy a car today.
In the 1930s, the price of a car was approximately $350, gold being about $35 per ounce. Ten ounces of gold could buy a car.
The price of a car today is around $40,000. That same ten ounces of gold will buy a car today.
Indeed, in 1926 when a one ounce gold coin was $20, you could buy a brand new model T Ford touring car for 13 of them. Also, the guy earning $2000 per year would not have paid any income tax or Socalled Security tax on his labors, so he could readily afford a cheap new car. That 100 gold double eagle income would be $430000 today. Plus since today that $430k would have 50% of it taken by fed, state, and local income taxes and Socalled Security, that income was closer to a 2025 million than not.
The model T touring car was the cheapest car on the market. Those same 13 gold double eagles at $4300/ea would be about $56000, but you have to earn about 73000 to have 56k net income.
Everything has been inflated but median income. The communist regime installed by 1913 has crushed us into poverty. We are being actively entered and enslaved.
You cannot hate government, lawyers, and banisters enough.
Not entered, enserfed.
Not banisters, banksters!
What I feel about new cars is about the same I feel about the NFL…I used to like it now forget it.
You don’t enjoy seeing Black Lives Matters and End Racism on the backs of NFL player’s helmets?
I don’t use the BLS calculator.
Shadow Stats has not been updated for over two years. Paging John Williams.
The improvements in materials and technology are natural progression; they should not add that much to the cost of a vehicle.
By making many “features” standard and turning individual options into packages, the manufacturers have found other ways to milk your wallet.
“Today, the typical buyer of a new Mustang GT is a gray-haired guy in his 50s.”
LOL every time I see a Mustang GT it has being driven by a gray-haired guy in his 70s, not his 50s!
It is instructive to overlay the graph of auto prices with the Fed’s graph of the M2 money supply:
https://fred.stlouisfed.org/series/M2SL
Print money, get inflation. Econ 101. Duh.
The spike at the right side of both charts shows that the damage from the COVID hoax came not just from the fake “vaccines,” but from the economic destruction as well…
With new vehicles being as expensive as they are now, you’d think they’d last longer than a few years, but nope, given what I’ve read about them here and elsewhere.
And with these billionaires pushing technocracy wishing to own EVERYTHING, they, in collaboration with many governments, are certainly working on making owning an automobile and a single family home increasingly unaffordable for average Americans.
One thing I find concerning is that the technocratic agenda is being implemented in this country under the Trump 2.0 administration. What’s also concerning is that more people, particularly those who voted for Trump last year, aren’t speaking out against it, though they probably would be if it were being implemented under a Harris-Walz regime.
I’m surprised (but not shocked) that Trump 2.0 has gone along with it as much as he has. Also disappointed.
That said, to your point re: Harris/Walz, that is part of why I actually seriously considered voting for them. Then I didn’t. I’m not quite ready to say I regret it, but I’m not as sure as I once was that the better of the two likely outcomes was achieved.
Look. It’s a slow-motion train wreck. Can’t stop it, can’t look away, if you’re smart just try to duck.
My first, take-out-a-loan-to-buy-a-new-vehicle cost me $5,300 dollars, with an 8-percent interest rate. That car lasted me many years: Manual trans, great gas mileage, etc. Makes me wish it could have lasted forever, with the computer-on-wheels these vehicles are today. It was front-wheel drive…a pregnant roller-skate, really, but it got me around nicely.
Another “premium” that the 2025 Mustang has that your Trans-Am does not is the retirement accounts of all the workers continuing to live longer than expected, during a time of exceptionally low interest rates on safe investments. Ford’s defined benefit program is funded fairly well (for now) but only after a decade of injections of cash by Ford to keep it going. With the boomer generation starting to retire en masse I have to think this is going to hit pretty hard, and the accountants (who are likely going to be on the receiving end real soon) are making sure the pension is well funded.
““It is important to remember that the new-vehicle market is inflationary,” says Cox Automotive analyst Erin Keating.”
I challenge Miss Erin to define inflation. Betcyha she either can’t or gives a world salad regurgitation of the keynesian tripe.
I came across this comment yesterday and it sums up the article perfectly.
I want to buy a new car that cost twice what my first house cost and is worth less than half of what I paid for it within two years. I want to buy a new car that is too complicated for me to do the most basic maintenance. I want to buy a new car loaded down with “safety” items I do not want. I want to buy a new car with a $1,500.00 headlamp assembly because a $15.00 sealed beam is no longer useful….
….said no one ever
I read the new car reviews and while there are some things that I like in them; the car in its totality is something I have little interest in. I’m happy driving antique cars on a daily basis. Good parts are getting harder to find but as everything else is going to hell in a hand basket what can you do? Not much it seems.
At a certain point I can see a lot of the car manufactures failing because the people who buy bespoke automobiles are not the kind of customers that buy Fords and Chevrolet’s.
The chapter 11 collapse of First Brands is going to be a real test for the business of old vehicle spare parts. First Brands was Trico, Anco, Raybestos, Carter, Fram, Autolite, Reese, Drawtite, Cardone, Bendix, Stoptech…
https://bondoro.com/first-brands-group/
Beyond how pretty much the largest aftermarket supplier going sideways is going be for trying to keep a car on the road how is this debit stress test going to drag down all automotive suppliers and manufacturers? This isn’t going to be good for anyone.
‘A new Mustang costs about $15k more (in real
moneyterms) than my Trans Am did when it was new.’Superficially, this is true. However, if I’m a Bureau of Labor Statistics economist charged with calculating the Consumer Price Index, I can make this go away with hedonic adjustment. It amounts to claiming that ‘you pay more, but you’ll get more.’
A V8 with 480 horsepower instead of 200, for instance. A six-speed manual or ten-speed automatic instead of four speeds. Independent rear suspension. Selectable drive modes (computers add value!). Four-wheel disc brakes. Nineteen-inch ‘rims’. LED headlights and taillights.
All of these serve the same function as the 1976 technology did. But LED lights, for instance, should burn out less often than incandescent ones. So in hedonic terms, the buyer is getting more for his money.
All told, after hedonic adjustment, auto prices probably haven’t risen at all. But, perversely, you still have to pay more to get more! Does this sound a little shady?
While hedonic adjustment sounds good on paper; the problem with it is that while many people can afford a $15 dollar sealed beam light its $1,500 LED replacement that lasts a couple times longer and breaks is a budget wrecker. Lets also not forget that the standardized sealed was available almost everywhere unlike it’s LED replacement.
Even worse the entire car is massively more expensive even if it’s better leading to lower sales and decreased profitability of the manufacturer in the end.
Hi Jim,
I take your point; however . . . I could (and have) nearly doubled the output of the TA’s engine via a cam swap, replacing the factory single exhaust with proper dual exhaust plus some tuning work. Total cost: Less than $1,000 to get comparable power/performance vs. the new GT.
Also, as Landru noted, while the LED light may last longer its cost to replace is orders of magnitude higher.
Don’t forget the cost of windshield repacement on just about any new car with the procedure requiring reattachment all of the sensors bonded to the glass to enable the questionably-desirable saaaaafety “features’.
Windshield replacement on my 2001 Solara is $350 at Safelite.
The same job on my wife’s 2016 Explorer is $800 due to two special trim pieces which must be replaced every time the windshield is swapped out.
The part alone for the camera component enabling the Lane Departure “Assist”, bonded to the windshield of my 2018 Camry, is $1200. If I opt to not replace the camera, the dash will light up like a Christmas tree every time I start the car and the vehicle would not pass inspection in some states or be desirable to a potential buyer.
Absolutely, Roscoe –
A windshield used to be just glass. Now it is an integrated part of the “safety” systems the car is hag-ridden with.
Back to your point, the cost of equivalent vehicles has increased by MORE than the Consumer Price Index, because the CPI has been adjusted for alleged quality improvements. That is, inflation is higher than the adjusted CPI suggests.
First and foremost the BLS was inflation calculator underestimates inflation by design. You’ve gotta’ admit it’s funny that as a group we distrust GovCo but then immediately reference BLS as the authority on inflation and use their calculator.
It’s a shame Shadowstats.com is a disaster of a site and of course doesn’t offer a free on-line inflation calculator to counter the BLS calculator.
To Jim’s point:
Fuel injection vs carburetors and the improvements in drivability and fuel economy.
Galvaneal sheetmetal and e-coat that doesn’t rust out in 4 years.
Stainless steel exhaust systems.
Independent rear suspension vs solid axle. Coil springs vs leaf springs. A front suspension that doesn’t bump steer, has good camber gain characteristics.
You can hand wave the horsepower but the reality is there is a whole lot more content in a new Mustang GT than you’re giving credit for vs. a 70s vintage muscle car.
Hi BID,
Yes, but: The Quadrajet carb my TA has can be replaced with a brand new one for about $400 and the fuel pump for $40 – and any idiot can do the work because the carb is held on by four 1/2 bolts; that plus a few linkages and that’s it. That literally constitutes the entire fuel delivery system.
The carb can also be rebuilt to good-as-new for about $50, too. And it can be done by almost anyone with basic mechanical skills and hand tools.
What will it cost to replace the EFI/GDI system in a new car? Can anyone do that?
Coil springs vs. leafs: I see no huge advantage. IRS does improve ride quality on poor roads; handling is a closer draw. My TA handles remarkably well with just a few changes such as poly bushings and larger diameter anti-sway bars. Yes, the Mustang’s limits are higher, but you pretty much need to be driving at track speeds to make use of that. And my TA isn’t laden with peremptory “safety” tech such as ABS, traction/stability control.
I can replace the TA’s entire exhaust from the manifolds back for about $300. How much will it cost when the Mustangs’ four cats and 02 sensors have to be replaced?
So, yes – there’s. more “content”? But is it better? Maybe – in some ways. In others, debatable.
It’s certainly not cheaper!
I hear ya Eric!
My 71 Olds 442 is bone stock down to its manual drum brakes. It could have been upgraded to disc brakes up front.
If I spent a couple of grand on steering and suspension upgrades it would really improve its handling. It need no improvements in the power area. As you say, it is aslo easily repairable.
What the new cars completely lack and in no way can they compete with the classics is character and soul. I never drive the ol’ girl that multiple people comment on it. Her bittersweet color is one never seen nowadays. She’s a true classic.
Reminds me of the time a few years back when a Fed governor was speaking to a group about how inflation wasn’t so bad because of how much better stuff was. He used an iPad as an example when someone in the crowd piped up “yeah, but you can’t eat an iPad”. Having just come back from grocery shopping I’m in with that guy.