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Have car prices changed in 20 years? And if not, why?
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up vote
9
down vote
favorite
I notice that there seems to be little or no change in car prices over the last 20 years and they seem to be unaffected by inflation.
For example, a Toyota Camry sold for about $23,000 +/- $2,000 (MSRP) around 1999-2000, and currently it sells for about the same.
Why is this?
inflation price united-states manufacturing
edited 13 mins ago
Kenny LJ
4,18411541
asked 19 hours ago
Lassie Fair
966613
add a comment |Â
up vote
9
down vote
favorite
I notice that there seems to be little or no change in car prices over the last 20 years and they seem to be unaffected by inflation.
For example, a Toyota Camry sold for about $23,000 +/- $2,000 (MSRP) around 1999-2000, and currently it sells for about the same.
Why is this?
inflation price united-states manufacturing
edited 13 mins ago
Kenny LJ
4,18411541
asked 19 hours ago
Lassie Fair
966613
2
The premise of this question seems wrong. It used to be possible to get new cars for just over $10k. I'd be really surprised if the Camry went for that much in 1999; comparable models were a lot cheaper.
– R..
9 hours ago
add a comment |Â
up vote
9
down vote
favorite
up vote
9
down vote
favorite
I notice that there seems to be little or no change in car prices over the last 20 years and they seem to be unaffected by inflation.
For example, a Toyota Camry sold for about $23,000 +/- $2,000 (MSRP) around 1999-2000, and currently it sells for about the same.
Why is this?
inflation price united-states manufacturing
edited 13 mins ago
Kenny LJ
4,18411541
asked 19 hours ago
Lassie Fair
966613
I notice that there seems to be little or no change in car prices over the last 20 years and they seem to be unaffected by inflation.
For example, a Toyota Camry sold for about $23,000 +/- $2,000 (MSRP) around 1999-2000, and currently it sells for about the same.
Why is this?
inflation price united-states manufacturing
inflation price united-states manufacturing
edited 13 mins ago
Kenny LJ
4,18411541
asked 19 hours ago
Lassie Fair
966613
edited 13 mins ago
Kenny LJ
4,18411541
asked 19 hours ago
Lassie Fair
966613
edited 13 mins ago
Kenny LJ
4,18411541
edited 13 mins ago
Kenny LJ
4,18411541
edited 13 mins ago
Kenny LJ
4,18411541
4,18411541
asked 19 hours ago
Lassie Fair
966613
asked 19 hours ago
Lassie Fair
966613
asked 19 hours ago
Lassie Fair
966613
966613
2
The premise of this question seems wrong. It used to be possible to get new cars for just over $10k. I'd be really surprised if the Camry went for that much in 1999; comparable models were a lot cheaper.
– R..
9 hours ago
add a comment |Â
2
The premise of this question seems wrong. It used to be possible to get new cars for just over $10k. I'd be really surprised if the Camry went for that much in 1999; comparable models were a lot cheaper.
– R..
9 hours ago
2
2
The premise of this question seems wrong. It used to be possible to get new cars for just over $10k. I'd be really surprised if the Camry went for that much in 1999; comparable models were a lot cheaper.
– R..
9 hours ago
The premise of this question seems wrong. It used to be possible to get new cars for just over $10k. I'd be really surprised if the Camry went for that much in 1999; comparable models were a lot cheaper.
– R..
9 hours ago
add a comment |Â
3 Answers
3
active
oldest
votes
up vote
15
down vote
Inflation is measured against a basket of goods. It's a symptom of what's going on in markets. Some products go up in price over time. Some go down in time. Some stay the same price, but change their specification. Some stay the same price, and change their specification.
So it's looking down the wrong end of the microscope, to ask why inflation hasn't affected car prices. Car prices are part of inflation. Changes in car prices affect inflation.
The causal link the other way is very very weak. Inflation puts pressure on wages. If this causes wages to rise, then the cost curve shifts, and equilibrium prices change. But for cars, wage costs are a very small part of total car manufacturing cost. And the market for labourers in the industry has shrinking demand and over-supply, so upward pressures are very weak.
The inflation experienced by car manufacturers is very different to the inflation experienced by the public. We've been through a global financial crisis and a super-cycle in commodities. A general-public inflation measure is a very poor measure of input-cost inflation for car manufacturers.
answered 17 hours ago
EnergyNumbers
6,46311228
Thank you for this answer -- very edifying for me.
– Kenneth Rios
17 hours ago
add a comment |Â
up vote
5
down vote
You also didn't look at car prices in general but rather just the Toyota Camry. For example a 2001 BMW M3 was ~$46,000 while a 2018 BMW M3 is ~$66,000.
Most cars have increased in price over the last 20 years, but some manufacturers will always have a cheap car in their lineup .
answered 11 hours ago
Jayson
592
New contributor
Jayson is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
1
I recall buying a Honda Civic in 1999 less than half what a comparable 2018 Civic goes for. Some of that is inevitably feature creep, but not the majority of it.
– Andy
10 hours ago
add a comment |Â
up vote
5
down vote
Specifically treating car prices, well, the prices are determined globally and not necessarily in dollars
In the last 20 years:
Car manufacturers move factories across borders to save costs, China and India have become major market player both as major manufacturers and as a major consumers
As a result of these causes, an additional major impact was added, which is the exchange currencies' exchange rates.
For the last 10 years:
Following the global economic crisis, interest rates dropped to practically zero worldwide, trying, among other things, to encourage local exports, in what was called a "currency war".
The last major impact, that I can add, might sound trivial, but it's there: the technology improvements implemented in car factories over the past 20 years, must have dropped the cost of manufacturing, for the same vehicles. meaning: either vehicles cost remained similar but cars got better, so products are not that comparable.
Or:
Vehicle manufacturing in the same place, over time got cheaper.
edited 49 mins ago
Malandy
1033
answered 14 hours ago
Guy Louzon
31219
add a comment |Â
3 Answers
3
active
oldest
votes
3 Answers
3
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
15
down vote
Inflation is measured against a basket of goods. It's a symptom of what's going on in markets. Some products go up in price over time. Some go down in time. Some stay the same price, but change their specification. Some stay the same price, and change their specification.
So it's looking down the wrong end of the microscope, to ask why inflation hasn't affected car prices. Car prices are part of inflation. Changes in car prices affect inflation.
The causal link the other way is very very weak. Inflation puts pressure on wages. If this causes wages to rise, then the cost curve shifts, and equilibrium prices change. But for cars, wage costs are a very small part of total car manufacturing cost. And the market for labourers in the industry has shrinking demand and over-supply, so upward pressures are very weak.
The inflation experienced by car manufacturers is very different to the inflation experienced by the public. We've been through a global financial crisis and a super-cycle in commodities. A general-public inflation measure is a very poor measure of input-cost inflation for car manufacturers.
answered 17 hours ago
EnergyNumbers
6,46311228
Thank you for this answer -- very edifying for me.
– Kenneth Rios
17 hours ago
add a comment |Â
up vote
15
down vote
Inflation is measured against a basket of goods. It's a symptom of what's going on in markets. Some products go up in price over time. Some go down in time. Some stay the same price, but change their specification. Some stay the same price, and change their specification.
So it's looking down the wrong end of the microscope, to ask why inflation hasn't affected car prices. Car prices are part of inflation. Changes in car prices affect inflation.
The causal link the other way is very very weak. Inflation puts pressure on wages. If this causes wages to rise, then the cost curve shifts, and equilibrium prices change. But for cars, wage costs are a very small part of total car manufacturing cost. And the market for labourers in the industry has shrinking demand and over-supply, so upward pressures are very weak.
The inflation experienced by car manufacturers is very different to the inflation experienced by the public. We've been through a global financial crisis and a super-cycle in commodities. A general-public inflation measure is a very poor measure of input-cost inflation for car manufacturers.
answered 17 hours ago
EnergyNumbers
6,46311228
Thank you for this answer -- very edifying for me.
– Kenneth Rios
17 hours ago
add a comment |Â
up vote
15
down vote
up vote
15
down vote
Inflation is measured against a basket of goods. It's a symptom of what's going on in markets. Some products go up in price over time. Some go down in time. Some stay the same price, but change their specification. Some stay the same price, and change their specification.
So it's looking down the wrong end of the microscope, to ask why inflation hasn't affected car prices. Car prices are part of inflation. Changes in car prices affect inflation.
The causal link the other way is very very weak. Inflation puts pressure on wages. If this causes wages to rise, then the cost curve shifts, and equilibrium prices change. But for cars, wage costs are a very small part of total car manufacturing cost. And the market for labourers in the industry has shrinking demand and over-supply, so upward pressures are very weak.
The inflation experienced by car manufacturers is very different to the inflation experienced by the public. We've been through a global financial crisis and a super-cycle in commodities. A general-public inflation measure is a very poor measure of input-cost inflation for car manufacturers.
answered 17 hours ago
EnergyNumbers
6,46311228
Inflation is measured against a basket of goods. It's a symptom of what's going on in markets. Some products go up in price over time. Some go down in time. Some stay the same price, but change their specification. Some stay the same price, and change their specification.
So it's looking down the wrong end of the microscope, to ask why inflation hasn't affected car prices. Car prices are part of inflation. Changes in car prices affect inflation.
The causal link the other way is very very weak. Inflation puts pressure on wages. If this causes wages to rise, then the cost curve shifts, and equilibrium prices change. But for cars, wage costs are a very small part of total car manufacturing cost. And the market for labourers in the industry has shrinking demand and over-supply, so upward pressures are very weak.
The inflation experienced by car manufacturers is very different to the inflation experienced by the public. We've been through a global financial crisis and a super-cycle in commodities. A general-public inflation measure is a very poor measure of input-cost inflation for car manufacturers.
answered 17 hours ago
EnergyNumbers
6,46311228
answered 17 hours ago
EnergyNumbers
6,46311228
answered 17 hours ago
EnergyNumbers
6,46311228
answered 17 hours ago
EnergyNumbers
6,46311228
6,46311228
Thank you for this answer -- very edifying for me.
– Kenneth Rios
17 hours ago
add a comment |Â
Thank you for this answer -- very edifying for me.
– Kenneth Rios
17 hours ago
Thank you for this answer -- very edifying for me.
– Kenneth Rios
17 hours ago
Thank you for this answer -- very edifying for me.
– Kenneth Rios
17 hours ago
add a comment |Â
up vote
5
down vote
You also didn't look at car prices in general but rather just the Toyota Camry. For example a 2001 BMW M3 was ~$46,000 while a 2018 BMW M3 is ~$66,000.
Most cars have increased in price over the last 20 years, but some manufacturers will always have a cheap car in their lineup .
answered 11 hours ago
Jayson
592
New contributor
Jayson is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
1
I recall buying a Honda Civic in 1999 less than half what a comparable 2018 Civic goes for. Some of that is inevitably feature creep, but not the majority of it.
– Andy
10 hours ago
add a comment |Â
up vote
5
down vote
You also didn't look at car prices in general but rather just the Toyota Camry. For example a 2001 BMW M3 was ~$46,000 while a 2018 BMW M3 is ~$66,000.
Most cars have increased in price over the last 20 years, but some manufacturers will always have a cheap car in their lineup .
answered 11 hours ago
Jayson
592
New contributor
Jayson is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
1
I recall buying a Honda Civic in 1999 less than half what a comparable 2018 Civic goes for. Some of that is inevitably feature creep, but not the majority of it.
– Andy
10 hours ago
add a comment |Â
up vote
5
down vote
up vote
5
down vote
You also didn't look at car prices in general but rather just the Toyota Camry. For example a 2001 BMW M3 was ~$46,000 while a 2018 BMW M3 is ~$66,000.
Most cars have increased in price over the last 20 years, but some manufacturers will always have a cheap car in their lineup .
answered 11 hours ago
Jayson
592
New contributor
Jayson is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
You also didn't look at car prices in general but rather just the Toyota Camry. For example a 2001 BMW M3 was ~$46,000 while a 2018 BMW M3 is ~$66,000.
Most cars have increased in price over the last 20 years, but some manufacturers will always have a cheap car in their lineup .
answered 11 hours ago
Jayson
592
New contributor
Jayson is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
edited 11 hours ago
answered 11 hours ago
Jayson
592
New contributor
Jayson is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
answered 11 hours ago
Jayson
592
answered 11 hours ago
Jayson
592
592
New contributor
Jayson is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
New contributor
Jayson is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
Jayson is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
1
I recall buying a Honda Civic in 1999 less than half what a comparable 2018 Civic goes for. Some of that is inevitably feature creep, but not the majority of it.
– Andy
10 hours ago
add a comment |Â
1
I recall buying a Honda Civic in 1999 less than half what a comparable 2018 Civic goes for. Some of that is inevitably feature creep, but not the majority of it.
– Andy
10 hours ago
1
1
I recall buying a Honda Civic in 1999 less than half what a comparable 2018 Civic goes for. Some of that is inevitably feature creep, but not the majority of it.
– Andy
10 hours ago
I recall buying a Honda Civic in 1999 less than half what a comparable 2018 Civic goes for. Some of that is inevitably feature creep, but not the majority of it.
– Andy
10 hours ago
add a comment |Â
up vote
5
down vote
Specifically treating car prices, well, the prices are determined globally and not necessarily in dollars
In the last 20 years:
Car manufacturers move factories across borders to save costs, China and India have become major market player both as major manufacturers and as a major consumers
As a result of these causes, an additional major impact was added, which is the exchange currencies' exchange rates.
For the last 10 years:
Following the global economic crisis, interest rates dropped to practically zero worldwide, trying, among other things, to encourage local exports, in what was called a "currency war".
The last major impact, that I can add, might sound trivial, but it's there: the technology improvements implemented in car factories over the past 20 years, must have dropped the cost of manufacturing, for the same vehicles. meaning: either vehicles cost remained similar but cars got better, so products are not that comparable.
Or:
Vehicle manufacturing in the same place, over time got cheaper.
edited 49 mins ago
Malandy
1033
answered 14 hours ago
Guy Louzon
31219
add a comment |Â
up vote
5
down vote
Specifically treating car prices, well, the prices are determined globally and not necessarily in dollars
In the last 20 years:
Car manufacturers move factories across borders to save costs, China and India have become major market player both as major manufacturers and as a major consumers
As a result of these causes, an additional major impact was added, which is the exchange currencies' exchange rates.
For the last 10 years:
Following the global economic crisis, interest rates dropped to practically zero worldwide, trying, among other things, to encourage local exports, in what was called a "currency war".
The last major impact, that I can add, might sound trivial, but it's there: the technology improvements implemented in car factories over the past 20 years, must have dropped the cost of manufacturing, for the same vehicles. meaning: either vehicles cost remained similar but cars got better, so products are not that comparable.
Or:
Vehicle manufacturing in the same place, over time got cheaper.
edited 49 mins ago
Malandy
1033
answered 14 hours ago
Guy Louzon
31219
add a comment |Â
up vote
5
down vote
up vote
5
down vote
Specifically treating car prices, well, the prices are determined globally and not necessarily in dollars
In the last 20 years:
Car manufacturers move factories across borders to save costs, China and India have become major market player both as major manufacturers and as a major consumers
As a result of these causes, an additional major impact was added, which is the exchange currencies' exchange rates.
For the last 10 years:
Following the global economic crisis, interest rates dropped to practically zero worldwide, trying, among other things, to encourage local exports, in what was called a "currency war".
The last major impact, that I can add, might sound trivial, but it's there: the technology improvements implemented in car factories over the past 20 years, must have dropped the cost of manufacturing, for the same vehicles. meaning: either vehicles cost remained similar but cars got better, so products are not that comparable.
Or:
Vehicle manufacturing in the same place, over time got cheaper.
edited 49 mins ago
Malandy
1033
answered 14 hours ago
Guy Louzon
31219
Specifically treating car prices, well, the prices are determined globally and not necessarily in dollars
In the last 20 years:
Car manufacturers move factories across borders to save costs, China and India have become major market player both as major manufacturers and as a major consumers
As a result of these causes, an additional major impact was added, which is the exchange currencies' exchange rates.
For the last 10 years:
Following the global economic crisis, interest rates dropped to practically zero worldwide, trying, among other things, to encourage local exports, in what was called a "currency war".
The last major impact, that I can add, might sound trivial, but it's there: the technology improvements implemented in car factories over the past 20 years, must have dropped the cost of manufacturing, for the same vehicles. meaning: either vehicles cost remained similar but cars got better, so products are not that comparable.
Or:
Vehicle manufacturing in the same place, over time got cheaper.
edited 49 mins ago
Malandy
1033
answered 14 hours ago
Guy Louzon
31219
edited 49 mins ago
Malandy
1033
edited 49 mins ago
Malandy
1033
edited 49 mins ago
Malandy
1033
1033
answered 14 hours ago
Guy Louzon
31219
answered 14 hours ago
Guy Louzon
31219
answered 14 hours ago
Guy Louzon
31219
31219
add a comment |Â
add a comment |Â
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2
The premise of this question seems wrong. It used to be possible to get new cars for just over $10k. I'd be really surprised if the Camry went for that much in 1999; comparable models were a lot cheaper.
– R..
9 hours ago