Kindof a side-bar — In most cases i strongly prefer median, any dataset with outliers or that is skewed in some direction is usually better represented by the median. And in my experiences most real-world datasets do have one or both of those.
All news/public relations/research publications without details about the distribution of the data are clickbait. It would cost nothing to provide deciles, or even quintiles.
That still would not really clarify the main question, which is whether the average transaction price may be rising due to consumer shift, with those of less means choosing to not buy.
The used car market is pretty rough too. A 10 year old Toyota Corolla with 100k miles is still a $10-15k car. Not terrible if you have the cash for it and you know it’s been maintained, but $15k is a lot to gamble on the previous owner having kept up with the maintenance.
Not saying that means you drop 50k on something else, when when a new Corolla can be had for between $22k-28k MSRP, I’d think pretty hard about gambling my $15k on a 10 year old unknown.
I paid $1300 and another $320 in fees for a 20 year old car but this is New Orleans where no one maintains anything so there was further down the pike in short order.
If that passed the functioning test, then great for you!
Statistically, the vast majority of buyers would prefer to buy a nicer car and finance it.
The reality is - unless you know a lot about cars - more times than not - you're going to spend WAY more money on a 20 year old car with >150,000 miles - then you are on financing a car 4x the price - and, especially, you don't need the $1520 that those people don't have to begin with.
>30% of Americans wouldn't even have the $1520 you paid.
Either you get ripped off at the point of sale (the car is totalled from any sane valuation) or you'll eventually get ripped off by mechanics.
Again, if this doesn't apply to you - then great - but it's not really surprising why people ignore the age-old adage to buy a car in cash when interest rates were negative in real terms for a generation.
I ended up spending about $3000 more on top of the $1620 to fix it up (160k mi) fully so while that was within my means, I am now free of a car payment for the foreseeable future so it really is kind of a Sam Vimes’ boots problem. I do know a fair amount about cars as do my friends.
This used to be what people did before COVID. Now it's a hardcore seller's market in the US:
The car chip shortage caused the resale value of cars to skyrocket. In the past few years my 15 year old CRV, which just passed 100k miles, has gone UP in value according to my mechanic because the used car market is so bad.
Many car dealerships, already well-known for poor consumer practices, have straight up refused to sell cars to people who don't wish to finance because they can make a lot more money off someone who wants to finance. You used to be able to convince them you planned to finance, then buy the car in full at the last minute, and the salesperson would do so because of sunk investment. Not anymore, many of my friends have experienced this firsthand when shopping for a new vehicle.
Combine this with it being all-but-required for people in the US to have a personal vehicle and drive if they want a job ("reliable transportation" in job postings), new & used car dealers have the additional leverage of time pressure as people can and do get fired for their car breaking down.
What I see a lot of wealthy people do, on the other hand, is finance a luxury vehicle, drive it for 3-5 years, then trade in for a newer model. Used to be lots of luxury vehicles, like the Giulia Quadrifoglio, with 20-30k miles for 30-40% of the original vehicle cost (25k-35k) which is an incredible deal for a luxury brand. This isn't really a thing anymore as the cost of a new car skyrockets.
I just can't understand who is buying these cars. As a single person with a 90th percentile income and zero debt or dependents, I literally can't even comprehend having a $1,000 car payment. How anyone else is affording this just doesn't make sense.
8 or 10 year loan. Then you roll that remainder into the next loan when you get another car.
It's absurd, to be honest. We financed our last vehicle, because we got a price discount via financing. The FIRST payment term they brought us was 8 years. And this was for a 19k vehicle.
People aren't looking at the terms, they're just looking at the payments. They're paying more for cars than they are for houses, monthly. I don't get it.
> It's absurd, to be honest. We financed our last vehicle, because we got a price discount via financing. The FIRST payment term they brought us was 8 years. And this was for a 19k vehicle.
I’m gonna go out on a limb and guess it was a Nissan dealership. Nissan can’t sell enough cars without subprime lending, that’s my guess as to why you were offered a 96-month term lol.
With a prime credit score, Toyota offered a 3 year term loan to me which I changed to 5 years (2.5%, it’s free money)
I could afford it, but I’d much rather put that money into my mortgage, pension, or an investment account. But then I don’t get much pleasure out of cars. If I loved nice cars then I might think it’s worth spending disposable income on one.
Completely agree here. I came from a family that loved its fancy cars, but the practical difference between an average car and a high-end luxury model is pretty minimal. Until you need to fix the latter.
> ... but the practical difference between an average car and a high-end luxury model is pretty minimal. Until you need to fix the latter.
You're right: broken gearbox on mine was a solid 15 K EUR at least. But... I paid zero.
My solution is simple: I buy a high-end luxury car used (four to five years old) but I then religiously pay every year for the official extended manufacturer warranty.
I pay 1400 EUR per year for that warranty but then any yellow or red light on the dashboard, any issue (sunroof not opening, sound system speaker broken, NAV issue, anything really), I bring it to any official dealership, in any country in the world and they fix it (it's already been at least to dealerships in Belgium (various little issues), France (gearbox but they didn't fix it: they didn't believe me it was broken), Germany (gearbox replaced), Spain (wipers broke down after a 1700 km road trip under heavy rain: like... it was just too much for the motor 15 hours non-stop), Andorra (yellow light, forgot what it was) and Poland (headlight was getting old and cranky, this summer)).
Car is now 12 y/o and 115 000 miles / 190 000 km and I just renewed the warranty for another two years, unlimited mileage.
For that's the thing with high-end luxury cars too: you have fancy stuff like a warranty valid until 15 years old and 350 000 miles / 400 000 km if you want (if I were to bring it in two years in Sep 2027 with 400 000 km and a broken engine, they'd be forced to replace it just like they were forced to replace the gearbox).
And that warranty is valid in any country in the world. And they give you a spare vehicle. And you've got assistance taking care of everything should you be stuck. For 120 EUR / month on a used car to me it's a no-brainer.
And in two years I'll just sell the car for 15 K EUR or something and buy another high-end luxury car, used (four or five years old), again.
I think for people who enjoy high-end cars but don't want to deal with the stress of having an engine or a gearbox breaking, a used high-end luxury car with an extended warranty is a good solution.
Practically I give to you that it's still just metal on four wheels.
The business model of most higher-end makes has evolved: the first customer leases the car for 3-4 years and then returns it to the dealer, who turns around and sells it to a customer with a full warranty for another 3-4 years.
So modern lux cars are actually pretty well-made and pretty reliable these days. The only catch is that they’re designed with the assumption that all maintenance will be done at the dealer and that the driver never sees a bill.
Once you exit that - do maintenance elsewhere or not under warranty, the costs become ridiculous and people start skipping necessary items. So the car breaks down and the repairs are even more ridiculous. So off to the junkyard it goes.
Stay inside the dealer+warranty bubble and you have a pretty good time, although many people will question your sanity buying an expensive extended warranty for a 12-year old car ;)
Not to mention that insurance is crazy with such high vehicle values. Easily another $200-300 a month, and that's if you're a good driver over 30 with no accidents.
I had a > $1000 car payment, but the interest rate was only 2.5%, not to mention I overpaid, so it was paid off early. I'll keep the car for at least 10-15 years.
Just looking at the "blue book" site suggests that a 5-year-old Accord with 50k miles can be traded for $20k and a 10-year-old Accord with 100k miles can be traded for half that, but a 2005 model with 200k miles is virtually worthless. So there's a cliff somewhere, but neither the 5 nor 10 year old example are negligible.
One point of annecdata to backup your figures: I traded my 2018 Accord (7.5 years old, 97k miles) this past weekend, was offered $11k and negotiated them up to $15k. So, trade ins are definitely worth more than nothing.
They've been snookered by American culture into believing that the bicycle is useless, and/or they've become trapped in an American exurb where the bicycle is in fact useless. I have a car but it mainly just sits there and like you I refuse to buy anything that costs more than about $30k. I drive a Honda Insight which at the time was the cheapest car Honda was selling in this country. The new Civic Hybrid annoyingly has 18-inch wheels so if I was looking at cars today I would probably favor the Corolla Hybrid. It blows my mind that people will by a Rivian.
Circular, since transportation and energy which includes motor fuels combine into the 2nd-largest component of the consumer price index, after shelter.
Less than zero. Car prices are dropping relative to other goods, though they've been mostly flat (in the sense of "inflating at the general rate") since 2010 or so.
As always, just go to FRED to ask these questions. This graph charts the ratio of the "New Vehicles" CPI value to the "All Items" CPI:
That's the salesman's way of saying that other goods (like gas and now electricity) have been getting more expensive faster than cars.
If you put 2 and 2 together, driving is getting considerably more expensive driven by more expensive cars and fuel, which one is rising faster is immaterial, inflation is the original problem but a used car salesman will find a way to use it to prove it doesn't exist.
> driving is getting considerably more expensive driven by more expensive cars and fuel
I'm at a loss. I literally showed you a graph showing that cars were getting cheaper over time. Do you not believe it, or maybe misunderstand what inflation is? You can chart new car price vs. median income too, it shows the same shape.
Fuel's a little more complicated. It's gone up in the last decade, but was going down in the 60's through 90's (not least because cars were getting more efficient). There was a trough in the late 90's.
> The graph shows only that cars are getting more expensive over time just not as mush as gas.
Gas isn't on the chart. It's showing the ratio between the auto segment of CPI (how expensive "a car" is) to the broader CPI metric (how expensive everything else is, on average). And it's going down.
I strongly suggest you think harder on the subject and study the chart (and FRED more generally) a bit.
> Inflation is a tax imposed by one group on another.
Does person A have a home? Then A, 100%. Regular citizens can get non-inflation-indexed, heavily-government-subsidized loans at leverage ratios[1] institutional investors could never dream of. And that's a better inflation hedge than almost anything. The home value inflates but your mortgage payments stay the same for decades.
The inability of people, even otherwise smart HN commenters, to reason about how inflation works has been really shocking to me.
[1] Literally 5x their net worth, or "20% down" in the local jargon
Maybe but either way, person A CANNOT set the price of anything because a house is not a productive asset, it does NOT produce anything that you can attach a new price to. The rich asset owners can, they can drive prices up and gain from both ends of the inflation scam.
> The home value inflates but your mortgage payments stay the same for decades.
Literally untrue for variable mortgages that are now the rule. More importantly, it's absolutely irrelevant at any scale for the reasons cited above and because inflating house prices don't protect from inflation - you pay a huge tax on housing for just being there, which isn't the case for the rich asset owners. Sales taxes are separate.
Then if the house goes up in price and you sell it, old and depreciated, you will have to buy another one at an inflated price, or go homeless, or live in an moldy old hose again that'll cost you a lot more for medical bills.
> The inability of people, even otherwise smart HN commenters, to reason about how inflation been really shocking to me.
The inability of people, who otherwise think themselves smart at economics, to reason about anything has never been shocking to me, it goes way back in history. Their "reasoning" amounts only to lame gaslighting attempts and they can never get out of that mode of thinking.
You never mentioned anything about the income curves by decile - inflation is a redistribution tool, it results in increasing income inequality which we observe. I gave you the explanation for that correlation.
I do, yes. A quick google shows 65% of US households are occupant-owned (with most of those being mortgaged, though I'm too lazy to do a full accounting). I think the point about "regular" people and inflation is apt and I stand by it.
I have a strong suspicion that you aren't actually making an economic point.
It's the safety regulations and tariffs that have been keeping them out so far. And it might be tough to sell them in enough volume to make it worthwhile for a US market redesign. While a lot of people ask for cheap subcompacts in the US, they have traditionally struggled to sell.
The existence of environmental protection is fine, the existence of CAFE fscked up perverse incentives is a problem.
Having some labor quality of life concerns, making sure we aren't being undercut as a national security issue is fine. Having the chicken tax, destroying investments in solar energy and electric grids and EV charging is not.
We have bad manufacturing incentives in this country, our government wants the US to fail at solar, and the Chinese are playing to win.
If you have environmental protection and they don’t, your manufacturing is going to be more complicated than theirs, and therefore more expensive. It’s that simple.
We can also pressure them to enact equivalent environmental protections and refuse to trade otherwise, which would be great for the planet. Checking compliance would be difficult though, lying is culturally treated differently in different places.
They don't even need to be Chinese EVs. Europeam and Asian brands are selling €15k small cars in Europe that pass European safety standards, comparable to the US ones.
My guess is that it is another form if hidden predictionism, even though Americans desperately need cheap cars, just like they need cheap apartments.
When I went to the site you listed, and checked the C3, it looked like the purchase price was much more than 15k. List price was 19k, and with Meinauto discount, 17.6k.
For me it offers 15000 plus transport to the dealership for the C3, but there’s plenty of other cars for less money on the list. Also: German prices, German taxes - the pricing is likely entirely different elsewhere.
I wish I did not have to point it out to 77.3 million American voters, but the entire point of tariffs, their only mode of operation, is to raise domestic prices.
> I wish I did not have to point it out ... the entire point of tariffs... is to raise domestic prices.
Trump has to point this out not you. Instead he promised this:
“Starting on day one, we will end inflation and make America affordable again, to bring down the prices of all goods.” NBC Montana, Trump Rally in Bozeman
Not everyone has that luxury due to commitments and priorities and not everyone enjoys or even thrives living in the city so I'm not sure what value this adds.
I always find it interesting how smug people who live in the city and/or have little experience in rural America can be about these kinds of topics.
This. I was fortunate to be able to have the choice to leave, but it wasn’t always this way. I often reflect on what it was like to have constant dread of the next auto repair I would have to pay for.
>I always find it interesting how smug people who live in the city and/or have little experience in rural America can be about these kinds of topics.
Allow me to be extra smug then. I live in a small town with an Amtrak station. It was hard work finding this place, but well worth it to me. It means I never have to drive an automobile again. That makes me happy.
I feel like they should also release the median price with the average. There are a lot of very expensive luxury/performance cars out there.
Kindof a side-bar — In most cases i strongly prefer median, any dataset with outliers or that is skewed in some direction is usually better represented by the median. And in my experiences most real-world datasets do have one or both of those.
All news/public relations/research publications without details about the distribution of the data are clickbait. It would cost nothing to provide deciles, or even quintiles.
That still would not really clarify the main question, which is whether the average transaction price may be rising due to consumer shift, with those of less means choosing to not buy.
Google is pretty terrible for this, treats median as a synonym for avsrage and entire first page of results is just copies of this story.
Inexpensive new cars are better than ever. Why not get a new Corolla or Civic and plan to keep it 10-15 years?
I guess I'm old fashioned but I buy cars up front for cash. I ain't paying 50K unless there's no other choice.
> I guess I'm old fashioned but I buy cars up front for cash.
A large portion of people buying cars barely have a couple thousand to put down for a down-payment.
When you add in registration fees, sales tax, etc - a large portion of car owners can't do this without financing.
Maybe none of them should be car owners - but most of them live in places where you have no option to get anywhere besides private vehicles, so...
Those people should buy older cars used. But if you only have a couple thousand to put down, you're going to have a bad time.
The used car market is pretty rough too. A 10 year old Toyota Corolla with 100k miles is still a $10-15k car. Not terrible if you have the cash for it and you know it’s been maintained, but $15k is a lot to gamble on the previous owner having kept up with the maintenance.
Not saying that means you drop 50k on something else, when when a new Corolla can be had for between $22k-28k MSRP, I’d think pretty hard about gambling my $15k on a 10 year old unknown.
I hear you... I have done the same analysis. The cheaper end new Japanese cars are a sweet spot, for sure.
You can't get an older, function car - with sales tax and registration fees - for less than $2000.
>50% of Americans have less than $2000 in savings: https://www.federalreserve.gov/publications/2025-economic-we...
There's ample financing for used car purchases.
E.g. 4.54% at 36 months https://www.penfed.org/auto/car-buying-service
I paid $1300 and another $320 in fees for a 20 year old car but this is New Orleans where no one maintains anything so there was further down the pike in short order.
If that passed the functioning test, then great for you!
Statistically, the vast majority of buyers would prefer to buy a nicer car and finance it.
The reality is - unless you know a lot about cars - more times than not - you're going to spend WAY more money on a 20 year old car with >150,000 miles - then you are on financing a car 4x the price - and, especially, you don't need the $1520 that those people don't have to begin with.
>30% of Americans wouldn't even have the $1520 you paid.
Either you get ripped off at the point of sale (the car is totalled from any sane valuation) or you'll eventually get ripped off by mechanics.
Again, if this doesn't apply to you - then great - but it's not really surprising why people ignore the age-old adage to buy a car in cash when interest rates were negative in real terms for a generation.
I ended up spending about $3000 more on top of the $1620 to fix it up (160k mi) fully so while that was within my means, I am now free of a car payment for the foreseeable future so it really is kind of a Sam Vimes’ boots problem. I do know a fair amount about cars as do my friends.
It's expensive to be poor. They may know they can't weather a broken engine on an older car, neither in time nor money.
This used to be what people did before COVID. Now it's a hardcore seller's market in the US:
The car chip shortage caused the resale value of cars to skyrocket. In the past few years my 15 year old CRV, which just passed 100k miles, has gone UP in value according to my mechanic because the used car market is so bad.
Many car dealerships, already well-known for poor consumer practices, have straight up refused to sell cars to people who don't wish to finance because they can make a lot more money off someone who wants to finance. You used to be able to convince them you planned to finance, then buy the car in full at the last minute, and the salesperson would do so because of sunk investment. Not anymore, many of my friends have experienced this firsthand when shopping for a new vehicle.
Combine this with it being all-but-required for people in the US to have a personal vehicle and drive if they want a job ("reliable transportation" in job postings), new & used car dealers have the additional leverage of time pressure as people can and do get fired for their car breaking down.
What I see a lot of wealthy people do, on the other hand, is finance a luxury vehicle, drive it for 3-5 years, then trade in for a newer model. Used to be lots of luxury vehicles, like the Giulia Quadrifoglio, with 20-30k miles for 30-40% of the original vehicle cost (25k-35k) which is an incredible deal for a luxury brand. This isn't really a thing anymore as the cost of a new car skyrockets.
Eh, depends on the interest rate. If someone wants to lend me $50k at 0-4% while I keep my cash in the market that's fine by me.
I just can't understand who is buying these cars. As a single person with a 90th percentile income and zero debt or dependents, I literally can't even comprehend having a $1,000 car payment. How anyone else is affording this just doesn't make sense.
8 or 10 year loan. Then you roll that remainder into the next loan when you get another car.
It's absurd, to be honest. We financed our last vehicle, because we got a price discount via financing. The FIRST payment term they brought us was 8 years. And this was for a 19k vehicle.
People aren't looking at the terms, they're just looking at the payments. They're paying more for cars than they are for houses, monthly. I don't get it.
Me sitting here with a 28% APR on my 11 year old car. My own doing bad credit but I did get the car I want through ACA.
> ACA
Affordable Care Act?
My guess is American Credit Acceptance... a subprime auto loan originator.
> It's absurd, to be honest. We financed our last vehicle, because we got a price discount via financing. The FIRST payment term they brought us was 8 years. And this was for a 19k vehicle.
I’m gonna go out on a limb and guess it was a Nissan dealership. Nissan can’t sell enough cars without subprime lending, that’s my guess as to why you were offered a 96-month term lol.
With a prime credit score, Toyota offered a 3 year term loan to me which I changed to 5 years (2.5%, it’s free money)
Ford. The town is medium to low income. So I'm guessing that's their motivation?
> 8 or 10 year loan. Then you roll that remainder into the next loan when you get another car.
What does this mean? Surely lenders are not lending more than the price of the new car with just the new car as the collateral.
That is exactly what they are doing. It's common to have negative equity in car, just roll to the next auto loan.
Suppose you are buying a new car for $30k, and you owe $10k on a car that would sell for $5k.
A dealership would take the car worth $5k and lend you $35k?
I'm also in the 90th percentile of income and I'm quite comfortably affording a $1000 car payment.
It would be very interesting to compare finances and see what it is that both of us are doing that gives us such wildly different perspectives.
I could afford it, but I’d much rather put that money into my mortgage, pension, or an investment account. But then I don’t get much pleasure out of cars. If I loved nice cars then I might think it’s worth spending disposable income on one.
Completely agree here. I came from a family that loved its fancy cars, but the practical difference between an average car and a high-end luxury model is pretty minimal. Until you need to fix the latter.
> ... but the practical difference between an average car and a high-end luxury model is pretty minimal. Until you need to fix the latter.
You're right: broken gearbox on mine was a solid 15 K EUR at least. But... I paid zero.
My solution is simple: I buy a high-end luxury car used (four to five years old) but I then religiously pay every year for the official extended manufacturer warranty.
I pay 1400 EUR per year for that warranty but then any yellow or red light on the dashboard, any issue (sunroof not opening, sound system speaker broken, NAV issue, anything really), I bring it to any official dealership, in any country in the world and they fix it (it's already been at least to dealerships in Belgium (various little issues), France (gearbox but they didn't fix it: they didn't believe me it was broken), Germany (gearbox replaced), Spain (wipers broke down after a 1700 km road trip under heavy rain: like... it was just too much for the motor 15 hours non-stop), Andorra (yellow light, forgot what it was) and Poland (headlight was getting old and cranky, this summer)).
Car is now 12 y/o and 115 000 miles / 190 000 km and I just renewed the warranty for another two years, unlimited mileage.
For that's the thing with high-end luxury cars too: you have fancy stuff like a warranty valid until 15 years old and 350 000 miles / 400 000 km if you want (if I were to bring it in two years in Sep 2027 with 400 000 km and a broken engine, they'd be forced to replace it just like they were forced to replace the gearbox).
And that warranty is valid in any country in the world. And they give you a spare vehicle. And you've got assistance taking care of everything should you be stuck. For 120 EUR / month on a used car to me it's a no-brainer.
And in two years I'll just sell the car for 15 K EUR or something and buy another high-end luxury car, used (four or five years old), again.
I think for people who enjoy high-end cars but don't want to deal with the stress of having an engine or a gearbox breaking, a used high-end luxury car with an extended warranty is a good solution.
Practically I give to you that it's still just metal on four wheels.
The business model of most higher-end makes has evolved: the first customer leases the car for 3-4 years and then returns it to the dealer, who turns around and sells it to a customer with a full warranty for another 3-4 years.
So modern lux cars are actually pretty well-made and pretty reliable these days. The only catch is that they’re designed with the assumption that all maintenance will be done at the dealer and that the driver never sees a bill.
Once you exit that - do maintenance elsewhere or not under warranty, the costs become ridiculous and people start skipping necessary items. So the car breaks down and the repairs are even more ridiculous. So off to the junkyard it goes.
Stay inside the dealer+warranty bubble and you have a pretty good time, although many people will question your sanity buying an expensive extended warranty for a 12-year old car ;)
I think OP is suggesting that if it's a ridiculous idea to have a car payment that high, why aren't poorer people agreeing with said idea?
Not to mention that insurance is crazy with such high vehicle values. Easily another $200-300 a month, and that's if you're a good driver over 30 with no accidents.
Can depend on where you live too... if you're living in a location where your mortgage is $1500/mo vs $3000/mo that's the difference of a new car.
Especially electric cars, which can depreciate up to 50% in the first year [1]. I can't comprehend being that impatient.
[1] https://www.wired.com/story/evs-are-losing-up-to-50-percent-...
I had a > $1000 car payment, but the interest rate was only 2.5%, not to mention I overpaid, so it was paid off early. I'll keep the car for at least 10-15 years.
25% of people in my state have a car payment above $1,000/mo.
It's clearly a massive priority for a lot of people but not one I understand either.
Rolling old car into new one means your loan is only the difference. Which is the same as a large down payment
Trade in value is usually negligible unless you're buying a new car every few years
Just looking at the "blue book" site suggests that a 5-year-old Accord with 50k miles can be traded for $20k and a 10-year-old Accord with 100k miles can be traded for half that, but a 2005 model with 200k miles is virtually worthless. So there's a cliff somewhere, but neither the 5 nor 10 year old example are negligible.
One point of annecdata to backup your figures: I traded my 2018 Accord (7.5 years old, 97k miles) this past weekend, was offered $11k and negotiated them up to $15k. So, trade ins are definitely worth more than nothing.
That’s how a decent number of people do it - buy new, trade in at some “sweet” spot whatever they deem it to be.
Past a certain point, it’s better to run it into the ground.
It's about keeping up with the Joneses.
They've been snookered by American culture into believing that the bicycle is useless, and/or they've become trapped in an American exurb where the bicycle is in fact useless. I have a car but it mainly just sits there and like you I refuse to buy anything that costs more than about $30k. I drive a Honda Insight which at the time was the cheapest car Honda was selling in this country. The new Civic Hybrid annoyingly has 18-inch wheels so if I was looking at cars today I would probably favor the Corolla Hybrid. It blows my mind that people will by a Rivian.
Does this include GM buying a bunch of their own EVs so they can keep offering the federal rebate for another month?
How much of this is inflation?
Accounting for inflation, the low-end cars are getting cheaper and you're getting more for your money.
Circular, since transportation and energy which includes motor fuels combine into the 2nd-largest component of the consumer price index, after shelter.
Less than zero. Car prices are dropping relative to other goods, though they've been mostly flat (in the sense of "inflating at the general rate") since 2010 or so.
As always, just go to FRED to ask these questions. This graph charts the ratio of the "New Vehicles" CPI value to the "All Items" CPI:
https://fred.stlouisfed.org/graph/?g=1N48P
> Car prices are dropping relative to other goods
That's the salesman's way of saying that other goods (like gas and now electricity) have been getting more expensive faster than cars.
If you put 2 and 2 together, driving is getting considerably more expensive driven by more expensive cars and fuel, which one is rising faster is immaterial, inflation is the original problem but a used car salesman will find a way to use it to prove it doesn't exist.
> driving is getting considerably more expensive driven by more expensive cars and fuel
I'm at a loss. I literally showed you a graph showing that cars were getting cheaper over time. Do you not believe it, or maybe misunderstand what inflation is? You can chart new car price vs. median income too, it shows the same shape.
Fuel's a little more complicated. It's gone up in the last decade, but was going down in the 60's through 90's (not least because cars were getting more efficient). There was a trough in the late 90's.
> I literally showed you a graph showing that cars were getting cheaper over time.
You're literally wrong. The graph shows only that cars are getting more expensive over time just not as mush as gas.
> You can chart new car price vs. median income too, it shows the same shape.
Shape? Median? Not good enough. I want to see the price piloted against each decile of income.
> Do you not believe it, or maybe misunderstand what inflation is?
Inflation is a tax imposed by one group on another. Maybe you misunderstand what it is?
> The graph shows only that cars are getting more expensive over time just not as mush as gas.
Gas isn't on the chart. It's showing the ratio between the auto segment of CPI (how expensive "a car" is) to the broader CPI metric (how expensive everything else is, on average). And it's going down.
I strongly suggest you think harder on the subject and study the chart (and FRED more generally) a bit.
> Inflation is a tax imposed by one group on another.
Yikes. Cite for that definition?
As for inflation being a tax, I always thought it obvious?
You have person A - who cannot set inflation and with severely limited opportunity to invest anywhere.
You have person B - who can invest in anything and also happens to influence the level of inflation.
Guess who is going to get ahead here.
Does person A have a home? Then A, 100%. Regular citizens can get non-inflation-indexed, heavily-government-subsidized loans at leverage ratios[1] institutional investors could never dream of. And that's a better inflation hedge than almost anything. The home value inflates but your mortgage payments stay the same for decades.
The inability of people, even otherwise smart HN commenters, to reason about how inflation works has been really shocking to me.
[1] Literally 5x their net worth, or "20% down" in the local jargon
> Does person A have a home?
Maybe but either way, person A CANNOT set the price of anything because a house is not a productive asset, it does NOT produce anything that you can attach a new price to. The rich asset owners can, they can drive prices up and gain from both ends of the inflation scam.
> The home value inflates but your mortgage payments stay the same for decades.
Literally untrue for variable mortgages that are now the rule. More importantly, it's absolutely irrelevant at any scale for the reasons cited above and because inflating house prices don't protect from inflation - you pay a huge tax on housing for just being there, which isn't the case for the rich asset owners. Sales taxes are separate.
Then if the house goes up in price and you sell it, old and depreciated, you will have to buy another one at an inflated price, or go homeless, or live in an moldy old hose again that'll cost you a lot more for medical bills.
> The inability of people, even otherwise smart HN commenters, to reason about how inflation been really shocking to me.
The inability of people, who otherwise think themselves smart at economics, to reason about anything has never been shocking to me, it goes way back in history. Their "reasoning" amounts only to lame gaslighting attempts and they can never get out of that mode of thinking.
You never mentioned anything about the income curves by decile - inflation is a redistribution tool, it results in increasing income inequality which we observe. I gave you the explanation for that correlation.
You probably meant own a home.
I do, yes. A quick google shows 65% of US households are occupant-owned (with most of those being mortgaged, though I'm too lazy to do a full accounting). I think the point about "regular" people and inflation is apt and I stand by it.
I have a strong suspicion that you aren't actually making an economic point.
No wonder Detroit doesn't want sub-$10K chinese EVs in the US 8-/
Repeal the environmental and labor regulations here and we can let those in no problem.
Is it so hard to acknowledge that China is better at manufacturing?
Both reasons can be correct
Doesn't Europe allow Chinese vehicles in their market? At least they admit it.
It’s not hard to be “better” when your competitor is wearing a strait jacket.
We have no idea if they are better at it, the last time there was a level playing field they weren’t a developed country.
It's the safety regulations and tariffs that have been keeping them out so far. And it might be tough to sell them in enough volume to make it worthwhile for a US market redesign. While a lot of people ask for cheap subcompacts in the US, they have traditionally struggled to sell.
The existence of environmental protection is fine, the existence of CAFE fscked up perverse incentives is a problem.
Having some labor quality of life concerns, making sure we aren't being undercut as a national security issue is fine. Having the chicken tax, destroying investments in solar energy and electric grids and EV charging is not.
We have bad manufacturing incentives in this country, our government wants the US to fail at solar, and the Chinese are playing to win.
If you have environmental protection and they don’t, your manufacturing is going to be more complicated than theirs, and therefore more expensive. It’s that simple.
We can also pressure them to enact equivalent environmental protections and refuse to trade otherwise, which would be great for the planet. Checking compliance would be difficult though, lying is culturally treated differently in different places.
They don't even need to be Chinese EVs. Europeam and Asian brands are selling €15k small cars in Europe that pass European safety standards, comparable to the US ones.
My guess is that it is another form if hidden predictionism, even though Americans desperately need cheap cars, just like they need cheap apartments.
What European car can you get for €15k?
Plenty: https://www.meinauto.de/lp-neuwagen-unter-15000-euro
Depends on where you live, obviously, but I used to own a C3 (on the list) and it was a perfectly usable car.
When I went to the site you listed, and checked the C3, it looked like the purchase price was much more than 15k. List price was 19k, and with Meinauto discount, 17.6k.
For me it offers 15000 plus transport to the dealership for the C3, but there’s plenty of other cars for less money on the list. Also: German prices, German taxes - the pricing is likely entirely different elsewhere.
https://www.dacia.ro/gama-dacia/logan.html
https://www.dacia.ro/gama-dacia/sandero.html
https://www.dacia.ro/gama-dacia/sandero-stepway.html
https://www.whatcar.com/best/the-10-cheapest-new-cars-you-ca...
The Dacia Logan and Sandero Stepway, especially, are quite usable as family cars.
I wish I did not have to point it out to 77.3 million American voters, but the entire point of tariffs, their only mode of operation, is to raise domestic prices.
> I wish I did not have to point it out ... the entire point of tariffs... is to raise domestic prices.
Trump has to point this out not you. Instead he promised this:
“Starting on day one, we will end inflation and make America affordable again, to bring down the prices of all goods.” NBC Montana, Trump Rally in Bozeman
Technically they are the same price they were 5 years ago if you account for inflation (25% over those 5 years).
It's just that our wages have not kept up (we don't see 40k -> 50k as shrug money).
Inflation: exists
I've owned cars since the mid-1980's and I don't think I've spent $50k on all of them put together. Probably getting close to that now.
I fortunately am unaffected by this. I choose to live where I do not need a car in the US.
Not everyone has that luxury due to commitments and priorities and not everyone enjoys or even thrives living in the city so I'm not sure what value this adds.
I always find it interesting how smug people who live in the city and/or have little experience in rural America can be about these kinds of topics.
This. I was fortunate to be able to have the choice to leave, but it wasn’t always this way. I often reflect on what it was like to have constant dread of the next auto repair I would have to pay for.
>I always find it interesting how smug people who live in the city and/or have little experience in rural America can be about these kinds of topics.
Allow me to be extra smug then. I live in a small town with an Amtrak station. It was hard work finding this place, but well worth it to me. It means I never have to drive an automobile again. That makes me happy.