Repair-It

A 2000 Hyundai Accent L had a $9k base price, which is $13,600 adjusting by median household income. The Chevy Spark comes pretty close to that and I will happily compare features and specs but I am quite certain it is still more car than a base Accent L. The Accent gets up to $10k very quick as you add automatic and like...any options at all, or 24.2% in 2000. Today that is $15,411.26. I think my argument holds up here, too. Admittedly the Accent was a serious value back then and I think Hyundai can be credited with providing solid value at the bottom end of the market. You can see how well the market for cheap cars is filled out in 2020.

Remember...the point of this thread is to discredit the idea that cars have gotten too expensive for the middle class or something. And it turns out today's cheap cars are actually better (not just equivalent, but BETTER) than the ones from 20 years ago, and are just as affordable. There is more choice for the consumer who would like to purchase a cheap new car. So that whole argument goes right out the window. It's not correct.

Here are some other perspectives I have.

This is a 2 income economy. There are pages of articles about how this all happened but it is a byproduct of what I guess I'd refer to as a thread of the feminist movement. I don't mean the right or opportunity of women to be in the workplace with men but the general pressure to work vice be a stay at home mom. Today, I think some/many women would like to be stay-at-home moms but it sets the entire household at a financial disadvantage - if you don't have two incomes, you're not keeping up. In general that's why some things seem really expensive. People who don't understand economics think you can hold one thing the same, while changing another variable. This is largely the faulty logic behind the rabid Bernie support.

I think that has been a major factor in the price of real estate (it is, after all, governed by supply and demand), but I'd also argue that the government has meddled in the real estate market in the past (mandating sub-prime loans because people who can't afford homes should be given mortgages they can't pay...?).

College tuition. Similar as above (lots of factors I agree). BUT, back to the car argument, there are still very cost effective ways to get educated. No one has a right to a $60k/yr private liberal arts education that the economy does not value. That's dumb.

And on the supposed gender pay gap, which is adjunct to this thread but related to the lie that everything is unfair and we need the federal government to "do something."

https://www.theatlantic.com/business/ar ... on/492965/

In discussions of the gender-pay gap, there’s one counter-argument that comes up a lot: The gap isn’t real, because after adjusting for the different types of jobs men and women tend to have, the gap shrinks to single digits. And so, the argument goes, men and women aren’t paid the same amount of money because they are choosing to go into different professions, and the labor market rewards their choices differently. In other words: unequal work, hence unequal pay.

The article goes on to discuss other things but as many left-leaning people do, they just struggle endlessly for reasons that any so-called equality gap is NOT a result of free choice. After all, bad decisions aren't your fault! It's everyone else's fault! And I shouldn't say bad decisions. Decisions, period. Decisions have pros and cons. It is no one's job but your own to evaluate those pros and cons.

A better article, with references:
https://www.dailywire.com/news/7-facts- ... stigiacomo

Go ahead, pick it apart. I'll wait here.

But it boils down to:

1. Women choose career paths which make less money.
2. Men are more likely to choose dangerous careers, which generally compensate more.
3. Female business owners, on average, earn less than half than their male counterparts.
4. Men work longer hours.
5. Women choose to leave the workforce for some time in order to raise children.
6. Female CEOs earn more than men.
7. Single women without children in major cities earn much more than men.

We have to stop this culture whereby if you feel something, then that overrules all facts and logic. It is not compassionate to tell someone they are not responsible for their decisions. How does that help them make a better one next time? It doesn't.

These cars you list as "cheap" or affordable to the middle class are the bottom of the barrel. Junk doesn't = cheap. The Elantra needed a transmission at 70K miles. The versa and Accent are garbage and will cost their owners far more in costs down the road.

I just disagree. That is ok.

Maybe you need to go back to before the year 2000, but there was a time when the middle class could afford a new family sized car. Not a shoebox that has AC and power windows. This argument is kind of ridiculous. (Very ridiculous - Let them eat cake!)

I will agree that the dual income thing has raised prices, but people need 2 cars now, so not sure how much that comes into play here. Definitely in the housing market where 2 people pay for 1 house. But 2 people paying for 2 cars... Not sure.

I don't know what the answer is, but it seems that maybe competition to make the better vehicle in a very competitive market, mandates on fuel economy, and safety, along with the ease of crazy loans and leasing has all gone towards making better, but more expensive cars.

We don't all need Ferraris but these shoeboxes you list probably aren't even very safe in an accident (safety is based on the class, not overall so even a high star rating is still bad compared to a larger vehicle).

So I've been doing a lot of typing and researching. Let's turn it around a bit.

there was a time when the middle class could afford a new family sized car. Not a shoebox that has AC and power windows. This argument is kind of ridiculous.

That time is now.

Find me an actual time (and I guess this is across decades including when a lot of things were different, including interest rates, so I guess you need to deal with those variables somehow) where cheap cars were BETTER than they are today.

And before you do that, my framework goes something like this: KBB estimated that in May 2019, the average cost (or transaction price?) for a new car was $37,185. Your point was, lots of people can't afford that. I agree, but I also said that many can. Went on to point out that you don't NEED to spend $37,185 or even $27,185 on transportation.

So the argument becomes, when it comes to families with tight budgets, are they better off or worse off than the equivalent family in the past?

What I'm finding is they are better off. There is more safety, choice, features, comfort, fuel economy, and warranty (in many cases) than there used to be.

If you think the 2000 Accent was bad, you aren't going to find anything better at 21.3% of the average household income as you go back in time.

Another factor that I haven't mentioned but bodes well for people who don't have a lot of money: generally used cars are better than ever and even cheaper than these cars. In many/all cases I'd point someone to a used car instead of a $15k new car. Used cars just get worse as you go back in time (except perhaps used 90s cars which was sort of a local optimum but that time has long passed for normal people).

But that was more than I wanted to type. So there is your challenge. Feel free to look at bottom of market, as well as maybe one or two steps up from the bottom of the market. If you want to look closer to cars that were Camry/Accord sized in the 90s which seemed like what would have been good enough for a family of 3 or 4 in the 90s, we can absolutely do that.

Actually, I thought I already did that.

viewtopic.php?f=16&t=3466&p=21218&hilit=accord#p21218
viewtopic.php?f=16&t=3466&p=21219&hilit=accord#p21219
viewtopic.php?f=16&t=3466&p=21272&hilit=accord#p21272
viewtopic.php?f=16&t=3466&p=21622&hilit=accord#p21622

It is entirely possible and even likely that the average transaction price, as a percentage of median household income, is higher than in the past. My argument is, so what? People who need to shop on the left side of that bell curve are still better served by what is available there, regardless of what is happening with the market in the middle or high end.

This discussion also eerily parallels other societal discussions. The impoverished from 100 years ago didn't have enough food to eat. Today's poor in the US are actually obese, and have a significantly higher standard of living than the poor across wide swaths of the globe. Hell, today's poor have a higher standard of living than the upper middle class 100 years ago. And people act like we've gone backwards somehow. "Wealth gaps" are not a problem to solve, when everyone is doing better.

I think part of the confusion/problem is that there are multiple discussions going on which is adding to the variables.

In my head, this was saying that the Middle-class shoppers are priced out of what I assumed meant "middle class cars".
I wouldn't consider these cars you are posting as affordable middle class family cars, which I thought the title insinuated.

Maybe the bottom of the market econobox hasn't moved much in price when adjusted for inflation. I'm not sure that is a good standard and I still disagree that these new ones you listed are even good cars.

I am trying to keep the politics out. I am specifically trying to decide if average cars are more expensive than before, and look at possible reasons. Some, I think is overengineering - turbo everything instead of NA, infotainment stuff, etc.

We can build better, but if you price out your base doing so, in my mind, you fail.

Look at the Gen 6 Camaro. It is the best Camaro ever. It has also priced out it's buyers in the trim they actually want. Best ever, but in my opinion, costs too much for a Camaro.

We are also looking at this in a vacuum a little because we are looking at just the car as a percent of income, but not taking into consideration other costs in comparison that might make even the same percentage "feel" unaffordable (like having other expenses that were not the norm 20 years ago).
An example would be car cost stayed the same but other "life" costs have gone up making the budget for other things tighter. This would not be the car companies fault, but that doesn't mean that they can't be adversely impacted by that.

Again, This isn't even about fault. I am not blaming the car companies for charging a lot, or saying they should be mandated to charge less. Just assessing the situation.

bill25 wrote: ↑Sat Feb 29, 2020 10:07 am I think part of the confusion/problem is that there are multiple discussions going on which is adding to the variables.

In my head, this was saying that the Middle-class shoppers are priced out of what I assumed meant "middle class cars".
I wouldn't consider these cars you are posting as affordable middle class family cars, which I thought the title insinuated.

Maybe the bottom of the market econobox hasn't moved much in price when adjusted for inflation. I'm not sure that is a good standard and I still disagree that these new ones you listed are even good cars.

We can focus on not bottom end cars. That's fine. I mean, do I need to copy and paste the posts that I linked above or do I need to retype everything? But it has to be family vehicles and we must compare to previous offerings in terms of price and everything else.

However, to address your last comment, I think the only question that matters is, are the cars on the cheap car list as good or better than the cheapest cars you could get 20, 30, 40, etc. years ago? I think the answer is, yes. And since they are as good or better, the question of whether they are good or not, is not important, because the ones we are comparing to are also not good. Do you not agree with this? It is unfair to say the 2020 Nissan Versa is a bad car, while ignoring the fact that a 1990 Hyundai Excel was a far, FAR worse car. Toyota still makes the Corolla and it's more expensive than a Versa the same way a 1990 Corolla was more expensive than a 1990 Excel. The point is, things have improved, not gotten worse. And that is at the bottom of market price points.

I am trying to keep the politics out. I am specifically trying to decide if average cars are more expensive than before, and look at possible reasons. Some, I think is overengineering - turbo everything instead of NA, infotainment stuff, etc.

Some cars are more expensive. But all of it can be boiled down to: some cost from increased regulations (safety, fuel economy, emissions) and some cost from consumer demand for things that cost money. I don't think basic transportation is more expensive than it used to be. Performance stuff and luxury stuff may be, but that's by demand.

We can build better, but if you price out your base doing so, in my mind, you fail.

There are plenty of vehicles that are more expensive than the average new car price that sell well. It's not really a cost thing. It's about what people choose to buy. And largely they are choosing to buy things that you don't like (i.e. not 2 door V8 coupes). It is what it is.

But if the cars available below the average transaction price today are as good or better than they used to be, there is actually no "failure" here. I don't see why this is hard to follow. I'll say again: a middle class family DOES NOT have to spend $37k on a reasonable family car. They do not. I have proven it. I will continue to provide evidence until you agree.

Look at the Gen 6 Camaro. It is the best Camaro ever. It has also priced out it's buyers in the trim they actually want. Best ever, but in my opinion, costs too much for a Camaro.

See previous comment. Pickup trucks and SUVs are probably more expensive than they used to be. But they also have crazy comfort, convenience and even performance compared to the way things used to be. They are basically all selling like crazy. They are almost all more expensive than a Camaro. And sometimes by a lot. And dual income families are buying them. Single income/less affluent people also have plenty of choice at the lower end. It's like...the economy works or something. You even got a nearly mint Camaro for $24k. I'm not sure what you're complaining about...unless it is just seems like you are complaining.

We are also looking at this in a vacuum a little because we are looking at just the car as a percent of income, but not taking into consideration other costs in comparison that might make even the same percentage "feel" unaffordable (like having other expenses that were not the norm 20 years ago).
An example would be car cost stayed the same but other "life" costs have gone up making the budget for other things tighter. This would not be the car companies fault, but that doesn't mean that they can't be adversely impacted by that.

Yes we can talk about total family costs. There are probably some articles about this.

Again, This isn't even about fault. I am not blaming the car companies for charging a lot, or saying they should be mandated to charge less. Just assessing the situation.

OK. But before I apologize for making assumptions, I am pretty sure you've been quoted as saying these are bad times because you can't go buy a new Camaro SS 5 years out of school on an engineer's salary "the way you used to be able to." I never agreed with your assessment that there was a problem that needed to be fixed.