Car Prices Will Climb For Years

[silvrsvt]

http://www.autoblog.com/2010/07/30/autoline-on-autoblog-with-john-mcelroy/

 

I've said it before and I'll say again. By 2015, the average new car in the American market is going to cost about $35,000. I'm not talking about the MSRP, which is already at an average of $33,000. I'm talking about the transaction price, what people actually pay for a car.

guess I'll watch Fordbuyer blow a head gasket now..

[NickF1011]

In other inflation-related news: Milk no longer 15 cents a gallon. Bread no longer 8 cents a loaf.

[twmalonehunter]

http://www.autoblog.com/2010/07/30/autoline-on-autoblog-with-john-mcelroy/

 

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guess I'll watch Fordbuyer blow a head gasket now..

 

Car prices have always been going up.....My 1997 F150 4x4 stickered for $24000....My 2006 F150 4x4 was $43000. It's not gonna stop, the world keeps getting more expensive.

 

They have to pass along the expense of complying with all the government safety regulations, as well as developing all the electronic gizmos and such that buyers want. Look how much more you get now than 10 years ago, it's quite staggering.

 

If you don't want to pay the price for a new vehicle, buy a nice used one. Cars are so well made now that a 2-3 year old car that has been taken care of can be just as good and reliable as new.

 

Car makers are in this to make money.

[jpd80]

Interesting relationship between drying up the used car market and being able to increase new car prices.

Ford sells about half the vehicles it did in 2000 but is heading for bigger profits.

There's a lot to be said for having a less complicated business.

Edited August 2, 2010 by jpd80

[Deanh]

In other inflation-related news: Milk no longer 15 cents a gallon. Bread no longer 8 cents a loaf.

correct...thats now the price of just the packaging

[twmalonehunter]

Interesting relationship between drying up the used car market and being able to increase new car prices.

Ford sells about half the vehicles it did in 2000 but is heading for bigger profits.

There's a lot to be said for having a less complicated business.

 

Right, and I don't think we will ever get back to the numbers of just a few years ago, i.e. 15-16 million cars per year. Cars simply last longer and are more reliable than they were 10-15 years ago, and I don't think there will be nearly as many people that just buy a new car every 2 years for the heck of it. Some still will, just not as many.

 

It's great that Ford can make nice profits at these sales levels, any more volume should just add up to more profits.

[FordBuyer]

Right, and I don't think we will ever get back to the numbers of just a few years ago, i.e. 15-16 million cars per year. Cars simply last longer and are more reliable than they were 10-15 years ago, and I don't think there will be nearly as many people that just buy a new car every 2 years for the heck of it. Some still will, just not as many.

 

It's great that Ford can make nice profits at these sales levels, any more volume should just add up to more profits.

 

A lot will depend upon lease sales. Many new car buyers opt for a bargain lease because that is only way they can afford the monthly payments. Lots of good lease deals here in Metro Detroit on Detroit Iron. :happy feet: I know you guys hate it when I bring up Motor City. And of course if lease sales increase, more buyers will be back in market when lease is up. There was just an article on Toyota and how the percentage of lease deals are way up. As vehicle prices escalate, you will see the percentage of lease deals rise. Most buying the Volt will probably opt for the bargain lease Chevy is offering. Btw, Ford is already offering Red Carpet leases on new Fiesta of $219/month on SES.

[NickF1011]

There was just an article on Toyota and how the percentage of lease deals are way up.

 

They are way up at Toyota because they are offering ridiculous rates that may very well end up biting them in the ass down the road.

 

Btw, Ford is already offering Red Carpet leases on new Fiesta of $219/month on SES.

 

In reference to my comment above, that's $30 more a month than some of the offers available now on the Corolla.

[RichardJensen]

Look how much more you get now than 10 years ago, it's quite staggering.

 

 

I don't think there will be nearly as many people that just buy a new car every 2 years for the heck of it. Some still will, just not as many.

 

NICE POSTS!!

 

The '91 Explorer offered pushbutton 4wd and about 80 cu. ft behind the front row.

 

It's estimated at 16mpg combined with a 4-speed auto and the Cologne V6. It had a driver's side airbag, rear drums, a three star driver protection rating, and standard ABS. It had 155hp and 220lb ft of torque.

 

The 2011 Explorer offers computerized off road settings, AWD, 80 cu. ft behind the front row, seating for 6 or 7, more airbags than you can shake a stick at, traction control, stability control, ABS, blind spot detectors, brake-precharging, electronic brake force distribution, better materials, better NVH, and (probably) 25-30% better gas mileage--and it's about six hundred pounds heavier. It has 290hp and 260lb ft of torque.

Edited August 2, 2010 by RichardJensen

[FordBuyer]

NICE POSTS!!

 

The '91 Explorer offered pushbutton 4wd and about 80 cu. ft behind the front row.

 

It's estimated at 16mpg combined with a 4-speed auto and the Cologne V6. It had a driver's side airbag, rear drums, a three star driver protection rating, and standard ABS. It had 155hp and 220lb ft of torque.

 

The 2011 Explorer offers computerized off road settings, AWD, 80 cu. ft behind the front row, seating for 6 or 7, more airbags than you can shake a stick at, traction control, stability control, ABS, blind spot detectors, brake-precharging, electronic brake force distribution, better materials, better NVH, and (probably) 25-30% better gas mileage--and it's about six hundred pounds heavier. It has 290hp and 260lb ft of torque.

 

 

Jeeesh....my buddy just bought a pristine 1964 VW Bug for $5,000 and with a tailwind, going downhill, and with high octane gas, he can get that baby up to a staggering speed of 55mph with its 40hp engine. And it comes with original Saffire AM radio that still works. Bahama blue exterior and dashboard and old seat belts from 60's standard. That is motoring at its best!

[FordBuyer]

http://www.autoblog.com/2010/07/30/autoline-on-autoblog-with-john-mcelroy/

 

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guess I'll watch Fordbuyer blow a head gasket now..

 

Just give me a good lease like Toyota does with its $149/month lease on its Corolla and I'm in state of bliss. :happy feet: I'm lookin for that great lease on a 2012 Focus SES hatch with open end least to buy if vehicle hangs together well after 3 years.

[RichardJensen]

Just give me a good lease like Toyota does with its $149/month lease on its Corolla

Not gonna happen. Toyota is projecting an unrealistic 60% residual after 3 years, which means they're probably going to be taking close to a $2k hit per unit sold at their financing arm in 3 years when they wind down these leases.

[theoldwizard]

A lot of the price increases in the past 10 years (and the next) have been due to government mandates and perceived safety benefits. Do we really need 6 or 8 air bags, when most vehicles typically carry 2 or less occupants ? I would hate to see the bill to replace all of the air bags in say a Flex !

 

The next big thing is going to be the government mandate "flight recorder" to know if you stepped on the throttle by accident or the Electronic Throttle Control went crazy.

 

Don't forget new roll over (roof crush) standards and a proposed changes to front and side impact testing procedures. Some day the government will mandate bumper height on pickups. That will save lives !

 

A couple of good things about downsizing to an I4 engine, you have 2 less HEGOs and 1 less light off cat ! Total cat "loading" is probably less also.

[RichardJensen]

HEGO?

[Captainp4]

HEGO

 

 

 

 

 

:D

[theDuff]

HEGO?

Heated exhaust gas oxygen sensor. "Heated" because they have a heating element to make them work right away rather then letting the exhaust heat them up. Nowadays we call 'em O2's.

[NickF1011]

Do we really need 6 or 8 air bags, when most vehicles typically carry 2 or less occupants ? I would hate to see the bill to replace all of the air bags in say a Flex !

 

Well, to be somewhat fair, they won't all deploy in a single incident depending on the number of occupants and type of accident.

[PREMiERdrum]

Well, to be somewhat fair, they won't all deploy in a single incident depending on the number of occupants and type of accident.

 

And, in the event that all 8 bags deployed, the car would likely be a total loss.

[NickF1011]

And, in the event that all 8 bags deployed, the car would likely be a total loss.

 

With a good chance that some of the occupants survive and/or avoid serious injury. In the end, isn't that worth whatever it costs to replace some airbags?

[tjl]

Is it possible that car prices are going up because people want more expensive cars?

 

I saw something talking about car price inflation in 2008, saying how from 1988, the average new car price went from $10,000 to $28,000.

 

What wasn't mentioned was what kind of car people bought for those prices.

 

I remember in 1988, $10,000 bought a new Honda Civic LX. At the time, that was the top of the line trim with power windows and locks.

 

Using CPI inflation, $10,000 in 1988 dollars is about $18,000 in 2008 dollars. Guess what, in 2008, that was about how much a new Honda Civic LX was. Although in 2008, the LX trim was a relatively low trim (there was a lower DX trim that few people bought, while above were added the EX and EX-L (leather) trims). Of course, the 2008 Honda Civic LX was a much better car in most ways than the 1988 Honda Civic LX.

 

But since the average new car price in 2008 was $28,000, not $18,000, that indicates that new car buyers' tastes went from Honda Civic LX tastes to something considerably more expensive.

[atvman]

A big reason that the average transaction price for a new car has gone up is the pre-owned market. Bargain hunters used to buy cheap new cars, now they are buying CPOs. The people buying new cars these days are buying them well equipped and spending good money.

[mettech]

In other inflation-related news: Milk no longer 15 cents a gallon. Bread no longer 8 cents a loaf.

 

 

[Kev-Mo]

Economics 101

 

Higher price = lower demand - pretty simple.

 

Statistically, the 'average' consumer cannot afford the 'average' priced car. This will, over the years lead to far less demand for new vehicles. Creative ways to sell them will only result in another bubble bursting. Consumer debt is already too high.

[silvrsvt]

Economics 101

 

Higher price = lower demand - pretty simple.

 

Statistically, the 'average' consumer cannot afford the 'average' priced car. This will, over the years lead to far less demand for new vehicles. Creative ways to sell them will only result in another bubble bursting. Consumer debt is already too high.

 

But also at the same time, they can downsize into a smaller car. If you get a 20K focus and put only 2K down on it, its only about $370 bucks a month over 5 years. I don't think that is asking too much $$$

[tjl]

But also at the same time, they can downsize into a smaller car. If you get a 20K focus and put only 2K down on it, its only about $370 bucks a month over 5 years. I don't think that is asking too much $$$

 

Note also that cars have been getting bigger.

 

What the market sees as "compact" cars (Focus, Mazda 3, Cruze, Elantra, etc.) is already nosing into the EPA midsize class based on interior room. The market "midsize" class (Fusion, Sonata, Accord, Camry, etc.) is nosing into the EPA full size class based on interior room.

 

Someone with an old Contour may well find a new Focus (either now or the 2012 model) to be an upgrade in interior room, even though the Contour was in a "larger" market class than the Escort (the Focus' predecessor).