patrick.net

The problem is marketing and top heavy sales and administration.
Cars got better gas mileage when Regan demanded better fuel efficiency.

Most cars would cost under 8K if not for their business structure of the dealership, and the salesman scheme. I can't for the life of me, see any value added by even having a salesman. They are an impediment to the buying process. Any moron can walk the lot take down the vin number of the car they want to buy, and go inside and buy it from any $10 an hour clerk.

OR better yet...

Check out the car in person. Test drive it.

And then buy the car ONLINE with home delivery shipping or pick up.

No dealing with slimly overly-nice fake sales people who refuse to give you a fair price because they want YOU to pay for their commission.

I also think that new cars are way overpriced for what you get. My 1995 Ford Escort still, gets better gas mileage than most new cars. Quite frankly, that's a big incentive right there not to buy anything new. I would need to be able to buy something that gets significantly better gas mileage before I would spend the amount of money they are asking for new cars to buy one, like the MPG one typically gets from a diesel.

That and I don't want a car with 15 million bells and whistles that I don't need either. I hate air bags, power everything, and the over-sized engines that all cars have these days. I think only the Chevy Cruz has an appropriately sized engine (1.6L, I think). My 1985 Ford Escort had en engine that size, and it was perfectly fine. I had the speeding tickets to prove it.

That and I hate 4 door cars. Not everybody will drive a SUV and quite frankly, by 2 door hatchback is probably better than a lot of pickup trucks.

CaptainShuddup says

The problem is marketing and top heavy sales and administration.

Cars got better gas mileage when Regan demanded better fuel efficiency.

Most cars would cost under 8K if not for their business structure of the dealership, and the salesman scheme. /p>

I was thinking that government safety regulations and the fact that you can't buy very many 2 door cars or cars without power everything, etc.

Something like an early 80's Ford Escort Diesel if made today would sell, but the auto companies marketing won't let them make it.

The old 1980's Honda CRX I believe got over 50mpg out of the box.

I think that when we start to make mandatory standards on cars they ultimately have to increase the costs. So when we add safety features and other parts it does contribute. For example in a few years it will be mandatory for electronic sensors to determine if tire pressure is low...as if you cannot tell by physically looking at it! In addition much of the money made on selling cars is based on the financing...

If you want to pay for a baseline used kia with nothing and pay cash they'll hardly pay attention (I know kia has low margins). If you want to buy a new Jag and finance the whole thing you'll have a ton of people swarming over you.

Personally I think the EPA ratings are crap. zzyzzx is right. I have a nissan sentra and it claims it gets 25mpg. I've never had it that low. More like 30 in the winter and 35 in the summer. Summer blend I do well on. I hardly use a/c but in winter I crank the heat up all the way.

There's a good book that talks about the market for used cars here
http://www.amazon.com/Velocity-2-0-Dale-Pollak/dp/0967156599

CaptainShuddup says

Most cars would cost under 8K if not for their business structure of the dealership, and the salesman scheme. I can't for the life of me, see any value added by even having a salesman. They are an impediment to the buying process. Any moron can walk the lot take down the vin number of the car they want to buy, and go inside and buy it from any $10 an hour clerk.

...lets not forget the overly-generous union backed pensions for the line workers, etc. - those costs are paid by us consumers on top of everything else....

I would disagree that modern cars are overpriced. If anything, if inflation were added to the picture, the price of the typical 4 door sedan has stayed about the same for the past 25 years or so. What's key to remember is that in that 30 years the enhancements in technologies in them that increase safety, fuel economy, reliability, and quality has drastically improved. When I was a kid in the early 80's you were lucky if a car made it to 100,000. Now its more or less expected they last at least 200,000. In fact, all of the cars we own all have over 200,000 miles and none have any issues to speak of. The reality is that you can quite easily keep a car for 15-20 years and many people do. You probably would not have been able to do that in the past as the cars would have rusted into the ground well before then.

Some of the more recent econo-cars are just as nice and in many cases nicer than the top-of-the-line luxury cars from 15-20 years ago. Most people take for granted that not so long ago, things like AC, stereos, ABS brakes, power steering, automatic transmisisions, power winows and locks, and intermittent wipers were ALL options. Now ALL of those things come standard, and again- prices have remained about the same. Additionally, in the past if you owned a "4-banger" ( 4 cylinder) car you were doomed to driving a sluggish car that at best probably got 25-30MPG. Now there are 4 bangers that have more horsepower than a 60's muscle car and get upwards of 40+ MPG. Amazing.

Now- don't get me wrong. I drive a plethora of almost ancient daily beater econo cars to work. But are new cars overpriced? I don't think so. The only cars I personally think are overpriced are a lot of the luxury brands. I say this because ironically a great deal of those brands are not only as much as 3 and 4 times more than your typical car, but they are often either at the bottom of the reliability and quality lists or at very best mediocre. The price being paid for them isn't neccesarily being repaid in anything other than perhaps prestige and performance. Personally I'll take reliability anyday.

zzyzzx says

CaptainShuddup says

The problem is marketing and top heavy sales and administration.

Cars got better gas mileage when Regan demanded better fuel efficiency.

Most cars would cost under 8K if not for their business structure of the dealership, and the salesman scheme. /p>

I was thinking that government safety regulations and the fact that you can't buy very many 2 door cars or cars without power everything, etc.

Something like an early 80's Ford Escort Diesel if made today would sell, but the auto companies marketing won't let them make it.

If the homeowner isn't insulted by your offer...you didn't bid low enough!!!

The same old man who lived down the street from us (that knew so much about real estate) in Ohio bought a "two door, standard" Ford every three years. He said it was always cheaper than keeping them and paying for repairs and maintenance.

You're right, you can't do that anymore. You really can't buy a strippo at all. Even the Accords, Civics, Camrys and Corollas come with A/C, power steering, disc brakes and stereo. You might find one with a standard transmission but in some cases they charge more for it because that car will never sell in volume.

The only ways to get around the car dealer are to do your research and buy a car from Craigslist or Ebay (I've bought two cars that way) or go through an auto broker if you want a new one. A friend of mine did that and saved himself about thirteen grand on a new 5 series BMW. I also understand the auction
lots down around LA are loaded with repo'd high end SUVs: Mercedes ML/GL, BMW X5, Land Rover, Porsche Cayennes...whatever you want, they have it.

The 1998 Accord (first and only new car) I bought on the day before Thanksgiving 1997 was $23K. Today, I understand that same car is about $25K and that's with leather seating and climate control air conditioning and a high end sound system which my car did not have. Right there, you know prices have gone down.

I bought my 1995 Ford Escort new for $12K (drive away price). Any comparable new car costs about 2X as much, and gets the same gas mileage. For what a new car costs, I can replace the engine and transmission in my Escort many many times over, so it really makes no financial sense to buy anything new.

Sorry but I disagree completely with this thread.

We are talking about a metric ton or more of metal and plastic and a lot of refined processing to put it together. Often there are hundreds of chips/computers as well. Another easy way to see that cars are not overpriced is to look at the margins of car manufacturers. They are very low, and the producers need to get bailed out every now and then. I would agree that there has been an increase in nominal prices, you can thank the Fed for that (and they also understate the true amount of inflation in their index).

Cars have also gotten much more reliable over the past 20 years. Consumer Reports specifically points this out. 20 years ago you had to worry that your car would break down on the way out the dealership, today that just does not happen and the difference between different brands is not that great. We make a huge deal out of individual incidents (like the Toyota acceleration problem, which turned out to be mostly human error of pressing the wrong pedal) but statistics clearly show a strong improving trend.

As for MPG, engines have gotten much more efficient, although most consumers have chosen to offset this with bigger cars, and the producers have responded. But the choice is still yours to trade down to a "smaller" model with great MPG. For example a Corolla today is at least as big as a Camry of the 90s and gets much better MPG.

Since average salaries have stagnated, and vehicle prices have risen in some cases. So in specific comparisons you may be correct. However in GENERAL cars are far cheaper in terms of VALUE.

From the article where I found the chart:

"One example is a 1949 Lincoln Cosmopolitan convertible. The car cost $3,948 in 1949. It had a V8 engine that got 152 HP and 8 miles per gallon. There were no airbags, no seatbelts and few modern features.

Today in 2008 you can get a Mazda Miata for $20,635. The Miata has 166 HP and gets 22 MPG city/ 27 highway. It has front side airbags, anti-lock brakes, an AM/FM CD player and remote entry as standard features.

The Miata will likely last twice as long as the Cosmopolitan. In the 1950's to 1970's a car would not be expected to last over 100,000 miles. But todays cars should last for 150,000 to 200,000. The new cars are MUCH safer. If you look at fatality rates per miles driven, from 1966 to 1996 the fatality rate per 1 million miles driven dropped from 5.5 to 1.7."

http://www.freeby50.com/2008/11/history-of-new-car-costs-and-average.html

Here is some more specific data points. I think the trick when comparing vs 90s is to look at a "smaller" model, which really is the same size

Toyota Camry 1992: 21 MPG mixed – 97 cft passenger volume
Toyota Corolla 2012: 29 MPG mixed - 92 cft passenger volume

Ford Escort 1995 24 MPG mixed - 91 cft passenger volume
Ford Focus 2012 31 MPG mixed - 90 cft passenger volume

The new "small" model will also have a ton of features that the "better" model did not have in the 90s (ABS, electronic stability control, airbags).

Robber Baron Elite Scum says

No dealing with slimly overly-nice fake sales people who refuse to give you a fair price because they want YOU to pay for their commission.

The Dealerships have a legal binding agreement, that the factory wont sell the public a car for that much cheaper. Factory direct was never about getting the car cheaper, you go FD to get options the dealer doesn't have.

[...]

Robber Baron Elite Scum says

Who Thinks Cars Are an Over-Priced Old Technology?

Absolutely. Cars are so 20th century. We don't need smart cars. We need smart highways.

The solution: computer driven personal maglift vehicles running on 3D highways.

What's a 3D highway? You build lanes in all three dimensions, including height. And the vehicles are all electric with the energy delivered by the highway.

The benefits

1. No pollution.
2. No greenhouse effect.
3. No need for expensive, heavy batteries.
4. No need for wasting energy transporting fuel.
5. No dependency on foreign oil.
6. No accidents (computer controls).
7. Much, much faster travel. (100 mph inner city speeds)
8. No intersections.
9. No auto insurance needed.
10. Cheaper cost of energy since it's electric and given on demand.
11. No traffic jams since many more highway lanes can be built in 3D than in 2D.
12. No delays for construction since a lane does not have to close to build or maintain another lane.
13. No drunk drivers. Since the computer drives, you can be shitfaced and still get from place A to B quickly and safely.
14. No incompetent drivers, student drivers, old drivers, cell phone drivers, etc.
15. No road rage.
16. You get have sex during your commute to work. Or, if you prefer, get other work done.

The only disadvantage:
This would great so many jobs that it would end the depression and high unemployment plaguing the U.S. today. Yeah, that's the only cost I could think of.

Smart Car, Clown car, Who buys because of it's name anyway ! Why couldn't they make it look a little less like some U-Haul trailer and more like this ?

The Costco Auto program will save ya a chunk a money. Saved over seven grand on a VW TDI wagon, a few years back.

drtor says

Cars have also gotten much more reliable over the past 20 years

Hard drives have also gotten much more reliable over the past 20 years. But are they as expensive? No.

So that logic of something being more reliable from it's ancient counterpart doesn't warrant it to be more expensive nor the same price.

Maybe you are right and it's just a case of salaries being way too low which I also think might be a contributer.

The revolution will be on two wheels, not four.

EBGuy says

The revolution will be on two wheels, not four.

Wheels are so stone age. There's nothing revolutionary about them.

Maglifts. 'Nuff said.

Dan8267 says

he solution: computer driven personal maglift vehicles running on 3D highways.

What's a 3D highway? You build lanes in all three dimensions, including height. And the vehicles are all electric with the energy delivered by the highway.

Love this idea in theory... But California can't even keep their normal highways maintained or build onto existing highways effectively. I think the 170 to 5 intersection has been under construction for like 3 years now and probably won't be done for another 3 years... It's a horrible bottleneck merging from the 170 to the 5 N and vice versa.

It's amazing how we underutilize our civil engineers and work crews. Sometimes I'm shocked we every were able to build skyscrapers and our transportation infrastructure in the first place.

That's the problem, it's not old technology. But, if they put all the engineering into one good car and one good truck, it sure would save the end consumers money, someone would always know how to fix it, part production would be all the same, cheaper, better, etc.
Since they all have the same engine, traffic would be smooth, less accidents, etc.

I get tired of watching all these old clunkers people driving around, they smoke, leak lots of fluids, it's the American way.

Cars are overpriced! So better rent!

everything says

if they put all the engineering into one good car and one good truck

No matter how good the car is, it still has a fundamental flaw, human driver.

drtor says

Ford Escort 1995 24 MPG mixed - 91 cft passenger volume
Ford Focus 2012 31 MPG mixed - 90 cft passenger volume

The new "small" model will also have a ton of features that the "better" model did not have in the 90s (ABS, electronic stability control, airbags).

I don't know where you are getting your number from but a 2012 Ford Focus is smaller than a 1995 Ford Escort, which is smaller than an Escort made in the 1980's.

That any my 1995 Ford Escort gets > 30MPG mixed.

We became a one car family 3 years ago. We paid cash for a new car 7 years ago from a heloc and then paid that off over a year or two and deducted the interest.

My husband uses an electric bike and loves it. We estimate a savings of about $7500 to $9500 from dumping the second car. Sometimes we swap out and I use the bike and a couple times a year we rent from enterprise.

KILLERJANE says

My husband uses an electric bike and loves it. We estimate a savings of about $7500 to $9500 from dumping the second car. Sometimes we swap out and I use the bike and a couple times a year we rent from enterprise.

Electric bikes are amazing. You get most of the health benefits of bicycling, but with a huge reduction in physical effort, so you won't show up at work all sweaty like you do riding a regular bike. And unlike with cars, pollution is negligible, there are no restrictions on who can use them, and they take up almost no space -- how can you not love them?

The only improvement I'd like to see with electric bikes is some kind of covering so that you can use them in bad weather without having to wear full-body rain gear. Maybe something like the pizza-delivery motorbike at the top left here, only but with side panels added:

Highways would need to get special lanes added so that you could be safe in one of these things, but that should be doable. As long as electricity doesn't spike in price in the next few years!

The article says this:

"Yes prices are actually going down this decade."

But...

If last year's model had optional features like iPod hookups and silly $25 LCDs that were priced at $1500 and this year's model includes those "features" for free, and if the price goes up by $1500 (forcing to pay for the options you don't necessarily want or need), then the BLS says there was no inflation.

Someone said this:

"When I was a kid in the early 80's you were lucky if a car made it to 100,000. Now its more or less expected they last at least 200,000."

You are speaking of American cars. They were absolute junk. Many of them would not last even 50,000 miles with out a new engine, paint job, etc.

Btw, lots of American manufactures really screwed up in the 80's: Fender and Gibson guitars, and Harley Davidson. They all got better in the 90's.

APOCALYPSEFUCK is Tony Manero says

I say everyone should be driving the 1971 Dodge Challenger and learn how to shoot out the window while tooling along on dirt roads at 120+ MPH

Will a Dodge Charger do?

http://www.youtube.com/embed/G5rjwBXTT8k

If getting from point A to B is your concern, then no, cars are not totally overpriced. They last for many years, and are very safe today due to vast amounts of research and development to engineer and produce.

But cars are also products, like a handbag, watch, or a pair of shoes. Style is important to some, such as myself. I like getting from point A to B in style and like to enjoy my driving experience as well. Sure it costs more, but it's all about what's important to each person.

From the link page...
"For the last 20 years during 1987 to 2007 prices have only risen an average of 0.9% per year."

That is total bullcrap. In 1987 there were still several models of new cars under 9K.

Average Price for new car in 1987 $10,3055.00
The average price of a new car today is running at $30748, up 6.9% from a year ago.

That is a 200% increase, if the author's statement were fact then it would be a 20% increase.

http://www.azcentral.com/business/consumer/articles/2012/04/09/20120409why-average-new-car-prices-hit-record.html

KILLERJANE says

My husband uses an electric bike and loves it.

Try doing that in places outside of coastal California. ;)

Vicente says

"One example is a 1949 Lincoln Cosmopolitan convertible. The car cost $3,948 in 1949. It had a V8 engine that got 152 HP and 8 miles per gallon. There were no airbags, no seatbelts and few modern features.

its rather stange since a 1963-64 ford mustang cost $2,500 NEW when it came out.

zzyzzx says

I bought my 1995 Ford Escort new for $12K (drive away price). Any comparable new car costs about 2X as much, and gets the same gas mileage. For what a new car costs, I can replace the engine and transmission in my Escort many many times over, so it really makes no financial sense to buy anything new.

If the homeowner isn't insulted by your offer...you didn't bid low enough!!!

You can get a brand new Nissan Versa for $11k msrp. More power than the Escort, similar mpg, far safer if you crash, less likely to crash due to abs, esc, quieter, more features.

I will admit however that the Versa sedan is strange looking. The Versa hatch is also kind of strange looking, but at least in an interesting way. The sedan looks like a child's drawing of a car.

FWIW cars in the US are a deal compared to the rest of the world. In Europe, China, and elsewhere, the same car will cost more. It's true that you can buy more stripped cars (QQ, Chery) but compare a US-made Honda or Buick to a China-made Honda or Buick (same design) and it's cheaper in the US.

KILLERJANE says

My husband uses an electric bike

Pics? (of the electric bike, not the husband).

SiO2 says

You can get a brand new Nissan Versa for $11k msrp. More power than the Escort, similar mpg, far safer if you crash, less likely to crash due to abs, esc, quieter, more features.

If I want to just move myself, I'd buy a used car for much cheaper (a beater, if my existing beater is unfixable). A Versa is significantly smaller than my Escort and doesn't have the cargo carrying capability. A Scion tC would be needed to be equivalent. However, the gas mileage of a tC sucks, and it's not made in USA.

CaptainShuddup says

From the link page...
"For the last 20 years during 1987 to 2007 prices have only risen an average of 0.9% per year."

That is total bullcrap. In 1987 there were still several models of new cars under 9K.

Average Price for new car in 1987 $10,3055.00
The average price of a new car today is running at $30748, up 6.9% from a year ago.

That is a 200% increase, if the author's statement were fact then it would be a 20% increase.

I agree, but more importantly one would have to compare the pricing on new cars to wage growth and not inflation numbers (irregardless of whose inflation numbers you are using).

housingcasino4865 says

Someone said this:

"When I was a kid in the early 80's you were lucky if a car made it to 100,000. Now its more or less expected they last at least 200,000."

You are speaking of American cars. They were absolute junk. Many of them would not last even 50,000 miles with out a new engine, paint job, etc.

My 1985 Ford Escort begs to differ. It lasted me 11 years and ~160,000 miles before the engine compression got too low to be drivable.