Monday, 3 November 2014

Are Cars Getting Less Affordable, or Does It Only Feel that Way? Our Infographic Explains

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Conventional wisdom says that cars are getting more expensive, and they are, a fact accompanied by much hand-wringing. The National Automobile Dealers Association (NADA) says that the average retail price of a new vehicle was up 3 percent in 2013, to a record $31,762. And this is par for the course. The only year since 1995 that the average price didn’t rise was 2008. But what do these year-over-year increases tell us? Are cars actually becoming less affordable? Seeking answers, we did two things. First, we compared average new-vehicle prices to median household income and found that, in relative terms, cars are not any less or more affordable today than they were two decades ago [see “Stop Complaining,” below]. Surely, though, some vehicles are more expensive than they used to be. So we also looked at individual models that have been in production for more than 20 years to find those with base prices that have risen the most, even after adjusting for inflation using the Consumer Price Index. Doing so, we also discovered plenty of vehicles that are actually much less expensive, relatively speaking, than they used to be. Here’s the surprising gist of it: