How Far Up Can Car Prices Keep Going?

In 1956, the average Cadillac sold for about $5,000. By 1966, it was about $6,000. In those days, Cadillac was the largest in the luxury car field, the German brands were not even ripples in the American market. Today, however, a BMW 535i stickers, without options, at over $50,000. The 750i, with no options, is over $76,500.

But the inflation rate since 1966 has been about 535%. That means that the $6,000 car of 1966 would cost less than $40,000 today, actually a bit over $38,000. But that kind of money today will get you a 3 Series, or a C Class, which in today’s market is a smaller, mid-priced car.

Sure, there’s a lot more equipment on the current luxury BMW than there was on the 1966 Cadillac. But that’s true of the market in general and has been for decades: considering engineering improvements and equipment enhancements, the price of a typical Ford didn’t rise at all during the sixties. The BMW holds the same relative position in the market today as did the Cadillac in 1966. But, in constant dollar terms, the sticker price is much more.

And the trend keeps going up.

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Shredmo - 9/28/2007 12:32:18 PM

+2 Boost

Car prices, what about beer prices? Sheesh!

Spectator - 9/28/2007 2:35:35 PM

+1 Boost

Especially city beer prices

$8.50 for a bottle...and it's not Beligum!?

What am I made of money.

Actually instead of being concerned about car prices and inflation...take a look at housing prices and inflation.

Annual wage increases are 1-5% normally. This increase is usually acatually offset with the increase in medical insurance your company charges you for being on their plan. That combined with an annual inflation rate of 3% and a housing inflation rate which in certain markets is through the roof and will never go back down (thanks DC)...most people aren't even breaking even with inflation anymore. Your actually loosing money. Coupled with a weak dollar. And the knowledge that college costs are going to be astronomically soon (those of us with kids love hearing each year how its going to cost us 200K to send a kid to college in 15years) and social security and medicare/caid and pensions wont be here for Gen X and beyond. Well it's just smiles and sunshine for everyone isn't it.

The hell with car price inflation...I want to be able to retire some day...maybe next to a BMW or MB in a nice double ply cardboard box.

EnnNorak - 9/28/2007 10:44:03 PM

+1 Boost

I bought a new Renault Dauphine in the early sixties for C$1,600 when gas in Canada was 35 cents per imperial gallon. I almost made a deal on a new 4-cylinder Mercedes diesel in the early sixties for C$4,000. I bought a new Chrysler Imperial in the Detroit area for U.S.$6,000 in 1972. If you can get a decent vehicle today for under $40K, you are doing well. What we need today is a good dose of deflation and the substantial paying down of national debt.

EnnNorak - 9/28/2007 10:52:01 PM

+2 Boost

If I could go back in time I would buy a new Silver Cloud that I recall sold for a mere C$14,000 back in the fifties. The Mercedes 300 SL with the gullwing doors went for C$12,500 back then and I also recall that the early Jaguar XKE roadster went for C$6,000. I have to spend more than all 3 of these fantastic cars at their combined 1950's price to get anything decent today.

EnvyofyouRS5 - 9/28/2007 1:35:28 PM

-1 Boost

XK, do not tell our agent resident spy to go back in time. without him you would not be posting, Nor I.

Heyhuub - 9/28/2007 1:56:40 PM

+2 Boost

You americans shouldn't complain, overhere we pay twice the amount for a car.

Designer1 - 9/28/2007 2:06:33 PM

+3 Boost

If everyone does what I do then the car companies will be forced to reduce their ridiculous prices. Always buy used, 2 or 3 years used.

Look at the real estate market, builders are begging people to buy and no one is, and they keep reducing their prices. I believe in a democratic society the people control the outcome of their economy. If they go crazy about buying things, they'll raise prices, if they slow down they'll cause them to drop.

zairnaim - 9/28/2007 2:24:34 PM

+2 Boost

i agree 100%

Threepoint1415926 - 9/28/2007 8:38:35 PM

+1 Boost

Put me on the list of people who has never purchased a new car. Couldn't be happier with my decision to be on that list either.

dumpsty - 9/29/2007 10:08:51 AM

+1 Boost

It's probably all the same around the world. You don't get as much for the value of a dollar anymore. (depreciating currency?) And if you consider how many other hands are in the pot (of profit) today than there was 50 years ago, you can see how inflation has ballooned monsterously.

DaHarder - 9/29/2007 10:28:35 PM

+2 Boost

The truly disheartening thing about paying exorbitant amounts of money for vehicles (yes... Me Included!) is that there really is no possibility of making anything in the long run.

What you're buying is the pleasure of having a new car, because, trust me, if I could go back in time and never trade my (very upgraded... and paid for) E30 M3 (for the E36), I would!