New cars are just for rich people now
jalopnik.comI feel this a bit. I had a Jeep Grand Cherokee which I loved but decided to have engine problems which apparently is not uncommon. After months of attempted repairs the only option left was a replacement engine that cost more than the value of the car. I considered it but decided against on the advice of a trusted mechanic who says the Jeep replacement engines are problematic and I'd just be inviting more repair cost. Based on how things had gone, I imagined this is correct.
I wanted to cheap, small, 2wd pickup to toss rocks and woodchips and the like into for around the town chores which I seem to do a lot of. Does not exist, somewhere along the line everyone decided a pickup truck is some sort of luxury vehicle with all kinds of bells and whistles. While base model trucks are affordable, I cannot find one anywhere, only high-level trims are available. And a used truck with 100k miles is still outrageously expensive and I have shell shock from the Jeep engine blowing up at that milage.
I really wish I could have my old Toyota light truck from the mid 90s again. It was perfect for those light run around town jobs. Who knew that they would be impossible to find 30 years later.
> "When you do the math on what that means to a median household, it is basically pricing the median completely out of the new vehicle market"
Some years ago, 'above median' didn't count as 'rich'. There were 'the masses' maybe like 90% then a bourgeoisie maybe the next ones above that, then less than 1% aristocracy and nobles. Also social class wasn't determined solely by net worth or income. Maybe we will go back to that kind of situation where the median will be considered squarely in 'the masses' class and nowhere near 'rich'.
I dunno. Ford saw the automobile as being revolutionary only if the person who makes the automobile is able to afford the automobile. (Funny, nobody applies this one to child care.)
Interestingly, Ford put his money where his mouth was and dropped the price of the Model T by 5x over the production period. Very hard to imagine today.
https://en.wikipedia.org/wiki/Ford_Model_T#Price_and_product...
> I will build a motor car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in God's great open spaces.
Thanks to Ford being sued by Dodge and setting the precedent that you must operate in the interests of the shareholders and not the customer or your employees.
> […] you must operate in the interests of the shareholders and not the customer or your employees.
This is a legal myth:
> The case still most often used in law schools to illustrate a director’s obligation is Dodge v. Ford Motor (1919)—even though an important 2008 paper by Lynn A. Stout explains that it’s bad law, now largely ignored by the courts. It has been cited in only one decision by Delaware courts in the past 30 years.
* https://hbr.org/2010/04/the-myth-of-shareholder-capitalism
The Stout paper, "Why We Should Stop Teaching Dodge v. Ford":
> This Essay argues that Dodge v. Fordis indeed bad law, at least when cited for the proposition that the corporate purpose is, or should be, maximizing shareholder wealth. Dodge v. Ford is a mistake, a judicial "sport," a doctrinal oddity largely irrelevant to corporate law and corporate practice. What is more, courts and legislatures alike treat it as irrelevant. In the past thirty years, the Delaware courts have cited Dodge v. Ford as authorint in only one unpublished case, and then not on the subject of corporate purpose, but on another legal question entirely.15
I mean, Ford could have also not sold shares(ownership) in his company then they could do what they want.
So if a company wants to cater to customers and employees first it needs to be organized as a co-op?
Yes.
By the way, SWE consultancy co-op are a thing and in my experience pay 15% more than regular consultancy.
I believe there is also the option of structuring it as a “public benefit corporation”.
Yes this is an excellent example! When I said 'some years ago' I pretty much meant pre-USA. The Ford story is a great example of that American socio-economic differences from the previous 90/9/1 kind of distribution they had before that in England or other places.
EDIT: Also, people today would be calling Ford as literally communist
What are you talking about? Ford was about as anticommunist as you could get.
He was a strong anti-Semite, a conspiracy theorist who railed against "international Jewry", who paid to print the fabricated 'The Protocols of the Elders of Zion' in the US. He was absolutely against unions. His private police force used violent opposition against unionization, like the Ford Hunger March and the Battle of the Overpass. And he admired Nazi Germany, and was literally praised by Hitler in Mein Kampf.
> What are you talking about? Ford was about as anticommunist as you could get. He was a strong anti-Semite, a conspiracy theorist who railed against "international Jewry", who paid to print the fabricated 'The Protocols of the Elders of Zion' in the US.
they would call him a communist, and also an anti-semite
You haven't said why they would they call him a communist, only asserted that he would.
People use "communist" as a generic slur - there's probably people who called Joseph McCarthy a communist too.
Is that really the point you're trying to make? That calling someone "communist" has no meaning these days?
Otherwise, you can read how in 1923 Ford wrote that communism has failed. In his own words, https://archive.org/details/in.ernet.dli.2015.260931/page/n1...
"As soon as [Russia] began to run her factories by committees, they went to rack and ruin; there was more debate than production. .. The fanatics talked the people into starvation. ... Bolshevism is now crying for the brains and experience which it yesterday treated so ruthlessly. All that “reform” did to Russia was to block production. ... The same influence that drove the brains, experience, and ability out of Russia is busily engaged in raising prejudice here."
"The reason why Bolshevism did not work, and cannot work, is not economic. It does not matter whether industry is privately managed or socially controlled; it does not matter whether you call the workers’ share “wages” or “dividends”; it does not matter whether you regimentalize the people as to food, clothing, and shelter, or whether you allow them to eat, dress, and live as they like. Those are mere matters of detail. The incapacity of the Bolshevist leaders is indicated by the fuss they made over such details. Bolshevism failed because it was both unnatural and immoral."
Shortly afterwards is his philosophy:
There can be no greater absurdity and no greater disservice to humanity in general than to insist that all men are equal. Most certainly all men are not equal, and any democratic conception which strives to make men equal is only an effort to block progress. ... It is the larger men who give the leadership to the community and enable the smaller men to live with less effort."
He believed him to be one of those larger men, and his methods the way to get smaller men to live with less effort. Which included being able buy his cars.
That's not communism, that's the utopian paternalism of American technocracy.
> Ford saw the automobile as being revolutionary only if the person who makes the automobile is able to make the automobile
What is this supposed to mean? I'm not sure if I'm being obtuse or its too profound for me to understand.
Maybe he means the person who makes the automobile can afford to buy an automobile?
Fixed typo inserted by spell checker.
You can find a better retelling of this elsewhere, but Ford wanted his employees to be able to purchase Ford cars. The story is often used when discussing the fairness of employees wages, or the cost of goods. Auto employees have long been considered part of the middle class. I think the OP was referring to the fact that probably many of the people making these cars can't even afford them nowadays. Given that cars are practically a necessity in most of the US, I don't think that sits right with people.
I dunno, auto workers are better paid than many other workers.
My son is still living at our farm but he is starting his first real job. We’ve looked at options for his first car, he is interested in getting an early 1990s Buick or something like that (which can be had under $4000), the kind of used car that I find attractive (a 2010-2020 Honda) is pretty expensive ($13-$18k). We’re leaning towards taking our chances with the bucket.
Mass production requires mass consumption.
That doesn't make any sense. This sounds like a play for a more loyal labor force, a larger labor force, or to head off unionization. Ford was an incredible asshole that supported Nazi beliefs. He's wasn't going to just give people money.
Quoting Ford “I will build a motor car for the great multitude. It will be so low in price that no man will be unable to own one.”. You are looking at it from a take of more people fighting over how big their slice of the pie will be. Instead of splitting up one pie, Ford wanted to make more pies and drive down the price from the efficiencies/economy of scale of making so many pies that everyone got their own. And it worked.
Being “revolutionary” in my use is that “cars change the world”, which they did. If it was all about F1 racing and Bentleys that 1% of people could afford, cars wouldn’t be the force that they are.
Yes, driving down the unit cost increases scale and makes things more affordable. That's standard commodity capitalism. Paying your workers more, well what percent of the economy did Henry Ford control? Was it enough to substantially influence mass adoption? In any case, that's coming right out of his own pocket, so he'd have to hope that it's a marketing strategy for... other capitalists? The rest of the population? Otherwise he's just subsidizing cars and eating the costs.
Raising the wages directly for labor-related issues makes more sense.
You have to remember that rich people like Henry Ford and their estate/descendants (e.g. the Ford Foundation) like to manufacture an image for themselves. It's a nice story if instead of spreading anti-Jewish conspiracy theories, Henry Ford was a great friend to the workers with a nonsensical business concept.
"Indeed, as a vocal antisemite, he used his status as one of America's most well-known and trusted business leaders to systematically spread conspiracy theories about Jews. His screeds against Jewish people became so well-known at home and abroad that he is the only American whom Adolf Hitler compliments by name in Mein Kampf.
...
But while it dramatically reduced manufacturing time—from 12.5 hours to 93 minutes per car, allowing mass production of up to 10,000 Model T cars a day by 1925—it also made his workers’ jobs more monotonous and unsatisfying. The turnover rate at Ford’s Highland Park, Michigan factory soared to 370 percent.
To solve the problem, Ford realized it would be cheaper to raise wages (which at the time were competitive with those at other auto companies) than to continue hiring and training new people at the same pace. So on January 5, 1914, he announced that his company would double wages to $5 a day. The move proved seismic: By prompting wage hikes across the car industry, historians say, it gave American factory workers a crucial boost into the middle class, allowing many to afford their own Model Ts.
...
While $5 a day was a generous factory wage at the time, it came with a substantial catch. Technically, workers’ pay remained less than or near $2.50 a day, and the extra money was a bonus they had to earn. The year Ford introduced the bonus, he established a company Sociological Department that sent inspectors to the homes of his employees—at this point, mostly male immigrants—to make sure they were living in a way Ford approved of. Workers were denied the full $5 a day if their wives worked outside the home, if their homes were unclean, if they displayed signs of drinking or gambling, if they took in boarders or if they didn’t contribute to a savings account. "
https://www.history.com/news/henry-ford-antisemitism-worker-...
Worth noting that American companies did stuff like this in South America too. The population generally doesn't want to work on the terms of the corporation, so they "terraform" the place until they have a compliant population. Shredding extended family ties, religions, etc. Anything that would interfere with the relationship between a man and his boss.
Making the product cheap enough for the common man to afford is the first and most important step in mass market adoption. You make up the loss in per-vehicle profit with volume and in the end of the day walk home with a lot more money. Ford is saying if a simple factory worker could buy his product he was going to be a rich man.
>Maybe we will go back to that kind of situation where the median will be considered squarely in 'the masses' class and nowhere near 'rich'.
We're already there. American society has stratified into three groups over the last 20 years. There's the 99th percentile elite who have hoarded over half of all overall wealth, the 90th percentile bourgeois (tech workers, lawyers, doctors, etc.) that are able to maintain a modicum of security and prosperity through real wage growth, and then the masses below who are desperately working themselves to death for near starvation wages to service the above two classes, with zero chance of economic mobility.
... And yet if you replaced everyone's wages with the average (which is of course the best redistribution can achieve), $97,962, call it $100k whilst that would be an increase of just shy of $30k per year, minus tax on that ($30k), average rent ($30k), transport ($11k), food ($5k), entertainment ($4k) ... which would leave you with $20k.
Note that taxes are progressive, so from a $70k wage you get about $10k "free cash" to spend, whilst a $100k wage gives you the above number of about $20k.
So it takes A little over 2.5 years' worth of average full-time wages to buy a car in the US.
Therefore I disagree, the problem is the average cost of a new car, expressed in labor (2.5 years average full-time labor), much more than the stratification of US society.
I would argue 6 months full-time labor would be quite expensive for a car, and for the value of a car to be that, you'd need to make $170k per year, you'd have to be in the top 10%. Only at a 5% income do the cars this article talks about become reasonably priced. And I do mean reasonably priced. Not cheap.
Second problem is if you look at where the problem is, profit ("capitalism") ... is not the problem. GM makes $2,150 per car, the average car manufacturer half that, according to Google. Whilst this amount would move the needle a bit, it would certainly not solve the problem. That would make cars affordable for the top 11% of the population (and that's taking the GM figures), which would be just the tiniest of improvement.
According to this article:
https://carfromjapan.com/article/industry-knowledge/how-much...
Only raw material cost, labor and (barely) tax would make a decent dent (at least 10%) in the cost of a car.
Note: numbers all just Googled and taken at face value, maybe converting to per year (from per month) but no more processing. Obviously big mistakes could have happened, although I think not. I could do better but back of the envelope this should be about correct.
It’s because used cars have gotten so good that automakers can’t compete with them at the low end. https://seekingalpha.com/instablog/49663329-trading-places-r...
Safety is a big factor here. The basic trim for all entry level models includes driving aids such as proximity sensors, blind spot warning, backup camera, pre-collision warning. The changes required to integrate those features into the car are diverse and influence design. The net result is that it's not economically feasible to offer them as optional components on higher trims and the base price of all models goes up as a result.
Meh. I feel like that's a scapegoat that they like to use. Honda packed all that into the Fit (Honda Sensing), and it wasn't a $50,000 car. It was reasonably priced, and an excellent, economical car, with a top safety rating. It's literally the exact same tech used in their top end cars.
But what they did was, they killed the Fit in the US. So now the cheapest Honda car you can get is the Civic. Which isn't the small car it used to be.
I mean also, how much does this tech cost really? A backup camera? You really gonna claim that cars are unaffordable because of a $20 LCD and $10 camera installed into the bumper?
Pre-collision warnings, blind spot monitoring, it's all 20 year old tech now. And it comes in everything.
I bought my Honda Fit in 2014 for 16k. It has a back up camera, but no other sensor/parking tech. I’ve put almost 200k miles on it without anything more than regular oil changes and brakes. I could afford a much more fun and feature rich vehicle, but there’s something to be said for the simplicity and functionality of this modest hatchback.
Europe is still full of cheap base models with manual transmissions. Americans just go for luxury and it shapes the market in that direction.
So your argument on a software development site is that feature creep isn't a thing?
>> unaffordable because of a $20 LCD and $10 camera installed into the bumper?
Yes. An automotive-grade LCD that will last years, plus a camera that will survive the elements, not mention the unreliable power supplies on which these must operate. Then 10+ feet of cable. Then the dozen little plastic clips to keep that cable secure. Then the manpower to install all of this. Yes. That camera system is more expensive than an injection-molded mirror bolted to the exterior of a car or glued to a windscreen. Multiply that by dozens of similar little things and it does result in more expensive vehicles.
Safety is also the driving factor in vehicle size. We are in an arms race of constantly increasing vehicle complexity and mass. The safest vehicle to be in any two-vehicle crash is almost always the bigger one. With mass comes cost.
The irony is that vehicles are now ridiculously safe in comparison to decades past. Regulators who for years improved safety by leaps and bounds (seat belts, crumple zones, anti-lock breaks etc) are now forced to playing at the margins. Every incremental improvement now comes at greater and greater complexity/mass/cost. Rear view and side mirrors are going away soon, to be replaced by backup cameras. Also are coming anti-drunk features. There is serious talk about interlock breathalyzers being built into all steering wheels. This is going to get much worse.
For those who cannot afford a car but still need to travel the distances, there is always motorcycles. New two-wheeled vehicles are still cheap.
I _hate_ this trend of moving everything into software. Touchscreens in cars are awful. And now cameras instead of mirrors? No thanks.
Motorcycles are absolutely not a solution as anyone who has ridden will tell you.
Not a solution to what, exactly? Motorcycles have satisfied most of my everyday transportation needs for many years now.
Not a solution to carrying passengers, or lots of bags, or in snow and ice, or very long distances, or going somewhere you don't want motorbike gear and helmet to worry about. I love my motorbike but it's not as practical as a car for lots of things.
It's funny - I find cars to be less practical than motorcycles for most of the trips I take, for example whenever traffic or scarcity of parking are involved - which is most of the time! - and if for some reason I could only have one vehicle, I want to say that I would choose the motorcycle, because life without it would suck; but then, a car actually can handle all the trips a motorcycle can make - comparatively slow, expensive, and annoying though the process may be - whereas there are a minority of errands one occasionally has to run which a motorcycle cannot handle at all. So perhaps the real answer is that it's too much to expect any one mode of transportation to handle every need.
Neither are bicycles and electric skateboards, but needs must. With cars costing tens of thousands, not to mention parking issues, I see a great many young people turning to two-wheeled vehicles in years to come. A small motorcycle, be it IC or electric, will always be the cheaper option.
This may not be the worst thing honestly, from an environmental perspective. The cars themselves have much longer usable lives now so it's for the best that cars move down to new users instead of needing to build more and more.
The downsides, however, is that while the car part of the car is more durable and long-lasting than ever, the software/computer parts of the car are hamstrung by terrible decisions that are sure to age very poorly. This will only get worse when GM decides they want to turn the infotainment screen into a data-harvesting cash cow.
Also, this will slow down the transition to EVs. And it ends up saturating the used car market with cars designed with the tastes of show-boating new-car buyers in mind. This screws over people who just want a humble, reliable, practical vehicle instead of an overspecced, oversized, brodozer.
Discouraging car use through high prices could be a great thing. But cities have been designed to favor car convenience so much, at the expense of everything else (walking, cycling, mass transit), that people are essentially forced to buy a car in order to work, shop, and survive. We discuss these things on Reddit/FuckCars.
People will still drive, they will just buy and drive used cars instead of new ones. Since the cars themselves are more durable, they will last longer and create less of an environmental burden to produce. (Assuming they are properly and adequately maintained. If people buying new are cycling through in 3-4 year intervals and not maintaining them since it's someone else's problem then that'll be much worse.)
More expensive cars are better for the environment if people start driving less or stop driving. But it's worse for the environment if people hold on to older cars, because they are less fuel efficient than newer models and release more fine particles in the air.
Is that still true of new cars made in the 2020s? I assume the emissions difference between a 6-10 year old ICE vehicle and a brand new ICE vehicle are probably pretty negligible in light of the footprint required to produce and bring a brand new ICE vehicle to market.
> This may not be the worst thing honestly, from an environmental perspective.
From a purely carbon perspective, new cars are always cleaner than old cars. This is simply due to less wear and tear, and technology improvements.
From a systemic point of view, you have to look at carbon impact of production (and end of life). Being a bit more efficient doesn't necessary net out well.
But you are forgetting that people aren't stuck with this system and could choose to revolt against it. Life is getting significantly harder for people and giving some future politician a convenient tools of a scape goat 'green leftists are taking away your cars' when taking away the car means taking away work, having to choose between having a home somewhere affordable and driving to a job to either giving up the job or giving up the housing could ultimately result in a long term more undesirable environmental result from people lashing out against being put into losing situations. So many people ASSUME the status quo will hold despite everything going on. You get Trump types all the time, but if things are good enough they don't normally catch on with people.
Meanwhile the average price of an EV has dropped $10,000 over the last 12 months.
https://insideevs.com/news/666533/average-ev-transaction-pri...
The average EV price is not yet less than the average internal combustion vehicle price, but it's getting close. TCO for the average EV is almost certainly less than TCO for the average ICE vehicle.
A correction from an inflated peak all across 2022 when chip shortages starved supply and gas prices surged EV demand. Production for many of the highly sought-after models is only now starting to catch up.
Average EV price in 2020 was $55,000 and average ICE price was $39,000. Average EV price today is $55,000 and average ICE price is $48,000.
Both ICE & EV went up about $10K, but the EV price has dropped back and the ICE hasn't.
Add in the $7500 federal tax credit on that EV and it's a dead heat. Even worse Tesla has a hefty margin on their vehicles right now and could go lower if they really wanted to put the squeeze on traditional automakers. They're also aggressively cost cutting the production. I think Ford, GM, Chrysler, BMW, Volkswagon, etc... are in more trouble than most people realize at the moment. I'm not saying they're going to go out of business next year, but I think they're going to experience significant market shrinkage in the coming decade if they continue down the path they are on.
I gave up on the idea of a Toyota Corolla Hybrid ($23K) when they said there was an 8 month wait list for one.
How long ago was that ?
A few weeks ago.
They say there are fewer new cars available at $21k today than in 2017. Did they take into account inflation?
$21k in Jan 2017 is nearly $26k Jan 2023. There seems to be plenty of new cars that cost that amount.
Inflation has gone up in no small part due to cars. They’re one of the biggest factors and people who aren’t buying them or driving heavily have seen far lower rates of inflation.
Inflation has gone up due to the reckless money printing, car prices just reflect this fact.
…and supply chain issues, a war in Europe, and opportunistic corporate profiteering…
Wages aren't going up with inflation. So if people couldn't afford a $26k car in 2017, how do you think they can afford it now?
You can adjust for inflation when wages follow it. I wonder for what proportion of the populaton it's the case.
Has anyone looked into knock on effects from the Obama era cash for clunkers that reduced the used car supply by 677,081 cars? I always thought that was going to impact affordability. It removed lower cost vehicles AND their future cannibalization for parts to keep other low cost vehicles on the road.
The other change I wonder is just the longevity of cars (which could counteract impact from cash for clunkers). My father used to buy a new car every 3-4 years in the 90s because cars sucked. Cars are more expensive now, but last much longer. My 7 year old car is as good as new still, my dad kept his last car 10 years.
Is a product that lasts triple the amount of time for less than triple the old price actually more expensive? No, but it IS now contradictingly unaffordable. It becomes the rich people and shoes trope. Poor people can only afford cheap shoes that wear out more often. When I could afford nice italian boots that lasted longer and were amazingly more comfortable I actually spent less on shoes, but I had to be able to shell out $500 for boots. Now I can only afford $40 for junk. Heck I have shirts from Nordstroms from 10 years ago that I still get complimented on but can't replace and am forced to slowly replace with cheap garbage shirts than wear out in a year because I'm broke and am sad to see myself fall into that trap knowing I am throwing away money to the benefit of looking worse for more $$$ spent over time.
All that said having moved down about 10 social economic groups the people I know have 2 daily struggles that keep them in constant anxiety. Housing and keeping their cars running. The system is not going to hold if this keeps up. People can't live in this constant stress and anxiety with no hope and are going to look to some way out. In the past in other countries that's been far left or far right political charlatans. Yet the people up high still expect the status quo to hold and are doing nothing to make things better.
I don't think the people & shoes trope necessarily applies. You can buy something like a Kia Forte for under $20K and I bet it's more reliable than a $50K BMW.
EVs are the way to go right now. Between the "fleet" loophole for federal credits, state credits, free charging for 2-3 years in some cases, discounted charging at night, manufacturers trying to get rid of the EVs that didn't succeed, no sales tax in some states. It's probably 50% cheaper than an ICE car
can you please link an ev that's cheaper than a 26k total cost of ownership over a 10y period(excluding registration) I bought a midsized sedan in 2019, 10y warranty, 17k out the door. I tried to justify the cost of an ev, the cheapest I could find was 32k after credits.
This tool lets you explore the space:
https://www.carboncounter.com/#!/explore
Note you can tweak specific rebates and/or gas prices, mileage per year, length of ownership etc. in the advanced options and they have presets for each state.
If you do 200,000 miles over those 10 years on a 20mpg car with $5/gallon gas, that's $50K in gas for your $17k car. I assume your numbers are lower, but it's not hard to see how TCO for an EV can be cheaper for many.
My electric company just introduced a 2.9c/kWh overnight rate. At 4 miles/kWh, that works out $1450 for 200,000 miles.
With credits, Aisera base model may get close to that number. But you will have to wait for it to be released and there're lots of people in line ahead of you. With that price and their right to repair policy, it is the less risky of the EV startups at this moment.
The link goes to the Launch Edition. But you can edit the options to reduce the sticker price to $25,600.
However, the All-Wheel option is tempting. Nobody needs a 0-60MPH in 3.5 seconds car, but it's very cool, anyway.
Depending on your commuting needs and sun availability in your area you might not need to recharge, ever.
People don't buy EVs in the US to be economical. That's not a thing yet. It's something for relatively rich people to do as a status symbol or for luxury, since most EVs are fairly luxurious.
Yep. The bottom of the EV market is sparse. Everyone is focusing on the 40k+ market.
...because of (a) car-price inflation kick-started by pandemic-era supply shocks, and (b) rising interest rates meant to drive down the rate of price inflation.
In short, both cars themselves and car-financing are more expensive.
_But_ I also see some car ads with weirdly/implausibly low interest rates. My understanding was that in these cases the base price is artificially higher to subsidize below-market financing rates -- and in those cases even if you don't need the financing, you may be better off taking it. But the point ends up being that these are not independent phenomena; MSRP prices are set with financing in mind.
E.g. https://cars.usnews.com/cars-trucks/advice/interest-free-car...
“Supply shocks” make it sound like something that could not be anticipated, rather than something that was caused by active incompetence from auto manufacturers at the start of the pandemic.
The supply shocks of checks notes three years ago, were certainly unanticipated. But it's been three years now, and prices haven't come down even though supply problems are clearing up. So what's up with prices? Well, to paraphrase the old sportscaster Warner Wolf, let's just go to the quarterly reports! Around the all the industries profits are setting records while they reassure investors that supply chain price increases are immaterial, and have full expectation that customers will simply accept the new prices.
https://www.kansascityfed.org/Economic%20Review/documents/93...
When the government prints more money, all money loses value.
A trite response that doesn't comport with the available evidence of today's economy. But hey, faith-based economics drives the world.
Not sure what you're suggesting. Also,
>> doesn't comport with the available evidence of today's economy.
it doesn't?
It helps when you actually read the comment you respond to, instead of knee jerk a bumper sticker.
From your linked article:
>> the idea that firms are capitalizing on their market power by raising their prices higher and faster than the growth in their production costs.
You think this is a plausible explanation in a competitive capitalist economy rather than the problem being trillions of dollars having been printed which devalues all money which makes prices go up which makes the corporations look like they made record profits because you HAVE to charge more money because all money is worth less and every input costs more? I'm not saying they didn't necessarily make record profits, btw, but if they did then good on them and that smells like a blood in the water type of business opportunity.
Even worse, when you dive into the "supply shocks" they were all in all fairly minor and tracked the decrease in demand. A lot of inflation is just companies using the excuse to raise prices and pad the bottom line.
We make like 3-3.5x household median for our city and I can't imagine buying a new car. The prices are batshit crazy. In the late '00s budget cars existed at like $9k new and $20k would get you a pretty damn good vehicle. Now that barely gets you a pretty damn good seven-year-old, used vehicle.
From the Washington post article:
> Ramirez, 33, and his wife Angelica Castro-Calle really want a new, small SUV with a little space for camping and paddleboarding gear
> Johnny Loredo and his wife paid $38,000 for a new Nissan Frontier truck
> If they hadn’t had a used Suburban to trade in
Yeaah. That could be the issue. People aren’t looking to buy cars anymore, but tanks.
To be fair, you quoted a couple that traded in a Suburban for a Nissan Frontier. The former is one of the biggest mass produced vehicles you can buy, the Frontier is large but considerably smaller and wouldn’t be out of place on European roads (truck wise).
And the first part of the quote describes a small SUV for another couple. Everyone’s definition of “small SUV” will vary, but I’m not sure many would infer tank.
Of course, your definition of tank could be very different to mine.
Honda dropped the lowest priced Civic LX model from their 2023 lineup https://www.caranddriver.com/news/a41612385/2023-honda-civic... but then backtracked because of customer demand. https://www.motorbiscuit.com/honda-civic-lx-returns-2023-che...
US vehicle sales were up in April [1], [2], so someone is buying them.
[1] https://economics.td.com/us-vehicle-sales [2] https://fred.stlouisfed.org/series/ALTSALES
A lot of that seems to be fleet sales to rental companies that need to recover from dumping their inventory to stay afloat during the pandemic.
Perhaps it's Uber drivers buying them with financing after being forced to drive a sufficiently recent model of vehicle.
There’s a huge backlog right now. An increase in sales tracks an increase in supply. The situation is changing rapidly, anecdotally. My local Toyota deal dropped their dealer markup from $10k to $5k recently
This article is kinda missing it. New vehicles are have always been a luxury for people with money to waste. Unless you get some crazy deal and financing they're never a good financial decision.
Well that used to be true, the actual painful thing going on with the car market right now is that in some ridiculous twist of events is that used costs more than new for a lot of vehicles. So yes new cars are more expensive, but used cars are a lot more expensive which hollows out the market that serves the average car buyer.
Another blow against the "cars = freedom" mantra we have so wrongly pursued for 50+ years. Now that prices are up and highway maintenance costs are continuing to increase you have no alternative but to open your wallet for the automakers and state departments of roads and highways bureaucrats because guess what, they've legislated your density and your sidewalks and bike lanes away and stopped you from taking the train.
When I ran the numbers for "am I, high-paid for my city and only at a medium-distance from the city center by local commuter standards, benefitting from the existence of cars?" over a decade ago, I was at break-even (except that I'd be healthier in a bike-and-walking-centric version of my city). Now? Haha. Hahaha. If I still had to commute, the numbers would surely be way into the "cars are a net-cost" side. And I've got a far better situation for that than most do....
People should check car prices in Denmark and then they wouldn’t feel so bad about prices in the US.
Kia Rio starting at $32k, with median salary 15% lower than the US.
If you're purchasing a new vehicle for over $40k, you're getting scammed IMO. There's a lot of great electric and hybrid vehicles with good reliability history.
But if you want to look like a _____ in a lifted dodge ram, well, we'll be happy to give you plenty of room on the road to roll your coal.
Do they actually exist on dealer lots now? For a while there, big cars and pickups were the only ones available. And dealerships were marking up electric cars so high that manufacturers got mad and started threatening them. https://www.motor1.com/news/569524/hyundai-genesis-avoid-dea...
Vehicles are rolling onto the lots quite a bit right now. Manufacturing is catching up.
However, they're rolling right back off the lots too, after 3+ years of shortages.
Show me an electric passenger truck that can pull 20,000 pounds.
Do you tow an excavator or bobcat behind your truck often enough to justify purchasing one given how high the ongoing costs will be?
But even then, Dodge does offer their 3500 at a base trim that's only a bit over the $40k bar I set (about $45k for the Tradesman trim). And you'll be foregoing electric for a few more years (or purchasing specialized construction equipment).
I have to say though, this is a bit of a different usecase than a family purchasing a car. Such a vehicle is going to be more of a work expense, after all.
Are there any light duty trucks, gas or electric, that can pull 20,000 pounds?
20,000 pounds is well into medium or heavy duty truck territory.
The same can be said about all the ______ driving their status symbol Teslas.
You're probably right. At least a Tesla can't be modified to roll coal. Yes people do that. Yes, they're absolute pricks. And at least most Teslas don't have their light bars at head height thanks to the lift kits. Nothing quite like the inside of your car being illuminated like it's noon at midnight.
But in the end, I'll take a pretentious prick over a malicious prick.
I think people tend to miss an important aspect of this conversation:
Cars as a whole are massively much more reliable for a lot longer than they used to, making used cars way more viable for most people.
Even the traditionally less-reliable brands are not exploding at 70k miles like they did 15 or 20 years ago.
I'm speaking out of ignorance here, since I have no idea what role a microchip plays in modern vehicles, but obviously it's geared towards software components.
Assuming that's true, then this whole chip shortage would have been a great time for someone to bring a software-less, low-tech vehicle to the market. I've personally been wanting that as our last vehicle completely shit the bed when the digital transmission encountered an error. Plus I hate touch screens in cars.
They aren't really what HN people would consider serious microchips. They certainly aren't CPUs. They are lots of basic little chips doing things like regulating an engine parameter or detecting brake pedal forces. One way forwards in reducing the overall demand for chips, the square-inches of silicon needed in a car, is to abandon the approach of scattering little chips all over the vehicle. Instead they could route all the wiring into a centralized control with a powerful CPU running effectively an OS for the entire vehicle. One chip to rule them all. But that just isn't how cars have evolved. History has incrementally made every system componentized and independent.
Even a "low-tech" car is still very complicated to build. Someone who is good enough to make a very good old style car (like Honda or Toyota), isn't financially incentivized to do so anymore. Such a car would not have any features to justify its brand new price over a used one. And the cost to reserve an entire factory line for this model is just too expensive and probably sale won't recover the cost of doing so.
Even if there had been demand for a car without basic features people got used to in the past 20 years or so (central locks, power windows, rain-sensing wipers etc.) it would not work because of the emission requirements. The engines that meet the requirements all run software in order to work. Ditto for the required safety features: backup cameras, anti-lock brakes, ESC etc.
It's generally not possible to meet emissions guidelines without computer control of the engine. Fuel economy also suffers. It's all a tightwire balancing act and the mechanical carburetors of the past are simply too crude to get the job done.
The older trains in NL have a computer that reads and displays all kinds of things but it controls nothing. If it doesn't work the train functions just fine.
A linux car seems a fun twist.
This is the only comment that seems to get at what I was talking about. I'm just saying that software is prone to error, it shouldn't be used for critical internal components in vehicles.
When you no longer have to worry about killing people development gets much easier. It will just take a different direction.
Seems like this should link to the source: https://www.washingtonpost.com/business/2023/05/07/new-car-m...
Yep! But that's ok! Now we can all ride bakfeits, which are perfect for most American's needs and will make us thinner and healthier!
A quick trip on the Googles:
2023 Nissan Versa - $17,366 2023 Kia Rio - $18,371 2023 Mitsubishi Mirage - $17,140
Just sayin....
Yeah, Kia Forte is still sub $20k. That’s a perfectly good car that seats four adults and does 40 MPG (kinda meh in Europe but okay). If you need more car than that for driving to work and buying groceries on the way home, that’s your problem, and I have zero sympathy for you.
Just join the motorcycle club...
I hear they're constantly making space for new members.
You don't see a lot of motorcycles with snow tires.
Or toddlers.
> Back in 2017, if you wanted a car that cost less than $20,000, you had 11 options. Fast forward to March of 2023, and that list had been narrowed to only two.
The story here is just “inflation happened”
That’s definitely a big part, but the other major reasons are: 1. Companies are focusing on selling higher profit margin vehicles (more expensive models vs high volume budget models) 2. Companies are focusing on SUVs and trucks since bigger cars are in demand. 3. To a small extent, the focus on inherently more expensive EV models
And even in a subgroup like trucks, try buying a basic stripped down pickup like you could 15-20 years ago. Just two doors and an 8 foot bed, a truck... they don't make them anymore. Instead you get one of these giant penis extensions they sell now and call trucks. I don't want 4 doors and leather, it doesn't need to be 8 feet off the ground, it doesn't need to the the size and weight of a semi... I just want a utility vehicle to haul crap between home depot, the dump, and my house. Even what used to be cheap, practical cars are now draped in "optional" bullshit you can't opt out of.
And now they want to gate features in my car behind yearly subscriptions, they can fuck right off. I'm not even tempted to buy new. I'm more likely to start buying older I don't want my car getting random software bugs and phoning home to turn of my heated seats.
True. I recently inherited a small 2016 truck. It's so stripped down my nephew didn't know what the crank was on the door. He had never seen a manual window crank ha! It does however have one nice feature; bluetooth. I could easily afford a nice car but this little truck is perfect. I don't drive that much so I could see having it the rest of my days barring gasoline is still made. I have no desire for a new car.
Car inflation, specifically. This is the same as saying that car prices have gone up.