Cars have gotten more expensive (?)

I was talking about this with my wife today, and it seems that used cars cost more than they used to, say 10-15 years ago.

Here are some examples:

1. In 1997, I bought a 1992 VW Jetta with 90K miles on it for $2600, which was a reasonable price then. When adjusted for inflation (Bureau Of Labor Statistics), that is about $3500 in 2010 dollars.

2. In 1994, I bought a non-running 1986 Porsche 944 Turbo for $2600. When I was done fixing it, I had spent just under $4000. Adjusted for 2010 dollars, that car cost me $3800 to buy and $5848 when fixed.

I don't think that, today, one could buy a five-year-old Jetta with 90K on it for $3500 or an eight-year-old Porsche for $5850.

Both cars had clean titles.

Did I get screaming deals on these cars back in the day, or are used cars really more money now (even adjusted for inflation) than they used to be?

likely yes, because they were probably more expensive when new, even adjusted for inflation. you should look at the used cost as a percentage of the new cost; e.g., in 1997, a 5-year-old 90K Jetta was worth 20% of the 1992 new cost. in 2010, a 5-year-old 90K Jetta is __% of the original 2005 new cost.

I'd guess that people are also holding on to their cars longer due to the economy, so there are fewer cars for sale, driving up prices a little.

In reply to Buzz Killington:

According to cars.com, the 1992 Jetta cost $11540 new. Adjusted to 2010 dollars, that's $17823. The Jetta, therefore, lost 77% of it's value over 5 years.

According to Road & Track, the 944 Turbo cost $29800 in 1986, or $58916 in 2010 dollars. It lost, in eight years, 86.6% of it's value.

I base these percentages on the $2600 I paid in 1997 for the 1992 Jetta and the $4000 I paid in 1994 for the 1986 944 Turbo.

A base model 2005 Jetta cost $17680 and would have to worth $4066 to have lost the same percentage of value over five years. Similarly, a 2002 Boxster S cost $51600 new and would have to be worth $6914 to have lost the same percentage of value over eight years.

I picked the Boxster S because it is as close to the same market spot as the 944 Turbo was as I could get. (Upscale/more powerful version of entry-level Porsche) Adjusted for inflation, their original MSRPs are comparable, too $29800 (58916 in 2010 $) for the 944 Turbo vs. $51600 ($62151 in 2010 $).

The official inflation figures are so massaged that they do not reflect reality. The CPI is almost meaningless.

In reply to TJ:

They seem close enough for our purposes. In 97 I bought a 91 metro for 700 bucks, in pretty good shape. It was only 6 years old, and had just over 100k on it. I don't think a 2004 aveo would go for 700 bucks now.

Joey

Given the significantly reduced maintenance costs and greater service life of most components in a modern car compared to cars built 15+ years ago, this is not very surprising to me. Also figure that consumer perceptions lag behind actual quality improvements, so while a 5 year old car back in '97 might not have actually been a ticking time bomb, a lot of people probably still thought it was. By now a lot of people have figured out that they don't just explode 10 miles after the warranty runs out anymore (not to mention that longer typical warranty terms have convinced a lot of people to keep their cars longer as well).

My dad always bought new and sold cars well before 100k (usually 60k or so), up until his 2003 Honda CRV. I convinced him to keep it when he wanted to sell it with 40k or so right after the warranty ran out. It's been maintained well and has had 130k relatively trouble free miles. He'll probably put 200k on it, but it would have been gone at 40k if I hadn't been the voice of reason :).

I read that as a percentage of yearly income, cars have increased greatly in cost over the past few decades. I wouldn't know, I'm not that old, so I'll have to take it with a grain of salt

It always amazes me how much cars cost in the mid to late 80s.

My 1989 accord LX-i for instance had a MSRP of $16,000. I could get a 2010 civic (slightly larger car, with modern options etc) for around the same price... or a 2010 accord for $21k, the $5k increase over the 21yrs span is a relatively small increase.

I will say that it seems like it's harder and harder to find nice cars in the $1000-1500 range.

What happened to the sub-$500 decent used car? In '84, my folks bought a '73 Olds Delta for $375. Eveything still worked and it was relatively rust-free - which is amazing in the snow belt.

joey48442 wrote: I don't think a 2004 aveo would go for 700 bucks now.

NADA said: '04 Chevy Aveo with 101k rough trade-in value is $1600

My first car was a Ford Pinto I bought for $150. The next was a 81 Corolla that was $350. Surfing Craigslist finds nothing running for under a grand and nothing worth owning for under 3K.

Also remember that real wages for most folks in the US haven't really kept up with the cost of living over the last 20-30yrs or so. Not only do cars last longer nowdays, but there are more people buying used.

M030 wrote: 1. In 1997, I bought a 1992 VW Jetta with 90K miles on it for $2600, which was a reasonable price then. When adjusted for inflation (Bureau Of Labor Statistics), that is about $3500 in 2010 dollars. 2. In 1994, I bought a non-running 1986 Porsche 944 Turbo for $2600. When I was done fixing it, I had spent just under $4000. Adjusted for 2010 dollars, that car cost me $3800 to buy and $5848 when fixed.

I remember trying to find a nice used car for my sister in '98, and I had trouble finding anything under 5k at a dealers in nice shape. Ended up with a 94 corsica for 5k.....no comment. At least it was nice shape. 4 year old, 5k car. At the time also looked at a vr6 passat but it was 6500 and the leather was trashed by a dog.

last fall bought a 04 saturn v6 wagon, low miles for 6k, from a dealer. Love the unreliable v-6 (seriously, so smooth). Seats stink and poor gas mileage.. 5 year old 6k car...Still a little upset I didn't just get a military deuce and a half for the same price.

Watching the used car market from dealers it seems to go up and down every few years. seemed like '05 lots of dealers had nice cars for 2-3k. And I'm sure, varies by location. I always make it a habit of grabbing the buy here pay here dealer fliers at the grocery store every week, this year dealers seem high. I think you got a great deal on the vw.