- Ford Motor Company via Assembly Magazine

Car prices - then and now

Deep thoughts whilst in viral lock-down

Economics is a dog-eat-dog world. In 2008, Steve Keen -- then an associate professor in economics -- predicted house prices would fall by 40% or he'd walk from Canberra to Mount Kosciusko wearing a T-shirt saying: "I was hopelessly wrong on house prices! Ask me how."

Which he did in 2009. At the time of writing this, house prices are (on average) over 100% of their prices in 2008 and, oddly enough, he's still predicting a 40% drop in prices. Perhaps, like a broken clock, he may be proven correct. I don't know... I'm not tough enough to be an economist.

But car prices are something I've examined ever since my first car back in 1983. So, given we've historical prices of cars since the 1980s (and earlier) this begs the question: are we better, or worse, off than then?

Apples and oranges and all that

The first objection the pitchfork-and-torch mob will raise is that today's cars are safer, faster, and more jam packed with goodies than the autos of yore. Therefore, comparing prices isn't fair because cars today offer so much more.

And this is true. Indeed, this holds for most technological advancement. Our fridges are better; our microwaves are better; are computers are more powerful. If you want a laugh, check out the price of a calculator in 1973. These were in the hundreds of dollars at the time, which (adjusted for inflation etc) is over a thousand dollars now.

What this means is even if the products aren't the same, you still can compare prices. It may be you're getting more for your money today.

Five historical car prices

I've decided to put down five car models that were sold back in the 1980s that I desired or bought (or had a mild interest in). I have tried to find their 2020 equivalent to check if they're still affordable (or not).

Please note: historic prices are from www.redbook.com.au.

1988 Mercedes 300E (W124) to 2020 E300 (W213)

W124 Mercedes Benz

W124 Mercedes Benz

In 1988 I hired a Mercedes 300E for my birthday. For a 25 year old, it was tremendous fun, but I knew I couldn't afford to buy it. Still, I managed a date with a young lady who later became my wife, which was a very desirable outcome. Now, looking at the prices...

1988 Mercedes 300E would have cost $107,400 (or $255,000 in 2020 prices)

2020 Mercedes E300 starts at: $111,000.

SUMMARY: A surprising discount on today's cars, but remember these were the days when Benzes were over-engineered. I once owned a W201 190E, and it was built to outlast time.

1990 BMW 525i (E34) to 2020 BMW 530i (G30)

By OSX - Own work, Public Domain, https://commons.wikimedia.org/w/index.php?curid=49067485

By OSX - Own work, Public Domain, https://commons.wikimedia.org/w/index.php?curid=49067485

In 1990 I paid $10 for a chance to win a white E34 BMW 525i. During the weeks preceding the raffle, I dreamt about driving around Sydney in a pristine white 525i. Of course, I didn't win it. But in 1994, after I moved to the UK for a stint, I managed to buy a white one for about five thousand pounds. It was a superb car and the saying "they don't build them like this anymore" applies in this instance.

In 1988, an E34 525i cost: $90,740 (or $191,000 in 2020 prices)

in 2020, a G30 530i M-sport starts at: $112,900

SUMMARY: Again, we seem to be getting bargains in 2020 when one compares it to those that came before.

1989 Porsche 911 Carrera 2 (964) to 2020 Porsche 911 Carrera (992)

A stock photo that may be the wrong model year (By IFCAR - Own work, Public Domain, https://commons.wikimedia.org/w/index.php?curid=980002)

A stock photo that may be the wrong model year (By IFCAR - Own work, Public Domain, https://commons.wikimedia.org/w/index.php?curid=980002)

In 1989 I bought a ten year old Porsche 924. I loved that car to bits, but in the back of my mind I desired either a Porsche 928 or, should I be so lucky, a Porsche 911. Around 1989, after I purchased some lotto tickets, I decided to check out 911 prices. They were high, which came as no surprise (PS: I didn't win lotto either, although that's less surprising).

In 1989, a 964 Porsche 911 Carrera 2 cost: $174,499 [manual] (or $396,000 in 2020 prices)

in 2020, a 992 Porsche 911 Carrera cost: $249,481

SUMMARY: Well, the Porsche 911 today is $150,000 cheaper in real terms which makes it... more "affordable" than ever? <*sigh*> Mind you, I still loved that 924 despite all the VW/Audi bits.

1991 Toyota Celica (ST184 SX) to 2020 Toyota Camry

A 1993 Celica similar to my 1991 Toyota Celica ST184 - the first and only car I bought new.

A 1993 Celica similar to my 1991 Toyota Celica ST184 - the first and only car I bought new.

In 1991 I sold my Porsche 924 and decided to buy a brand new car. I narrowed it down to a Honda Prelude (the four wheel steering) or a Toyota Celica ST184. I loved the looks of both of them, but the Celica took my fancy. It had an organic shape that, even today, polarises opinions. I also remember what I paid for it and that feeling of 10% of its value disappearing as I left the forecourt.

Unfortunately, they never became the classics I thought they would -- not that it mattered. Soon afterwards, in late 1991, my wife was pregnant with our first child and, to put it in her words: "there's no way I'm putting a baby capsule in the back seat of a two door car". Ergo, I sold the Celica in early 1992.

In 1991, my old Toyota Celica SX Manual cost: $33,141 (or $65,000 in 2020 prices)

In 2020, a Toyota Camry base model: $32,174 (drive away!)

Summary: It makes me weep to see a modern Camry being sold for LESS THAN WHAT I PAID FOR MY CELICA IN 1991. Damn! Where's the tears-must-flow emoji?

1989 Ferrari 328 GTB to 2019 Ferrari Portofino

Ferrari 328 GTB - An old dream car (By Alexandre Prévot from Nancy, France - Ferrari 328 GTS, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=48903101)

Ferrari 328 GTB - An old dream car (By Alexandre Prévot from Nancy, France - Ferrari 328 GTS, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=48903101)

Imagine it's 1990 and you're a young person driving their Porsche 924 to his local mechanic to get it serviced. As you're driving in a state of bliss, a red Ferrari 328 GTB roars by in full V8 glory and you see it.

I remember the 328's round, rear tail lights as they disappeared up the road. It was beautiful. Now, imagine my surprise when, after I arrived at the garage, I saw it parked there to be serviced by my mechanic. While I didn't meet its owner, who'd left, I still recall its crisp lines. During the 2008 GFC, prices of these dropped below $100,000, and I was seriously tempted to cash in a kidney and buy one; but I did't. To my regret, though, as prices have bounced.

1989 Ferrari 328 GTB cost: $193,460 (or $440,000 in 2020 prices)

2019 Ferrari Portofino Cost: $400,000 plus on-road costs

Summary: So, yet again, a new Portofino's a "bargain" in comparison. Tidbit: a 1989 Ferrari 328 can be yours for less than $240,000 -- looking at second hand car sales.

What cars were expensive when you were young/younger?

There are a number of other honourable mentions -- from the Lotus Esprit I saw in North Sydney in 1992/3 to the Nissan 300ZX monsters that blasted by Botany. I wonder what they cost in their day, and what that price would be adjusted to today's numbers.

And now over to you, dear reader. Please leave a comment if there was a car you desired, or owned, when you were young/younger, that seemed expensive and, when adjusted to today's values, actually is as (or more) expensive than its modern counterpart?

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Comments (19)

  • That is one tricky thing with car prices: rebates and promotions. This makes it hard to compare even various years within a single model...

      1 year ago
    • True, which is why it's a bit apples and oranges. The general surprise is cars are, in real terms, cheaper with more "bang for your buck".

      For example, the 964 911 is slower, less safe, less stable, and with a lower to speed than the 992 911......

      Read more
        1 year ago
    • Many people gets surprised how much better our living standard got... Remember the Captain Marvel movie where the characters do the dishes together after the dinner? I mean, dishwashers existed in the 80s too, but it really proliferated...

      Read more
        1 year ago
  • I read the whole thing and thought, wow these cars are expensive before I got to the bottom and saw in it Aussie money. A better metric might be to use USD as that is primarily what manufacturers use when setting car prices.

      1 year ago
    • A good idea, and one for someone in the US to do.

      I used the Australian dollar because I've lived in Australia most of my life and it's the market I'm most familiar with.

      Economically, the best metric would've been in multiples of weeks...

      Read more
        1 year ago
    • I completely understand why you used AUSD.

        1 year ago
  • P.J. O'Rourke has done some good research on this question.

    His family owned a Buick dealership in Toledo, Ohio.

      1 year ago
    • Thank you, and thank you for the snaps. I will follow this up! 👍👍👍

        1 year ago
  • Great article Stuart! Had to spend some time converting the prices to Euros so I could imagine them 😂😜.

    One problem with inflation rates that are accepted is that they are an average, and ignore many other factors (wages, etc.).

    Still had a fun read!

      1 year ago
    • True, but being a young, working man in the 80s I remember thinking cars were outrageously expensive -- and looking at the conversions to today's money I was right.

      Mind you... a 911 is still as much a pipedream today as back then.

        1 year ago
    • I'm only 20 myself, but the way my dad told me about cars, they seemed an insane luxury to own.

      Recently, I've seen that there are cheap but good cars around.

        1 year ago
  • You also have to consider wages though

      1 year ago
    • The calculator I used was simple in that it used interest rates over the time. Wages have also grown, so this actually makes cars more affordable.

      Probably a better metric is cars in terms of weeks of the average wage at the time.

        1 year ago