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
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
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)
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.
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)
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?