There’s a shared belief that cars are getting too expensive for most shoppers to afford. But is this fact or just a myth?
While sticker prices on cars have certainly climbed over the last 20 years, we must also factor in the general increase in the purchasing value of the American dollar—AKA the rate of inflation. Today’s yearly inflation rate is somewhere between 1.5% and 2.5%; the cumulative rate of inflation between 1999 and 2019 is a whopping 54%. So, purchasing a vehicle for $20,000 prior to Y2K would be the same as buying a $31,000 vehicle in ’19.
Let’s look at a practical example: If you’d purchased a 1999 Chevrolet Malibu new, it would have set you back approximately $16,000—its original MSRP. Adjusted for 54% inflation, that same Malibu purchased with today’s money would cost $25,600 and change.
But the 2019 Chevrolet Malibu has a starting price of just $22,000, 86% less than the ’99 model when taking into consideration cumulative inflation. To top it off, the 2019 Malibu offers, in addition to an array of advanced safety features and modern technologies, the following improvements over the model 20 years its senior:
- Horsepower increased by 10
- Torque increased by 29 lb.-ft.
- Fuel efficiency increased by 7 city/6 highway mpg
The improvement in fuel efficiency alone represents at least $3,300 in additional gas savings over 100,000 miles.
What about SUVs, the current champions of the roadway? Here’s how the all-new 2019 Chevy Blazer compares to its 2000 cousin:
- The base 2000 Chevrolet Blazer had a sticker price of just over $19,000. With inflation, its 2019 cost would be $29,300.
The four-door 2019 Chevrolet Blazer has a retail price of $28,800, which is, of course, slightly less than the 2000 model’s MSRP after accounting for inflation. Its estimated EPA mileage is 22 city/27 highway mpg, a modest increase over the 2000 Blazer’s 17/23 mpg. The entry-level ‘00 Blazer was also a 2-door SUV, while the 2019 model is a sporty crossover with seating for 5 passengers.
So, are new cars more expensive than they were 20 years ago? While some new vehicles may be pricier than comparable decades-old models, our math shows that many vehicles today are cheaper after adjusting for inflation. In fact, when you factor in all the built-in technology, improved safety, and gains in reliability, the overall value of a newer vehicle is undeniably better.
Auto Financing: Just One Click Away
Despite proof that cars are priced just as affordably as they were 2 decades ago, many people still feel as if they’re unable to purchase new vehicles—and that feeling is justified. Wage stagnation continues to be a significant concern, as economists have noted that Americans’ purchasing power today is equal to that of the early-1970s when the average hourly wage was $4.00.
Although we can’t raise the federal minimum wage, our Overland Park Chevy dealership is in the business of helping Kansas City shoppers who need financial assistance. We offer great monthly specials on new Chevrolet models, as well as numerous, low-interest auto financing options. As an added convenience, our customers can even get instantly pre-approved for a car loan online. Simply reach out to one of our Chevy salespeople at 913-649-6000 to begin your application or learn more about McCarthy-Morse Chevrolet.