Hypothetical new car price question

The talk in the scion thread got me thinking. Young people (18-30) aren't typically buying new cars. It seems to me, anecdotally at least, that for the baby boomer generation it was pretty common for people to buy new cars in their 20s. I had always thought that this was because cars were comparatively cheaper back then. So I did a little research and was surprised by what I found.

I used a 1965 Mustang as my baseline. It had a price range when new of $2500 to $3500. So I put $3000 into an inflation calculator for 1965 and came up with a todays value of $22533. That dollar figure seems to me to be right in line with a mid level sedan today. So judging solely on this information I would have to say that my assumption that affordability is the reason more people were buying new then is wrong.

I think a bigger factor is how much better cars are today. I have been told that in the 60s a car that had 100,000 miles was considered to have reached the end of its service life. Todays cars can easily hit 2-3 times that mark. Meaning it is much easier find a "good" used car with plenty of life left in it.

But the reason I started this thread was a question that has rattled around in my head for a while. I picked a 65 mustang as baseline because I own one. When I look at mine I marvel at the simplicity of it. No air bags, no abs or traction control, fuel management is handled by a carburetor and mechanical pump, ignition by a set of points. No ac, no power steering, brakes, locks or windows (although they were available). The question is, lets say that Ford decided to mass produce the 65 Mustang today in 2015, an exact replica of the ones they built 50 years ago, but with modern manufacturing process, what would the msrp be on something like that if they used the same markup as any typical car? It seems to me like the could be profitable at $11K, half of their original msrp adjusted for inflation. Am I also wrong on this? What does the hive think? I know there are some guys here how work in the industry that could shine some light on this.

So today's apparently gadget-obsessed, eco-conscious and image-manicuring millennials are driving used cars "because why not?"

You're on the right track to the right answer though, keep working it out...

the problem with that is the processes are matched with what goes in the car.

For that car, the only thing that would be gained is a fully automated stamping/welding process. The engine design would have to change to use all of it's modern abilities- so the hand assembly would offset some of the cost of the higher tech.

And I would not be stunned to see that the assembly parts- subframes and whatnot- slow things down enough on the old car that it, too, would raise the cost of making it.

But I'm not an assembly guy, so I'm not sure about that.

Flounder incoming! :

Regular people's incomes are on a 7 year downward trend relative to inflation and most people feel as though they have no job security.

GameboyRMH wrote: So today's apparently gadget-obsessed, eco-conscious and image-manicuring millennials are driving used cars "because why not?" You're on the right track to the right answer though, keep working it out...

You have $20k to spend on a car. Do you spend it on a brand new Focus, or a used BMW M3? 30 years ago, the used car was not as good an option, as cars didn't last that long. Not that they do, the risk of getting a used car has gone down a lot.

So you can get a used M3 and still have money to spend on modifications.

Or more realstically, you can get a used Honda Accord that will do for many years.

The older you get, the more you want something new. Or are less tolerant of used stuff.

The_Jed wrote: Flounder incoming! :

Jeez dude why did you have to blurt out the spoilers?

You'd have to look at inflation on a variety of things in order to determine affordability of a large purchase like a vehicle.

An easy one, for starters, is the price of college education and the inability to sell that debt. Most kids these days carry about $27,000 of debt when they leave college at 22 or 23. Take a look at the price of college education relative to inflation since the 60's.

A guy used to be able to make enough money to not only provide for himself, but he made enough to provide for an entire family on his single income, so if he was a bachelor paying for a car was relatively easy.

alfadriver wrote:

GameboyRMH wrote: So today's apparently gadget-obsessed, eco-conscious and image-manicuring millennials are driving used cars "because why not?" You're on the right track to the right answer though, keep working it out...

You have $20k to spend on a car. Do you spend it on a brand new Focus, or a used BMW M3? 30 years ago, the used car was not as good an option, as cars didn't last that long. Not that they do, the risk of getting a used car has gone down a lot. So you can get a used M3 and still have money to spend on modifications. Or more realstically, you can get a used Honda Accord that will do for many years. The older you get, the more you want something new. Or are less tolerant of used stuff.

For me specifically, it's obvious, but for the average Joe, they want an appliance that Just Works, isn't ugly, and maybe plays nice with their iPhone. A used M3 is just a troublesome, out-of-fashion, basketcase-in-waiting to them. One of the few people I know my age who owns a new car got himself a boring-ass Lancer and always tells me I should have one new car instead of two old ones that give trouble. We're like the guys in the "cars as washing machines" story, and Lancer Guy is a good representative of the average Gen. Y'er,

I get the not caring about what car thing. My wife put a ton of thought and research into what fridge to buy. She asked what kind i wanted, i said "Not too expensive and will last a long time" some people see cars the same.

New cars are just too expensive up here for most people to consider buying them. A mid-range Mazda 3 hatch with the automatic costs $22k before taxes, $27k all taxes, freight, and PDI in.

After buying 2 new cars over the years between my wife and I, and also dealing with the insurance cost and annual taxes, we wont be buying a new car ever again. We are totally ok with fully loaded used cars in the $10-15k range from now on.