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The $25k car is going extinct?

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Re: The $25k car is going extinct?

#861

Post by nzealand »

wavemode wrote: post #762
dudeinhawaii wrote: post #751

Earlier quoted context omitted.

While we're being data driven - the narrative isn't far off from reality. Looking at inflation in isolation is also misleading. Plainly, prices have risen faster than pay. Avg. new-car price: $23,017 in 2005 -> $47,465 in 2024 (+32% after inflation). Median household income: $46,242 in 2005 -> $80,610 in 2023 (+12% after inflation).

Average new car price is very misleading. When you buy a car, they don't charge you the average, they charge you what the specific car you're buying costs. If there are a dozen cheap car options for sale, it is irrelevant to me that there are also some more expensive options for sale.

MSRP of Honda Accord went from $15k-$30k in 2005 to $30k-$40k in 2025.

MSRP of one model is also not perfect, but it's another data point.

Re: The $25k car is going extinct?

#862

Post by Dylan16807 »

potato3732842 wrote: post #850
Dylan16807 wrote: post #825

Earlier quoted context omitted.

What's new on the mandatory list? Electronic stability control doesn't sound like it adds any meaningful costs over ABS. Backup cameras are a cost but not a huge one. What else is there?

ESC in effect mandates the same hardware as the highest end ABS systems and adds throttle by wire on top of that. Pretty much every AWD car can do "dumb" ABS that uses pedal pressure to run with just the sensors the AWD system uses (front axle speed and rear axle speed) but you need an expensive ABS system with a pump and a throttle by wire system if you want to be able to have the system do stuff when no foot is on…

A new pump or the power braking pump I already have?

Is throttle control a mandatory part?

Re: The $25k car is going extinct?

#863

Post by riku_iki »

nzealand wrote: post #861
wavemode wrote: post #762

Earlier quoted context omitted.

Average new car price is very misleading. When you buy a car, they don't charge you the average, they charge you what the specific car you're buying costs. If there are a dozen cheap car options for sale, it is irrelevant to me that there are also some more expensive options for sale.

MSRP of Honda Accord went from $15k-$30k in 2005 to $30k-$40k in 2025. MSRP of one model is also not perfect, but it's another data point.

2005 accord is a 2025 civic class wise

Re: The $25k car is going extinct?

#864

Post by TaupeRanger »

giantg2 wrote: post #649
reliabilityguy wrote: post #630

Earlier quoted context omitted.

While I do agree with you, I think you have to account for income as well, and not only the car price (even if adjusted for inflation) to determine affordability.

Pretty sure inflation adjusted median income has increased from 2005 to 2025. But it sure doesn't feel like it. I wonder if other costs such as housing and healthcare have gotten less affordable affecting the real affordability. Inflation adjustments should capture this, but it feels like it doesn't.

Yes, this measure is called "Real Wages" and has been increasing basically since 2013 (https://fred.stlouisfed.org/series/LES1252881600Q). But as you point out, that measure uses CPI, which doesn't weigh mortgage/rent and healthcare affordability as heavily it would need to match what the average family experiences.

Re: The $25k car is going extinct?

#865

Post by toxik »

itsoktocry wrote: post #826
toxik wrote: post #552

Earlier quoted context omitted.

They are required by law in no small part because car manufacturers want it to be. Compliance is a moat.

I often wonder what it's like to think everything is some grand corporate conspiracy.

I often wonder what it's like to put words into other people's mouths.

Re: The $25k car is going extinct?

#866

Post by reliabilityguy »

infecto wrote: post #642
reliabilityguy wrote: post #633

Earlier quoted context omitted.

Can you provide some information on this, please?

State level tax subsidies. Federal, things like a the chicken tax which imposes import taxes in categories like small trucks. Easy top of mind ones.

Tariff is lot a subsidy! lol

Tariffs on trucks ensured that there is a substantial number of manufacturers here in the US.

So, can you provide any info on the subsidies?

Re: The $25k car is going extinct?

#867

Post by TulliusCicero »

DangitBobby wrote: post #188
TulliusCicero wrote: post #185

Earlier quoted context omitted.

The solution to number one is more competition: a new company willing to take smaller margins to gain market share.

Seems like all the new entrants would rather compete at the high end.

There's often companies willing to compete with small margins. For example, grocery store business is already known for small margins in the US, and one of the recent winners that's been expanding a lot is Aldi, which is known for its consistently low prices, so it's unlikely their margins are any better.

Re: The $25k car is going extinct?

#868

Post by scottLobster »

dylan604 wrote: post #653
kachapopopow wrote: post #608

Earlier quoted context omitted.

I think people are saying that you can't find a used car for cheap anymore more than anything.

After the supply chain crisis which saw used car prices look like new car prices, the used market really never came back to a sane level. I also wonder how many people are in the market for cars old enough to not have all of the telemetry tracking, "everything is computer" touchscreen nonsense which could be having an effect on the supply/demand of that part of the used car market. I recently bought a car specificall…

Nah, it's price.

Issue was every manufacturer slashed production during the pandemic either intentionally or due to parts shortages, so cars built during the pandemic years are abnormally scarce.

Add in that used car loans always have higher interest rates than new car loans, if you're buying with anything other than cash there still isn't that much of a discount on gently used/certified vs new.

You have to really go back a few years or get a relatively high mileage before you start finding cheap options again.

Re: The $25k car is going extinct?

#870

Post by TulliusCicero »

jazzyjackson wrote: post #192
TulliusCicero wrote: post #185

Earlier quoted context omitted.

The solution to number one is more competition: a new company willing to take smaller margins to gain market share.

Economies of scale says before you can build a cheap car you must first be a large company

One possibility is companies that are already established overseas entering the US as a new market for them.
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