Affordability

corktina

I was just thinking back to 1989 when I bought my first new car, Opel Kadett 1.4LX 4 door saloon. It cost just over £10000 (about €13000 I guess).

I'm currently looking at The Focus and the cheapest is about €21000. Not much of an increase for 25 years is it!.

So, what has made new cars more affordable?

cruizer101

Your problem there is comparing it to property which has become unaffordable.

I was young back then so can't remember much in the way of prices but a mars bar was 30p ish a can of coke 50p, doubled and taking account of euro thats about 80c and 1.20 which is close enough to todays prices and I'm sure if you compared other items you would see a similar trend. Property is not something to compare against as the rate at which it increased was ridiculous, little to no weight should be given to property prices as an indicator of overall inflation.

That said, I'd also say car technology has advanced vast amounts in the last 25 years making it seem like we are getting a lot more for our money.

BrianD3

You could express the price change in terms of average incomes - similar to the "Guinness Pint Index"
http://www.finfacts.ie/Private/bestprice/guinnessindex.htm

I remember in this forum circa 2010 posting on several occasions about how cheap the scrappage deal Renaults were at the time. In nominal terms the prices were very similar to what was being charged for the equivalent (but inferior) car from 15-20 years earlier. In real terms the 2010 cars were considerably cheaper. Yet posters here still whinged and doom mongered about how the 2010 cars would suffer "epic depreciation" which predictably has turned out to be a load of bullsh*t.

corktina

cruizer101 wrote: »

Your problem there is comparing it to property which has become unaffordable.

I was young back then so can't remember much in the way of prices but a mars bar was 30p ish a can of coke 50p, doubled and taking account of euro thats about 80c and 1.20 which is close enough to todays prices and I'm sure if you compared other items you would see a similar trend. Property is not something to compare against as the rate at which it increased was ridiculous, little to no weight should be given to property prices as an indicator of overall inflation.

That said, I'd also say car technology has advanced vast amounts in the last 25 years making it seem like we are getting a lot more for our money.

I wasn't actually comparing it to house prices, I'll edit the origianl post to remoive that as it confuses the issue. Thx for posting

CiniO

corktina wrote: »

I was just thinking back to 1989 when I bought my first new car, Opel Kadett 1.4LX 4 door saloon. It cost just over £10000 (about €13000 I guess).

I'm currently looking at The Focus and the cheapest is about €21000. Not much of an increase for 25 years is it!.

So, what has made new cars more affordable?

What was the average salary then (in 1989) and what is average salary now?

And to answer the question what made cars more affordable - well I suppose in 1989 Irish economy while probably growing, was at fairly low level compared with other EU economies.
At the moment, we are rather at the top.