Back in 1973, a car cost less than 17 weeks’ worth of the median family income, and 13 vehicles were sold for every
100 people in the 20-65 age group. Now, it takes 21 weeks of median family income to purchase the average new car, down
from a high of 26 weeks in 1994 (when only 7.5 vehicles were sold for every 100 people in the aforementioned age
group). Why is this? Regulatory changes are certainly one of the largest ones, as devices such as airbags and three-way
cats don’t come for free.
But consumer expectations have changed as well. With the ever-present struggle to increase quality comes increased
costs as well, and maybe it?s time to start wondering if we?re reaching (or have passed) the point of diminishing
returns (it?d be fair to ask that question about emissions and safety performance, as well). Cars also continue to
increase in feature count; SUVs bring their own set of creature comforts that wouldn?t have been expected three decades
ago. It might be possible to argue that modern cars, on average, will last longer than their counterparts from 30 years
ago. Regardless, as manufacturers struggle to find ways to utilize excess capacity, it might be good to remember that
in 1920, a Model T cost only $3300 in today?s dollars.