Yesterdays dollars

[Traveler]

Let me start by asking what is probably a stupid question. I know as much about finances as a monkey dies about fly a jet.

I don't understand why a 5 year old car sold for "X' dollars in 1990 but today a 5 year old car of the exact same make and model costs 5 times "X".

I would think that since cars are flooding the market the price would not go up THAT much.

Can someone explain it to me in a way that a dummy can understand?

 

[Knight]

Reasonable question but the 5x seems like a slight exaggeration. 1990 t0 2018 or 28 years is pretty healthy time span to not recognize the cost of all that is involved in pricing. Wages to technology all have to be considered. Wages all along the line not just the car manufacturer. Think about the multitude of parts and pieces that go into making one car. Technology built into cars not just the robotics that are used on the assembly line aren't cheap.


I google this question


average cost of a car computer

Best Answer: If by computer you mean the Engine Management System, then about $2k. so with labour $2.5k.


Source(s):
http://www.horsepowerfreaks.com/sale/aft...
Avon · 8 years ago




I hope looking at the cost to manufacture now vs. 28 years ago makes sense to you.

 

[mathjak107]

Let me start by asking what is probably a stupid question. I know as much about finances as a monkey dies about fly a jet.

I don't understand why a 5 year old car sold for "X' dollars in 1990 but today a 5 year old car of the exact same make and model costs 5 times "X".

I would think that since cars are flooding the market the price would not go up THAT much.

Can someone explain it to me in a way that a dummy can understand?

the car first of all is not the same car even if the model name is the same as technology trickles down . but putting that a side inflation changes the dollars value as well as commodity , financing and labor costs . for the most part it is not prices that change but the dollars value .

the proof of that is in the 1800's one ounce of gold bought a decent mans suite and a good pair of shoes . today one ounce of gold still buys a decent man's suit and a good pair of shoes. so prices have not changed much. the dollars value has changed .

 

[Traveler]

The 5 times cost is no exaggeration. In 1990, I bought a 3rd work vehicle, (model year 1980) an Econoline E-150 for $2,000.
Looking around this month, I see the price of a 10 yr-old Econoline E-150 is around $10,000

Just for laughs I also checked out the prices of 20 yr-old E-150's, van's which I might add are not even running, and the prices were still $2K plus. Of course this is California and things can get pretty strange here.

I just looked on Craigs List and I see several 2008 Ford E-150 vans for sale for $21,000. So that would be 10 times the cost of the vehicle I bought. PS, the 2008 E-150 sold MSRP original price, for $26,000. In ten years the selling price of the van dropped only $5,000. Pretty darn strange.