Back in 1956 a fellow named Lee Iacocca came up with a plan he called 56 for 56.

20% down and $56.00 a month for three years would buy you a new Ford, the average wage in the 1956 was just under $5000.00 per year. This would have made your car payment 11% of your income.

Factoring for inflation that would be $480.00 per month now... this would correspond with an average income of $42,000 / yr.

The median income in the US is just over $50,000 / yr per household, average payment for new car loans is $452.00 per month but the lengths of the loans is 5 years or more for 90% of purchasers.

That's silly, everyone knows that recorded history began in 1953.



Don't they?

Along the same vein, I wonder if cars are actually more expensive now. Sure they cost more, but you're also getting things like ABS, air bags, power everything, climate control, etc. Strip away the expense of all those items, adjust for inflation, and I wonder what we would see.

Looked up the average price of a car in 1956 and this was $2050.00, average rent was $88.00 a month, and average wage was a little lower at $4500.00 / yr... and fuel cost .22 cents a gallon.

Average house price was $11,500... my friend said his mortgage in the 1950's was $50.00 a month and that he had a 15 year mortgage.

Factoring for inflation the average car in 1956 would cost $17,000 in 2013 dollars, the average selling price for a new car in 2013 is a little over $30,000.

Comparing inflation rates between 1956 and now means that what your dollar bought then now costs $8.56... this means that the average wage needs to be $38,000 / yr to have kept pace with inflation since then... average per capita income in the US is $42,000 for 2012.

Many of those things like houses, cars, and fuel have outrun the inflation rate...

Sure, but that's a $13,000 difference for the car itself. Maybe there's $13,000 worth of extra stuff in a new car.

Agreed! Especially with people that would qualify as middle class. I have several co-workers that are on the lease bandwagon. A couple have made fun of the fact that my personal car is a 16 year old truck. But my truck is paid for and other than repairs will be on the road until I can no longer get parts for it. Ditto my wife's vehicle. Hers is a bit newer and will probably need to eventually be replaced. When the time comes it will be replaced with a gently used vehicle that we pay cash for. Then driven until it is no longer viable to repair or we can't get parts for it.

Aaron

The difference between a late 50's automobile and a 2013 automobile is like night and day when it comes to materials and technological advances.

At the entry level you can get a decent car for around $12,000 with all the things a modern car needs like ABS, airbags, etc.

Mind you... for about $3000.00 you could have bought this in '56... about $24,000 in 2013 dollars.

A developed country is not a place where the poor have cars. It’s where the rich use public transportation.

- Gustavo Petro, Mayor of Bogotá

Good one. Maintenance costs went up 11% percent last year! What the heck is driving auto maintenance costs to go up so fast in one year? Employee health insurance?

Don't mention it. I know this topic comes up frequently on this forum but it's interesting to see AAA's figures go up each year. Back in 2007, the cost of operating a small sedan was $6,219.00 dollars! Five years later, it's three thousand dollars more!

https://www.theautochannel.com/news/2...26/041259.html

In two months I'll be moving into a place that will cost me $487 less per month than I'm paying now. Will I buy a car with that extra money? No. Certainly that is enough to make a monthly payment on a mid size low end car. I'll use that money to pay my only debt which is a medical bill.

I do not know anybody in my social circle who is earning over $25,000 per year. When I hear about the median income being in the $40,000 range it makes me wonder just where these people are. I know they exist because I see people driving expensive cars and living in houses with children. I don't know where they are working. There is a hospital in my town and there are about fifty doctors listed in the phone book. There are some lawyers around with quite a few locally owned businesses too, but those numbers seem small compared to the population. Maybe I just don't associate with the right people (income wise).

The newspaper job listings don't have jobs that pay very much. I rarely see any executive type job listing. I do see some nursing positions open occasionally. To make up for all of the low paying jobs there must be quite a few high paying jobs available to make the average income so high. I don't see them around here. Maybe these averages are taking into account the billionaires.

I must say I'm envious of the people who have new cars and trucks during the winter. I would prefer using a car to go to work when the temperatures are below freezing. I must be at work by 6:40 AM. The local buses don't run until 7:30 AM. and they end at 5:30 PM. This morning my ride was in 17ºF air. Yesterday was colder. I understand the allure of cars as toys and as tools.

The Road & Track story about the young man without a license was interesting. As it was written it seems he wasn't totally swayed to join the automotive owners club.

Occasionally I've wondered about how much extra income I would need to earn to decide to buy a car. My job is just three miles away. I go there twice per day. I don't do out of town trips and I've had my fill of joy riding back when I was a teenager. I bike sixty-five miles per week. Owning a car for such low mileage would really be a luxury. It is the only way I can think about it. I can't justify it as a necessity because I know I can live without a car. This perspective is something that most car owners don't have. Since they haven't ever tried living without a car they have no idea that they could get by without one.

Even with car costs hitting an all time high nothing will change. Several people at work have told me that they wish they could do what I do. They say they admire me. None of them are taking up vehicular cycling. Cars are an addiction that is hard to break.

AAA 2012 Driving Costs link: https://newsroom.aaa.com/2012/04/cost...2%80%99-study/

That doesn't surprise me. It must have been about 20 years ago that an associate of mine purchased a new car in cash! I will probably never hear anyone pay for a new car in cash for the rest of my life.

All of those 7 year loans are never paid off and the dealers know this. They use the 7 year loan to get the monthly payments reasonable knowing full well the car won't move off the lot with a 4 year loan since people are making less. After 4 or 5 years, the owner trades in the car for a new one rolling over the loan for another 7 year note.

Note that the average income is usually given as the average household income, meaning that two people earning $25k have a household income of $50k.

Income also varies by age a lot; if you are in your 20s, you are more likely to be around people with entry level salaries than would be the case if you were older. I did a quick internet search; the average teacher's salary for MT is $40,000, but the starting teacher's salary is $25,000 (which appears to be the lowest in the country).

As well as even economy cars car that can be expected do 100,000 miles with a minimum of maintenance, tires that last for 50,000 miles and 5-6 passenger sedans that can easily get 25-30 mpg with the air conditioner running while listening to a far better sound system, in a far safer car with better suspension and braking than 50 years ago.

So, Lee's plan then took 11%, and people spend more like 8% now, so cars are cheaper?

So, cars are like 80% more expensive now?

So, they cost about the same, but we're paying for airbags and anti-lock brakes and such?

A 1956 VW Bug was $1495, or about $12,000 in today's money for an entry level car, so cars cost almost exactly the same?

https://ca.answers.yahoo.com/question...9103011AAwx8Mh

I suspect operating costs are higher now, which is a big factor in making total cost of ownership higher now. Gas price in today's money was $2.50 in '56.

I'd be shocked if insurance was not much higher adjusted for inflation. I suspect you're paying more now for tires, batteries and such now due to fees for environmental impacts. And, you have to consider hidden costs. How much are we paying now in taxes or higher prices passed on to consumers to pay for more and better (at least bigger) roads?

I'll conclude that the cost of the car itself is rather flat over the past 50 years or so. Cars perform better, and this performance is delivered at a better price. However, safety requirements have filled in this gap, keeping the prices from dropping. In addition, we have decided, on average, to buy cars with more luxury features, so we actually spend a higher % of our income on our cars. Expenses after purchase tend to be higher, including gas, insurance, and hidden costs. So, total cost is higher, though exact figures are elusive.

Sure, if you consider a 32hp car with zero amenities (ya know, like safety features, useful heater, defroster, gas gauge, normal handling on slippery roads, rust proofing, etc) equivalent to a 21st Century entry level car sold in the U.S.

It is always a blast to read such "insights" on motor vehicle ownership costs/value on the list of the car-free.

IMO, the TRUE cost of a car is its value to the individual or family that owns it. I once inherited a "free" car that was economical and reliable. This was about as "cheap" a car as one could have. Still, it disrupted my life to the point that I thought even its minimal expenses were too much for my budget. Or budgets, since I believe we have an emotional budget also. So I sold the "free" car and enjoyed spending the money on things that had some TRUE value for me.

Yawn.

When you adjust for inflation it just tells you what that 1956 Beetle would cost in 2013 dollars but if you were to spend $12,000 today you could get a car like the Nissan Versa which is a 4 door sedan with 110 horsepower that gets 33mpg (combined) and has a full compliment of safety features, handles better, and comes with a working heater.

This may be the car free forum but lots of people are car light or are considering reducing their dependence on the personal automobile and the costs of acquiring and operating a vehicle are usually one of the primary considerations.

I think that price wise, we are getting more for our money when we buy a new car than those folks did back in the 1950's because they are so much better... you would be hard pressed to find a car from the late 50's that could compare to a modern car in regard to performance and safety features.

I think the problem now, as it has always been is that many people are living beyond their means so they are buying vehicles that would be beyond their budget save for the fact that amortization periods are so very long and make the monthly payment less, but over the long term costs a lot more.

Same applies with homes... it appears that a new bubble is building because the mortgage industry is a greedy bunch and they will do whatever they can to help people live in a house they cannot afford.

My parents never took out a car loan and never owned credit cards, they always paid cash and the only long term debt they had was their home.

I bought a 1986 Toyota in 1994 that had 70,000 km on it and was selling for $16,000 and the salesman could not understand me when I asked him what kind of discount there was if I paid cash.

He kept telling me I had to talk to the finance department and if anyone is familiar with the big automakers you know that besides building cars, they are also in the business of loaning money.

Even more fun was buying a house for cash... the realtor almost fell off his chair when I said I did not have to talk about getting a mortgage pre-approved.

I pretty well said that, but thanks for snipping something out of context and taking it to mean what you want it to mean.

Why would anyone even mention a '56 VW and any modern car sold in the U.S. in the same sentence, unless trying to point out how inferior one was to the other, no matter what the price? What did you want it to mean?

The frequency of maintenance service and repairs on new vehicles is much less then old vehicles. New cars can easily go 100 000 KM without any repairs or maintenence other then regular oil changes. Old cars required constant adjusting and tinkering and tune ups to keep them running smoothly. I think most of the cost is in labour charges, insurance and gas. I remember when shops used to charge only $45 /per hour and now they charge $90++ dollars per/hour. Parts replacement such as alternators, starters, fuel pumps were much easier to replace on old vehicles then new vehicles. Old vehicles also never required any computer diagnostic tests which can get expensive when trying to diagnose an electronic problem.

Yeah cars from the 50's and cars from today are not really comparable at all. The cars from the 50s' came with a 90 day warranty (seriously) and you would be lucky if the car went to 100,000 miles. (Some did, of course, but it was a big deal in a way it isn't today). Maintenance was constant compared to today's cars: there were like 50 places where the car had to be lubed every couple of months - now it's all sealed bearings. Even today's $3.50 in gas compares well to the $2.50 equivalent you'd pay back then when you consider mileage.

All of this means that it's easy to buy used cars that are decent, reliable, and will probably lost longer than a new car bought in 1955. (And that is probably also the reason why fewer people are buying new cars).