What's the lowest priced new 2021 car in the US? Would you believe $18,000?

Posted by freedomforall 3 weeks, 1 day ago to Economics
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A new Toyota Corolla stickers for just under $19k. A Mazda3 lists for just over $20k.

The 2021 Honda Civic starts at $22k.

Chevrolet doesn’t sell a new car that costs less than $21k – because it no longer sells cars at all. The just-over-$16k Sonic has been cancelled, leaving the micro-crossover Trax as the lowest-priced new Chevy on the field.

It stickers for $21,400 to start.

Ford no longer sells an affordable car, either – having cancelled all of them, too – including the Fiesta and Focus. This leaves the EcoSport – another micro-crossover – as the lowest cost new Ford.

That one stickers for $19,995 to start.

There is nothing on the menu at Dodge that stickers for less than $27,500 – and that one’s a minivan. If you want a car from Dodge, you’ll pay considerably more. A new Charger sedan starts just under $30k; the two-door version of the same thing – a Challenger – is slightly less at just over $28k to start. They are both great cars but there’s nothing Beetle-analogous at Dodge – which once upon a time was an entry-level brand, a notch up from Plymouth – which is a brand no more.

As for VW, the People’s Car is now the rich man’s car, too. Or at least, the not-poor-man’s car. The lowest priced new VW – the Jetta – stickers for just under $19k to start. As in $5 under ($18,895).

Now, the Jetta is also a fine car. It is a Cadillac in comparison with the ’70 Beetle. But it also costs about $6k more than the ’70 did, in actual purchasing-power/adjusted-for-inflation dollars. This would be ok – a net gain – if the purchasing power of the average American had tracked upward along with inflation. If it had, the average American would be getting much more car for about the same money as the average American paid for a car back in 1970.

Instead, he is getting more car – and paying for it. Because he has less money. His income has not kept up with inflation, while his taxes – including those not styled taxes such as the now-mandatory health insurance mordita – have gone up.

A lot.

Since he can’t pay for his car, he finances it – routinely for six or even seven years as opposed to the three or four it took in 1970. And because this hiding of cost has become almost universal, there is less incentive for the car companies to offer actually affordable cars. It is easy to hide the $3k difference between a $15k Hyundai and an $18k Toyota over six years of monthly payments.

It’s just another $50 per month … easy!

Except it’s hard.

People just don’t see it – yet – because so long as they can finance and so long as they can make that monthly payment, the thing seems viable.

Until the day comes when it isn’t.

This has created its own self-sustaining feedback loop. The cost of entry-level goes up because most people are financing more – and for longer. It doesn’t make sense for a car company to sell a $15k car when they can finance the $20k car.

And the more who finance the $2ok car, the fewer $15k cars on the market. There is no longer an incentive to keep prices down when costs can be hidden.

This is why things like air conditioning and power windows and locks are now standard equipment in every new car. It used to be optional. The Versa was the last new car that let you skip AC and power windows if you didn’t want to pay for them.

But now you can’t avoid paying for such things because everyone else is financing them. And once you get accustomed to financing AC and power windows and locks, why not also an LCD touchscreen and an upgraded stereo, too? How ’bout a turbocharged engine while we’re at it?

And so, they do.

But for how long?

Meanwhile, it’s interesting to imagine what a car like the ’70 Beetle would cost today – if it could be built using modern manufacturing techniques and taking advantage of all the advances that have made it possible to build $15k cars with AC, power windows, locks and so on.

Probably, the 1970 Beetle could be built for less than $10k in today’s dollars, which would put it within reach of many people’s ability to buy in three years or less. But solvency and prudence are as out of fashion in Heliogabalus-era America as showing your face.
SOURCE URL: https://www.ericpetersautos.com/2020/10/31/the-rising-cost-of-entry-level/


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  • Posted by $ blarman 3 weeks ago
    I'll just note a couple of the things which make cars expensive:

    1) Government regulations. Whether they are catalytic converters or safety standards, government regulations only make cars more expensive.
    2) Union workers. There is a reason that cars depreciate 10%+ as soon as you drive them off the lot: that higher sticker price wasn't real value but the costs of union wages and benefits. A typical union worker barely has a high school diploma but with benefits makes six figures even as a starter!
    3) Steel prices. The US imports much of its steel because it has failed to invest in better steel-making technology. My dad worked for a steel company while going to college and by the time it was my turn they'd been shut down for a decade.
    4) Over-automation. Good grief. If the car doesn't have all the bells and whistles (power locks, power windows, good stereo, GPS built into the dashboard, USB ports in six places in the car and a DVD player in the back of the driver's seat, you can't even sell it. Not to mention the entire rack of motherboards in the engine compartment. What happened to a simple carburetor-driven vehicles with a manual transmission?
    5) Maintenance costs. See #4.

    Take me back to the old days where one could work on a car themselves and you didn't have five miles of wiring to worry about. But keep the LED lighting ;)
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    • Posted by term2 3 weeks ago
      I can remember my first car- a 1950 Plymouth that I got in line 1962. If it had spark and fuel of some sort, it would run. Very reliable actually, and if it stopped, you could pretty much fix it yourself. Now thats a pipe dream- If it stops you are essentially stuck.
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      • Posted by $ TomB666 3 weeks ago
        Mine was a 47 Dodge with Fluid Drive!
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        • Posted by term2 3 weeks ago
          Back in the late 40’s and 50’s there were a lot of transmission ideas tried out. As I remember the gm hydramatic was in a lot of their productd
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          • Posted by $ TomB666 3 weeks ago
            I've read that Ford tried something in a Mercury right after WWII that was a big failure. GM's hydramatic is credited with making the superchargers necessary for the high altitude flying of the big bombers possible. I know for certain that GM hydramatics were in Lincolns as I have a friend who owns one of them.
            So you are spot on ;-)
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    • Posted by 3 weeks ago
      Well said, blarman.
      I have been enjoying my '99 model since '14. I did replace the audio deck for $120 in '16 to play mp3's, but I don't miss any of the other 21st century features that many people must pay for.
      There are a number of features that came on my '99 that I do appreciate that weren't available in the 70's. I like anti-lock brakes, 4-wheel disc brakes, electronic ignition, modern radial tires, better mpg, power windows/locks. I would have voluntarily paid for them all without government meddling. If I am careful I should be able to sell my car for as much as I paid since it is a limited production edition.
      The biggest problem is keeping mice from eating the plug wires and nesting on the engine block in cold weather.
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    • Posted by $ Olduglycarl 3 weeks ago
      You would think that using shared body pannels would have brought the selling price down...just look at each model level in every brand...they are virtually the same car...and most are UGLIER than Olduglycarl himself...Oh, that's me!
      I have Never witnessed such disjointed design on wheels...might have been a page out of the GM worker that stole Cady parts over several year and then put them all together into one car!
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  • Posted by tohar1 3 weeks ago
    I think that's why I was so excited about the ill-fated ELIO. When the idea was introduced, it was a car that could comfortably seat 2, was well appointed, had an estimated 84 MPG and really spoke to me with the +/- $8K price tag. They haven't officially closed up shop, but it doesn't look too good for the thousands of people who ponied up money in advance to get their "Spot In Line". Website is still active if you're curious &/or if you have a couple million dollars you'd like to invest in the company: http://www.eliomotors.com
    I'm a small stockholder still in the company & really wish they could get this going...
    BTW: My wife & I just purchased a 2018 Jeep Grand Cherokee Laredo E--Let me tell you this thing is an animal! Luxury appointments, and pretty dang good gas mileage in my book, rides like a dream & we saved almost $20K off the sticker price by purchasing used. We love our Jeeps...her last 3 vehicles have been Grand Cherokees. Now I'm driving the hand-me-down 2004 that I thought about trading in until the dealership offered $750 (WTF!!!) for this still decent vehicle.
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    • Posted by $ nickursis 3 weeks ago
      Exactly. I think Elio is dead like the Tucker, he was challenging the established companies, and had no big backer. Soreass could have tossed him 100 million and not funded riots, but there you go...
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      • Posted by tohar1 3 weeks ago
        Sad part is he did have some decent sized backers...Overstock.com and several manufacturing suppliers (Firestone, Delco, Roush, Pep Boys) were a few that had lined up some decent $$$$.
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  • Posted by term2 3 weeks ago
    This is the fault of the federal reserve. First of all, it expands the money supply and second of all it keeps interest rates super low.

    great for the banks, but bad for consumers.
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  • Posted by $ Commander 3 weeks, 1 day ago
    And what helped this along? Car Allowance Rebate System, 2009...another Dem program for the financiers.
    I watched too many get ensnared in leases before they understood basic finance.
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  • Posted by evlwhtguy 3 weeks ago
    "Probably, the 1970 Beetle could be built for less than $10k in today’s dollars,.."

    I don't thinks so, you would have to factor in the additional costs of airbags, antilock breaks etc all mandated by government,

    Best thing to do is buy a used Toyota 4 cylinder and lear how to swing a wrench. Also.....learn how to make do with a reasonable sized car....I cant tell you how many idiots I see driving a 4WD behemoth by themselves back and fourth to work in flat sun belt areas. Almost no one in the US really needs a 4WD SUV. A Toyota Camry will do almost everyone.
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    • Posted by $ TomB666 3 weeks ago
      Well yes and NO. Because of my physical condition I can't get in to one of the small cars for sale today. After a couple of months of shopping I wound up buying a Ford Flex because it is the only one I could find that I could get into without spending a couple of minutes doing contortions to wiggle into it. I envy people who can still fit into today's tiny cars. (I'm 6'2" with DISH and arthritis in my spine - not complaining, just dealing with it.)
      And YES to 5 year old Toyotas, Fords, Chevys, Hondas and lots of others being still very good cars with a lot of life left in them.
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    • Posted by 3 weeks ago
      I think the author agrees that government meddling raises the price, and he was talking about the same features as the '70 Beetle (which would not be "road-worthy" under federal law.)
      I agree with your comments on rational car size. In a free market people have free will to make decisions that don't make sense for us. Sometimes they are rational for their situation; sometimes they are irrationally affected by advertising and other factors.
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      • Posted by evlwhtguy 3 weeks ago
        I suspect than an equivalent car....sans the government required stuff and modern creature comforts could probably be produced for less. Manufacturing is incredibly more efficient than it was. I bet cars like this are made in China and India. BTW....I bought a 1994 toyota Camry 8 years ago with 225K on the clock for $1100.00. Puffed smoke when you started it as it had bad valve seals. I got it for my kids to drive to school. Still have it, the wife drives very day it is our beater car. 367K miles on it gets 25 around town, and 28 on the highway. Looks like a POS as we never wash it but the AC blows cold and it always starts. If you are a young person....LEARN CAR MAINTENANCE!!! [Note....we live in NC....where there is no rust!]
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  • Posted by mspalding 3 weeks ago
    Used cars are a great deal. Especially ones that are about 3 years old. The price is radically lower. And with today's higher quality, you still get a long-lasting ride.
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    • Posted by 3 weeks ago
      I'd say in many cases going for an even older car is wise if you can find one without high miles/usage. I bought my current car in 2014 for about $6,500 when it was "only" 15 years old and had about 45k miles. Since then it has needed about $1,000 in maintenance - tires, oil changes, brakes, etc. Car insurance is the biggest expense for me. Granted I use it sparingly, but many people could buy such a car every 5 years and have no (or very low) car payments. The loss to depreciation in those 5 years would be very little, too. Of course, if everyone did it, the market would change and there would be a lot fewer new cars sold- fewer used cars in the future and higher prices.

      I see that used car dealers are doing very well in this economy and private sales of used cars are practically non-existent. Almost no one has cash to buy a car outright and used car dealers offer financing - at insane rates of interest.
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    • Posted by term2 3 weeks ago
      God help you if things break. The cost of repair is astronomical. Used car warranties are useless- get one and you will find out that when it comes down to it- ITS NOT COVERED.
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  • Posted by $ Abaco 2 weeks, 6 days ago
    We're in a different paradigm, I think, than we were in the 50s, 60s... One of my dad's first cars was a corvette. He paid cash and I think the car was around $1500. The price of cars relative to everything else seems to have come way up as the new paradigm for the broke middle-class Americans is to finance everything.

    FWIW, I like the Corolla. Good little car. My wife used to have one. We sold it to the kid down the street when he went to college and I bet it's still running like a top...
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  • Posted by $ nickursis 3 weeks ago
    Well, a quick check found a new Hyundai Accent for 15,295 MSRP. I bought a Elantra 5 years ago for 14K well appointed, never had any issues with it drove it 100K miles, had to dump it for an Outback as my wife would not go in it, too low to the ground (It is compared to the Outback, about 4" vs 9") Outback will have to last forever, but it is AWD and I do sometimes have to drive in snow and ice. I get your point, that was what Elio was trying to do, produce a 2 person commuter car people would buy, but I guess he failed, haven't heard a word since 2016, lost 3500.00 on that deal, as I believed in the concept.
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    • Posted by 3 weeks ago
      I see that model online at 15,395, but there are none available within 250 miles of my location - according to the Hyundai website.
      A friend is very pleased with his '14 Hyundai mini-van. Very comfortable and economical.
      There are so many government obstacles to entry in the new car business and they drive the cost up and limit competition- similar to the Pharma business.
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      • Posted by $ nickursis 3 weeks ago
        Oh, certainly. Nowadays, you almost always have to wait while they find the car you want and get it there. The one I bought was brought down from Washington, because I had the gall to want a manual transmission. You don't have that with Outbacks, they all are automatic, because they are variable speed, multi clutch. But I do like the Outback, they wanted 39K we got it for 31K with .9% financing. It was the mid range model, but my wife loves it, so that is what counts.
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        • Posted by 2 weeks, 6 days ago
          You'd know better than I on the car delivery, nick. My last new car purchase was in '89. I couldn't get a new Mazda MX5 without a big $ premium where I lived (LA, CA) and arranged to pick one up in Atlanta on the return flight from a vacation in Rio. Left my luggage on the flight back to LA and had a friend pick it up there. Can't do that these days with the jack-booted thugs running the airports. Sure was a fun drive back to LA in the days after Thanksgiving '89.
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  • Posted by $ pixelate 2 weeks, 3 days ago
    After putting 250k miles on my 2003 Camry, I am looking at the 2019 Camry models ... looks like I can get a "new" one with 10k miles on it for around $18k. I like the fact that the new models have the modern features: glass panel electronics, Car-Play (auto synch to iPhone, etc), more air-bags, miles remaining per fuel level, dynamic air tire pressure reading, etc ... The best part about the old '03 Camry is that the back seat is like a couch -- I've saved a lot of dough by crashing out on the couch instead of paying for hotel lodging.

    It really amazes me that lots of folks entertain the notion of a 60, 72 or the mind-boggling 84 month car loan.
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  • Posted by Owlsrayne 2 weeks, 5 days ago
    I would love to go back to those day that you could do your own auto repair work. After high school my brother and I enjoyed modifying 4 & 6 cylinder engine cars with low restriction exhaust systems, Offenhauser intake manifolds with 4 barrel Holley carbs. Repair work on newer out of warranty vehicle can run in the thousand of dollars. Unless one has a large retirement nest egg new cars are out of the question.
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