Why are New Cars So Expensive?
Over time, the cost of buying a car has increased considerably due to advancements in engineering, technology, safety, and design. Sticker prices today compared to those 30 years ago are significantly higher after adjusting for inflation. In turn, this means car buyers are stretching their budgets now more than ever.
A case in point is the Ford Explorer, which has been in continuous production since 1991. When the Explorer was introduced in the early 1990s, its base price was $30,755 in 2020 dollars compared to its current base price of $32,765. The $2,000 difference is noticeable, but that gap widens considerably moving up the model range to the higher trim levels. In 1991, the top-level Explorer Eddie Bauer started at $42,089 in 2020 money compared to today’s top trim level, the Explorer Platinum, which has a starting price of $58,250. That is a difference of more than $16,000.
This kind of general cost increase has been a common trend across the entire auto industry for decades. There are many reasons why newer cars are more expensive than their counterparts from years past, the primary one being they have evolved into better products overall.