Let's crunch some numbers. Take Acura, for example. The least expensive model in 1996 was the Integra RS 3-door, priced at $18,795. It offered a 139-hp 1.8-liter engine, 14-inch wheels with hubcaps, two airbags, power windows and mirrors, and a cassette player. Its fuel consumption was 10.2 L/100 km in the city and 7.0 L/100 on the highway.
In 2006, the most affordable Acura is the CSX Touring. With a base price of $25,400, it offers a 155-hp 2.0-liter engine, 16-inch alloy wheels, a climate control system, cruise control, a power group, keyless entry, and a CD player. It also offers front airbags, side airbags and side curtains as well as antilock brakes. The fuel consumption of the CSX is 8.7 L/100 km in the city and 6.4 L/100 km on the highway.
The entry-level Acura might cost more today, but it offers more power, a lot more equipment, it uses less fuel, pollutes less and is safer. All that for $6,600 more.
But wait. Let's calculate the inflation rate in these numbers. With a 3% annual inflation rate (in the automotive industry), the Integra of 1996 would cost about $25,260 today. I've made these calculations pretty quickly, but considering that a 2001 Integra started at $22,500, my numbers must be close to reality. For the equivalent of an extra $140, look at all the CSX offers in comparison with the 1996 Integra RS.
Here's another example: the 2-door Chevrolet Cavalier was selling for $13,600 in 1996. It offered a 120-hp 2.2-liter engine, 14-inch wheels, two airbags and an AM/FM radio. Its fuel consumption was 10.1 L/100 km in the city and 6.0 L/100 km on the highway.
Its successor, the 2-door 2006 Chevrolet Cobalt LS, costs $15,710. It offers a 145-hp 2.2-liter engine, 15-inch wheels, two airbags, and a CD player. Its fuel consumption is 9.5 L/100 km in the city and 6.1 L/100 km on the highway.
If we consider the inflation rate, the 1996 Cavalier would cost $18,275 today. It now looks like the Cobalt is quite a deal, is it?
So, while we think that our cars are more expensive today, it's the other way around. It's rather our net revenues that aren't increasing...
In 2006, the most affordable Acura is the CSX Touring. With a base price of $25,400, it offers a 155-hp 2.0-liter engine, 16-inch alloy wheels, a climate control system, cruise control, a power group, keyless entry, and a CD player. It also offers front airbags, side airbags and side curtains as well as antilock brakes. The fuel consumption of the CSX is 8.7 L/100 km in the city and 6.4 L/100 km on the highway.
The entry-level Acura might cost more today, but it offers more power, a lot more equipment, it uses less fuel, pollutes less and is safer. All that for $6,600 more.
But wait. Let's calculate the inflation rate in these numbers. With a 3% annual inflation rate (in the automotive industry), the Integra of 1996 would cost about $25,260 today. I've made these calculations pretty quickly, but considering that a 2001 Integra started at $22,500, my numbers must be close to reality. For the equivalent of an extra $140, look at all the CSX offers in comparison with the 1996 Integra RS.
Here's another example: the 2-door Chevrolet Cavalier was selling for $13,600 in 1996. It offered a 120-hp 2.2-liter engine, 14-inch wheels, two airbags and an AM/FM radio. Its fuel consumption was 10.1 L/100 km in the city and 6.0 L/100 km on the highway.
Its successor, the 2-door 2006 Chevrolet Cobalt LS, costs $15,710. It offers a 145-hp 2.2-liter engine, 15-inch wheels, two airbags, and a CD player. Its fuel consumption is 9.5 L/100 km in the city and 6.1 L/100 km on the highway.
If we consider the inflation rate, the 1996 Cavalier would cost $18,275 today. It now looks like the Cobalt is quite a deal, is it?
So, while we think that our cars are more expensive today, it's the other way around. It's rather our net revenues that aren't increasing...