Re:The Real Cost of the 2008 Financial Crisis
by smogcutter on Tuesday September 11, 2018 @08:18PM
(#17964589)
This got me to dig into historical prices a little, and turns out I was even more wrong than that. Looks like car prices were pegged to inflation until about 1997, where they level off while overall CPI keeps growing:
That said, loan terms are lengthening and subprime loans are a large and growing part of the market. That has to be buttressing prices. I really can't back this up, but my suspicion is that over the long term, available credit has helped discourage auto makers from simply making cheaper cars.
Today you can buy a cheap appliance computer for a price that would've been unimaginable in 1995. And you can buy a cheap appliance car... for about the same price as in 1995. Obviously the two markets don't work the same way, but there's still something odd about that.
https://fred.stlouisfed.org/series/CPIAUCNS
https://fred.stlouisfed.org/series/CUUR0000SETA01?utm_source...
That said, loan terms are lengthening and subprime loans are a large and growing part of the market. That has to be buttressing prices. I really can't back this up, but my suspicion is that over the long term, available credit has helped discourage auto makers from simply making cheaper cars.
Today you can buy a cheap appliance computer for a price that would've been unimaginable in 1995. And you can buy a cheap appliance car... for about the same price as in 1995. Obviously the two markets don't work the same way, but there's still something odd about that.