In an age of living a luxurious life, even for those living well beyond their means, we’re seeing prices gradually moving up, pinching middle class consumers in the process. The automotive market is one of those industries in which we’re witnessing the inflation of car prices. Vehicles that shouldn’t be priced any higher than $16,000 – $18,000 are nearing $20,000+, and consumers are beginning see how buying a 1-2 year old used car is a better fiscal decision than walking into the dealer and driving off the lot in a brand new car. But are consumers partially to blame for the uptick in vehicle prices?
Europeans are known to prefer luxury and driving experience over flat-out performance, which is why European auto makers produce more expensive cars that capture the very best in what the automotive world has to offer. Over the years we’re seeing this trend beginning to grow in the United States as flat-out performance is not selling as quick as luxury, something Cadillac refuses to see as they’re marketing performance first and their sales figures are dropping because of that. Muscle cars have made a slight rebound with the emergence of the Dodge Charger and Challenger Hellcats, the new fastback Ford Mustang, and the Chevrolet Camaro which will be sporting a new look next year.
If you’ve been to car shows recently you’ve noticed that interiors of low-end cars now have an upscale appeal. The Mazda3 and Mazda6 have very comfortable and luxurious interiors, which is a slight shock considering that they’re not a luxury brand. The Honda Civic EX-L, priced around $25,000, has an amazing interior, and if you forget about the engine that it has, you’d have to say that it’s a very impressive car. This leads me to the Toyota Yaris, which some trims cost near or exceed $19,000. That’s absolutely outrageous as this is the Hyundai Elantra GT’s price range territory. True, it gets less gas mileage than the Yaris, but why buy a micro hatchback when you can buy a full size for the same price?
The interiors and their infotainment systems are partially to blame, but so are the consumers. Bluetooth, navigation systems, electric sunroofs, touch displays, and premium cloth or leather seats all factor into the price. The reason why cars like the Honda Fit and Toyota Yaris are considered economical cars is because they’re supposed to be cheap while also offering great gas mileage. Not in 2015. While you have the option to buy the base model, $16,000 is still no drop in the bucket either. Which raises the question as to why consumers would buy new in this current market? Leasing offers have become more appealing than buying, and you actually end up with a better car for 24-36 months than if you bought a car for $18,000.
The luxurious lifestyle is great, but are we living way beyond our means? The Mazda3 was once affordable, a rival to the Ford Focus. Now a top trim Mazda3 is impeding on the Chrysler 200’s territory. For those who do have the money to buy a $25,000+ car, this is a great time to buy. Instead of spending $40,000 on a Mercedes Benz or BMW, you can get an upscale interior for a fraction of the cost. In the sure sense of practicality, a top trim Mazda3, Subaru Impreza Premium, or a Honda Civic EX-L is a much better option, and you don’t break the bank buying a car that offers every infotainment system on the market.
Car companies have their reasons for spiking the prices of cars, but consumers’ demands for luxury interiors and infotainment systems have been a cause for more expensive cars that were once affordable. Whatever happened to the days when we’d get in our cars, turn on the radio, roll the windows down, and enjoy the driving experience? Owning a luxury car is by no means a bad thing, but we’re continuously outdoing ourselves by demanding luxury in cars that are nowhere close to being upscale.