4 ms·

So, $9,000 ($9,450 per autotrader) in 1990 is roughly $18,000 ($19,000) in today’s dollars by most inflation calculators. (I realize we are skirting dangerously

So, $9,000 ($9,450 per autotrader) in 1990 is roughly $18,000 ($19,000) in today’s dollars by most inflation calculators. (I realize we are skirting dangerously close to tautological money value conversations here, but having lived and paid for things in both years, double seems close. Maybe a little under-reported, actually.) So, if someone put a new car on the market for $18,000 with the (lack) of features of the 1990 ford mustang, the poor reliability, louder interior noise, no bluetooth, dim/unsafe headlights, it wouldn’t sell. It wouldn’t sell because you can easily purchase a used 2015 Ford Mustang in good condition for this price. Approximately 0% of buyers would prefer a 1990 mustang to a 2015 mustang. Cars have added an incredible amount of value staying at or near their inflation-adjusted prices in the last 30 years. wireless audio, navigation, safety features, performance / efficiency tradeoffs, reliability are all miles better. Combine these features with very low interest rates and increased interest in financing, and actual prices are similar-to-better today on a monthly basis. A new 5 liter mustang costs maybe like $36k right now. Average mortgage rate in 1990 was 10% (!). Assuming car loans were 12%, then a 5 year financing of a $9,500 car would have been $211 per month in 1990 dollars, or $422/month in today’s dollars. New mustangs can be leased for as little as $300/month, purchased for $400-650/month. So, these prices are not wildly out of line with 1990s era prices. And, maintenance costs are vastly lower as well. All that to say, Tata motors is doing less well than tesla, toyota or ford, and I think that’s likely to continue.

OscarCunningham 5y ago
I didn't adjust the $9000 for inflation because according to the CPI calculations there's been ~0% inflation for cars. So if they're right a new 1990 Mustang would be priced at $9000 today in today's dollars.
- vcavallo 5y ago
  That critical detail whooshed over the head of the comment to which you’re replying.
- mrfredward 5y ago
  There is no metric for "inflation for cars". What the BLS data is saying is that the nominal price/quality for cars has stayed the same. So in 1990 you could get a mustang for $20k, and if instead you stuffed 20k in you mattress for 30 years, you could now buy a base model Kia, which when all the positives and negatives are added up delivers similar value to the features of a 1990 mustang. A 2021 mustang costs a lot more, but it's obviously in a different league, hence the adjustment. Meanwhile, that $20k buys at loss less food, healthcare, education, house, etc which is why "today's dollars" are worth less and why it's fair to say cars got cheaper in inflation adjusted terms.
  - OscarCunningham 5y ago
    > So in 1990 you could get a mustang for $20k, and if instead you stuffed 20k in you mattress for 30 years, you could now buy a base model Kia, which when all the positives and negatives are added up delivers similar value to the features of a 1990 mustang. Yep this was my point. We can see if the CPI is being calculated correctly by comparing cars which had the same price in each year and see if they really are about as good as each other. Whether you want to call this 'inflation for cars' is just semantics. (The original article says a Mustang in 1990 cost $9000, but I've also found sources for $10000 and $20000 so you might be right on that point.)
    - mrfredward 5y ago
      Oops, yeah I mixed up some numbers there, would have to be a mustang loaded with options for my comparison.

OscarCunningham 5y ago

I didn't adjust the $9000 for inflation because according to the CPI calculations there's been ~0% inflation for cars. So if they're right a new 1990 Mustang would be priced at $9000 today in today's dollars.

vcavallo 5y ago
That critical detail whooshed over the head of the comment to which you’re replying.
mrfredward 5y ago
There is no metric for "inflation for cars". What the BLS data is saying is that the nominal price/quality for cars has stayed the same. So in 1990 you could get a mustang for $20k, and if instead you stuffed 20k in you mattress for 30 years, you could now buy a base model Kia, which when all the positives and negatives are added up delivers similar value to the features of a 1990 mustang. A 2021 mustang costs a lot more, but it's obviously in a different league, hence the adjustment. Meanwhile, that $20k buys at loss less food, healthcare, education, house, etc which is why "today's dollars" are worth less and why it's fair to say cars got cheaper in inflation adjusted terms.
- OscarCunningham 5y ago
  > So in 1990 you could get a mustang for $20k, and if instead you stuffed 20k in you mattress for 30 years, you could now buy a base model Kia, which when all the positives and negatives are added up delivers similar value to the features of a 1990 mustang. Yep this was my point. We can see if the CPI is being calculated correctly by comparing cars which had the same price in each year and see if they really are about as good as each other. Whether you want to call this 'inflation for cars' is just semantics. (The original article says a Mustang in 1990 cost $9000, but I've also found sources for $10000 and $20000 so you might be right on that point.)
  - mrfredward 5y ago
    Oops, yeah I mixed up some numbers there, would have to be a mustang loaded with options for my comparison.