From NYT, an interactive guest essay by Clifford Winston:
For generations, working- and middle-class Americans could find an inexpensive, reliable set of wheels to get around. In the 1970s oil crisis, such modest models came to be known as “econoboxes” and surged in popularity, particularly among a large and vibrant middle class.
That era is over.
The average transaction price for a new car now sits around $50,000. In December, it became just about impossible to find one for less than $20,000.
…
I’ve wondered about this question myself. Here’s part of Winston’s answer:
Source: Winston (2026).
I’m afraid I am going to have to dissent in this case.
Whether measured as a multiple of average hourly wages or median household income, the average new car is less expensive than it has ever been — even less than 10 years ago:
https://fred.stlouisfed.org/graph/fredgraph.png?g=1UJnq&height=490
In fact, a new car as a multiple of average hourly earnings costs only 30% of what it did in the 1960s.
And although I didn’t include it in the graph, the same holds true as to disposable personal income.
I’m open to an explanation as to why the above metrics don’t tell the “real” story, but absent that, the hypothesis of this article doesn’t seem to hold up.
One issue that might be complicating things is that in the 1960s and likely 1970s, a majority of households may only have owned one car. Now, not only do both spouses almost always own cars, but so does every teenager in the family.
For yucks, since this article doesn’t offer an average price for the fleet of new cars, but rather for individual models.
What’s missing from the NYT article, your calculation and the cars-of-the-past price comparison is hedonics. Of course, hedonics are moatly beside the point for the issue at hand; a “better” car doesn’t change how big a chunk it takes from the household budget.
Because of the hedonic issue, I went back and looked up the starting prices of economy cars from about 1970-80, including the VW Beetle, Toyota Tercel, Ford Maverick and Pinto, Chevy Chevette and Vega, and a couple others. They ranged from about $2000 in 1970 to about $4500 in 1980. Adjusted by average hourly wages, that’s about $18,000 now.
I also looked for a list of the10 least expensive cars now. They ranged in price from $18,000 to $25,000.
I just don’t see the big difference.
Comparing an averaged price vehicle now vs. a starter vehicle 50 years ago is an apples/oranges thing.
maybe we should consider the median rather than the mean cost for a new car? decades ago, i don’t think the luxury car market was so accessible. i have heard the median cost is $5k to $10k less than the mean, today. but not sure what is was decades ago.