12 November 2020

Do we pay more for our cars now than we did 30 years ago?

If you are asked the following question: « Is buying a new car more expensive today than it used to be? » « . Right off the bat, you might tend to say, « Yes! It is much more expensive to buy a car these days.  » And yet …

Of course, if we compare the price of new cars over the past 30 years, we notice that it has indeed increased. However, if we translate the selling price into the number of weeks of work required to make the acquisition (taking into account the average salary for each period) we arrive at a rather interesting finding.

We have chosen to compare the working time required to acquire three comparable new vehicles: the Toyota Corolla, the Nissan Sentra and the Honda Civic.

So, if we compare our purchasing power in 1990 vs in 2020, it is surprising to note that in terms of the acquisition of a new vehicle, it has remained more or less the same!

ModelToyota Corolla
4-PR 4RM 
Toyota Corolla
1990 Toyota Corolla Review & Ratings | EdmundsToyota Corolla 2020 - View Specs, Prices, Photos & More | Driving
Price (PDSF)$15 238$20 790
Average employment income / year$35200 ($2933.33/month)$46200 ($3850/month)
Number of months of work required5,2 months5,4 months
ModelNissan Sentra
4-pr GXE
Nissan Sentra
Nissan Sentra - Wikipedia2016 Nissan Sentra Review, Ratings, Specs, Prices, and Photos - The Car  Connection
Price (PDSF)$15 240$20 583
Average employment income / year$35200 ($2933.33/month)$46200 ($3850/month)
Number of months of work required5,1 months5,3 months
ModelHonda Civic
Honda Civic
Honda Civic (fourth generation) - Wikipedia2020 Honda Civic Si Coupe and Sedan Paint Color Options
Price (PDSF)$14 995$23 585
Average employment income / year$35200 ($2933.33/month)$46200 ($3850/month)
Number of months of work required5,1 months6,1 months

We can therefore conclude that even though vehicles were less expensive 30 years ago, they haven’t really become less accessible for middle-class Quebecers.

Not to mention the fact that the automobile has made significant progress in terms of safety equipment (ABS, air bags, etc.), comfort (air conditioning, GPS, etc.), roominess and performance. You have a lot more for your money these days.

But there is a catch in this beautiful story…

Buying a car isn’t the only step to consider. You also have to calculate gas costs, insurance, pay registration fees, do maintenance … the list goes on!

And since these additional costs have risen sharply over the past 30 years, it’s safe to sat that they are the main culprits that lead us to believe that buying a new car is more expensive than it was before.

It is not the purchase of the car that costs more, but the necessary costs that surround it.