$48,000 . . .• https://www.ericpetersautos.com, By eric
A related number is the average family's income, which is about $67,000. The average individual's income is about $44,000.
These are some interesting numbers – especially when juxtaposed.
It would take the average $44k-earning individual more than one year's pay – pre-tax – to buy a $48,000 car.
It would take about 75 percent of a $67k-earning dual-earner family's pre-tax income to buy a $48,000 car.
Which of course is why they both finance the $48,000 car neither can remotely afford. Many of them for seven years – or longer. More about that – and the inevitable outcome – here.
Two years ago, the average priced paid for a new car was about $35,000. So, about a $13k increase over about two years.
But why have new cars become so expensive so suddenly?
Incomes haven't increased to match, obviously. And "inflation" – i.e., the diminishment in buying power of money – hasn't, either. At least, not that much.
The reduction in the buying power of money – which manifests as having to spend more of it to get the same (or less) – accounts for only about half (about $6k) of the roughly $13k increase in the price paid for the average new car last year.