But Toyota barely raised the price of the Camry. Here are 32 years of real-world price increases compared to the CPI for New Vehicles.
By Wolf Richter for WOLF STREET.
It’s the time of the year again when I get to update the extra-special proprietary non-adjusted WOLF STREET Real-World New-Vehicle Price Index, or more precisely the F-150 XLT and Camry LE Price Index, with the MSRPs of the 2023 model year. The F-150 XLT is just above the XL model (low end of the F-series). High-end models of the F-series can cost over twice as much as an XLT. The Camry LE turned into the low end of the Camry line when the Camry L was discontinued. The F-150 XLT and the Camry LE both go back to 1990 and beyond, and both are bestsellers, which is why I use them for my index.
I use the base version of these models, with no add-ons and without destination and delivery charges, to show the price increases of the bestselling truck and the best-selling car in the US going back to 1990. And for an extra-special hoot, I compare that to the CPI for new vehicles.
The chart below shows the MSRP for each model year of the F-150 XLT (red, left scale), and the Camry LE (purple, left scale), and the Consumer Price Index for New Vehicles (green, right scale). We’ll get to the details and numbers in a moment:
- MSRP of F-150 XLT: +231%
- MSRP of Camry LE: +77%
- CPI for new vehicles: +43%, including the 18% increase over the past 24 months.
The price increase of the 2023 F-150 XLT blew my ears off, compared to the 2022 model and the 2021 model, about +10% each year, two years back-to-back, total blowout price spikes. Over those two model years, from the 2021 model to the 2023 model, the base MSRP without destination and delivery charges jumped by $7,540, or by 21%, from $35,400 for a 2021 model to $42,940 for the 2023 model. Time to go on a buyers’ strike, no?
This is what the inflationary mindset is all about: Manufacturers think that people will pay whatever because people paid whatever plus big-fat addendum stickers last year, so here we go.
Ford has been whining all year about its cost increases, and used this whining as reason to jack up its retail pricing – the inflationary mindset at the manufacturer. A lot of media attention was focused on the multiple price jack-ups of the electric F-150 Lightning. But not much ink was spilled on the blowout price jack-ups for the second year in a row for the regular F-150 XLT – the truck that the average American is supposed to be able to buy.
By contrast, Toyota raised the 2023 Camry LE price by a benign 2.6% to $25,945 without destination and delivery charges, after having raised it only 1% in the prior year.
Trucks are just so profitable for dealers and automakers. The thing is – automakers figured this out long ago – Americans don’t mind paying out of their nose for big equipment while letting automakers and dealers pocket huge profit margins.
But when it comes to a car, suddenly, they’re very price conscious and they don’t want anyone to make any profits. This has been the case for 20 years. And that’s why the MSRP of the Camry, which until the year 2000 had been above that of the F-150 XLT, is now 40% below it!
Last year at this time, it was a huge mess. Supply chain chaos had tangled up production plans, and the ramp-up of production of the 2022 models was delayed. The whole thing was utter chaos. I delayed my update until November 20, and even then, I could only get the F-150 XLT rumor-price that was floating around among dealers, and that an exasperated dealer passed on to me, which turned out to be way low.
At the time, dealers were slapping big-fat addendum stickers on the few 2021 trucks that had, and MSRPs were suddenly no longer the top price, but the bottom price. I’d never seen anything this crazy in my entire life. Why were dealers able to do that? Because they could, because people were paying whatever, because the inflationary mindset had taken over.
This year, the chaos has settled down somewhat. The obnoxious addendum stickers are largely gone. Some 2023 Camrys are arriving at dealers. The first 2023 F-150 models may be arriving in November.
The CPI for new vehicles jumped by 10% year-over-year through August, and +7.3% in the prior 12-month period, according to the Bureau of Labor Statistics, having finally picked up some of the price increases. But these increases in the CPI were from a low base that hadn’t really moved up at all for 20 years – due to the “hedonic quality adjustments.”
Hedonic quality adjustments make sense on a conceptual basis. If you compare a current model-year F-150 to the 1990 model-year F-150, you see that they’re the same vehicles in name only. The new model is bigger and more powerful (the base engine is a 290 hp 3.3L V6 with a silky-smooth electronic 10-speed automatic transmission). It has better fuel economy (EPA rates the 2022 model at 19 mpg in the city and at 24 mpg on the highway) and comes with all kinds of safety features, including four-wheel-disc brakes (as opposed to drum brakes in the rear), plus antilock braking, multiple airbags, and all kinds of passive safety systems. The new model is loaded with convenience features (note the 8-inch “Productivity Screen” in the instrument cluster among many other features). It has 17-inch aluminum wheels, and a gazillion other things that buyers of the 1990 model couldn’t even dream off.
The CPI for new vehicles attempts to calculate the price changes of the same product over time. If the product is improved in dramatic ways, as vehicles are, then the CPI estimates the costs of those improvements every year and removes them from the index. My gut tells me that these “hedonic quality adjustments,” though they make sense on a conceptual basis, have been exaggerated.
The result is that the CPI new vehicles increased by only 21% since the year 2000, driven almost entirely by the 18% increase over the past two years. The last two years of the CPI make sense.
But it’s more complicated. The outcome is that CPI for new vehicles increased by 21% since 2000, while over the same period, the price of the basic Ford truck jumped by 121%, to $42,940 in 2023, from $19,410 in 2000.
Since 2000, “median family income” increased by 75%, according to the Census Bureau, from $50,732 in 2000 to $88,590 in 2021. This has the effect that these new trucks have moved out of reach for many more consumers.
On the other hand, the Camry, which has also gotten larger, more powerful, and better in myriad ways, has increased in price by “only” 27% since 2000 – and with median family income creasing by 75%, it has become more affordable. Its price increases since 2000 are not far above the new-vehicle CPI’s increase of 21%.
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“Since 2000, “median family income” increased by 75%, according to the Census Bureau, from $50,732 in 2000 to $88,590 in 2021.”
And bumped everyone into higher tax brackets. I doubt $88,590 less taxes bought you the same lifestyle you had in 2000 at $50,732 less taxes.
“Hedonic Adjustments” just another way for Government to hide true inflation.
Tax brackets are adjusted for inflation.
What source are you using for median household income figures?
86k is significantly higher than what I am used to seeing, but perhaps I have been looking at slightly stale figures, figures that might have escalated dramatically (somehow) over the last few years.
(Another possibility is that various sources of data – incl my own – are very slack about highlighting nominal vs. real figures – the latter is theoretically more useful, but like any “adjustment”, opens the door to opaque abuse)
Which also brings up the usefulness of a chart tracking median (nominal) HH income growth since 1980/1990/2000. I’m pretty sure you periodically post one.
We could start with unaltered nominal data, then debate about legitimate adjustments.
“What source are you using for median household income figures?”
Read the text!!! I didn’t say “median household income.” I said “median family income,” which is the standard figure that the Census Bureau uses. Google it. Try: St. louis fed median family income
Wolf I don’t believe tax brackets are adjusted for inflation. Toward the beginning of the Reagan Admin, in 83 I think, a tax bill and cut pushed and promised by Reagan did just that. This then as often happens that good adjustment was taken out in a subsequent Admin. Because inflation stayed low it has never been put back in. I think you reader is correct
You must have never done your own taxes. Google: federal income tax brackets. They’re increased every year. I hate this uninformed argumentative stuff posted by people too lazy to google and too uninformed to know even the basics.
Is the Death Tax adjusted for inflation?
Last I heard, it was not, and Congress plays games every so often to raise the amount of the exemption.
Fed Estate Tax threshold:
Minnesota is one of the states that also has a ‘Death Tax.’. It was $2.7 M in 2019, and has been $3.0 M from 2020 until now. After the first three million, Minnesota take 13% of the estate upon death — up to the next threshold of $10 M, after that, it is 16% that goes to the Minnesota Department of Revenue.
This is one reason that many Minnesotans choose to have dual residency (185 days outside of Minnesota & in other state is the required time it takes) in states without an Estate Tax and an Income Tax.
Married couples who are near the limit can set up a an A-B Trust for their estate. If one spouse dies before the other, half the estate is transferred to an irrevocable trust, B trust or “bypass trust.”
There are law firms and attorneys that specialize in this field. If you are near the threshold, it is wise to get their services working for your estate.
Supply chain chaos is just an excuse to jack prices. Businesses are constantly looking for interesting sounding, plausible reasons to “adjust” their prices to their satisfaction. The tug-of-war between seller and buyer gets skewed when massive amounts of cheap dollars flood the market. Then, we see true distortions in the pricing model as people lose their discipline and spend while the going is good.
It’s very difficult to compare these vehicles. As Wolf notes, the 1990 Camry and 2022 Camry are the same vehicle – in name only. Otherwise, they are vastly different cars.
Hedonic adjustments are hard but if we go by size alone (which is factor that a lot of people consider when they purchase a vehicle) then I think it would make sense to compare the 1990 Camry with say the 2022 Corolla. Both those models are roughly the same size (the interior cabin of the 2022 Corolla is larger than the 1990 Camry but the 1990 Camry has a little more trunk space). Even then, the 2022 Corolla has a more powerful engine and is much more fuel efficient, plus has better amenities and sophisticated safety systems. The Corolla LE has a starting MSRP of just under $21,000. That’s about a 60% increase in 32 years compared to the similarly-sized 1990 Toyota model. Price increase-wise, seems pretty reasonable compared to overall inflation.
I say that Corolla is probably priced like a necessity, while Ford F150 is priced like a luxury.
A lot of guys are buying these trucks for work. Then all the other guys who don’t need the truck for work get one too cause…well psychology
Now price the corolla without all the forced options stacked on. Subtract $2000 for the dashboard screens / computers. A few thousand more for the lane following and other driver “assist” computers, push button start, keyless entry, etc…
Really compare apples to apples and the price difference is pretty modest.
I’d rather have my 1985 camry than anything on the market today. Too bad some kid drove into it in a parking lot.
Great points Harrold
Then you can buy a new Kia Rio sedan for $16.5K. It has about the same horsepower and cabin dimensions as the 1990 Corolla.
The fact is that although some folks may wax nostalgically about those cars from long ago, very few people actually want to buy the sort of stripped-down vehicles you describe nowadays – which is why very few car companies actually make them.
Correction: Rio has the same horsepower as the 1990 Camry.
and dimensions as the 1990 Camry.
I agree with this. People want everything but buy what they can afford. Aside from average household wages going up it’s also worth looking at financing rates because most people are not making cash purchases. I was too young in 1990 to know first hand so I had to look it up but it looks like even with rate increases since 2009 average financing rates were still more than double in 1990 than they are today.
There’s a lawsuit on Hyundai,Kia for excessive oil consumption.read online at 140,000 miles was using 1 qt every 1,000 miles
I helped my mom (age 79 at the time) buy a new Corolla over Memorial Day weekend 2020. She perfectly timed covid bottom and got 0% financing. There’s stuff on there neither of us know how to get to or turn off. I don’t use the cruise control because it defaults to that “adaptive cruise” thing and brakes for vehicles in front WAY too early, with more than enough space for another car or two to fit in.
Then that giant screen. No tactile sensation, all the buttons are the same with just the words changed. Stupid graphs and charts everywhere. Figuring out how to change AM to FM to no avail while I’m trying to pass a truck on the interstate.
These don’t feel like “improvements” to me.
I agree that Toyota has some of the worst human engineering on the planet. On my Lexus (a brand of Toyota) for example, there is no dedicated A/C button. If I just want air but no air conditioning I have to go through several clicks on the remote interface. Very unintuitive; it drives me bonkers. At least for the adaptive cruise (which I use quite often as it is very convenient) there is a direct access button on the steering wheel to control the following distance (of which there are three possible distance settings). The car itself drives like buttah’ though :)
I’ve intentionally chosen a base 2020 Tacoma SR to minimize the number of bells and whistles (I even have a regular style key that turns to start the engine and I love it!) and I can confirm everything you mentioned above about 2020 Toyotas.
Toyota adaptive cruise is one of the worst things I’ve ever experienced in any cars – I honestly tried it at least 4 or 5 times and it is terrible for almost any situations except for maybe towing a heavy trailer. The screen is atrocious too. It doesn’t even have adaptive brightness – something even most of the first basic smartphones had in 2008-2009! – so screen will either blind you at night or you won’t see a thing in the sun. The interface is so counter-intuitive that I still don’t get how this flies in 2020s.
And mind that this is coming from someone with an Engineering degree who spends hours every day in front of the computer for living. I don’t even want to imagine emotions of someone in his/her 70s trying to navigate this…
All this electronic BS distracts drivers from focusing on the road ahead of them. Toyota made a big mistake putting those screens on all their Corolla sedans. The screens block vison and will become an expensive item to replace once they don’t work. I was thinking of trading up but have decided to keep my 2000 Toyota Corolla until it no longer runs. I’m going to register it as a historical vehicle.
THANK YOU IN!
WE, in this case the family WE, tried to buy a new Honda Accord early this year, and were SO put off by the apparently ”standard” tech that we backed out of the deal.
HUGE screen blocking the view,,, HUGE amount of tech just waiting to go bad, with nobody at dealer able to fix,,, etc., etc…
As was said in song long ago, “When will they ever learn” etc…
Certainly, those that WANT a vehicle with tons of stuff, AKA ”shite” NOT NEEDED by most if not vast majority of drivers, those folks absolutely should be offered such shite,,,
For the rest of us, NO and NO and HELL NO…
And to HELL, straight line or not, with all the ”REAL” fascists doing their best these days from both sides of the aisles to control WE the PEEDONs…
(Just BTW, always independent,( AKA NPA ) ,,, and always voter in every election since 1966.)
Some young women have absolutely Going to have to run for POTUS of the platform of:
STOP THE NANNY STATE,,,
Seems to me that Tulsi and Nikki , and a few similar WOMEN will be able to do so with very successful results, eh!!!
My 1978 Corolla 2-door was outstanding.
My brother’s 1982 Corolla Station Wagon was even better.
They should just make those cars again.
It’s amazing to me that in 1990 the Camry was actually more expensive than the F-150.
The 1990 Camry was far superior to the Ford F-150.
I drove a 1989 f150 from 2013-2017 as my daily driver. Anything that went wrong with it took a hundred bucks and a little elbow grease to get it running tip top again. Miss that old girl.
Small pickups used to be cheap transportation. In 1987 right after graduating from high school, my sister bought a brand new bare bones Ford pickup, two-seater, manual transmission, manual windows, no amenities (I think it did have a radio), fairly decent gas mileage, about the same price as an econobox import at the time. She drove it for like 15 years, it was indestructible. I think small pickups were the start the trend single women driving SUVs. All the single women I know drive either an SUV, crossover, or some kind of sport or lux like BMW. None drive a Camry ;-) My sister now drives a Mustang convertible.
I remember the commercials from the early 80s for a basic compact truck like that and it was “$4995”
I was making $4 an hour in high school in 1984 in a restaurant as an assistant cook. If I worked full time that would be around $8,300 in one year. Compare that to $4,995 cost for a car.
Now the same job pays about $15 an hour or $30,000 in one year.
No way I could get a small truck like a new Ranger for less than $30,000 out the door.
Maybe could get the cheapest Ford Maverick for $25,000 out the door if it is available.
It used to be trucks were a bare bone work vehicle.
No air-conditioning. No rear seats. No upholstery. No power steering, locks or windows.
Just four wheels, an engine and a bed to carry stuff.
About as inexpensive as you make something go from A to B.
Now, pickup trucks are to men as purses are to women. (Price is no object)
Oh, and not a scratch to be had!
Please bring this back, pleeeeease. I need a work truck with a bed that isn’t 6″ long.
The price of F-150 is directly correlated with the price of gas, or diesel. It’s only logical.
??Errata stuff–>> Last section, first paragraph…$19,410 in 2020. Expect that was year 2000 data? (Disclaimer-Don’t do windows nor bowling scores.)
Hey, magic! That date changed over in a poof. A self fixing site!
An AI powered site: it acts while you’re still thinking about it :-]
Most of them don’t buy Price…
They Buy Monthly Payment..
“I can afford that”
Remember when Vehicle loans were 3 years?
Then 4, 5, 6, and now.. some go as high as 9 YEARS…
What is the Net final cost of that Loan..?????
They don’t CARE!!!
They want what they want.. and they hope they can pay the monthly…
I know… some of you are driving
Flintstone Mobiles, and you have kept it running since the times of Spartacus…
I get it.. That is smart…
But the average moron, sorry Customer.. walking onto a lot..
I can afford the low Bi-Weekly (or even…)
Read em and weep…
Just finished reading Origin. Good read and gets you thinking about AI without being a sci-fi novel in a way that only Dan Brown can accomplish.
When i bought my f150 xlt new in 2014 the msrp listed was 37k, i bought it for 32k. When i looked at 2020″s (not to buy) msrp was listed a 47k, ridiculous. Paid mine off a year and a half early on a 7 year loan. Never buying new again. Had to the last two vehicles because there weren’t any used ones to buy. Paid all three vehicles off that i ever owned starting with my first in 2000. 0 issues with the current truck (f150) so it’s ride till it dies.
You need some over priced thing that you actually don’t need. It is cool. People will like you.
What do you drive, Mr opinionated?
“My name is blurry face and I care what people think.”
Ditto. I have had 5 Ford [work] trucks and I expect to die before my 2015 F-150 kicks the bucket.
By them trucks might start at 100k.
PS my wife loves it.
The fact that my wife hates my 95 Tacoma tells me never to get rid of it.
Much of this is the mindset of the American executive – short term profits. The Japanese think of the long term.
“In the long term, it will be someone else’s problem” – American corporations, politicians, and consumers. Short term bias is blinding us and becoming a self fulfilling prophecy- ie there won’t be a future if all we care about is consuming everything now.
A Ford F150 is a car with a truck bed. Small axles, small brakes, etc. When you want to do work, you don’t buy an F150. These prices are absolutely bananas.
What the FED and CONgress have done is unforgivable. They have basically stolen the purchasing power of the entire middle class and poor. Now most cannot afford a new vehicle or a house. This country sucks now.
How exactly did the Fed do that, and not dumb consumers? Toyota doesn’t seem to have the problem.
Check the prices and inflationary rate of the Tacoma, the Highlander, and the Sequoia to name a few, over the last 20 years…Toyota may not be as egregious as Ford when it comes to the F-150’s rise in profit margins over the last two decades, but don’t kid yourself, Toyota has most definitely rode the same Pickup/SUV craze wave as Ford has, that has given them fatter profit margins on those models, than they were getting 20 years ago.
Again, how is that the Fed’s fault, that truck manufacturers are gouging? You yourself called it profit margins.
“Again, how is that the Fed’s fault, that truck manufacturers are gouging? You yourself called it profit margins.”
Apparently you don’t understand easy monetary policy and how it produces credit bubbles like we have now, which washes over every asset class and durable good. I’d say it’s time you read Wolf’s site for a looooooooong time. You’ve got a lot of catching up to do.
“Time to go on a buyers’ strike, no?”
Nope, sign me up for a 10 year loan. ;-)
As you say, there is a different mindset for pickup truck owners.
Years ago, one guy at work bought a new truck, then another, then another, and they parked them side by side. At break time they stood around admiring and comparing them.
Aren’t the slope of graphs shallower for housing and vehicle CPIs than real world prices? Shouldn’t they be the same, no matter the adjustments?
“Because they could, because people were paying whatever, because the inflationary mindset had taken over.”
But they’re not actually “paying whatever,” they’re BORROWING WHATEVER because a bank decided to loan them more money than they should have. This is a credit bubble, and the banks are just as responsible as anybody for the situation. They are fueling inflation. On what planet is 170% loan to value acceptable? This is a really disgusting business model.
Well Said. Bad times are in store for a lot of the people in the U.S. and elsewhere.
Take a look at the reporting # from AMD, NAVIDIA, INTEL, etc.
Wait till TMC reports. Wait till AMAT reports.
Good time to be in anything other than Stonks.
When you buy anything buy it with CASH so you can feel the pain right then and there. Your perspective on prices will sink in immediately and you most likely will change your mind about the purchase; even on the most minor items; give it a try. Go to the bank and pull out the cash; you’ll see. Credit Cards are a large enabler of inflation.
Buy once, cry once.
Good tactic. I used that tactic myself in my early years, and it works well. Now that I am older, being a cheapskate is ingrained in my DNA so I use plastic now, and pay the balance every statement, and get the 3-4% cash back, but still don’t buy anything that is not on sale. Then when I find something really cheap, I buy all of it.
“inflationary mindset had taken over“ – Wolf is correct, pretty accurate, ahead in his reporting and assessment about inflation (as compared to msm). Talking to lot of people it seems that this mindset of pay what ever has taken over as people have low mortgage (refinanced at low rates), and increase in salaries/income of last few years (also with stock market gains from last 10 years) so they don’t care.
It is going to hard to dislodge this inflation with out massive deep recession (high unemployment rate).
I wonder with all the refinancing at low rates, will it effect people’s sending mindset when they are unemployed as they might be able to cover their low rate mortgage payment from unemployment benefits (I know they can not get paid unemployment benefits forever) or from the huge saving.
Looking at the inflation, employment (labor force participation), house prices, vehicle prices, etc the economy is completely distorted.
Life just feels getting harder for peasants (falling back further in life as compared to others who have assets like house….)
You may have a house and the asset of whatever equity you have built up – but it doesn’t help put groceries on the table.
Just because I own my house in retirement doesn’t mean I can take a year and travel the world.
I’m still seeing more and more brand new (60-80k) pickup trucks on the roads these days. Have to wonder if the census bureau made a rounding error and median household incomes are 1.5 million instead of 150k in some of these MA and NH towns.
I also can’t believe still seeing so many brand new vehicles with paper plate numbers waiting for their registration. It’s almost like people don’t anticipate a recession, and are not trying to save as much cash as possible. Blows my mind.
So in 2019, I moved back to the Midwest and started a landscaping company (I had a bunch of experience in CO). Showed up to the first job in a little Ford Focus to do an estimate. It was a big job. Two large retaining walls and four paver patios. She looked at me and my Ford Focus and asked, “are you going to be able to do the job.” I said, “yes, I’ll figure it out.” I won the bid. With how much I made, I figured I needed a crappy truck that just needed to do this one job and then I could use the earnings to buy a better truck. I went on the hunt and found a 1993 F-250 automatic to go check out. The guy said it had 78000 miles. Now I was skeptical because in CO we had a 1983 Chevy that had 134,763 miles and I know it had that mileage because the odometer never moved. So skeptical. Went to go look at it. Tiny bite of rust, no oil leak, the pedals weren’t worn, interior was right out of 1993 with no tears, and the best air conditioner I’ve ever experienced, bed liner, extended bed, and whoever ordered this truck went all out. Also it was the v8 big block 7.5 liter (460) and gets 8 miles whether you are going for a drive, hauling something, or going down hill. Got it for 2,700 bucks and have spent about 700 on new brake lines, spark plugs, oil changes, brake pads and rotors, and starter. No longer do landscaping but it is a fun truck and after looking at this feel great as 30,000 dollar difference can buy me a lot of gas and repairs!
Those 460’s are bulletproof. They will run 3-400 K with good maintenance.
I knew a guy who had one for his work truck, he wanted a new truck but the company would not buy him one because his old truck seemed to run fine. He tried to blow it up for a year so the company would buy him a new truck and he said he could not do it. He said no matter what I do to this thing I cannot blow it up….
I can destroy a half-ton truck in my line of work in just a few years. Oddly enough, half tons of the 90s were much tougher in terms of the abuse they could handle. My late model 3/4 ton GMC can barely handle the abuse, and that’s after I swapped out the rear end with a 1-ton axle and springs (so it’s really a 7/8 ton now). F-150s are toys. Most men like to pretend that they are good consumers – out for a deal, but the F-150 pricing trend proves the exact opposite. Middle age men, the typical F-150 buyer, it turns out, are really poor consumers. Half ton trucks today, and I don’t care if you pull a boat on the weekend with it, scream vanity. The more of these lifted and big wheel varieties I see, the less impressed I am. I guess you can say my impressions are inversely proportional to how dumb you make your truck look. Ford is laughing all the way to the bank at American collective male inadequacy.
Had 1948 ford pick up in high school ,would drag around these yuppie trucks all day long
Mine was a 1951 with a crashbox. $200. Loved it. Zero status vehicle back in the sixties, though.
It’s definitely a vanity thing and occasionally a political statement. When I was a kid you’d mainly see working pickups, but now they’re driven by people who have them waxed and buffed every weekend and wouldn’t let you put your dog back there.
Look at the Japanese Yen. They are worth so much less. The cheapening of the yen leads to a bargain priced Japanese car – assuming it was built in Japan with Japanese labor and parts.
The Camry is made in Kentucky. Most Japanese cars and trucks that you can buy in the US are made in US factories (in Alabama, Kentucky, Texas, etc.) or in Mexican factories, with components from the US, China, Thailand, and some from Japan, and so the exchange rate of the yen is largely irrelevant.
In San Antonio, Texas, Levi’s blue jeans used to be made in the plant where Toyota now makes trucks.
Chevy makes their trucks mostly in Mexico now.
Honda is investing $700 million in Ohio to re-tool existing auto and powertrain plants. Honda and LG Energy Solution, in a joint venture business deal, are waiting on “final government approval” to produce EV battery modules in a plant 40 mile southwest of Columbus, Ohio. This will be a $3.5 billion of investment in Fayette County, Ohio by a company from Japan and a company from South Korea (LG).
“Final government approval” is code for tax dollars and tax breaks to sweeten the deal. But the new ‘Inflation Reduction Act’ has this nice $7,500 deal per vehicle if the batteries are made in the USA, and that’s part of it too.
Wolf is on record, and is quite right IMO, that tax deals on EVs are not needed. Please weigh in on this if you would Mr. Richter. Thanks…
“Final government approval” is code for tax dollars and tax breaks to sweeten the deal.
That very likely used to be true PR, but only in some places to my certain knowledge.
What it means these days and the last few decades where I have been involved with GUV MINT ”deals” at all levels from local to federal is code for the various and sundry GUV MINT folks, both elected and appointed/hired to get their hand on their share of the deal.
While a ton of it goes to their wife’s aunt’s cousins’ BIL, etc., it is quite clearly the nut that it takes to get any ”deal” through any GUV MINT approval process…
“… is on record, and is quite right IMO, that tax deals on EVs are not needed. Please weigh in on this if you would…”
My opinion on tax incentives for EVs has been run over brutally by Congress.
Even if you think that tax incentives for EVs would somehow be a good thing, they’re now totally idiotic because there is red-hot demand and not enough supply and huge waiting lists for EVs, and all those incentives will do is heat up inflation further, as prices will increase, and have already increased, to swallow the incentives. No one in Congress listens to me tho.
Very good point, five or six years back, Mazda was in a hurry to find a partner that had a plant in North America so they could start producing some of their models in NA because the exchange rates and import/export fees were killing them because all their vehicles were still made in Hiroshima. Toyota gladly became their main partner.
It’s the “Personal Pick-Up Truck” that is mainly the 10% of vehicles that use 30% of the gas. That usually has just a driver and an empty bed. Terrible efficiency for moving even two bodies around. Excessive weight, air drag and geared to tow. Please, people, buy a small car to transport your body. I’m no Greenie, but we’ll all need that gas when supplies shrink.
Looking at the VOLUME of sales and the resale values we see the truth of how these are valued.
Camry’s volume has been pretty stable over the years where as the f150 has declined significantly. It’s been discussed before how these ridiculous truck type vehicles are over-priced because the wheeler-dealers are making higher priced sales on less and less volume.
As for resale value, especially in a world where petroleum costs will continue to climb, the Camry has always had excellent resale value. Toyota is top of the line in petroleum vehicles now so of course….
Where as these flimsy, over priced gas guzzler truck type things, with all the optional junk that no one needs…..
It’s terrible AND one can find videos on line now where dealers are talking about how 72 and 84 month loans are standard these days BUT banks are pulling back now and not lending on these over priced, quickly depreciating piles of scrap metal.
Do people really believe there is status in driving a truck? lol ridiculous. Not good enough for me. I wouldn’t be caught dead driving that. The only truck I would drive would a Uhaul or Penske sticker on the outside. Let them service and take the depreciation while I use it for a few hours. lol.
“piles of scrap metal” – Amen!
Yeah, I really don’t understand the fixation with trucks, any more than I understand women’s fixation with shoes.
Don’t forget purses.
Yet, Truck culture is very real and ingrained in a large portion of American society.
The Camry of today is a much safer faster car.
Same with the f-150, it would be great to be able to buy a bare bones of either with crank windows, manual locks etc WITH the more powerful engines.
If they had a Camry with an auction jack and manual everything except safety features (auto braking, ABS, stability control) etc I’d be all over it if it came with their most powerful engine. Same with the F-150, but their best engine comes at the top tier trim because those add-ons are where the profit is.
Imagine a Camry LE with the 3.5 that weighs less than the trd by a decent margin and a manual and AWD? That car would be fast, fun and cheap cupeled with toyo reliability? Done, I’ll get one this weekend.
What use is a faster car? To lose your license or kill yourself?
Agree SO much R2/3:
“I can resist anything except temptation” was key for me when I had my last Porsche, and almost bought the farm driving up the PCH north of THE bay, took it home and sold it quick…
And to extend the PU discussion just a bit after driving dozens and owning a dozen or so over the last six decades:
Best ”working truck” was a 1964 IH 3/4T that the boss said to go to the batch plant and fill with concrete… weighed out at 6,600#s OF THE MUD. Front wheels came off the road going back to the project, but got there OK and we off loaded ASAP as the mud set… 6600 pounds net load!!!
Best overall was 1984 Chevy 3/4T that got up to 23 on highway, never let me down from ’94 to 2019 when sold to pay off a new Ram that carried more, pulled twice as much, got better overall mileage and had residual value in Jan2022 equal to purchase price, so literally drove for gas cost only as routine maintenance was included…
As others have pointed out, buy the vehicle for the work it needs to do, otherwise, love the ”truck is purse for men” comment!!! SO TRUE!
I drove a 3/4 ton 77 chevy cheyenne for work a couple years. 4 on the floor like the good lord intended. Every body panel a different color, front bumper was a 5″ I-beam and rear was a 5″ C Channel. Was quite the beauty.
I wonder if cost to lease small pickups trucks played a role in how their sticker price evolved over the last 5 years.
I had to look this number up, but apparently up to 34% of new vehicles were leased at some point in 2017 – which I would say is a pretty significant number. One interesting tidbit is how leasing math is (or at least used to be between 2017 and 2020) vastly different for passenger cars and pickup trucks. Most passenger cars have a residual value of around 50-55% after a 12k miles per year / 36m lease. Trucks, on the other hand, sometimes have residuals of 80% or more which drastically changes the whole calculation.
Basically, when I was in the market for a new leased vehicle in 2019-2020, I could’ve gotten a tiny Buick Encore with questionable reliability for ~$280/month … or a Toyota Tacoma 4WD Double Cab for $250/month. Any mid-sized SUV was well into $400+/month range.
With that in mind, truck manufacturers could’ve easily jacked the prices up on trucks and still be in a very competitive position for those leasing their trucks.
Not sure if it works this way though, just a wild guess based on what I’ve been seeing in the market over the last 3-5 years.
Residuals are often “fudged” by the OEM captive finance companies to move what products needs to be moved. Residuals are one of the few portions of the calculation that are relatively unlimited in fudgeability. The money factor can’t go to zero (has to be at least .0001 as multiplying by zero = zero), customers don’t want to put a penny down, so the only alternative left was the residuals. The manufacturers used a subsidy called “residual enhancement” whereby the manufacturer paid the difference between the actual residual value and what was needed to make the deal pencil. Naturally, the concept blew up in their face fabulously in normal market conditions.
It once was that ALG was the bible on residuals. It was important to manufacturers to court them when banks or were in the leasing business as well as for the indies. However, the OEM’s became the driving force in leasing some of that influence was lost.
There are multiple factors that go into establishing residuals… supply (or oversupply), unit volume, incentive spending (which reduces resale value as you can get a new one for close to used if the incentives are high enough), consumer product acceptance, life cycle (what year of production cycle) were the key elements.
If the dummies were establishing residuals based on the last few years’ resale values, there’ll be a smoking hole where some of these lease operations once were.
Realistically the F-150 is just not that great a vehicle. I still drive an ‘08 Chevy Diesel Crew Cab and you never convince me to trade my old truck for that Ford.
BTW, while we are on vehicles here, for those with a limited used car budget, one of the cheapest & best used cars out there is your grandma’s old 199-2005 Buick LeSabre. Bulletproof motors, lots of parts available, and can often be found with very low mileage for under $3500. These can easily run 3-400k miles.
I’d love to hear about why there is this everlasting chip shortage. Nobody seems to explain this. Who makes them? What kind of chips are these? Why can’t they supply what they did 3 years ago?
The PC industry now has more supply than demand. But nobody in the world can build a car any more. This is all very strange.
Not strange at all. You just need to get informed. There is lots of good stuff out there on it. What the automakers are short are microcontrollers (for door locks, mirrors, sensors in the engine control system, etc.), they’re relatively low cost, trailing edge tech made in aging fabs where there isn’t a lot of money in it. And so no one wants to invest in it. But they’re also very specialized for vehicles. For example, the chips in the engine compartment and especially near the exhaust system have to be able to endure the heat.
I mention it from time to time, including here in my article about cutting-edge semi glut:
“All this comes even as cheap, low-end, tailing-edge semiconductors and microcontrollers used in automotive components continue to be dogged by shortages, and continue to hamper global auto production. In other words, there is a glut in high-end chips, and a shortage in the cheap stuff coming out of aging chip plants that companies weren’t motivated to invest in because there isn’t a lot of money in it.”
With a glut of high-end chips, you’d think that one of the companies would stoop to making a couple of bucks on low-end chips instead of watching future orders plunge.
Not that simple. It takes $3-5 billion to build a modern fab. You can’t build cheap $1 microcontrollers in that fab without losing your shirt. You have to have high-margin products to amortize the fab. Also, one would have to redesign the controller for the new fab technology. It can be done, but prices for these cheap controllers would go up an order of magnitude.
I read that Samsung (?) is building a modern fab to supply these microcontrollers, but they won’t be “cheap” anymore; prices will be raised enough to make the fab profitable, and if you don’t like those prices, well, wait in line somewhere else — which would be an interesting turn of events, and a logical solution. But this stuff takes years to play out. So we’ll see.
Imagine the fleet of people employed to come up with these totally meaningless statistics. Probably a team per vehicle trying to figure out how to account for all the improvements over time. Multiply that by every vehicle. Then the meetings and reviews with the chiefs to make sure it is all “sensible and justifiable”. Imagine that waste repeated thousands of times across all government departments. And our lot here in the UK get the vapours when they are forced almost at gunpoint to cut 6% out of the budget…”heavens above, where on earth will we get it from?”
I think you give them too much credit. Most of it just likely made up between donuts.
As most people finance their cars, the only have a look at the monthly financing cost. Debt slaves for a lifetime.
They get ripped of twice.
Although cars offer today more confort than ever they quiet expensive compare to the income generated.
If you can. Take care of your car. With good maintenance you drive them for years. But get one you love. Live is too short to drive boring cars.
Based on what I’ve looked into, the median US income is worth about 36% less now than it was in 2000. Hard to imagine how any of this is sustainable.
It is amazing that while the Camry has gotten more affordable, the average American family is worse off because instead of purchasing the Camry, the family is buying SUV or pickup. Thus the auto loans are making the household poorer. Households feel emboldened by low interest rates and long terms to buy the decked out F150. This will change shortly.
“Hedonic quality adjustments make sense on a conceptual basis.”
But not so much in practice.
Like when one considers that the primary purpose of a vehicle is to just get one safely from point A to point B at lowest initial, operating and maintenance costs.
Or that a PC is ten times faster than your previous one which was already instantaneously fast for what you needed to do.
Another interesting point is that the rated mpg of the Camry has not changed much in 32 years yet the mpg for the pickup is a 50%+ improvement over the 1990 model.
The Ford trucks of that vintage I owned all had big-six 300ci engines. Wonderful torque and legendary longevity. Mileage was not great but didn’t vary much. The same engine was used in some industrial construction equipment, gensets, and UPS trucks. Ford stuck with the design for thirty years. The replacement is much lighter and more economical. I’ve got one of those now in my ’07 e250. It’s a good engine too. Not near as tough. Roll-up windows, manual locks, dumb key, no “screen”. Less to go wrong.
“If it ain’t there, it can’t break”. -Henry Ford
I just remember all those crap American cars from the 70’s that kept my parents broke because they were junk and broke down all the time. Never bought American and unfortunately, with the politics, prices, and attitudes, I never will. Plus Tundras are much better trucks than any Ford product. They might as well close MI due to lack of interest.
Like Wolf has stated many times, the Tundra is made in the US. Kind of blows a hole right through your argument.
Never bought American and never will. Tundras are better than 150’s all day, every day.
The Tundra is made in Texas. Cheers!
Oops, I need to read the entire comments section before replying. I should have known you’d already debunked this.
Toyota management team isn’t American. Cheers!
When I started out as a contractor, I pulled a small 7×14 trailer with my LX470 because of its “legendary drivetrain.” Same engine as the older Tundra. The exhaust heat and pressure blew out an O2 sensor and the hot exhaust gasses almost burned my LX to the ground. The smell of fireproof felt filled my cabin for a month. The alternator could barely keep up with the electric brake controller and it would kill batteries every couple months. I spent thousands fixing that LX before I got an F250 with the 6.2l engine and it pulls a trailer twice that size. Stiffer chassis too, which has saved me from an accident a couple times during emergency maneuvers while towing a trailer. Those Toyota v8s are great but they’re not work vehicles.
F-150 price even worse if you used the price of the battery-powered version.
I see a lot of comments complaining about the hedonistic adjustments, as they are often done for features people don’t want. I agree, to an extent. I hate some of the things like lane departure where the steering wheel seems to take on a mind of its own.
That said, modern cars are MUCH safer than they were 30-40 years ago.
I can’t tell you how many times I’ve seen pictures of a car accident where the car is pulverized and flipped upside down, and learned that the passengers walked out with nothing more than a scratch. Compared to these cars, the cars of yesteryear were death traps.
Vehicles are much safer, but the average driver seems not to be.
Agreed. In my opinion, that’s a function of cultural decay caused by factors I won’t get into out of respect for Wolf.
Let’s just say that the glue that held us together and caused people to generally follow the rules (including rules of the road) out of respect for society is gone.
You are really arrogant….and ignorant. You don’t think Wolf could deal with someone telling “The Full Truth per Fox” here?
I am shaking in my boots as I face your immense societal/financial “knowledge”. Please don’t expose me for the fool I am, as I’m just a mere commenter.
Both my parents walked away or were taken home (by the wonderful cops in those days ) from those kinds of crashes decades ago when they drove home from the bar drunk, as in:
” Not Drunk is he/she who from the floor cannot either rise again or drink once more, but Drunk is he/she who prostrate lies and cannot either drink or rise.”
WAAY too many other factors to consider.
Of course we must keep in mind, “All GENERALIZATIONS are false, including this one.”
IMHO, THE best policy and the one I follow is:
“One drink of alcohol,,, “DON’T DRIVE.”
Vintage, sure you can point to anecdotes, but the facts don’t lie. Vehicle fatalities peaked in 1972 or 1973 (and in absolute terms, not per capita), when the population was much less.
Ignoring total miles driven is kinda anecdotal, (and meaningless) don’t you think?
Hell, I’d just call it flat out cherry picking, which is much WORSE than any simple anecdote, right?
The size of the Camry hasn’t changed much in 30 years. The Ford F-150, like pretty much all the pick-up trucks is much larger than the same name model of 1990.
Anecdotal but relevant: last night I saw a TV spot (East Tennessee station) offering a Ford F-150 at $10,000 below MSRP. I don’t know what the actual numbers were, but it’s something.
Same thing in Louisiana,on dodge
I received this from Ford last week, three weeks after we bought a 2022 F150 Platinum for the business, so of course, it doesn’t do me any good.
When it comes to getting into a new vehicle, we’ve got your back – with an Exclusive Cash Offer just for you. Save $2,000 on a new F 150®, Super Duty® or Expedition®; $1,250 on a Ranger®, Explorer®, Edge®, EcoSport®, Escape® or Mustang®; or $750 on most other vehicles.*
Having purchased several new top-shelf F150s, F250s, and Expeditions for corporate purposes in the last ten years, I can attest to the ridiculous prices for what you get. It’s almost embarrassing. Then again, a little Accord or Camry isn’t worth $40K either.
Fortunately, the business has been debt free since 2010, and these are tax-deductible ways to move money out of the checking account.
Until those idiots inovating glove box to be opened within the menus of the touchscreen etc, this shit will keep going!
Ford could sell as many Mavericks as they wanted to. But they do not want to. It is there as a token to show MPG.
Had a 2022 preordered, canceled after a year. Ordered a 2023. If they burn me twice, I will never consider a Ford again. Dangerous game they are playing.
Bottom line is all vehicles do basically the same thing, the haul your butt from point A to point B. Hedonics is basically BS. Seriously, how much more pleasant is it to drive to the store with all the gadgetry, or 100 more horsepower really worth?
There was a book written in the 90’s about millionaires, that claimed the vast majority of them never purchased a new vehicle until after they were rich, and many would not do it even do it then.
Your ego can be the most expensive thing you will ever support….
Yes, going to the store to buy groceries in a old Volkswagen Bug works. It will take you from point A to point B, and back again.
But to me, going to the store to buy groceries in my 425 horsepower high performance sports car is just a bit more enjoyable. Although my favorite mode for a trip to my store is using a backpack and riding my 175 horsepower high performance motorbike.
There will come day when I’m too old to be able to drive and ride. Until then, today’s technology & performance is there, waiting and ready for me in my garage. I use it and I enjoy using it.
But right now, up here in the northern prairie, it’s snowing. So, time to switch the tires from summer to winter on my gravel bicycle for today’s lunchtime ride, eh? C’est la vie.
So long as you realize and accept the circumstances. That is what freedom is all about, living as you please.
I just get a little weary hearing people whine about not being able to retire in the style they want when they squandered a lifetime of earnings supporting their fragile egos, buying new cars and houses they could not afford…..
In my life, I have owned everything from VW’s to Corvette’s, and everything from Mini Bike’s to Harley’s, and looking back honestly, it was the junky cars and bikes I really enjoyed the most. I never worried where I parked them, or if they got scratched. I did not have to worry about keeping them detailed, or even locking them. There is a lot to say for lowering your stress levels and just enjoying life.
Fair analysis would included Tundra or GM or Chevy or Ram trucks
Be Sierra versus accord would be similar.
Yes prices are totally out of line.
Nope. The criteria are:
1. consistently best-selling models in their segment (to be the most representative)
2. nameplate must go back to at least 1990, which is when my chart starts.
Ram nameplate established in 2010
Tundra since 1999
Silverado & Sierra nameplates go back a ways, but with lots of changes. None of them were bestsellers.
What I would have liked to have is a compact/crossover SUV that goes back to 1990. That’s a huge segment. But the segment doesn’t go back to 1990, though there were some forerunners. That segment got started as a mass-market segment in about 2000.