<p>Inflation is measured against a basket of goods. It's a symptom of what's going on in markets. Some products go up in price over time. Some go down in time. Some stay the same price, but change their specification.</p>

<p>So it's looking down the wrong end of the microscope, to ask why inflation hasn't affected car prices. Car prices are part of inflation. Changes in car prices affect inflation.</p>

<p>The causal link the other way is very very weak. Inflation puts pressure on wages. If this causes wages to rise, then the cost curve shifts, and equilibrium prices change. But for cars, wage costs are a very small part of total car manufacturing cost. And the market for labourers in the industry has shrinking demand and over-supply, so upward pressures are very weak.</p>

<p>The inflation experienced by car manufacturers is very different to the inflation experienced by the public. We've been through a global financial crisis and a super-cycle in commodities. A general-public inflation measure is a very poor measure of input-cost inflation for car manufacturers.</p>

CC BY-SA 4.0
2018-10-13T18:12:19.250Z
Rising wages also exert an upward pressure on demand (more people can afford it -> more people will buy it -> the product commands a higher price), but wages overall have been flat for so long that this effect is largely nonexistent too.
Kevin
CC BY-SA 4.0
2018-10-13T23:49:23.873Z
In spite of all the manufacturing automation, wages remain a significant part of the cost of cars - perhaps not the top line item, but significant nonetheless. That's why manufacturers are always eager to move production to less developed countries where labor is cheaper. As labor costs go up, car prices will rise at least marginally. Local/domestic wage inflation might not affect the price of a car because of the proportion of foreign labor in its manufacture.
Anthony X
CC BY-SA 4.0
2018-10-11T15:47:53.983Z
2018-10-12T11:01:41.723Z
2018-10-12T11:01:41.723Z
410 gone
<p>Specifically treating car prices, well, the prices are determined globally and not necessarily in dollars</p>

<p><strong>In the last 20 years:</strong></p>

<p>Car manufacturers move factories across borders to save costs, China and India have become major market player both as major manufacturers and as a major consumers</p>

<p>As a result of these causes, an additional major impact was added, which is the exchange currencies' exchange rates.</p>

<p><strong>For the last 10 years:</strong></p>

<p>Following the global economic crisis, interest rates dropped to practically zero worldwide, trying, among other things, to encourage local exports, in what was called a "currency war".</p>

<p>The last major impact, that I can add, might sound trivial, but it's there: the technology improvements implemented in car factories over the past 20 years, must have dropped the cost of manufacturing, for the same vehicles. meaning: either vehicles cost remained similar but cars got better, so products are not that comparable.</p>

<p><strong>Or:</strong></p>

<p>Vehicle manufacturing in the same place, over time got cheaper.</p>

CC BY-SA 4.0
2018-10-11T18:51:44.733Z
2018-10-12T08:38:24.180Z
2018-10-12T08:38:24.180Z
Guy Louzon
<p>You also didn't look at car prices in general but rather just the Toyota Camry. For example a 2001 BMW M3 was ~\$46,000 while a 2018 BMW M3 is ~\$66,000.</p>

<p>Most cars have increased in price over the last 20 years, but some manufacturers will always have a cheap car in their lineup . </p>

CC BY-SA 4.0
2018-10-11T22:47:40.597Z
I recall buying a Honda Civic in 1999 less than half what a comparable 2018 Civic goes for.  Some of that is inevitably feature creep, but not the majority of it.
Andy
CC BY-SA 4.0
2018-10-12T17:48:14.323Z
@Andy - Having owned a 1999 Civic and a 2016 Civic, there's nothing "comparable" about those cars.  A base model 2016-2018 Civic is more comparable to a mid-range 1999 Accord imo.  Size of the car, features, speed, cabin noise.  I agree with your general point...just don't think the Civic is a good example.
zzxyz
CC BY-SA 4.0
2018-10-13T15:51:28.747Z
Over that length of time, many (most? all?) cars have changed out of all recognition. Compare the size and styling of the Mark 1 Ford Fiesta to the current model with that name, for example.
Andrew Leach
CC BY-SA 4.0
2018-10-11T21:44:43.297Z
2018-10-11T22:18:25.430Z
2018-10-11T22:18:25.430Z
Jayson
<p>You're not considering that today's $23,000 car might not be the same car as the one from 20 years ago, or that the costs of its manufacture might not be the same.</p>

<p>While the "basket of goods" another answerer referred to has simple items in it like rice, soap, tee-shirts and hammers, a car is a very poor item to measure inflation with, because of its complexity. Hundreds of parts and indeed hundreds of different types of materials go into it. Many dozens of different raw commodities are involved. Scores of different kinds of worker inputs are involved, with probably thousands of different individual contributors adding value along the way before you get your car.</p>

<p>Today's \$23,000 car is probably made with cheaper materials. A 20-year-old Camry today probably feels cheap-o compared to a brand-new one, but, <strong>at the time</strong>, a brand-new Camry at that price point 20 years ago probably felt reasonably decent compared to other Camrys at lower trim levels and other cars at lower price points. Today's $23K Camry on the other hand feels cheap-o compared to the premium trim Camry and compared to other cars at higher price points with more premium materials.</p>

<p>That's one factor. Another is, today's cars are produced with 20 years' worth of production efficiency improvements. So even with the 20 years worth of technology improvements which make today's Camry a more advanced car than the 20-year-old one, it's still cheaper because cheaper ways to automate production have been found.</p>

<p>Products like this are really really bad things to use to judge inflation. Today's iphones cost about the same as those from 10 years ago too (in nominal dollars), but they're clearly way way more phone for your money. Something today with five million times the computing power of something which took a Congressional appropriation 60 years ago costs a five-millionth as much as that dinosaurian system.</p>

<p>Certain things work against the inflationary trend, on the surface, but really tell you nothing whatsoever about inflation.</p>

CC BY-SA 4.0
2018-10-13T13:51:47.420Z
It's actually really interesting to read how inflation is calculated for technology based items - https://www.bls.gov/cpi/quality-adjustment/questions-and-answers.htm has a lot of really interesting input on how the US calculates inflation at least. Question 6 there is similar to the question here, except with TVs (even more subject to changes in quality/pricing over time).
enderland
CC BY-SA 4.0
2018-10-12T17:58:54.307Z
2018-10-12T17:58:54.307Z
Beanluc
<p>A quick search led me to this (rather outdated) page indicating that average new car prices actually went down for some time, when corrected for inflation.</p>

<p>So it is definitely not the case that prices don't increase, but perhaps not as fast as you see other things increase.</p>

<p><a href="https://seekingalpha.com/article/81546-real-prices-for-new-cars-keep-going-down" rel="nofollow noreferrer">https://seekingalpha.com/article/81546-real-prices-for-new-cars-keep-going-down</a> </p>

<p>My personal intuition is that in the period of 1988 to 2006 cars have become less of a luxury good and more of a commodity. Which is why they became not as expensive as they could have been.</p>

CC BY-SA 4.0
2018-10-12T10:37:43.293Z
2018-10-12T10:37:43.293Z
Dennis Jaheruddin
<p>Car prices haven’t gone up due to the majority of auto makers profits being from the truck and SUV market. Trucks and SUVs have gone up 40% since 2007. I bought a brand new GMC 1500 in 2007 for \$20,000.  That same truck today is \$29,000. (\$20,000 X 1.45 = 45% inflation. </p>

<p>As well the price of heavy equipment, trailers, and diesel trucks have gone up 30-40% as well. A 2007 Dodge 2500 diesel MSRP was around \$42,000. Currently that trucks MSRP is around \$60,000.</p>

CC BY-SA 4.0
2019-08-22T09:21:17.713Z
2019-08-26T20:04:51.743Z
2019-08-26T20:04:51.743Z
Jason Godwin
<p>Manufactured goods become cheaper over time. Fiat currency loses purchasing power over time (due to a generally increasing supply).</p>

<p>In this particular case (which is further complicated by government regulations and consumer emotions), the two sides seem somewhat balanced.</p>

CC BY-SA 4.0
2018-10-12T23:41:20.887Z
2018-10-13T19:31:20.760Z
2018-10-13T19:31:20.760Z
Jamie Clinton
<p>Lets start from the beginning, there is no such thing as inflation/economic growth ( TINSTAIEG, similar to TINSTAAFL ). Because when you expose the methodology, you get arbitrary view which depends on the judge who defines methodology. One rule have worked for ages, but only for long-long-distance - price of Money, i.e. the price of Gold/Silver troz. But this classic approach, though free from third-party risks, does not answer the question "What is inflation anyway?" entirely. Merely it does another definition.</p>

<p>If we go with the car price in gold ounces, we are having slow deflation over last decades. High gasoline was holding car sells in emerging markets, because of that many Korean manufacturers were bankrupt. Some of those are now Tata Motors - in India. In Russia major car maker AutoVAZ-Renault, was having problems in last 20 years to even sustain the quality of product.</p>

<p>From the other side, there is even more pressure in the market, Tesla is pushing with heavy weight to shift the market to their side, if Tesla succeed in the end, they will destroy traditional market. But they are fighting heavy battle with arabs, who control the petroleum market. Todays cars are mostly just the arm of petroleum "big politics".</p>

<p>High oil price will return, and it really <em>does</em> hold the car price. <strong>Inflation flows, just the other way.</strong></p>

<p>Nice question, my Austrian colleague!</p>

CC BY-SA 4.0
2018-10-12T19:17:18.707Z
I am not talking about gold, I am talking about goods priced in dollars. I can tell you I used to buy candy bars when I was a kid and they were a LOT cheaper than they are now (in dollars). That's inflation.
Lassie Fair
CC BY-SA 4.0
2018-10-13T07:10:44.517Z
This answer lacks text cohesion, it seems almost computer generated. Still, there are some (in my opinion incorrect) statements in there relevant to the question, so rather than delete it I will downvote it.
Giskard
CC BY-SA 4.0
2018-10-12T19:05:55.687Z
2018-10-12T19:05:55.687Z
sanaris
<p>I do remember Camry's around $25k in the beginning of 2000s!</p>

<p>If our memories don't fail us, you are right the inflation hasn't touched Camry's price. This phenomenon in fact happens very often mostly for these reasons:</p>

<ul>
<li><p>Production technologies improve and the companies can produce the same unit of product with less resources. This effects high tech products, e.g. some cars, computers</p></li>
<li><p>Production process improves: supply chains improvements, outsourcing, etc. </p></li>
<li><p>Quality of the product decreases. E.g. some processed foods contain less protein now and more sugar and fat</p></li>
<li><p>Patents expire</p></li>
<li><p>Regulations, taxes, tariffs, etc. are lowered</p></li>
</ul>

<p>There are many more of course but these I think are the most common and significant. I won't attempt to guess how many, if any, of these affected the Camry price. Probably a few. Sometimes several factors pull in different directions and some outweigh the other.</p>

CC BY-SA 4.0
2018-10-12T09:51:33.267Z
2018-10-12T09:51:33.267Z
Arthur Tarasov
<p>Price is just a signal indicative of the money supply, and the product market supply &amp; demand. It may not carry any information on quality or intrinsic value. The cars today have in general much better functionalities than 20 years ago, so I think the comparison is rather on the value of a personal transportation vehicle, not on the cars itself. Something like medical oxygen or diamonds that is mostly homogeneous might provide better comparison. </p>

CC BY-SA 4.0
2018-10-13T00:52:43.680Z
This would be a stronger answer if it moved from the purely speculative to including references that establish that car prices have been flat and that this is the reason.  As is, you are providing a possible reason for something that may not be true.  Further, increasing functionality should increase the price, not make it hold steady.  I.e. your argument doesn't explain the question's observation.
Brythan
CC BY-SA 4.0
2018-10-12T15:14:29.643Z
2018-10-12T15:14:29.643Z
Yiqun
<p>I notice that there seems to be little or no change in car prices over the last 20 years and they seem to be unaffected by inflation.</p>

<p>For example, a Toyota Camry sold for about \$23,000 +/- \$2,000 (MSRP) around 1999-2000, and currently it sells for about the same.</p>

<p>Why is this?</p>

CC BY-SA 4.0
2018-10-12T00:15:38.640Z
The premise of this question seems wrong. It used to be possible to get new cars for just over $10k. I'd be really surprised if the Camry went for that much in 1999; comparable models were a lot cheaper.
R.. GitHub STOP HELPING ICE
CC BY-SA 4.0
2018-10-12T09:27:28.197Z
Cars have actually got hugely, radically, cheaper. Today's Camry is faster, more fuel efficient, better equipped, safer, more reliable, and so on. It's probably not even possible to buy a new car as poor as a '99 Camry any more.
Jack Aidley
CC BY-SA 4.0
2018-10-12T10:39:33.743Z
Your example would suggest that the camry was a somewhat more exclusive car in 1999 than the new camry is today.
Dennis Jaheruddin
CC BY-SA 4.0
2018-10-12T10:46:50.173Z
@DennisJaheruddin No, just that it's a much better car today. You get far more for the same money. It's a basic problem with inflation measures and improving technology.
Jack Aidley
CC BY-SA 4.0
2018-10-12T11:26:12.637Z
@JackAidley Note that cars in general [did get more expensive before correcting for inflation](https://economics.stackexchange.com/a/24968/19756). So my point is that if this car did not, it is now actually lower in the pricerange than before (so compared to other cars it is now less fancy). -- Of course the features between this car, old versions and other cars are all over the place, so that is why I don't say anything about the price-value ratio (which of course did get a lot better).
Dennis Jaheruddin
CC BY-SA 4.0
2018-10-12T12:56:17.067Z
@DennisJaheruddin: It's not about price-value; it's about comparing prices of different things. The only thing the '99 Camry and the 2018 Camry share is the name. The actual product being purchased today is hugely superior to that being purchased in '99. Whereas the price of apples is still measuring the price of an essentially similar product, the price of car isn't.
Jack Aidley
CC BY-SA 4.0
2018-10-13T06:51:34.657Z
@R.. And you can still get a new car for just over $10,000, at least in the UK. The cheapest new cars (e.g. Peugeot 108, Hyundai i10) are a little under £10,000 _including tax_. Take off the tax, and that’s pretty close to US$10,000.
Mike Scott
CC BY-SA 4.0
2018-10-13T21:35:20.957Z
TVs and smartphones have done down in price and up in specs, by a lot.
Dan Dascalescu
CC BY-SA 4.0
2018-10-14T20:36:14.213Z
The quality is going down.
i486
CC BY-SA 4.0
2018-10-15T03:07:04.767Z
@JackAidley: That narrative is popular but does not seem to be supported by fact. If cars now were "vastly superior" to those 20 years ago in fuel efficiency we'd be getting 100 mpg. My 26-year-old car got over 42 mpg when new (somewhat less now due to various issues) and the 2018 model is rated for no better than that.
R.. GitHub STOP HELPING ICE
<inflation><price><united-states>
Car prices haven't changed in 20 years, no inflation?
Lassie Fair
# Car prices haven't changed in 20 years, no inflation?

(Asked by: username_0 on 2018-10-11)

I notice that there seems to be little or no change in car prices over the last 20 years and they seem to be unaffected by inflation.

For example, a Toyota Camry sold for about \$23,000 +/- \$2,000 (MSRP) around 1999-2000, and currently it sells for about the same.

Why is this?

**Tags:** inflation, price, united-states
> **Comments:**
> **username_1**: The premise of this question seems wrong. It used to be possible to get new cars for just over $10k. I'd be really surprised if the Camry went for that much in 1999; comparable models were a lot cheaper.  
> **username_2**: Cars have actually got hugely, radically, cheaper. Today's Camry is faster, more fuel efficient, better equipped, safer, more reliable, and so on. It's probably not even possible to buy a new car as poor as a '99 Camry any more.  
> **username_3**: Your example would suggest that the camry was a somewhat more exclusive car in 1999 than the new camry is today.  
> **username_2**: @DennisJaheruddin No, just that it's a much better car today. You get far more for the same money. It's a basic problem with inflation measures and improving technology.  
> **username_3**: @JackAidley Note that cars in general [did get more expensive before correcting for inflation](https://economics.stackexchange.com/a/24968/19756). So my point is that if this car did not, it is now actually lower in the pricerange than before (so compared to other cars it is now less fancy). -- Of course the features between this car, old versions and other cars are all over the place, so that is why I don't say anything about the price-value ratio (which of course did get a lot better).  
> **username_2**: @DennisJaheruddin: It's not about price-value; it's about comparing prices of different things. The only thing the '99 Camry and the 2018 Camry share is the name. The actual product being purchased today is hugely superior to that being purchased in '99. Whereas the price of apples is still measuring the price of an essentially similar product, the price of car isn't.  
> **username_4**: @R.. And you can still get a new car for just over $10,000, at least in the UK. The cheapest new cars (e.g. Peugeot 108, Hyundai i10) are a little under £10,000 _including tax_. Take off the tax, and that’s pretty close to US$10,000.  
> **username_5**: TVs and smartphones have done down in price and up in specs, by a lot.  
> **username_6**: The quality is going down.  
> **username_1**: @JackAidley: That narrative is popular but does not seem to be supported by fact. If cars now were "vastly superior" to those 20 years ago in fuel efficiency we'd be getting 100 mpg. My 26-year-old car got over 42 mpg when new (somewhat less now due to various issues) and the 2018 model is rated for no better than that.  

---

## 10 answers

### Answer by username_7 on 2018-10-11. Score: 21

Inflation is measured against a basket of goods. It's a symptom of what's going on in markets. Some products go up in price over time. Some go down in time. Some stay the same price, but change their specification.

So it's looking down the wrong end of the microscope, to ask why inflation hasn't affected car prices. Car prices are part of inflation. Changes in car prices affect inflation.

The causal link the other way is very very weak. Inflation puts pressure on wages. If this causes wages to rise, then the cost curve shifts, and equilibrium prices change. But for cars, wage costs are a very small part of total car manufacturing cost. And the market for labourers in the industry has shrinking demand and over-supply, so upward pressures are very weak.

The inflation experienced by car manufacturers is very different to the inflation experienced by the public. We've been through a global financial crisis and a super-cycle in commodities. A general-public inflation measure is a very poor measure of input-cost inflation for car manufacturers.

> **Comments:**
> **username_8**: Rising wages also exert an upward pressure on demand (more people can afford it -> more people will buy it -> the product commands a higher price), but wages overall have been flat for so long that this effect is largely nonexistent too.  
> **username_9**: In spite of all the manufacturing automation, wages remain a significant part of the cost of cars - perhaps not the top line item, but significant nonetheless. That's why manufacturers are always eager to move production to less developed countries where labor is cheaper. As labor costs go up, car prices will rise at least marginally. Local/domestic wage inflation might not affect the price of a car because of the proportion of foreign labor in its manufacture.  

---

### Answer by username_11 on 2018-10-11. Score: 14

You also didn't look at car prices in general but rather just the Toyota Camry. For example a 2001 BMW M3 was ~\$46,000 while a 2018 BMW M3 is ~\$66,000.

Most cars have increased in price over the last 20 years, but some manufacturers will always have a cheap car in their lineup .

> **Comments:**
> **username_12**: I recall buying a Honda Civic in 1999 less than half what a comparable 2018 Civic goes for.  Some of that is inevitably feature creep, but not the majority of it.  
> **username_13**: @Andy - Having owned a 1999 Civic and a 2016 Civic, there's nothing "comparable" about those cars.  A base model 2016-2018 Civic is more comparable to a mid-range 1999 Accord imo.  Size of the car, features, speed, cabin noise.  I agree with your general point...just don't think the Civic is a good example.  
> **username_14**: Over that length of time, many (most? all?) cars have changed out of all recognition. Compare the size and styling of the Mark 1 Ford Fiesta to the current model with that name, for example.  

---

### Answer by username_10 on 2018-10-11. Score: 8

Specifically treating car prices, well, the prices are determined globally and not necessarily in dollars

**In the last 20 years:**

Car manufacturers move factories across borders to save costs, China and India have become major market player both as major manufacturers and as a major consumers

As a result of these causes, an additional major impact was added, which is the exchange currencies' exchange rates.

**For the last 10 years:**

Following the global economic crisis, interest rates dropped to practically zero worldwide, trying, among other things, to encourage local exports, in what was called a "currency war".

The last major impact, that I can add, might sound trivial, but it's there: the technology improvements implemented in car factories over the past 20 years, must have dropped the cost of manufacturing, for the same vehicles. meaning: either vehicles cost remained similar but cars got better, so products are not that comparable.

**Or:**

Vehicle manufacturing in the same place, over time got cheaper.


---

### Answer by username_15 on 2018-10-12. Score: 2

You're not considering that today's $23,000 car might not be the same car as the one from 20 years ago, or that the costs of its manufacture might not be the same.

While the "basket of goods" another answerer referred to has simple items in it like rice, soap, tee-shirts and hammers, a car is a very poor item to measure inflation with, because of its complexity. Hundreds of parts and indeed hundreds of different types of materials go into it. Many dozens of different raw commodities are involved. Scores of different kinds of worker inputs are involved, with probably thousands of different individual contributors adding value along the way before you get your car.

Today's \$23,000 car is probably made with cheaper materials. A 20-year-old Camry today probably feels cheap-o compared to a brand-new one, but, **at the time**, a brand-new Camry at that price point 20 years ago probably felt reasonably decent compared to other Camrys at lower trim levels and other cars at lower price points. Today's $23K Camry on the other hand feels cheap-o compared to the premium trim Camry and compared to other cars at higher price points with more premium materials.

That's one factor. Another is, today's cars are produced with 20 years' worth of production efficiency improvements. So even with the 20 years worth of technology improvements which make today's Camry a more advanced car than the 20-year-old one, it's still cheaper because cheaper ways to automate production have been found.

Products like this are really really bad things to use to judge inflation. Today's iphones cost about the same as those from 10 years ago too (in nominal dollars), but they're clearly way way more phone for your money. Something today with five million times the computing power of something which took a Congressional appropriation 60 years ago costs a five-millionth as much as that dinosaurian system.

Certain things work against the inflationary trend, on the surface, but really tell you nothing whatsoever about inflation.

> **Comments:**
> **username_16**: It's actually really interesting to read how inflation is calculated for technology based items - https://www.bls.gov/cpi/quality-adjustment/questions-and-answers.htm has a lot of really interesting input on how the US calculates inflation at least. Question 6 there is similar to the question here, except with TVs (even more subject to changes in quality/pricing over time).  

---

### Answer by username_3 on 2018-10-12. Score: 1

A quick search led me to this (rather outdated) page indicating that average new car prices actually went down for some time, when corrected for inflation.

So it is definitely not the case that prices don't increase, but perhaps not as fast as you see other things increase.

<https://seekingalpha.com/article/81546-real-prices-for-new-cars-keep-going-down>

My personal intuition is that in the period of 1988 to 2006 cars have become less of a luxury good and more of a commodity. Which is why they became not as expensive as they could have been.


---

### Answer by username_17 on 2019-08-22. Score: 0

Car prices haven’t gone up due to the majority of auto makers profits being from the truck and SUV market. Trucks and SUVs have gone up 40% since 2007. I bought a brand new GMC 1500 in 2007 for \$20,000. That same truck today is \$29,000. (\$20,000 X 1.45 = 45% inflation.

As well the price of heavy equipment, trailers, and diesel trucks have gone up 30-40% as well. A 2007 Dodge 2500 diesel MSRP was around \$42,000. Currently that trucks MSRP is around \$60,000.


---

### Answer by username_18 on 2018-10-12. Score: 0

Manufactured goods become cheaper over time. Fiat currency loses purchasing power over time (due to a generally increasing supply).

In this particular case (which is further complicated by government regulations and consumer emotions), the two sides seem somewhat balanced.


---

### Answer by username_21 on 2018-10-12. Score: 0

I do remember Camry's around $25k in the beginning of 2000s!

If our memories don't fail us, you are right the inflation hasn't touched Camry's price. This phenomenon in fact happens very often mostly for these reasons:

* Production technologies improve and the companies can produce the same unit of product with less resources. This effects high tech products, e.g. some cars, computers
* Production process improves: supply chains improvements, outsourcing, etc.
* Quality of the product decreases. E.g. some processed foods contain less protein now and more sugar and fat
* Patents expire
* Regulations, taxes, tariffs, etc. are lowered

There are many more of course but these I think are the most common and significant. I won't attempt to guess how many, if any, of these affected the Camry price. Probably a few. Sometimes several factors pull in different directions and some outweigh the other.


---

### Answer by username_22 on 2018-10-12. Score: 0

Price is just a signal indicative of the money supply, and the product market supply & demand. It may not carry any information on quality or intrinsic value. The cars today have in general much better functionalities than 20 years ago, so I think the comparison is rather on the value of a personal transportation vehicle, not on the cars itself. Something like medical oxygen or diamonds that is mostly homogeneous might provide better comparison.

> **Comments:**
> **username_23**: This would be a stronger answer if it moved from the purely speculative to including references that establish that car prices have been flat and that this is the reason.  As is, you are providing a possible reason for something that may not be true.  Further, increasing functionality should increase the price, not make it hold steady.  I.e. your argument doesn't explain the question's observation.  

---

### Answer by username_19 on 2018-10-12. Score: -2

Lets start from the beginning, there is no such thing as inflation/economic growth ( TINSTAIEG, similar to TINSTAAFL ). Because when you expose the methodology, you get arbitrary view which depends on the judge who defines methodology. One rule have worked for ages, but only for long-long-distance - price of Money, i.e. the price of Gold/Silver troz. But this classic approach, though free from third-party risks, does not answer the question "What is inflation anyway?" entirely. Merely it does another definition.

If we go with the car price in gold ounces, we are having slow deflation over last decades. High gasoline was holding car sells in emerging markets, because of that many Korean manufacturers were bankrupt. Some of those are now Tata Motors - in India. In Russia major car maker AutoVAZ-Renault, was having problems in last 20 years to even sustain the quality of product.

From the other side, there is even more pressure in the market, Tesla is pushing with heavy weight to shift the market to their side, if Tesla succeed in the end, they will destroy traditional market. But they are fighting heavy battle with arabs, who control the petroleum market. Todays cars are mostly just the arm of petroleum "big politics".

High oil price will return, and it really *does* hold the car price. **Inflation flows, just the other way.**

Nice question, my Austrian colleague!

> **Comments:**
> **username_0**: I am not talking about gold, I am talking about goods priced in dollars. I can tell you I used to buy candy bars when I was a kid and they were a LOT cheaper than they are now (in dollars). That's inflation.  
> **username_20**: This answer lacks text cohesion, it seems almost computer generated. Still, there are some (in my opinion incorrect) statements in there relevant to the question, so rather than delete it I will downvote it.  

---

