Although many of you will frown upon the title of this article, it is actually true. A car is often considered a very expensive purchase; the old marketing cliché goes that the car is the 2nd most expensive buy after a house. It will be true for the most of us, however, in all honesty it depends on how much does the car cost. Today you can find plenty of cars that are more expensive than houses. This story is about cheap cars, so let’s not deviate from our main goal. What has really happened to car prices during the last 100 years?
The best way to compare cars for sale then and now is to look at the vehicle prices in comparison with the average salary. One of the most appropriate examples is the 1922 Austin 7. It was built and sold as an affordable car for a price tag of £152. With the adjustment towards the inflation it equals around £6,000 in today’s money. Sounds very cheap for a British-made car! But was it cheap?
If you compare it with the average wage of a factory worker, the imaginary sense of affordability instantly disappears. With a weekly wage of around £2.80, an unskilled worker had to save 54 weeks’ worth of salary to buy a car. Of course, it never happened because they hardly managed to get by and pay their bills. That’s why at the dawn of motoring, the car was a luxury item.
That explains why in 1910 there were only around 8,000 cars on the streets of Britain; the number has now increased to over 21 million.
The situation was slightly better in the USA – a Ford Model T cost $825 in 1910. With a salary of $19.25 per week our unskilled worker had to work for 43 weeks to buy a car. Again – only a statistical number. The reality was that a factory worker couldn’t possibly afford a car.
Today, a small, cheap car – something like Ford Fiesta – costs £9,500. A factory worker would earn something in the region of £18,000 p.a. which means that he’d only have to work 27 weeks to buy a car. And for today’s situation, a worker being able to afford a vehicle is not at all impossible. With various car finance and leasing options available, no wonder that the number of vehicles on our roads is steadily increasing.
This short detour in motoring history was prepared by Creditplus car finance provider.