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Would You Pay $50,000 for a new Corolla?

A famous political saying of 50 years ago “You’ve never had it so good”* could well apply to today’s new car buyer.

 We’ve been doing some homework on ‘value for money’  new cars comparing those manufactured today against those produced a generation ago.

We looked at two popular cars – the Holden Commodore and the Toyota Corolla.

Let’s look at the Corolla first.

In 1985, a Toyota Corolla CSX Hatchback 5-door with 5 speed manual transmission and a 1.6L engine cost a base price of $14,140, excluding delivery costs. Air-conditioning, power steering and front power windows were extra cost options which would have brought the price up to just under $17,000, excluding delivery costs.

 

Twenty-five years ago, the Holden Commodore was relatively new and was the most popular car of the year. A 1985 Commodore SL VK 3 speed automatic cost $14,815 at the dealership. Add to that the extra costs you had to pay for air-conditioning, 4 wheel disk brakes, power steering and power windows. This brought the price up to just over $18,200 before delivery and registration costs.

Now let’s adjust these 1985 prices, allowing for inflation and calculate them into today’s dollars. The consumer price index has nearly trebled – a factor of 2.615. So this means that in today’s dollars, the Commodore would have cost $47,632 and the then locally produced Corolla Hatchback translates into a staggering $44,324 at today’s prices.

 

Now let’s look at what hidden extras you get with the modern version that would have cost a motza in 1985 – assuming you could get them.

ANCAP Safety Ratings – the modern car has built-in crash protection; “crushability zones” and front and side airbags. They have anti-skid braking as standard – that hardly existed in 1985, and only on the most expensive cars like Mercedes, and traction control- which did not exist.

Whilst the enormous advances made with vehicle safety are probably the most important, let’s not forget reliability.

The JD Power company in the USA just released its’ latest annual reliability survey – see our report here. It shows a reliability factor of 151, which is the best that the survey has ever reported, and that’s an outstanding 140% improvement on reliability standards on those of 25 years ago.

But let’s put all of that aside and compare just the raw dealer floor prices.

We worked out that our venerable 1985 Toyota Corolla would cost $44,324 in today’s dollars. (Of course, if you add in all the safety features, you’d be looking at well over $50,000 but forget that for a moment.)

So, would you pay $44K for a new Corolla? Of course you wouldn’t – not when you can get a staggering 52% discount!! A new Corolla is just $21,000 – less than half the price of it’s 25 year old equivalent in today’s dollars..

That’s a great deal for a Corolla. Now how does the Holden Commodore fare?

We have an inflated 1985 cost of $47,632 and a brand new Commodore, equipped with airbags, anti-lock braking, traction control, CD player will set you back just $36,990, which is around 30% less than twenty-five years ago.

Just occasionally we have to remind ourselves that it is indeed true – “we have never had it so good!”

* British Prime Minister,  Harold McMillan, 1957 http://credit-n.ru/zaymyi-v-ukraine.html

3 comments

  1. David says:

    It’s that cars are cheaper all round the world but here in Australia we are still being robbed blind compared to the US and other consumers

    e.g 135i Convertible around USD$44K base, In the Uk abt 36K Stirling (AUD$55k) (not sure about US taxes or ORC) here in Aus RRP is around $75K and drive away a staggering $90K
    Note from Editor:- pricing in Australia versus overseas is a very contentious point that we shall be dealing with in a future newsletter

    April 29th, 2011 at 1:31 pm

  2. colin says:

    I think you will find disc brakes were standard on the Dunnydoor in 1985.

    April 30th, 2011 at 8:13 am

  3. Richard says:

    Hi Colin, According to our information 4 wheel disc brakes are listed as an optional extra on the SL model in the 1985 specs..

    May 1st, 2011 at 7:18 am