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Comment by OscarCunningham | Hacker News Reader

If somebody put a new car on the market for $9000 with the same features as the 1990 Ford Mustang, what would happen?

Yes, they'd be arrested for not meeting safety standards. But assuming we changed the law, would people want to buy it?

Would it be better or worse than a second-hand modern car at the same price?

Given the option, my bet would be that people (those on the mid to low end of the economy anyway) would strip out just about every feature not essential to the car going down the road if it meant big savings. They'd ABSOLUTELY do if for 50% off. Safety features would be gone in an instant.

Cars don't come with airbags or even seat belts because consumers demand them, they do so because its the law. That's not to say safety features are a bad thing, just that their omnipresence isn't due to economic forces.

Do you really think the seat belts are the problem here? I mean, they're not a big cost driver.

This question seems to contain the embedded assumption that there is a problem, and there is exactly one of them.

Those on the the mid to low end economically seem to still buy decked-out F150s instead of compacts

Maybe safety features are a weak force, but I know plenty of parents that buy vehicles based on safety features. Volvo is pretty famous for marketing their safety features and kid friendly features as a competitive differentiator.

> Would it be better or worse than a second-hand modern car at the same price?

The difference would be so huge that I'm not convinced this question isn't rhetorical.

Features that were high end or cutting edge in 1990 (progressive power steering, power windows, air conditioning, power adjustable seats, traction control, cruise control, airbags) are ubiquitous on all but the very cheapest cars nowadays. Features that we take for granted (Bluetooth integration / in-dash maps, automatic headlights, non-awful automatic transmissions, non-awful stereos) didn't even exist in 1990. Certainly from a safety perspective, probably from a luxury and convenience perspective, and possibly even from a performance perspective, a $9000 second-hand car is better than any car from 1990.

So, $9,000 ($9,450 per autotrader) in 1990 is roughly $18,000 ($19,000) in today’s dollars by most inflation calculators. (I realize we are skirting dangerously close to tautological money value conversations here, but having lived and paid for things in both years, double seems close. Maybe a little under-reported, actually.)

So, if someone put a new car on the market for $18,000 with the (lack) of features of the 1990 ford mustang, the poor reliability, louder interior noise, no bluetooth, dim/unsafe headlights, it wouldn’t sell. It wouldn’t sell because you can easily purchase a used 2015 Ford Mustang in good condition for this price. Approximately 0% of buyers would prefer a 1990 mustang to a 2015 mustang.

Cars have added an incredible amount of value staying at or near their inflation-adjusted prices in the last 30 years. wireless audio, navigation, safety features, performance / efficiency tradeoffs, reliability are all miles better.

Combine these features with very low interest rates and increased interest in financing, and actual prices are similar-to-better today on a monthly basis.

A new 5 liter mustang costs maybe like $36k right now. Average mortgage rate in 1990 was 10% (!). Assuming car loans were 12%, then a 5 year financing of a $9,500 car would have been $211 per month in 1990 dollars, or $422/month in today’s dollars. New mustangs can be leased for as little as $300/month, purchased for $400-650/month.

So, these prices are not wildly out of line with 1990s era prices. And, maintenance costs are vastly lower as well. All that to say, Tata motors is doing less well than tesla, toyota or ford, and I think that’s likely to continue.

I didn't adjust the $9000 for inflation because according to the CPI calculations there's been ~0% inflation for cars. So if they're right a new 1990 Mustang would be priced at $9000 today in today's dollars.

That critical detail whooshed over the head of the comment to which you’re replying.

There is no metric for "inflation for cars". What the BLS data is saying is that the nominal price/quality for cars has stayed the same. So in 1990 you could get a mustang for $20k, and if instead you stuffed 20k in you mattress for 30 years, you could now buy a base model Kia, which when all the positives and negatives are added up delivers similar value to the features of a 1990 mustang. A 2021 mustang costs a lot more, but it's obviously in a different league, hence the adjustment.

Meanwhile, that $20k buys at loss less food, healthcare, education, house, etc which is why "today's dollars" are worth less and why it's fair to say cars got cheaper in inflation adjusted terms.

> So in 1990 you could get a mustang for $20k, and if instead you stuffed 20k in you mattress for 30 years, you could now buy a base model Kia, which when all the positives and negatives are added up delivers similar value to the features of a 1990 mustang.

Yep this was my point. We can see if the CPI is being calculated correctly by comparing cars which had the same price in each year and see if they really are about as good as each other. Whether you want to call this 'inflation for cars' is just semantics.

(The original article says a Mustang in 1990 cost $9000, but I've also found sources for $10000 and $20000 so you might be right on that point.)

Oops, yeah I mixed up some numbers there, would have to be a mustang loaded with options for my comparison.

The baseline utility of a car is that it transports you to and from a job, errands and leisure activities. A $9,000 2021 "1990" Mustang would do that rather well, and the other safety/quality improvements probably aren't worth almost $20k to most people, especially given that most people consider themselves above average drivers.

$9,000 for a used car gets you the safety improvements, but perhaps not the new car reliability, even adjusting for 30 years of quality improvements.

I think it would sell rather well so long as it had Bluetooth.

> $9,000 for a used car gets you the safety improvements, but perhaps not the new car reliability

I'm not convinced of that. Reliability has definitely been trending upwards. 100k miles used to be considered a high-mileage car, but now a car model that didn't regularly make it to that distance would be considered defective.

That leads me to think that twenty years from now that essential features in vehicles (sold in the US) will be emergency care related so that the owners can avoid the increasing cost of emergency medical care.

In 2040 no one will buy a mint condition '2020' vehicle because it won't include a defibrillator, IV fridge, and stowable gurney.

And perhaps an auto-crematorium to save on funeral costs as well.

You have just given me a most amazing cartoon science fiction vision of the future. Thank you!

If we're speculating, I don't think many people would buy any car in 2040. The task of taking people from point A to point B will be accomplished by robotaxis, while being more convenient, safer, and cheaper.

The people buying their own cars would probably still be around, as there are people buying their own horses today.

> would people want to buy it?

I think we (the consumers) have also been conditioned hedonistically upwards (for lack of a better term) in the last 30 years, as in we wouldn't probably transport our family anymore in a car with no airbags or very few airbags, to say nothing of the crash-test characteristics of new cars compared to cars made 30 years ago.

So, to answer the question, because we (the consumers) have also changed we wouldn't probably purchase as many new 1990 Ford Mustangs or Honda Accords at $9,000 or $12,000 (meaning half the price for the latest models) as we have bought 30 years ago if said models would have costed $4,500 or $6,000 (meaning half their price at that time).

But, nevertheless, I think there is a sweet spot between our new hedonistic expectations (we want airbags now) and a fairer (meaning cheaper) price.

Sort of an interesting detail on the safety standards. Even though these mostly impact/protect the eventual owner _only_, they are forced into the car design such that a prospective buyer’s choices (and prices) are constrained. Oddly enough, both these mandated price-increases and the inflation-hiding hedonic adjustments that benefit from them are coming from the same general vicinity..

Isn't this basically the dacia sandero? In germany it's around 8500€ (10300$US).

If you are safety conscious and nothing else, I reckon cars are more affordable now.

I would totally buy a mint condition 1992 Sunburst Yellow Miata for $9k.

I would have an issue playing Red Barchetta in it, because of the poor color matching, but I'd still do it.

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