New cars today offer astounding value compared with those from a decade ago. I'll explain.
The average car buyer in 2003 paid $25,056; last year, $27,204, according to DesRosiers Automotive Consultants and Statistics Canada. In dollar terms, a Honda Accord or a Hyundai Sonata has gone up about $2,000. But in real terms?
"You take in 10 years of inflation and real savings are in the 25- to 30-per-cent range over the past decade or more," says Michael Hatch, chief economist at the Canadian Automobile Dealers Association.
There's more. Cars today are better equipped, far more technologically advanced, more fuel efficient, safer and better built – by a huge margin.
For example, in 2003 you could get a Hyundai Sonata GLX sedan for $26,495 versus a 2013 Sonata SE for $27,399. That 2003 Sonata had a fairly pedestrian 2.7-litre V-6 (170 horsepower) paired with a four-speed automatic gearbox that slurped fuel like a college kid attacking a keg on Friday night. The 2013's ultramodern direct injection four-banger (200 hp) is not only a smoother, vastly more responsive engine, it is rated at 8.7 litres/100 km in the city, 5.6 highway versus 12.3 city/7.9 highway for the V-6 in 2003 – a massive difference in fuel economy.
The Accord? The 2013 Sport with continuously variable transmission went for $27,195, while the 2003 LX-G with five-speed automatic went for $26,000. To equip those cars comparably today – feature-for-feature – you would have needed to add $3,026 in options to the 2003 car, such as $1,197 for alloy wheels and $445 for front fog lights, which were standard in 2013. The 2013 also gets far better fuel economy from a four-cylinder engine rated at 189 hp, versus 160 in 2003.
Drive both pairs of cars back-to-back and you'll be astonished at the differences. The power train improvements of the last decade alone are worth a couple of thousand, easy. Funny, but not everyone gives the auto industry credit for nailing down better fuel economy while also juicing performance.
"The product quality is way better, too – a consequence of technological advancements, intense competition, consumer demand for higher quality and stiff government regulations for fuel efficiency and pollution reduction," Hatch says. "We're at the point where the average new car that rolls off the line at a plant can expect to see 300,000 kilometres in its lifetime."
That latter point is backed up by DesRosiers research, which shows that the expected useful life of a vehicle in Canada has been longer than 300,000 kilometres since 2008. You buy a car today, it'll run until at least to 2024, perhaps 2029, or 2030. Put another way: Buy a new car today and your newborn will be graduating from high school before the car moves to the recycle bin.
Then there's equipment now versus back when Jean Chrétien was prime minister. That 2013 Sonata was shod with big and relatively fat wheels and tires – P225/45VR18 versus P20560HR16 in 2003. Of course, the ride quality of a 2013 Sonata is a massive jump from 2003. Bigger wheels and tires fill up the wheels wells, too. Park these two side-by-side and the 2003 looks homely and wimpy.
In 2013, the Sonata came with a power driver's seat; the 2003 had a manual one. You can go longer between fill-ups in the 2013 thanks to a 70-litre fuel tank, versus 65 in 2013. The newer Sonata came standard with an ignition disable system to thwart thieves, but not so in 2003. Sound? The 2003's AM/FM/CD stereo looks like an antique compared with the AM/FM/XM/CD/MP3 audio system in the 2013 car. And so on.
You might expect that with cars today being so superior, owners would hold onto them longer and new car sales would be suffering. Not so. Canadians, Hatch says, are on track to buy a record 1.8 million new light vehicles this year. Sales for 2014 will be up about 6 per cent on the year, barring some catastrophe.
"Consumers are responding to all of the competitive pressures that make life tough for our guys, the dealers, and also the manufacturers. They are responding to product choice. They are responding to very strong levels of affordability out there. And also it's an incredibly competitive market – which makes it really a golden age for consumers."
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