Prices of automobiles continue to soar year after year in the U.S. as automakers add more gadgets and features. Things like a rear-view camera, nice-sized “infotainment system” for all the internet-enabled apps, etc. are common in most cars today. However all these features are priced into the cost of the vehicle. A vehicle that cost $20,000 twenty years ago may easily go for $30,000 or more now.
According to a recent article in the journal, the average new vehicle sold in August cost a record $35,420 based on research by J.D. Power.
Source: Car Sales Are Down Almost 20%, but Prices Are Setting Records, WSJ, Sept 5-6, 2020
To put that $35,000+ in perspective:
- The current U.S. Federal Minimum Wage = $7.25 per hour
– This rate has been the remained the same since July, 2009.
- The current Federal Poverty Guideline = $26,200 for a family of four.
So someone working for minimum wage would need to work 4,885 hours (or) 30.5 months (or over 2.5 years) to buy a new vehicle that costs over $35,000 with cash. Of course, this does not take into account living expenses like food, rent, utilities, etc.
