IF Vehicles Like The C8 Corvette And Kia Telluride Exist For UNDER $60,000, WHY Are Autos Getting SO Expensive?

Vehicles are getting more expensive because heavy investment demands are putting pressure on earnings and cash flow. EV (development, inventory build, marketing, etc), autonomous driving (huge increase in engineers and little near term returns), new technologies, slowing markets, growing markets, increased material costs, etc etc are all squeezing profits and eating cash. Prices are rising to combat these issues. The C8 and Telluride are new models and are priced to gain market acceptance rapidly. Manufacturers recognize that failure is not an option on these and are using restraint in setting their price for now.

Just as the Model 3 proved- the BASE sticker price of the least expensive version of a car does not indicate its availability or lack there of. WHile it is nice that such version may someday exist- the reality is - you cannot buy that version most of the time. Even if you do - it is likely it will be shipped with some non-selected added options and a raised price.

THe fact is now - in this world - that NEW cars are now the dominion of the wealthy - the average person cannot afford virtually all of them. The average new car now cost more than the price of my first AND second houses. Long term financing for lower classes is selling some cars NOW but taking these buyers off the market for a LONG time. THe wealth- on the other hand - have had a record economic expansion to look at - and they have (Including me) cleaned up with stocks the average person cannot afford to buy as well. THat has at least also partially helped cause the rise in SUV sales and the loss of the more basic sedans that are now out of reach for the average buyer - and in the future they will have less choice on the used market.

But as long as the rich continue to get richer - they tend to buy more prestigious cars - raising the average.

Poor vs “rich” doesn’t factor individual decisions people make, ever! Our “poor” are richer than probably more than 1/2 the rest of the world. That said why are our borders being invaded, opportunity! Americans that don’t use the opportunities given them really have no one to blame, least of all rich Maybach owners. This is s general statement and there are clearly hardship cases.

That said govt regulations, development costs, “benefits” and wages are the biggest factors. I agree the average 4 person family is likely going to be priced out of the new car market very soon. One reason companies are looking at lower cost mfg regions. Economics.

@xjug Now that TomM has killed a friend so he can inherit and be rich, he doesn't care about commoners.

Actually - for MOST people - Their ability to afford a vehicle based on their current income status is the HIGHEST priority. It makes no difference if OUR poor people make more money than others around the world - the fact that THEY cannot afford to buy most new vehicles is already well documented. For most people = if you cannot afford the payment - you likely cannot get the loan - much less even consider to try to buy a vehicle. (Yes there are those who buy over their heads - but eventually something has to give for them too - likely a repo - of something they own) For most of MY life - I could not afford new cars - especially when the kids were in College. I rebuilt transmissions on the side (mostly for racing but sometimes when I needed the money I did what I had to) and my kids and I put together cars from parts to get them through college years.

While ALL cars are indeed getting more expensive because of added equipment required for various reasons, and development of new types of vehicles - it still remains that a person making the average or median wage in this country cannot afford the average car sold in this country. But - the rich - who have been supported by tax breaks others did not get - have more disposable income and they can afford more expensive cars - which is WHY the high level models of many of these vehicles sell faster than the base models. Notice that in the USA the affordable cars in the lower price ranges are being cancelled by car makers because of lack of sales.




Matt - your accusation that I KILLED someone to inherit money is absolutely INSANE.

Well your comments here are evidence of dementia and dementia and insanity go hand in hand.

Drive the new Telluride and get back to us.

Thanks!

Asshole11 go drive a Telluride and get past your hatred of Korean people.

I never said the Kia was better than the Land Cruiser off-road, but OK.

What I can say is that the Telluride DESTROYS the relic that is the Land Cruiser where it matters — ON TARMAC.

The Land Cruder (sic) is on a 25 year old chassis that has had only the most minor of nip/tucks, so it is hopelessly outdated.

It all comes down to volume, platform sharing, cost of inputs and fixed costs. If you are making millions of cars per year, you have economies of scale and lower input costs and COGS. IE like Ford. If you are making 8500 cars a year like Ferrari, you are spreading all your costs over a very small number. Therefore the cost of each unit has to be sky high to make the business viable. It will be up to the consumer to make the call to pay more for a Benz than the Kia and buy a Corvette when they could afford the Ferrari.

Mainstream vehicles have also dramatically closed the gap with premiums to the point that the difference doesn't justify the increase in price.

In some cases the mainstream product is better than the product. Go drive a Telluride and a Volvo XC90 back to back. The Volvo will be priced 2X that of the Telluride comparably equipped and the Telluride will be the one that feels most premium.

The mainstream Ford Explorer will easily trounce the premium XT6 for $25K less.

I am curious, 00R, who you feel the rivals for the Telluride are. It's actual rivals are the Highlander, Pilot, et al, whom all top out close to $50K. Do you truly believe the Telluride rivals the X7 and GLS?

As far as the C8, the Vette has always been a crazy performance bargain when compared to exotics. But, price also controls demand, so that's part of the equation for supercars. I doubt Ferrari or Lambo have the ability to produce thousands of cars monthly. At the same time, price creates exclusivity. This also seems to be the same play (demand control) for the NSX as Honda/Acura isn't balking at its' perceived low sales. And its refresh/update is impressing drivers across the board. So, Acura is still dedicated to the car, unlike most brands that would abandon a "slow-selling" car and not bother with further enhancement developments.

I'll add that I've spent the better part of a year with a Stinger GT. While it drives and rides as well as my previous S5 and 435i, and maybe better, there are very clear differences in overall quality and refinement. Is that worth the price variance? Not sure as it's hard to quantify. The paint quality is below. The structural integrity is below. Interior quality is below. Exterior trim quality is well below. Infotainment system is glitch at least once a week.
In addition, Kia dealerships do not have loaner cars, which is quite a PITA, whereas Audi and BMW dealerships always had a loaner for me.

The C8 Corvette is a genuine bargain, the Kia Telluride not so much. The Telluride is very nicely styled, but it is still a front drive/transverse engine SUV and it is priced in line with the Highlander, Pilot and Traverse. The C8 on the other hand looks like it will easily outperform cars costing twice as much.

I just had a Passport for a week, which is essentially a Pilot sans third row.

The Telluride BLOWS IT AWAY.

I'm pretty sure that the C8 Corvette will be an $80,000 car out the door.

Can somebody in the automotive retailing sector please confirm for us what the "on the road" retail price of a C8 will be?

Can't yet. On sale will be after the first of the year.

No one seriously believes that there will be a $60K C8 Corvette. With Porsche pricing policies, the C8's will cost tens of thousands more.

This article is like asking why pay $80 - $100 for NIKE'S when you can go to Walmart for a similar shoe and pay $9.99

You won’t find me buying any Nikes, regardless of the price.

Your analogy is rubbish.

If anything we're asking why New Balance is able to ship a nice running shoe for $80 while a similar pair of Nike running shoes retail for $160.

I need to go drive a Telluride and see what all the fuss is about.

It's a handsome vehicle. It's well made The refinement quite good to the point that you buy mainstream and the whole thing feels a league higher. I'd argue that the Telluride and the new Explorer are so good that the RX, MDX, and XT5/6 will have a harder time justifying their price premiums.