Magazine's prediction on prices from 30 years ago appear to be off (tongue in cheek)

[GON]

Below is an advertisement from 28 years ago. That ad writers shot a bit too high; I suspect the numbers published in the ad will not be hit in the next two years. But the ad does demonstrate the results of printing currencies.

 

[atikovi]

Depends on where you get your burger, where you go on vacation and what basic means to you. Those figures could be right on the money today.

 

[Leo99]

Those retirement guidelines always seem to over-estimate how much money you'll need in retirement.

 

[loneryder]

Depends on where you get your burger, where you go on vacation and what basic means to you. Those figures could be right on the money today.

Last time I ate at Five Guys it was just under $20 for a small burger, small fries and drink. Won't be going anymore.

 

[atikovi]

Last time I ate at Five Guys it was just under $20 for a small burger, small fries and drink. Won't be going anymore.

Was at Roy Rogers last week (only once every 2-3 months) for the bacon cheeseburger combo. Not as bad at $11, but still, that was like $7 two years ago.

 

[MrHorspwer]

Calculations are a little off.

Average price of a new car in 1996 was $18,777.

Over the past 28 years, inflation has averaged 2.52% year-over-year, leading to a cumulative cost increase of almost exactly 100%.

Based on the actual rate of inflation, using the $18,777 average cost in 1996, the calculated average cost of a new car would be $37,983.

Current average new vehicle cost in 2024 is $47,244, so the average cost of a new vehicle is outpacing inflation. Considering the significant increase in safety, features, comfort, and fuel economy, you could easily make an argument that these are the real reasons for the cost increase, not simply inflation.

But I digress.

To hit the $65,000 new vehicle price the ad predicts, inflation would have had to average 4.25%.

Actual inflation is 60% less than the dire inflation predicted by the ad.

 

[daves87rs]

- Well, 4 guys or a Big Mac meal
- Disney world, some cruises
- Pretty much any non- base pickup truck.

Prices will will only go up from here- remember your 401k depends on it………

 

[GON]

Calculations are a little off.

Average price of a new car in 1996 was $18,777.

Over the past 28 years, inflation has averaged 2.52% year-over-year, leading to a cumulative cost increase of almost exactly 100%.

Based on the actual rate of inflation, using the $18,777 average cost in 1996, the calculated average cost of a new car would be $37,983.

Current average new vehicle cost in 2024 is $47,244, so the average cost of a new vehicle is outpacing inflation. Considering the significant increase in safety, features, comfort, and fuel economy, you could easily make an argument that these are the real reasons for the cost increase, not simply inflation.

But I digress.

To hit the $65,000 new vehicle price the ad predicts, inflation would have had to average 4.25%.

Actual inflation is 60% less than the dire inflation predicted by the ad.

Earlier today I read an article that inflation is not "fair" across the board.

The article stated that wages have risen more than inflation. And if a worker didn't have to purchase food, fuel, or housing, the consumer was "beating" inflation.

But if the same consumer had to purchase food, fuel, and housing, instead of being ahead of the game, even with increases in wages, their buying power was reduced by no less than 25 percent.

So, the old saying continues to ring true "figures lie and liars figure".

On a side note, I think one has to look at the "out the door price" when comparing new vehicle purchases from 30 years ago to today. Dealer fees, taxes, documentary fees, etc. I suspect are not part of the calculations you posted but appear to be universally mandatory in every new vehicle transaction today.

An extreme but clear example is the sales tax rate in Chicago:
2024--Minimum combined sales tax rate value: 10.25%

1996- 2024--Minimum combined sales tax rate value: 6.25%

 

[Pew]

An extreme but clear example is the sales tax rate in Chicago:
2024--Minimum combined sales tax rate value: 10.25%

1996- 2024--Minimum combined sales tax rate value: 6.25%

'
Just a head up, it's been 10.25% sales tax in Chicago since 2016. I don't believe it has changed since then though.

 

[wpod]

This nation is 35 trillion in debt and still spending your income like they have the printing presses.

 

[carviewsonic]

Inflation on groceries and a tank of gas is what I notice the most, since we purchase those items every week. I worry about inflation on housing for my kids and other young adults; rent is high and house prices have increased dramatically in the last few years.

 

[GON]

'
Just a head up, it's been 10.25% sales tax in Chicago since 2016. I don't believe it has changed since then though.

That was not clear in my post, sorry, it should have showed 1996 minimal tax rate was 6.25%, my post said 1996-2024, the 2024 wasn't suppose to be in that line, just 1994.

 

[BHopkins]

Calculations are a little off.

Average price of a new car in 1996 was $18,777.

Over the past 28 years, inflation has averaged 2.52% year-over-year, leading to a cumulative cost increase of almost exactly 100%.

Based on the actual rate of inflation, using the $18,777 average cost in 1996, the calculated average cost of a new car would be $37,983.

Current average new vehicle cost in 2024 is $47,244, so the average cost of a new vehicle is outpacing inflation. Considering the significant increase in safety, features, comfort, and fuel economy, you could easily make an argument that these are the real reasons for the cost increase, not simply inflation.

But I digress.

To hit the $65,000 new vehicle price the ad predicts, inflation would have had to average 4.25%.

Actual inflation is 60% less than the dire inflation predicted by the ad.

Thanks for taking the time to do the math.

I did notice that the magazine ad said it would take $65k to buy a "basic car". One could argue that the most basic car would be a Corolla or Civic, or Sentra. But let's say that more of a mid range basic car would be a Sonata or Accord or Camry. MSRP, before option packages, taxes/licensing and all the other fees, for these three are between $27.5k and $28.5k. It's been a while since I've bought a new car, but let's estimate another $3.5k for all that, putting any of these available in the $31k - $32k range, for a basic car.

So yea, their estimates were pretty grim.

 

[SevenBizzos]

Pretty accurate. "Basic car" was off, but the other two could be close. That $12.5k is a week at Disney for a family of four.

 

[Cujet]

What I've found is that I'm not healthy enough to go on a big vacation, eat the whole burger or need a new car.

 

[GON]

What I've found is that I'm not healthy enough to go on a big vacation, eat the whole burger or need a new car.

Not buying it- last I recall you were checking out 200k electric Maybachs........

 

[Graham Piccinini]

This nation is 35 trillion in debt and still spending your income like they have the printing presses.

Thankfully they're actively working on resolving that debt. Just a few hours ago US House passed another $95,000,000,000 in aid for Ukraine, Israel, and Taiwan. According to their math - this is how everyone should fight debts.
Excuse me while I go apply this logic to my credit cards.

 

[CKN]

Thankfully they're actively working on resolving that debt. Just a few hours ago US House passed another $95,000,000,000 in aid for Ukraine, Israel, and Taiwan. According to their math - this is how everyone should fight debts.
Excuse me while I go apply this logic to my credit cards.

Your credit cards are not fighting a nation who is less than stellar in all regards. I will just let this go at that.....

 

[hrv]

Was at Roy Rogers last week (only once every 2-3 months) for the bacon cheeseburger combo. Not as bad at $11, but still, that was like $7 two years ago.

Did not know they were still around..

 

[Graham Piccinini]

Your credit cards are not fighting a nation who is less than stellar in all regards. I will just let this go at that.....

Ok CNN.