Inflation and car prices

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Sat 29 Dec 2001 22:02
Inflation and car prices - Bob H
This relates back to a post a few days ago by Alvin about the Moris Minor he bought for £410 in 1961 and a VW Beetle for £624 in 1964. - also the article in the Telegraph today on the Fiesta being 25 years old.

Looking at the rise in Retail Price Index since 1961(a factor of 13.625) and 1964(12.37) the Minor would cost £5586 and VW £7718 at todays prices. Given the much higher spec of today's cars they must be better value now.

With the notable exception of houses, I suspect most of the major items we buy are cheaper in real terms now. (A reasonable 3 bed Semi in SE England would cost £3-£3.5K in 1961 say £40-£50K now)

Discuss!

Bob H
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Sat 29 Dec 2001 22:17
Re: Inflation and car prices - Brian
If you know of a reasonable 3-bed semi in S E England for under £50k, you must be in a different S E England to the rest of us! ;-)

That would just about buy the double garage to put your Morris Minor and VW Beetle in, in most places.
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Sat 29 Dec 2001 22:28
Re: Inflation and car prices - Bob H
Brian,
What I was saying was that £3-£3.5K in 1961 equates to £40-50K at today's prices. That why I said 'with the notable exception of houses'!

Bob H
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Sat 29 Dec 2001 23:12
Re: Inflation and car prices - alvin booth
You had me going there for a moment Bob.....40/50K for a house in the SE.
I don't know the factors you use. I know a well used one is the mars bar index and I'm not sure how accurate any of them are. Inflation rate has been manipulated over the years to suit the government of the day.
My own simple one is to think of average wages from one period to another.
And the average wage I use is not the publicised one as they seem far to high and must include Rupert Murdoch and his ilk.
When I began my apprenticeship in 1953 my wage was £1.40 (28 shillings) per week.
When I finished it was about £9.00
I would imagine the average manual worker in 1964 would be on little more than £11.00 although of course it was much higher in certain industries which were on bonus schemes.
therefore if someone in 1964 was on very good wages of £20.00=£1000 p.a.
A VW beetle would represent over 6 months wages.
How does that relate to your inflation factor Bob.
Alvin
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Sun 30 Dec 2001 16:09
Re: Inflation and car prices - Andrew T
The other well-tried benchmark is a pint of beer. Of course most of that (like fuel) is excise, but try a few sums on that basis if you like !
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Mon 31 Dec 2001 00:03
Re: Inflation and car prices - Sue
alvin booth wrote:

> I know a well used one is the mars bar index

The sad thing is, when a mars bar cost 6d (in real money) it was too big for me to eat a whole one without feeling sick!
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Sun 30 Dec 2001 00:06
Re: Inflation and car prices - Randolph Lee
Humm I spent about a shilling (5 new pence) for my first pint in 1964 I think the av. price of a Pint today is about 2 quid in the London area... point is the RPI does not work for all things... how much did a top spec TV cost then and Now?

~R
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Sun 30 Dec 2001 09:54
Re: Inflation and car prices - john w.
Regional variations will obviously confuse things.
We bought our first house (in Godmanchester) in 1959. It was a 3-bed semi with a brick-built garage and backed onto farmland, and it cost £1,995.
Those houses - little improved - now change hands at around £110k.
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Sun 30 Dec 2001 13:34
Re: Inflation and car prices - Bob H
Alvin,
I used the Government RPI statistics. There is a site that gives all of the statistics back to 1915 with the method of working out inflation between any 2 dates. It can be found at:-

www.crowsnest.co.uk/north/rpi.htm

I would guess your 1964 estimate of £1000 pa is about right. What would you think the equivalent would be now - £20K ? If so wages have outstripped inflation by about 50%. A basic new car now is £6-7K.

Disposable income is really what counts and tax rates and housing costs are major factors in that.

I think I stand by what I said:-

"With the notable exception of houses, I suspect most of the major items we buy are cheaper in real terms now."

Randolph,
My parents bought their first TV in 1952 for 79 Guineas(£82.95) It had a 10" screen and was of course single channel. That equates to £1461 in today's money.

Bob H
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