Why Are New Automobiles Expensive?

Why Are New Automobiles Expensive?

Over time, the cost of purchasing a car has risen considerably due to advances in engineering, technology, safety, and design. Sticker rates today relative to those 30 years ago are considerably higher after adjusting for inflation. In fact, this means car buyers are stretching their budgets now more than ever. There are several reasons why newer cars are more costly than their counterparts from years past, the main one being they have developed into better vehicles overall.

Why Are New Automobiles Expensive?

Engineering Advancements

Giving a vehicle greater efficiency and capability means more funding for technical research and development. As R&D expenses go up for carmakers, those costs are passed on to the customer. The new Ford Explorer with its standard EcoBoost powertrain yields much more performance, quality, and towing capacity than the 1991 version. But for every additional horsepower or mile per gallon achieved, the customer will ultimately endure a rise in price.


In-vehicle entertainment has transformed from basic six-speaker stereos to advanced infotainment systems, such as Ford Sync 4. These modern systems use wide touchscreen displays and cellular-based data connections to provide services such as navigation and real-time traffic. In addition, several vehicles offer regular Android Auto and Apple CarPlay for mobile functionality in the dashboard, as well as Wi-Fi internet access. All such electronic systems are costly to build and manufacture.


Modern cars have more features than ever, including hands-free power-opening liftgates and backup cameras to heated steering wheels and ventilated seats. The days of touting power windows and air conditioning as up-level facilities are long gone. Even in base trim, many vehicles come well equipped with features that improve convenience and comfort in new and unexpected ways.

Many of these bells and whistles bring a significant premium to the car’s bottom line. Furthermore, the higher the trim level, the more high-end content there is to be had, allowing automakers the ability to charge higher prices and enjoy greater profit margins.


As vehicles get bigger, it takes more material to build them. More content costs more money. The 1991 Ford Explorer was 184 inches long, 70 inches wide and 67 inches in height. To compare, the 2020 Ford Explorer is 198 inches long, 79 inches wide, and 70 inches in height. As cars get longer, wider, and bigger, base prices will continue to go higher.

We hope this would answer your questions. Do leave your opinions as well down below.

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