Young people carry a pretty heavy financial burden these days. Affordable new cars seem like a dream. They’re too expensive to buy right after graduation when you’re carrying about $22,000 in student debt.
And that number is from 2017. It’s probably gone up since then. The jobs market for new high school as well as university graduates is really tough. How can the car industry help?
Help is a Click Away
A number of manufacturers offer incentives for new graduates. Here’s a selection of links to the manufacturers’ incentives pages:
But beyond that, what can manufacturers do? They can add value.
Which got me thinking.
That was Then
Almost 20 years ago, it seemed much easier for someone to afford a new vehicle. So what’s changed? Let’s take a look back in time to a mainstay affordable vehicle, the Honda Civic.
Back in 2002, you could have a Honda Civic in multiple trim levels, the most popular being the LX model. Not much has changed. There’s an awful lot of 2020 Honda Civic LX models on the road. So how would these two stack up against each other (cue the Time Tunnel music here)?
Back in 2002, when the minimum wage in the province of Ontario was $6.85, you could purchase a Honda Civic LX with the G package for $20,100. Today’s Civic LX? $23,100. Have a look at the Common Equipment on these two vehicles. Not much in common, that’s for sure.
Common Equipment: 2002 versus 2020 Honda Civic LX
Now let’s look at the Automobl Value Comparison.
Automobl Value Comparison: 2002 versus 2020 Honda Civic LX
This is Now
Today, the minimum wage is $14/hr in Ontario. That’s not enough to pay down student debt and afford a new car, but at least it’s more than double the minimum wage from 2002. But what happens to the price of the car? Did it double?
No, not by a long shot. And look at the Automobl Value Advantage. It’s more than $7,000 in favour of the newer Civic. Every area is improved: performance (more horsepower), handling (brake cornering assist), comfort (automatic temperature control, Apple Carplay/Android Auto, 8 speaker audio) and safety (side impact and curtain air bags, vehicle security alarm, stability control, adaptive cruise control). So in real terms, that’s like getting a $7,000 discount on a brand new Civic.
This probably doesn’t make you feel better about the cost of a new vehicle. It’s still an expensive proposition. But the value is there. I’m sure we could look at similar stories for vehicles like the Toyota Corolla or Mazda3. It’s amazing that manufacturers can offer this level of equipment while keeping the price to an increase of $3,000 over 18 years. Now that’s impressive. Affordable new cars are more than just price; you have to consider the value they offer.
When you’re ready to start your research, be sure to check out our New Car Buying Course. When you’re ready to compare current models, our Automobl Comparison Tool can help you ensure you’re getting the value that’s important to you when you buy. Use our handy checklists when you’re shopping at the dealer and for delivery too.