April 30, 2013

The Corvette Affordability Index

Not too long ago I was watching Motor Week on PBS.   They reviewed a new 2013 Camaro 1LE model.   The new Camaro is an example of what I'd consider a revival of the quintessential American Muscle Car.     The cost of the model is $37,035.   That seemed quite reasonable for a car with 426 horses that will go 0 to 60 in just 4.5s.  Thats a lot faster than the original muscle cars of the 60's and 70's.

I wondered to myself: if todays muscle cars are more or less affordable than the originals?    I remembered that the old cars in the 60's and 70's usually sold for "a few thousand dollars".   For example, the 1970 Plymouth Cuda had a base price of $3,400.   But how does that compare to wages back then versus the $37,035 cost of that new Camaro and todays wages.   Was it more or less easy to buy an American sports car with a typical income?

I thought it would be interesting to look at the base price of a muscle car and compare it to median wages and see how affordable such a car would be over time compared to typical incomes.    The Chevy Corvette has been in production continuously since 1953.     I can use the Corvette then as an example of an American sports car and see how its prices compare to wages over a long period.

The Corvette Affordability Index (CAI) is the base price of a Corvette Coupe as a percentage of median household income.

Here is the Corvette Affordability Index from 1967 to 2011 :

The CAI has been in the 100-110% range for around 30 years now dating back to the 1980's.   Before that back in the 60's and 70's it was closer to 75% level.  
To create the index I used the base MSRP of a Corvette coupe.   Note theres a break at 1983, as they didn't list the price for that year.  I got the numbers out of the CorvetteForum website.   A user posted the numbers there and cited 'Corvette Sports Car Superstar, by the auto editors of Consumer Guide.' as the source for most of the figures.   Here are the base prices for Corvettes going all the way back to 1953:

Now lets compare that to new vehicle price index from the BLS.    I previously talked about the new car price index from the BLS in an older article.

The long term price trend of Corvettes is similar pattern to the new price index from the CPI.

One last graphic shows the MSRP of Corvettes adjusted for 2011 dollars :


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