Vehicle prices have fallen

One of the reasons given for Australia's record one million new vehicle sales last year is affordability. Cars have never been so affordable, say the economic pundits. But they've also never been so expensive.

Australia's favourite car for the 12th year in a row, the Holden Commodore, cost about $31,500 five years ago for an Executive and under $30,000 10 years ago. A base Omega now costs $34,990.

However, the dollar isn't worth as much as it used to be and wages are much higher.

Commsec chief economist Craig James says cars are the most affordable they have been in 20 years, according to Commsec's affordability index. The stockbroking arm of the Commonwealth Bank uses a formula that predicts the amount of time it would take an average weekly wage earner to pay off the list price of a base model Holden Commodore auto.

At today's average income of $1102.40 a week, it would take 31.3 weeks to pay off a Commodore. Five years ago that was 36 weeks, 10 years ago it was 42.3 and 20 years ago it was 35.7. The number crunchers agree cars are more affordable in 2008.

But what do you get for your money these days? Remember when remote mirrors, airconditioning, central locking, power windows, CD players and anti-lock brakes cost extra?

Now they are standard in even the cheapest and most basic models on the market.

We compared the mid-strength Berlina spec of the 2002 VY Commodore with the latest VE Commodore to see what you get standard.

The VY cost $40,850 for the V6 and $45,440 for the V8 and five years later these have decreased. The V6 is now $39,990 and the V8 $44,490. The punter gets more for their buck and it starts under the bonnet of the V6 with 180kW compared with 152kW in the VY.

Primary safety features in the VY went to anti-lock brakes. The VE adds an electronic stability program with ABS, electronic brake force distribution, brake assist and traction control.

Secondary safety features in the VY extended to a driver and front passenger airbag.

Now you get dual-stage front airbags, side impact airbags and optional curtain airbags.

Features in the VY were scant, but you did get climate control air and 15-inch alloy wheels.

The VE now comes with dual-zone climate air, 17-inch alloys, plus a host of other features such as an auxiliary plug for your iPod, Bluetooth mobile phone connectivity, front fog lamps, leather wrap steering wheel and rear park assist.

“Given that prices haven't increased or have been maintained in most cases, despite significant safety, technology and feature upgrades, and when taking CPI into account, it's incredible value,” GM Holden spokeswoman Shayna Welsh says.

The Commodore isn't the only vehicle to offer more for your money. Imported vehicles have far more value than they have had previously.

While the strong international value of our dollar has made most other manufactured imports cheaper, few imported vehicles are cheaper than they were five or 10 years ago.

Car importers argue that if they were to reduce the price of new vehicles it would also erode the value of used vehicles.

We don't want our five-year-old car to be worth half what we paid for it when we trade it in.

Instead of reducing new car prices, importers are adding more equipment at no extra cost.

One imported brand that has been experiencing rapid sales growth is Honda, but not just because of the favourable exchange rate.

With most of its Australian fleet built in Thailand, the company has been able to pack their vehicles with features because of the cheaper production costs in Thailand and the lower import duty through the free trade agreement with Australia.

Ten years ago Honda Australia launched a special edition Honda CR-V with ABS, sunroof, alloy wheels, roof rails and other added features to celebrate its golden anniversary.

It cost $33,950 for the manual transmission variant and $35,950 for the four-speed automatic, while the standard model was $29,950 (manual) and $31,950 (automatic).

Airconditioning, remote central locking, power windows and electric mirrors were standard on all models with a two-litre engine.

Today, the base model CR-V costs $31,990 (manual) and $33,990 (auto), which is almost $2000 less than the '98 anniversary model and $2000 more than the base model.

Today's CR-V has a 2.4-litre engine and has a host of features. Safety gear includes ABS with EBD, brake assist, stability control, four airbags and front active headrests.

Standard creature features include steering wheel-mounted cruise and audio controls, speed sensitive audio volume and an auxiliary audio input to connect to iPods.