As I have posted before, I owned one of the very first 1990 LS400 cars sold in the fall of 1989. 14 years ago. Anyway, I just "came back" to Lexus (the mistake was moving on to Mercedes) with a new '03 LS430, sticker just a hair below $58,000.

I began to wonder to myself how the car could have gone from $38,000 in 1989 to $58,000 today. Then I did some calculations. First, I went to a web site that computes prices adjusted for inflation. To my surprise, $38,000 of 1989 dollars equals about $57,000 today. Then you have to adjust for the standard equipment in today's car (CD changer, heated seats, better warranty, traction control, air cooled seats, multiple air-bags vs just a single airbag in the '90) and, surprise, the car actually costs the same or less in inflation adjusted terms as the 1990 model year car.

I am not sure what good this info is, other than it's just interesting!
Daryll40

 

Never thought about it. Thats pretty cool!

 

Interesting theory, I never thought about that myself. You do have lot more gadgets now compare to the early 90s. I think is well worth the money. I own a 98 LS400 with 32K miles and soon an owner of a brand new GX470. The GX470 will be the first new car I have brought since 93. My 98 LS400 is a CPO I brought two years ago. I love driving that car!!!

 

What is a "C P O I"?

 

Is a Certified Pre-Owned Lexus.

 

32K MI on an LS that you bot used 2 years ago? You sure don't go anywhere!

Daryll40

 

The only time we use it is on the weekend. My buddy and I takes turn driving when we go golfing. One weekend I take my car and next time he takes his. I end up taking mine for the long drive cause I'm not to crazy about his car.

mad.

 

Cool cost analysis Daryll!

 

I think your wrong..First off the first LS400's were sold at a loss ,Lexus only made money on the ES250 which was(rebadged camry) They did it to break into the luxury car market.........I read the story on this years ago.....................Believe Me Lexus Now Makes Money On Every Car.

 

Whether or not Lexus made money in 1989 on each LS or not, that has nothing to do with my point. So how am I wrong?

Here is the math, pure and simple. Today's "average equipped" LS costs about the same in inflation adjusted terms as the 1990 model.


1990 LS, average options, stickered for $38,000.
2003 LS, average options, stickers for about $58,000


CPI as of September 1, 1989 was 125.0
Today the CPI is 184.6

184.6 is 48% higher than 125.

$38,000...the sticker price of the 1990 Lexus in 1989...plus 48% equals $56,240. Add in the extra airbags, better radio and CD changer (that was extra money in 1989), the better 6 yr 70000 powertrain warranty and maybe a few other things I can't remember offhand and the car is priced about the same in REAL, INFLATION ADJUSTED TERMS as in 1989.

Toyota's profit or loss on each car is not my point.

Daryll40

 

I see your point Daryl and your analysis looks just fine, it's just a rough comparison. The average Joe wouldn't even know what the CPI is!

A very interesting point you have noticed; thanks for pointing it out to us .

 

Daryll:

using a similar analysis, it will appear that the '04 LS is cheaper than the '03 version. Why ?

'04 stickers at ~ '03 sticker, BUT with major changes some of which are standard:

6-speed tranny in '04 (0-60 @ 5.9s vs 6.3s)
moonroof
2 additional airbags (for the knees) in '04 over '03

These standard equipments alone constitute many more $ on the '04, yet pricing remained at '03 level. Factor in the subjective exterior changes, and you can see that bar none, the '04 is a great buy over the '03 any way you slice/dice it. If I were buying an LS, I'd buy the '04 in a heartbeat.

Q: how much better will the redesign be by MY '06 ? Hmmmm.....

 

Now we are talking about something somewhat different. On the surface, you are absolutely right that the '04 packs more features and a newer, updated bodystyle for the same STICKER price. The reality, however, is that smart shoppers won't pay full sticker for an '03 if they can get an '04 for the same price. So, unless you are a sucker (and I am sure the Lexus dealers have found a few), and most purchasers of $50,000+ vehicles are at least somewhat financally savvy, the TRUE TRANSACTION price of the '03 will be less to reflect it's lower value in the marketplace.

As to your comment that most people don't know what the consumer price index (CPI) is...c'mon! Any babyboomer who lived thru the inflationary '70s...and most buyers of $50,000+ cars are at least that old, surely knows about inflation and the CPI. I totally disagree that Lexus buyers don't know what CPI is.

Daryll40

 

Daryl: When new- do you think your 90 LS400 was a higher quality car than your new LS430? I have heard that quality has went down. Especially after 1994. I have heard that the 90-94 LS400s were the most reliable and best built. I have no idea however.

 

I doubt it. My '03 LS430 only has 2500 miles on it, but so far not one flaw. From what I read on the internet bulletin boards and the car magazines, quality is just not an issue...it's solid. Was the 90-94 better? My guess is that the current vehicle is just as good, with more toys and a more evolved (better seats, better sound system, etc) setup.