Saying you can't compare car prices to inflation because cars are in the CPI... We're really doing this?
New cars make up about 4% of the CPI, and used cars around 3%, so together they’re only a small part of the inflation basket. If new car prices doubled tomorrow and nothing else changed, headline inflation would rise by about 4%, but car prices would have increased 92% relative to inflation.
Inflation measures the decline in the value of money over time. If car prices rise significantly more or less than that decline can explain, that’s meaningful. If they don't... that's not.
New cars make up about 4% of the CPI, and used cars around 3%, so together they’re only a small part of the inflation basket. If new car prices doubled tomorrow and nothing else changed, headline inflation would rise by about 4%, but car prices would have increased 92% relative to inflation.
Inflation measures the decline in the value of money over time. If car prices rise significantly more or less than that decline can explain, that’s meaningful. If they don't... that's not.