Via Wolf Street

And I mean, not just by a little. The F150 XLT & Camry LE are at it again. My annual brain-twisting stunner.

By Wolf Richter for WOLF STREET.

Toyota finally released the MSRP (manufacturer’s suggested retail price) of its 2021 Camry LE, after releasing prices of higher-end Camrys a while ago. Ford released the MSRP of its 2021 F-150 XLT in October. The Camry has been the best-selling car in the US. The F-Series has been the best-selling truck, as well as the best-selling automobile of any kind in the US. Both models go back beyond 1990, and there are not many models that have been continuously produced since 1990.

They form the WOLF STREET “Pickup Truck & Car Price Index.” It’s not seasonally adjusted, and it’s free of “hedonic quality adjustments” and other methods that the government uses infamously to lower its “Consumer Price Index for New Vehicles.” It reflects price changes of the same model over the years, in their purest form, and is my annual brain-twisting stunner.

Camry LE Prices.

You cannot yet find a 2021 Camry LE in showrooms. Build dates start in mid-November, I was told. But higher-end 2021 Camrys are already out there.

The low-end Camry L got axed for the 2021 model year, and the base version of the LE is the rock-bottom Camry you can buy. The Camry was redesigned for the 2018 model year, which, as is typical, came with a jump in price. In between redesigns, prices change little. So MSRP for the 2021 model is $24,970, unchanged from the 2020 model, but up 70% from the MSRP of a 1990 Camry LE.

Cars face dying demand in America. Ford, GM, Fiat Chrysler, and others have already dropped many of their car models. For example, Ford ended production of the Fusion in August. Automakers have switched production to trucks, SUVs, vans, and compact SUVs. Compact SUVs are based on car chassis and power trains but are a little higher and offer more space, and are more expensive than equivalent cars, and Americans love them, and automakers love them because they make more money on them. But the Camry has survived.

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F-150 Prices.

The MSRP for 2021 F-Series trucks ranges from $28,940 for the base F-150 XL to nearly $100,000 for a Crew Cab Lariat 4×4 with all the options, bells, and whistles. The base F-150 XLT is one step up from the XL. The 2021 model got a redesign – a revised nose, new headlights, new taillights, and some other things. And as you expected, the redesign came with a price increase: the F-150 XLT base MSRP, after remaining unchanged last year, rose by $890 to $35,050. This is up a stunning 170% from 1990!


Hardly anyone pays MSRP. There are nearly always incentives by automakers and discounts by dealers. But this was also the case in 1990. The MSRP is set by the automaker at the beginning of the model year and doesn’t change for the model year. What changes are the incentives and discounts. But MSRP allows us to approximate year-to-year price changes.

The WOLF STREET “Pickup Truck & Car Price Index.”

The chart below shows the MSRP of the F-150 XLT for each model year (+170% since 1990, blue bars, left scale), the MSRP of the Camry LE (+70% since 1990, red line, left scale), and the Consumer Price Index for New Vehicles by the Bureau of Labor Statistics (+21% since 1990, green line, right scale), which is now about where it had been in 1997, an indication that somehow there was no inflation in the prices of new vehicles:

To put the F-150 XLT, the Camry LE, and the CPI for New Vehicles on the same scale, I converted the data into “percent change since 1990.” This shows three things:

  1. The apparent absurdity of New Vehicle CPI, which has remained flat for over 20 years even as actual prices have soared;
  2. The dying demand for cars in the US that doesn’t allow automakers to raise prices as much as they can with trucks;
  3. And the red-hot demand for trucks, amid Americans’ willingness to pay out of their noses for trucks, while automakers are raving about their ability to shift Americans into these high-profit trucks:
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But it’s not the same Camry and the same F-150.

The 2021 Camry LE comes with Amazon’s Alexa, Apple CarPlay, and Android Auto. You might hate Alexa, but many Americans are in love with her and cannot imagine life without her. So now she not only inside the bedroom but also inside the car.

The 1990 Camry LE didn’t even know who Alexa was. It had a four-speed automatic transmission instead of the super-duper electronic do-it-all 8-Speed Direct Shift ECT-i Automatic with sequential shift mode of today’s base Camry LE.

The 2021 Camry LE’s 4-cylinder engine produces 203 hp versus 115 hp for the 1990 model. Today’s Camry LE is rated at 38 MPG on the highway. The 1990 Camry LE was rated at 28 MPG on the highway.

Today’s Camry LE has an audio system with a 7-inch touchscreen and six speakers, 17-inch alloy wheels, integrated backup camera with projected path, auto on/off headlights, Tire Pressure Monitor System, and an 8-way power-adjustable driver’s seat.

Today’s Camry LE has 10 airbags, front and rear energy-absorbing crumple zones, side-impact door beams, “Pre-Collision System with Pedestrian Detection,” “Lane Departure Alert with Steering Assist,” and many other safety features.

It has Hill Start Assist Control, which is sweet in San Francisco, when you’re stopped pointing up a hill that is so steep that you’re just looking into the sky, though it might be less useful in Illinois. It has Dynamic Radar Cruise Control, which allows you to use the cruise control in dense expressway-traffic as it adjusts to the speed and lane changes of vehicles in front of you. And it has lots of other features of modern vehicles.

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The F-150 has made similar progress. The base engine is the 3.3L V6 with 290 hp and 265 lb.-ft. of torque. And it comes with a 10-speed automatic transmission. The truck has a long list of features that are similar to the Camry’s, in addition to some special truck features, such as towing capacity.

Vehicles today offer features, including safety features, and performance that their 1990 models couldn’t even dream of.

Which brings us to inflation.

Price increases consist of at least two factors:

  1. The loss of purchasing power of the dollar (inflation as a monetary phenomenon), meaning the price you pay for the same thing over time.
  2. The costs of quality improvements, for example going from a 4-speed automatic transmission in 1990 to a 10-speed can-do-it-all automatic in 2021.

To separate the loss of purchasing power of the dollar from the costs of quality improvements, and remove the costs of quality improvements from the CPI, the Bureau of Labor Statistics employs “hedonic quality adjustments.” It estimates the additional costs of these quality improvements and removes them from the CPI for New Vehicles every year.

How these costs of quality improvements are estimated determine how much of the actual price increases are removed from CPI calculations. And clearly, the BLS has gotten very aggressive in estimating and removing those cost, given that its CPI for New Vehicles has remained essentially flat since 1997, while the actual prices of new vehicles have soared.

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