Interesting tool here which calculates the price now allowing for inflation (accepting of course that not all products and services are subject to the same inflation rate) but it is interesting nonetheless. https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator
Bought a Panigale V4S in 2018. The tool reflects quite accurately the price today. Also bought a new Vito a year later and it’s miles off. To replace my van today would cost me ~double. I guess shit happens when you shut down your economy for 18 months (lockdowns)… No surprise.
Interesting link. I bought my bevel new in 1980 costing more than my years wage at £2800. Equivalent of £11700 now. Guess the equivalent would be a V4R today which is actually less than my wage so looks like bikes are getting cheaper in real terms in the long run
Paid £9500 for my 916 Bip New in 97, fortunately 50% of that was a compensation payout. As for bikes getting cheaper, I must be in the wrong job because compared to my wages now, the equivalent in the current Ducati range is more than 25% dearer.
Interesting I came across this - titled "Thinking Errors" and how we cannot understand certain things - because we are actually one up from chimpanzees We understand linear growth but exponential growth is incomprehensible. We come from a linear growth environment. Inflation 5% in a country. Most do not think that is so bad, But in 14 years your money will be worth ½ what it is today. The human brain cannot readily understand the exponential function. The powers of compounding is the most powerful force in the Universe Rule of 70. 10% return on investment means your money will double in approximately 7 years. 10% = 70/10 = 7 years (where the 10 = 10% interest) 8% inflation your money is worth half what it is is today in approximately 8.7 years 70/8 = 8.7 years (where the 8 is 8% inflation) This is more intuative that a percentage. Never trust your instinct about exponential growth as we are incapable. Clever stuff
Alternatively, real interest rates are not widely appreciated ie interest rate - rate of inflation. If you are receiving 10% on your savings and the inflation rate is 12% your real interest rate is -2%. If you pay tax on your interest the return will be reduced further because inflation is ignored for tax. Conversely, if you buy a vehicle on 0% finance over 4 years and the inflation rate is 2% per year effectively, the finance company are returning you 2% real interest per year.
If you bought the vehicle for cash outright, instead of on finance (at "0% interest"), you could get a discount on the price. That demonstrates the concealed interest charge.
Especially if there is a manufacturer’s contribution to the deposit included in the deal. Legally they can’t ask for that deposit back if you pay it all off & avoid the finance deal.
The BoE uses the Consumer Price Index (CPI) but some people and organisations use the Retail Price Index (RPI) which returns even more dramatic results. For example, when calculating general damages, lawyers and judges apply RPI to the sums awarded in past comparable cases in order to update them.
The RPI includes the cost of housing ie mortgage interest payments whereas the CPI doesn’t. There are probably larger disparities in the cost of housing between regions than any other purchase.
