Used Car World

Clunkers & Creampuffs

Chapter 3: Production and Prosperity

Expansion of Automobility in the 1920s

by James M. Flammang

Ford was among the first to set up a moving
assembly line, and other automakers soon
adopted the concept in the name of efficiency.

After the Armistice that halted "The Great War" (World War One) came the 1921 depression – followed by eight years of optimism and modernism. This was the era when "everyone" was (or soon would be) rich. The age of marketing and advertising, of "money madness" and "easy" payments, broadened automobility to a remarkable degree.

Recalled as the "Jazz Age," the era of Bohemians and Babbitts, of flappers and free business practices, the Twenties also paved the way for the commercialization of nearly everything. Rather than praising the prosperity of this New Economic Era, some critics warned of potential dangers from the rising emphasis on money and wealth, even considering it to be a significant contributor to high crime rates.

Auto industry profits were high during the '20s, reaching a peak of 25.3 percent in 1922, and never lower than the 16.1 percent profit figure reached in 1927 and '28. Automakers wanted high profits rather than providing more equal income distribution, which would have been necessary in order to keep selling the high volume of cars being produced. Thus, overproduction became a clear problem by the late 1920s. Cars were sold, obviously, but with greater and greater difficulty.

See Chapter 8 for details on market saturation and the "used car problem"

Four elements comprise this summary of the road into and through 1920s prosperity: family cars and family life, the auto industry, the used-car market, and those easy (installment) payments. American families were subject to a new emphasis on possessions and conveniences. Ads for cars and other products stressed pleasure, and appealed more to women. For the middle class, at least, the family car was fast becoming an integral part of family life. Even the millions of far-from-prosperous families doubtless felt an occasional twinge of desire – and wondering when they, too, might enter the world of automobility.

A 1924 Chevrolet ad claimed that the "once poor laborer and mechanic now drives to the building operation or construction job in his own car. He is now a capitalist – the owner of a taxable asset. His wages have been increased from $1.50 or $3.00 a day to $5.00 or $15.00 a day." Furthermore, "he has begun paying for a suburban home of his own.... He has become somebody."

In reality, however, not so many workers fit that caricature. The move from cities to the suburbs for most ordinary working-class families was not destined to come for several decades. Even if they did manage to acquire some sort of automobile, it wasn't necessarily much of a "capital asset."

As Staughton and Helen Lynd discovered in their "classic," meticulously detailed sociological study of "Middletown" in the mid-1920s, surprising numbers of Americans would rather have a car than a bathtub (assuming they couldn't manage both). Family-focused, original research for their book took place in the real city of Muncie, Indiana.

The 1920s decade was considered the era of free choice. Customers could be more selective about their purchases. More goods were available, and quality improved. Besides that, style was growing more and more important – at least to those who could afford the particular commodity in the first place.

The nation took quickly and enthusiastically to wheels, as car registrations multiplied tenfold between 1915 and 1929. By decade's end, more than half of American families owned private autos. Part of the rise was due to increasing availability of closed sedans rather than open touring models; but most of it was the result of falling new-car and used-car prices, coupled with relatively stable incomes.

Prior to the 1920s, the vast majority of cars sold were open models: touring cars, roadsters, and compact runabouts. Sedans (often with a center door) were offered by many automakers in the teens, but cost considerably more than an open touring model from the same manufacturer. In 1916, for example, a center-door Ford Model T sedan was priced at $640 – nearly double the cost of a family-sized touring car, which sold for only $360.

As the Twenties emerged, sedans became increasingly common – both two-door and four-door styles. They dropped steadily in price, compared to the open roadsters and touring cars. Not until the early to mid-1930s, however, did Ford and Chevrolet sedans become cheaper than equivalent open models.

Clearly, the closed automobile was the portent of the future. In 1919, only 10.3 percent of the cars sold were closed models; but by 1927, its proportion had skyrocketed to 82.8 percent. The sedan was here to stay, having far-reaching implications for the families of the nation, who might have been put off by the open tourer's vulnerability to rain and cold. Not every family could yet afford a car by 1929 – even a used one. Not nearly. But the vision of a cozy sedan doubtless produced visions of comfortable mobility in the minds of many who had, up to that time, been less than thoroughly impressed.

On the new-car front, the auto industry set records in production and sales. Ford dropped its Model T to a record low base price in 1923: just $290 for a runabout. Several competitors were producing low-priced cars, including the Star and Chevrolet's $490 Model 490. When Ford launched its far different, technologically advanced Model A in 1928, though, it was no longer a basic, low-budget vehicle.

Plymouth, on the other hand, stressed the low-priced sedan from the beginning. In its first year (1928) a two-door sedan could be purchased for $690 – just $5 less than the price of an open phaeton with similar seating capacity. And Plymouth's four-door sedan cost only $25 more.

Though major technical advances were few during the Twenties, cars were growing more reliable and lasting longer. Not many major automotive inventions emerged during that decade, but engineering and machining quality improved markedly. Autos were becoming more reliable and longer-lasting. Increasing efficiency, though, did not lower car prices; it typically went instead toward producing more elaborate models.

For the middle class, an expanding number of good used cars at reasonable prices became a tempting alternative to low-cost new models, as we'll soon see in greater detail in our chapters on the used-car market. Not only could the buyer save an average of 40-percent first-year depreciation; he could get a bigger, or more prestigious, car for less money than an unimpressive new model.

How were the workers doing? Ads claimed that "any" worker could own a car; but with the average industrial wage only $24.11 a week in 1925, it just wasn't so. That average worker earned 70 cents an hour for a 49.9-hour week. Average annual earnings ran from $1,450 for all full-time manufacturing workers to $1,652 in the motor vehicle industry. For non-farm industry workers, the average was only $1,434.

Quite a few wage earners, however, were buying secondhand Model T Fords – and some got an even better deal on an "orphan" make at the local used car lot. Some budget-strapped families discovered early on that obsolete, discontinued makes could be good buys on the growing low-end used car market. Big old sedans of less-popular makes, secondhand and beyond, served as a real alternative to new models for large, cash-starved families.

During the Twenties, the phenomenal growth in easy payments came into play. They'd been available on a small scale since 1903, and to "responsible" buyers since 1910-15. But after General Motors Acceptance Corp. (GMAC) was established in 1919, time payments zoomed. By the mid-l920s, three-fourths of all cars, new and used, were being sold on time, making ownership a reality for millions who could never come up with the cash in one swoop. That proportion fell later in the decade, a reaction to overly zealous credit terms (as little as 10 percent down) that later became more reasonable.

Bankers and auto-industry leaders had mostly opposed time payments, dubbed "dangerous" by pioneer automaker Ransom F. Olds. But as one small-town merchant wrote in 1928, "to keep Americans working we must keep them wanting ... and installment selling makes it easier to keep Americans wanting." Others insisted that people "work harder" when they're striving for a powerful goal, such as an automobile.

Meanwhile, the used cars were piling up on dealers' lots as a result of intense competition for new-car sales.

See Chapter 4 for more on installment buying

Click here for Overview: Casual History of the Used Car

Click here for Chapter 1: Early Days – Rich Men's Playthings, Poor Men's Dreams

Click here for Chapter 2: Ford's Model T and the Masses

Click here for Chapter 4: "Easy" Payments

Click here for Chapter 5: Family Cars and Family Life

Click here for Chapter 6: Five-Dollar Flivvers

Click here for Chapter 7: Rise and Fall of the Used Car

Click here for Chapter 8: Saturation and Salesmanship

Click here for Chapter 9: A Global Blowout

Click here for Chapter 10: Selling in Hard Times

Click here for Chapter 11: Wheels for the Workingman

Click here for Chapter 12: Okies, Nomads, and Jalopies