Classic Cars: Why Are The Parts To Pricey?

I chose this question because my dad collects classic cars and I frequently see catalogs that come in the mail that are filled with parts for all sorts of car parts. I know my mom gets on my dad a lot about buying too many parts at a time because they can get very pricey. Why are the parts to pricey? I know that the parts themselves are fairly simple and much less complex than a part you would find for a new car. I assume that car parts are so pricey because the parts simply aren’t made anymore. Classic cars are special and almost rare, so it also seems unlikely that there are too many of these cars sitting around in junkyards that can me scrapped for parts. I ask my dad about the part production process and he said that there are companies that make their own parts or they sell parts call “old-new parts” which are original parts from original vehicles. He also said that there are not many companies out …show more content…
Therefore, the price of parts is relatively high for classic car enthusiasts. We can see this trend by looking at the supply and demand curve. This demand is so high because car parts are very inelastic; nothing can replace these parts. We know that there are only three or four companies that my Dad could supply parts for my dad. Obviously the market for car parts is very small. We know that this industry is not perfectly competitive because opening a classic car parts store would be costly and difficult considering how small the market is. From my observation, the classic car parts industry is an increasing cost industry. According to our readings, an increasing cost industry occurs when costs rise as industry output increases. If there was suddenly a surplus of car parts, then the demand would automatically go down. This would cause the cost of parts to decrease. Considering how small the market for these parts is, it seems unlikely that there would ever be a parts