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Have guitars inflated with inflation?
Not too long before the Holidays, I posted a couple of new threads in the Guitar-Muse forum, asking whether Gibson and Fender had priced themselves out of the market. This generated the seed for an article idea and some really interesting research by yours truly. Does inflation affect guitar prices? Read on…
My “concern” was that new musicians, or for that matter, anyone who doesn’t have lots of spare cash, couldn’t afford a quality instrument such as a Gibson Les Paul or a Fender Strat at today’s prices. ( I know I can’t afford one.) They would have to “settle” for an Epiphone, a Squire or another cheaper copy to get close to what they really wanted. Even the used ones hold their value to an extraordinary level.
I went to every site I could find, including Fender and Gibson, to look for prices from 1980 to 1984 for comparison purposes. I went to every used and vintage site as well… no luck. Finally, I called Fender and Gibson to request their MSRP on a 1980 Strat and Les Paul Standard; $870.00 for the Strat and $849.00 for the LP. Lesson learned: pick up the phone stupid! The internet does not have all the answers.
Plugging those 1980 values into the inflation calculator at www.usinflationcalculator.com , we find that there has been 178.6% inflation since 1980. That means the Strat should list at $2424.00, and the LP at $2395.00. Today, at their respective web sites, the Strat lists for $1529.99 and the LP Standard at $3499.00. As you can see, Fender has done a real job holding down prices as they are $894.00 less that the inflation rate but, Gibson has raised their prices as they are $1104.00 above the rate of inflation.
In the spirit of the apples to apples comparison, the LP is a more expensive guitar to make than the Strat. The price of mahogany, what the LP body and neck is made from, is at an all time high. Gibson just finished negotiating with the federal government over their use of woods that are now endangered or prohibited. Anyone ever hear of Granadillo? That’s what the LP’s fretboard is now. I played the LP Standard and didn’t realize the fretboard wasn’t Rosewood!
The bottom line here is that Gibson has incurred more costs and has raised their prices accordingly. Are they ripping you off? Nah. Are they overpriced? Not if you consider the investment value and that you can get an LP anywhere for $2499.00. Fender, on the other hand, has actually lowered their prices. Better automation in the Corona factory is part of it but, the Strat is not as expensive to make. Is the American Standard Strat a good investment? Sure. Spend some time on the vintage guitar sites and you’ll see that Strats are just as crazy in their value as anything else. And, at $1099.00 anywhere you want, an excellent value.
So, I was way off base and I’m not ashamed to admit that I don’t know everything. Researching this article was an education in itself on the value of “vintage” instruments, those that are special in some way like a ’53 LP Custom, the ’57 Gold Top, the ’63 Strat or ’57 Tele. Then there are the used guitars that don’t fall into that category, like a ’72 Gold Top or an ’88 Strat, that still demand more than you’d think.
Gibson and Fender aren’t pricing themselves out of the market but are really just trying to make a living while providing quality instruments so you can make your own history.