Inflation is a sustained increase in the overall price level. This means that if you look at the prices of all goods and services, they have risen over time, The most comman measure of inflation is the consumer price index (CPI). If buy a car for ‘$20,000 today, will it be worth more or less in 10 years? It depends on what happens to inflation over that period. If you ‘assume there is no change in inflation rates, then your car willbe worth about $16,500 after ten years ($20,000 x 90% = $18,000; 18K)