Mon, 12 September 2022 | consumers economy travel
According to newly released data from Kelley Blue Book, a Cox Automotive subsidiary, the average price paid for a new car in the U.S. in August surpassed July's record and held the average transaction price (ATP) firmly over the $48,000 threshold. In August 2022, the Kelley Blue Book new-vehicle ATP reached a new high of $48,301, surpassing the previous high of $48,080 established in the preceding month. Prices in August 2022 increased 10.8% ($4,712) over the previous year and 0.5% ($222) from July to August.
During the summer, the supply of new-vehicle inventory days stayed constant in the mid- to upper 30s and is now beginning to rise. Days' supply in August was 43% more than it was during the same period in 2021, when inventory constraints first started to have an effect on the market. Even still, the number of new vehicles on the market in the United States, at around 1.2 million units, is still considerably lower than it was in 2020 and 2019. With barely 1.1 million units sold on average per month in 2022, new car sales are still low in the face of low supply and high prices. For comparison, sales were 1.4 million per month on average during the first eight months of 2019.
The market's strongest price performers continue to be Hyundai, Land Rover, Honda, and Kia, which last month transacted between 5- and 9% above sticker. The less expensive Italian manufacturers Alfa Romeo and Fiat as well as Ram, Volvo, Lincoln, Buick, and Volvo all sold 1% or more below MSRP in August. Naturally, the brands with the most days' supply of vehicles are also those with the lowest pricing strength.
Prices are still high and steadily rising each month, according to Rebecca Rydzewski, research manager for Cox Automotive's economic and industry insights. Automakers are concentrating on building and selling high-margin vehicles, so the product mix is essentially what's keeping prices high. "New-vehicle inventory levels have been rising through August, now reaching the highest level since June 2021. However, supply of popular segments - like subcompacts, hybrids, and EVs - still remain very low."
The average cost of a new non-luxury car this month was $44,559, which was a record for non-luxury cars and an increase of $132 over the previous month. Non-luxury car buyers spent an average of $1,102 more than the sticker price, up from the previous month. In August, non-luxury consumers spent about 2% more than MSRP than they had a year prior. One good thing for buyers: in August, truck purchasers spent $142 less than sticker.
The average price for a new luxury car in August 2022 was $65,935, an increase of $878 from the previous month's record-breaking premium ATP of $65,057. Although prices are getting closer to sticker costs, luxury consumers still spend more than MSRP for new cars. Even while the percentage of luxury vehicles in overall sales dropped from 17.7% in July to 17.5% in August, it is still historically high. The increasing share of luxury sales is assisting in raising industry ATP on the whole.
The average cost of a new electric vehicle (EV) grew by 15.6% in comparison to a year ago and by 1.7% from July. According to estimates from Kelley Blue Book, the average cost of a new electric car is over $66,000, which is significantly higher than the industry standard and more in line with luxury than mainstream costs.
At only 2.3% of the average purchase price, incentives were historically low in August compared to July. Incentives were typically 5.5% of ATP a year earlier. The largest incentives in August went to full-size and luxury cars, while the lowest incentives went to high-performance cars, vans, and electric vehicles. In August, brands with greater stock levels provided greater incentives. For instance, the Stellantis brands often had higher-than-average inventory and incentives in August. Stellantis' incentives in August averaged 4.4% of ATP, up from 4.1% in July, but were still historically low.
Source: Kelley Blue Book