New Vehicle Prices Set Record in June

In June, the average price paid for a new vehicle was the highest on record and marked the first time that the average transaction price (ATP) surpassed the $48,000 mark, according to new data released by Kelley Blue Book, a Cox Automotive company. 

The new-vehicle ATP increased to $48,043 in June 2022, according to Kelley Blue Book, beating the previous high of $47,202 set in December 2021. June prices rose 1.9% ($895) from May and were up 12.7% ($5,410) from June 2021.  

After being in the mid-30s since mid-January, new-vehicle inventory days’ supply inched up to the high 30s in June. Customer demand remains strong due to continued supply issues. These conditions enabled most dealers to continue selling inventory at or above the manufacturer’s suggested retail price (MSRP).

The average price paid for a new vehicle has been “over sticker” throughout 2022. In June, new vehicles from Honda, Kia, and Mercedes-Benz were transacting on average between 6.5% and 8.7% over MSRP. On the other side of the spectrum, Buick, Lincoln, and Ram were selling at nearly 1% below MSRP. 

In June, the average price paid for a new non-luxury vehicle was $43,942, up $615 from May, the highest price for a non-luxury vehicle on record, according to Kelley Blue Book. Car shoppers in the non-luxury segment paid on average $1,017 above sticker price. In each month of 2022, consumers have paid roughly $1,000 more than MSRP compared to $158 over MSRP in June 2021. 

"While prices for the industry are, on average, higher than MSRP, there are some non-luxury segments that are more affordable such as compact cars and compact SUVs/crossovers," said Rebecca Rydzewski, Cox Automotive’s research manager of economic and industry insights. “These segments are selling for more than 30% less than the industry average transaction price.” 

In June 2022, the average luxury buyer paid $66,476 for a new vehicle, up $1,097 month over month, the highest price for a luxury vehicle ever. For comparison, luxury vehicles were selling for nearly $825 under MSRP one year ago. Luxury vehicle share remains high and increased to 18% of total sales in June, up from 17.3% in May.  

In June, the average price paid for a new electric vehicle (EV) increased by 3.8% compared to May and 13.7% compared to a year ago. The average price for a new electric vehicle – over $66,000, according to Kelley Blue Book estimates – is above the industry average and more aligned with luxury prices versus mainstream prices. Hybrid/alternative energy vehicles are selling at just over $39,000 in June, a $3,593 increase over May and an $8,453 increase versus a year ago.

Month over month, new-vehicle average transaction price changes (by segment) saw prices mixed in terms of increases and decreases. With an ATP of $39,040, hybrid/alternative energy cars had the largest increase of $3,593. With an ATP of $66,997, electric vehicles saw an increase of $2,444 in June, while vans increased by $658 to an ATP of $50,126. The different car segments showed minor increases in average transaction price in June versus May.

Also in extremely short supply, compact cars were up only $146 (or 0.6%), while mid-size cars were up 1% (or $325) for the month. Luxury cars showed a 6.4% decrease in ATP and full-size cars showed a 0.2% decrease.

Meanwhile, electric vehicles had the lowest incentives (as a percentage of ATP) of 0.4%, and entry-level luxury cars had the highest of 3.4%. Incentives dropped to a record low level in June, averaging only 2.3% of the average transaction price, according to Kelley Blue Book. 

Originally posted on Automotive Fleet