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  • Average New Car Prices In July Over $48,000

    Average New Car Prices In July Over $48,000

    "We are here to help you make a good, smart car buying decision.  If you're thinking about doing something, there is a lot going on in the auto industry with the shortages of new cars and some vehicles are still very hard to come by and they're bringing premium money as you might suspect. But if you've got a trade-in, trade-in values are still very high, however, I am seeing movement downward in pricing at the auction, I've seen it now for three weeks in a row... so if you're on the fence and you've got a trade-in, I would consider doing something now." 

    - Jerry Reynolds, host of the CarPro Show

    Listen to Saturday's CarPro Show Podcast  


    If you were hoping new vehicle prices would dip in July,  they did just the opposite, topping June's record, according to Kelley Blue Book data. KBB reports that the average price paid for a new vehicle in the U.S. last month increased to $48,182.  That tops the average new vehicle average transaction price of  $48,043 set in June. To break it down further, July prices rose 0.3% ($139) from June 2022 and 11.9% ($5,126) from July 2021All data provided in a KBB press release.

    New-Vehicle Supply


    The supply of new-vehicles on dealer lots remains steady -- in the mid-30s in July, according to KBB.  KBB says surprisingly, days' supply the end of July was 27% higher than it was in 2021, when inventory shortages first started to impact the market, demand was even higher, and days' supply dropped into the 20s. Still, with roughly 1.1 million units in inventory in the U.S., KBB researchers say new-vehicle inventory remains significantly below levels seen in 2020 and 2019. 

    MSRP


    Due to inventory issues and high demand, KBB says most dealers continue to sell vehicles above the manufacturer's suggested retail price (MSRP).  The brands that are selling for most over MSRP according to KBB says the brands with the most new-vehicle price strength in the current market are Honda, Kia, Land Rover, and Hyundai, transacting between 5% to 8% over sticker last month.  The brands selling 1% or more below MSRP are Ram, Volvo, Lincoln, Buick, Alfa Romeo and Fiat.

    "It's still a sellers' market," said Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive. "New-vehicle inventory levels are better than a year ago, but remain historically low, and that's keeping new-vehicle prices elevated. Still, even though average prices are at a record level, there are affordable vehicles out there. Compact cars and SUVs and subcompact models typically transact for 30% to 40% below the industry average."

    Non-Luxury New Vehicle ATP Sets New Record


    KBB reports the average price paid for a new non-luxury vehicle last month was $44,431, up $363 from June, and a new record for non-luxury vehicles. Car shoppers in the non-luxury segment paid on average $875 above sticker price, a decrease from the prior month. Still, shoppers are paying more than they did compared to a year ago when they paid 0.8% below MSRP.

    Check out July Small SUV Sales

    Luxury New Vehicle ATP Drops


    On the other hand, luxury prices dipped in July. KBB says last month the average luxury buyer paid $65,530 for a new vehicle, down $382 from last month's record, when luxury ATPs hit $65,912. Still, luxury buyers continue to pay more than MSRP for new vehicles, although prices are trending closer sticker prices. For comparison, KBB says luxury vehicles were selling for $386 under MSRP one year ago. Still, luxury vehicle share remains historically high, which has pushed the overall industry ATP higher, but it fell to17.8% of total sales in July from 18.2% in June.

    Electric Vehicle ATP Drops


    The industry also saw a drop in electric vehicle new-car pricing in July.  KBB says the average price paid for a new electric vehicle (EV) dropped in July by 2.3% compared to June -- but it's up 18.8% versus a year ago.  Even at that drop,  EV's are in luxury car pricing range with the average price for a new electric vehicle – over $66,000, according to Kelley Blue Book estimates.

    Incentives


    There was some good news on the incentives front, with incentives increasing slightly in July versus June. Still, they remain low at 2.4% of the average transaction price. A year ago, KBB says incentives averaged 5.9% of ATP. Full-size cars and luxury cars had the highest incentives in July, while high-performance cars, full-size luxury SUVs, and electric vehicles had the lowest.

    Here's a look at the KBB data by manufacturer, make and segment, as provided in KBB's press release.

    kelley-blue-book-july-1

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    Table/Data Source: KBB Press Release.
    Photo Credit: FGC/Shutterstock.com