“The surge in new-car prices appears to have peaked,” said Michelle Krebs, executive analyst for Cox Automotive. Cox Automotive is the parent company of Kelley Blue Book.
Prices Will Keep Declining, but Slowly
Krebs expects prices to come down further, but slowly.
“While we expect vehicle supply to improve, it will continue to be tight, particularly through the first half of the year,” she said. “Because of this, we expect prices to remain high for the foreseeable future, but car shoppers can rest assured we don’t anticipate any more record highs.”
A worldwide shortage of microchips – the average new car contains more than 100 – has forced automakers to trim production. That has kept prices high through simple supply and demand.
Non-Luxury Cars Are Declining Faster
But prices have also risen because Americans continue choosing more expensive vehicles. The final sale price of the average non-luxury car has declined for three straight months, but Americans have bought enough luxury vehicles to keep the overall average increasing.
Car Shoppers in Luck; Minivan Shoppers Out of It
Car shoppers still are paying more than $900 above sticker price on average. Consumers have paid more than MSRP for each of the last eight months, whereas one year ago, non-luxury vehicles were selling for more than $1,600 under MSRP.
The average luxury buyer paid $64,635 for a new vehicle in January. That’s down $804 from December’s numbers, but still more than $1,300 above sticker price.
Cars saw larger decreases than any other type of vehicle. The average new car sold for $1,263 less in January than in December. SUV buyers paid an average of $45,512 — a decrease of $913. Truck buyers saw the lowest decrease. They paid $54,331 on average, or $483 less than one month before.
Minivan buyers, though, had it worst. The price of the average minivan increased by $1,308 to reach an average transaction price of $48,207.
Incentives Still Rare
While shoppers may be able to negotiate a lower transaction price than they could have a month ago, they can’t count on much help from advertised discounts. Incentives made up just 3.9% of the average sale last month, matching the record low set in December 2021.