Yikes! Kentucky buyers likely to pay more than ever as new vehicle prices soar
The average transaction price for a new vehicle in the United States reached a new high of $46,036 in October setting a record for the seventh straight month, according to a new report from Kelley Blue Book.
The average is a 12.9 percent or $5,266 jump from last year and a 2 percent or nearly $1,000 increase from last month. Kelley Blue Book attributes the inflation to customers paying above market value for vehicles during the well-publicized microchip shortage and declines in inventory.
Car shoppers paid an average of 2 percent more than the manufacturer’s suggested retail price last month, which equates to an average of $800 over sticker price.
“Whether they are desperate or impatient, consumers continue to pay hundreds of dollars above the suggested price for new vehicles,” said Kayla Reynolds, an analyst for Cox Automotive. “While the average transaction price jumped to a new record high, the average incentive package fell to a 20-year low. To score a new vehicle, buyers are accepting no-haggle pricing, with significant market adjustments in some instances. It is absolutely a seller’s market right now.”
Sales of luxury cars and SUVs helped drive up the average price but double-digit price increases have occurred in compact and mid-size cars as well, according to Kelley statistics. Hyundai brand vehicles, for example, were up 14.2 percent over October of 2020. The average purchase price was $33, 466. Toyota brand vehicles were up 15.3 percent to $39,447.
“New-vehicle inventory remains far below healthy levels, and many automakers are steering available microchips to higher-end, higher-margin products. As a result, volumes are depressed, but sales revenue has jumped significantly,” the report said.
Last month, the car share of the U.S. auto market dropped to 21.5 percent, down 4 percentage points from two years ago. Meanwhile, the overall share of expensive SUVs rose 3 percentage points to 52.4 percent, while the pickup truck share increased 2 percentage points to 19.3 percent.
Kelley Blue Book does not expect much relief from high new vehicle prices any time soon, it reported. New-vehicle inventory is expected to be low through the first half of 2022 and automakers will continue to focus on high-revenue vehicles..
New-vehicle demand continued to sit at a lower-than-usual mark last month. Over one million (1,056,137) new cars were sold in October, which is a 4.1 percent increase from October but a 22.4 percent decrease from October 2020.
This story was originally published November 17, 2021 at 11:37 AM.
