New Vehicle Prices Hit Record Eight Months in a Row – Remarketing

New-vehicle costs elevated additional into document territory in November, together with a modest improve from the month prior, in keeping with new information launched Dec. 10 by Kelley Blue E-book.

Common transaction costs (ATPs) are sharply elevated from final 12 months, up greater than 13% from November 2020. New-vehicle stock ranges stay tight, and with ample client demand, sellers have been in a position to maintain costs at or above the producer’s urged retail worth (MSRP). In latest analysis from Cox Automotive, almost 70% of franchised sellers indicated their new-vehicle costs are increased than pre-pandemic ranges.

Whereas costs have been elevated final month, gross sales have been sluggish, with gross sales quantity on the lowest degree of the 12 months. November was the sixth straight month of quantity declines. In actual fact, at 1,020,355 models, November’s gross sales hit the bottom degree since April 2020, when the worldwide pandemic first shut down the financial system.

“Excessive costs and restricted decisions probably are protecting many automotive consumers on the sidelines,” mentioned Kayla Reynolds, analyst for Cox Automotive, in a information launch. “It’s nonetheless a vendor’s market, and we don’t anticipate issues to alter anytime quickly. Nonetheless, with excessive costs being the norm proper now for each new and used automobiles, which means trade-in values are very favorable and may help soften the blow for customers as they buy their subsequent car.”  

Luxurious car gross sales, which usually improve in November and December, comprised 17.4% of whole gross sales in November and helped to drive ATPs increased. For comparability, luxurious gross sales made up solely 15.9% of the market six months in the past in Could. 5 years in the past in November 2016, luxurious gross sales accounted for less than 14.4% of the U.S. market. In November 2021, the typical luxurious purchaser paid $61,455 for a brand new car, a record-setting sum almost $1,000 greater than sticker worth. As compared, one 12 months in the past luxurious automobiles have been promoting for greater than $3,000 beneath MSRP.

The common worth paid for a brand new non-luxury car final month was $43,144, additionally a document excessive and greater than $900 over sticker. For every of the final six months, the typical worth paid by customers was above the MSRP.

Even essentially the most inexpensive segments registered large year-over-year features, in keeping with the Kelley Blue E-book evaluation. Subcompact automotive transaction costs in November have been up 17% year-over-year, whereas compact automotive costs have been up 16%. On the opposite finish of the affordability spectrum, full-size SUVs confirmed the smallest year-over-year features, up solely 4.8% year-over-year, with common transaction costs climbing above $73,000.

One purpose total new-vehicle transaction costs stay elevated is as a result of extra inexpensive sedans are taking a smaller share of the market. In November 2021, automobiles ($41,026 ATP) on common have been extra inexpensive than new SUVs ($45,201 ATP), vehicles ($54,462 ATP), or vans ($46,523 ATP). Vehicles additionally had increased incentives at 4.7%, expressed as a proportion of ATP. Total, trade incentives fell to a document low, averaging solely 4.1%.

As well as, market share for automobiles reached among the many lowest ranges ever, plummeting to 21.7%. As compared, in November 2020 automobiles commanded 24.5% share, and in November 2018 automotive share was almost 30%. As fewer automobiles are bought, vehicles and SUVs dominate the market driving ATPs to trace increased.

Initially posted on Automobile Remarketing