New cars sit in the front row and obscure the street-level view of an empty lot of new cars at Toyota of Orange in Orange, California, in November (Beautiful Images)
In today’s installment of the US inflation story – and how new and used car prices are the key drivers of it – we hear from the folks at car valuation house Kelley Blue Book, who noted that car price had another modest gain in November to keep them in record territory. Report KBB The average new car transaction price is up more than 13% compared to November 2020.
People still need cars. Dealers’ inventories are low, largely due to shortage of microchips worldwide and other supply chain issues (plus the growing awareness of both agency and automakers that they can maintain smaller inventories in the future). So dealers reacted to that underlying supply and demand situation in a predictable way, by keeping prices at – or above – the manufacturer’s suggested retail price (MSRP).
But perhaps the bookies are playing too much? Sales slowed in November. The month with the slowest sales of the year. Automakers shipped 1,020,355 units to the U.S. in November, the weakest month since the pandemic hit in April 2020. The underperformance can partly be attributed to potential buyers. Trying to shop during the holiday season. However, there is another possible reason.
“High prices and limited choice may be keeping many car buyers on the sidelines,” said the Cox Automotive analyst. Kayla Reynolds. “It’s still a seller’s market and we don’t expect things to change any time soon. However, with high prices now the norm for both new and used cars, it means something.” barter These values are very beneficial and can help mitigate the blow for consumers when they buy their next vehicle. ”
Luxury vehicles have a slightly higher share of the market, with 17.4% of sales and with an average transaction price of $61,455 – and buyers pay an average of about $1,000 more than the MSRP.
ATP for non-luxury vehicles is $43,144 – and buyers pay an average of $900 for stickers.
One reason these numbers are still high: sedans continue to die slowly. A year ago, traditional passenger cars accounted for a quarter of sales. This November, their market share fell further, to 21.7%. So with expensive vans and SUVs dominate the market, they’re pulling all the averages up:
- Car ($41,026 ATP)
- SUV ($45,201 ATP)
- Vans ($46,523 ATP)
- Vans ($54,462 ATP)
And if you were hoping for this December deals to Remember, forget it. That’s a record low of 4.1% – almost non-existent.
Meanwhile, the lack of new car and their high prices have continued to drive up the price of old car to the point of incomparable. The average retail price of a used car is currently $26,000. And according to the US Bureau of Labor Statistics Consumer Price Index for the last month, as of March 2020 when the pandemic began, the average used car price has increased by 39.8%.
Visit KBB for more details on November new car report.