New-Vehicle Prices Hit a Record High in June — When Will Prices Finally Ease?
The average price paid for a new vehicle in the U.S. last month was the highest on record and marked the first time the average transaction price surpassed the $48,000 mark, according to new data released by Kelley Blue Book, a Cox Automotive company.
The new-vehicle ATP hit $48,043 in June, topping the previous high of $47,202 set in December 2021. June prices rose 1.9% from the previous month and 12.7% from June 2021.
Demand for new cars remained strong despite the high prices, overall inflation and fears of an economic downturn. That demand, coupled with ongoing supply issues, enabled most dealers to continue selling inventory at or above the manufacturer’s suggested retail price.
The average price paid for a new vehicle has been “over sticker” throughout 2022, Kelley Blue Book said in a July 12 press release. In June, new vehicles from Honda, Kia and Mercedes-Benz sold between 6.5% and 8.7% over MSRP on average. On the other side of the spectrum, Buick, Lincoln and Ram sold at nearly 1% below MSRP.
The average price paid for a new non-luxury vehicle last month was $43,942, up $615 from May and the highest price for a non-luxury vehicle on record. Car shoppers in the non-luxury segment paid $1,017 above sticker price on average.
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“While prices for the industry are, on average, higher than MSRP, there are some non-luxury segments that are more affordable such as compact cars and compact SUVs/crossovers,” Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive, said in a statement. “These segments are selling for more than 30% less than the industry average transaction price.”
The average luxury buyer paid $66,476 for a new vehicle in June, up $1,097 from a month earlier and the highest price for a luxury vehicle ever. That’s a big change from the previous year, when luxury vehicles sold nearly $825 under MSRP, on average.
The average price for a new electric vehicle in June pushed about $66,000, up 3.8% from the previous month and 13.7% from a year earlier. The average price for hybrid/alternative energy vehicles came in at just more than $39,000 in June, an increase of $3,593 from the previous month and $8,453 from the previous year. More consumers are considering EVs, hybrids and smaller, fuel-efficient gas-powered cars as gas prices continue to linger near record highs.
The high car prices are likely to stick around for the foreseeable future because of “a collision of crises disrupting the supply chain,” Kelley Blue Book said in a report last month. The global microchip shortage has hampered the ability of carmakers to build vehicles fast enough to meet demand. Meanwhile, new COVID-19-related lockdowns in Asia and the ongoing war in Ukraine have slowed the supply of other parts.
It all makes for a challenging environment for both automakers and consumers.
“I don’t see MSRPs going down,” Stephanie Brinley, principal analyst at IHS Markit, told Car and Driver in March. “But I do see some of the volatility with transaction prices leveling off when we get supply closer to demand.”
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