8 Out of 10 Shoppers Paid Above Sticker Price for a New Car in January

By Nathalie Voit

According to car tracking service Edmunds, 8 out of 10 buyers (82.2%) paid above sticker price for a new vehicle in January. This was compared to buyers overpaying in just 2.8% of new vehicle purchases in January 2021 and 0.3% in January 2020, Edmunds said on Feb. 15.

The average transaction price for a new vehicle in January 2022 surged to $728 above the manufacturer’s suggested retail price (MSRP), compared to $2,152 below MSRP one year ago and $2,648 below MSRP two years ago, the car-shopping experts said.

The average amount paid for a new car rose to $45,717 in January, $728 above the suggested retail price of $44,989. This was in contrast to new vehicle prices in 2020 and 2021, when buyers were offered a discount from the MSRP.

The cost of a new vehicle increased amid ongoing inventory shortages and high consumer demand, Edmunds said.

According to data from the U.S. Bureau of Labor Statistics released Feb. 10, prices for new vehicles experienced 12.2% year-over-year inflation in January 2022.

Higher prices were also driven by wealthy consumers’ willingness to pay extra for their vehicle of choice.

However, many buyers have been forced to pay a premium for access to transportation, Edmunds’ executive director of insights, Jessica Caldwell, said in the press release.

“The fact that an overwhelming majority of consumers are paying above sticker price would have been unthinkable even just a year ago,” she said. “This is in part driven by affluent consumers being willing to shell out more cash to get the vehicles that they want, but there’s also a vast population of individuals who are being forced to do so simply because they need transportation and have no other choice.”

According to Edmunds, the most overpriced auto brands in the market right now are Cadillac, which commanded a sticker price of $4,048 above MSRP; Land Rover, with an average markup of $2,565; and Kia, with an average markup of $2,289. Porsche and Acura followed.

Alfa Romeo, Volvo, and Lincoln topped the list of brands that boasted below-sticker prices, Edmunds said.

Edmunds’ experts advise holding off on a new car purchase until prices stabilize.

“Consumers might be waiting up to a year or longer if they want to hold off until the market resembles anything close to the pre-pandemic normal, but some buyers simply cannot wait,” said Ivan Drury, Edmunds’ senior manager of insights. “If you know you need a new vehicle soon — or if you have a vehicle coming off lease and its term can’t be extended — doing extra research is critical to get an advantage, and using the list set forth below is a decent starting point if you’re looking out for price discrepancies among different brands.”