By Nathalie Voit
The average price for a new vehicle climbed to an all-time high of $46,000 in November, according to a report released by valuation and automotive research company Kelley Blue Book.
Average transaction prices (ATPs) rose 13% from the same period one year ago, Kelley Blue Book said. The sharp increase in prices was driven by low inventory levels related to the global semiconductor shortage and strong consumer demand.
Over two in three franchised dealers admitted their new-vehicle prices are higher than before the pandemic, according to Cox Automotive. Nearly three in four franchised dealers said their prices are higher than pre-pandemic levels on the used-vehicle side.
Despite the rise in prices, overall sales remain low, Kelley Blue Book said. November’s sales levels were the lowest since April 2020, when the pandemic began, at 1,020,355 units. November also marked the sixth consecutive month of volume declines.
“High prices and limited choices likely are keeping many car buyers on the sidelines,” said an analyst for Cox Automotive, Kayla Reynolds. “It’s still a seller’s market, and we don’t expect things to change anytime soon. However, with high prices being the norm right now for both new and used vehicles, that means trade-in values are very favorable and can help soften the blow for consumers as they purchase their next vehicle.”
Luxury vehicle sales dominated a larger market share in November and December than in prior years, the firm said. Luxury vehicles accounted for nearly one in five sales in November, with the average cost for a luxury vehicle last month at $61,455, $1,000 over the list price. In contrast, the average luxury buyer at the same time last year paid $3,000 less than the MSRP, Kelley Blue Book said.
Meanwhile, last month’s average price for a non-luxury vehicle was a record-setting $43,144, more than $900 over the list price.
Vehicle inflation has become the most pronounced among what used to be traditionally more affordable models, Kelley Blue Book said. This is because ATPs for affordable models have been pushed up as consumer preferences have shifted toward more expensive SUV, truck, and van models, the firm said.
For example, subcompact car transaction prices increased 17% in the twelve months leading through November, while compact car prices jumped 16%. In contrast, full-size SUVs, typically the most expensive models, showed the smallest annual price gains, rising only 4.8% year-over-year.
Overall, the average transaction price for new cars in November was $41,026. Cars remained more affordable on average than new SUVs ($45,201 ATP), vans ($46,523 ATP), and trucks ($54,462 ATP), the report found.