The typical price of a brand new automobile surged to a record high in December and neared a whopping $50,000.
December was a robust month for sales of costly trucks that cost $60,000 or more, which helped push the common price higher, in accordance with a latest report from vehicle valuation company Kelley Blue Book.
The typical sale price for a brand new vehicle was $49,507 in December, up from $48,681 in November — which was a record high for brand new automobile prices on the time.
Kelley Blue Book notes that prime auto loan rates are discouraging some buyers, depressing sales. The rates are a part of the rationale holiday automobile buying deals were much worse this cycle than they’ve been in previous years.
But despite the downward pressure on demand for brand new cars resulting from financing costs, sale prices keep moving higher.
“The transaction data from December clearly indicates overall prices showed no signs of coming down as we headed into year-end,” says Rebecca Rydzewski, a research manager for Cox Automotive, Kelley Blue Book’s parent company.
Why latest automobile prices are so high
Latest vehicle prices are up 5.9% prior to now yr, in accordance with the December consumer price index (CPI).
The share of buyers purchasing luxury vehicles is growing. And on account of seasonal trends, December is a month that normally sees increased luxury sales. The performance of this segment of the market in December contributed to the high average price.
A few of the hottest luxury vehicles are trucks. Ford’s F-Series pickup, which sells for a mean of $66,451, is the best-selling vehicle without delay. Greater than 75,000 of those trucks were sold in December, the perfect month of the yr for this vehicle.
But average prices rose in December for non-luxury vehicles too, hitting $45,578, a rise of $994 from November.
Experts say the excellent news for buyers is that latest vehicle inventory has improved prior to now yr and can likely proceed on that trajectory in 2023 as supply chain issues and production challenges move behind us. (The used automobile market has cooled down significantly, with prices down 8.8% prior to now yr.)
Latest vehicle inventory increased to 1.8 million units in December, which is 66% higher than a yr ago, in accordance with Cox. Meaning it’s getting easier for buyers to search out the automobile they need because the frenzy for available inventory calms down.
While the supply of recent vehicles is much below pre-pandemic levels — inventory was hovering around 3.5 million units at the top of 2019 — Cox says the industry will likely should try to extend sales by offering higher deals if buyer demand doesn’t pick up soon.
“While new-vehicle supply rose 37% since September and is 66% above a yr ago, the sales pace at the top of December had improved by a scant 2%,” says Charlie Chesbrough, senior economist at Cox. “If this trend continues — and it seems more likely to achieve this — automakers might be under heavy pressure to maneuver the metal with higher incentives.”
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