You're not imagining it--new cars really have gotten much more expensive

You're not imagining it--new cars really have gotten much more expensive
Jan 2023

The average transaction price of a new vehicle rose by 4.9 percent in 2022, according to Kelly Blue Book. As a result, the average sales price of a new vehicle in December was $49,075, a $2,297 increase over 12 months earlier. (Average sales prices were higher than MSRP thanks to factors like dealer markups.) Some of the rise is a consequence of a lack of inventory, which was at its lowest level ever early in 2022 due to factors like supply chain shortages caused by the pandemic and the Russian invasion of Ukraine. But prices have continued to rise even as more new cars have made their way to dealer lots.
"The transaction data from December clearly indicates overall prices showed no signs of coming down as we headed into year-end," said Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive. "Luxury prices fell slightly in December, but non-luxury transaction prices were up. Truck sales were particularly strong last month, and with many trucks selling for more than $60,000, a new record was all but inevitable."
?>The average selling price for a new non-luxury car in December was a record $45,578, up almost $1,000 over November. The average selling price of a new pickup was even greater, at over $59,000, and was even higher if we look at Ford's best-selling F-series. In December, Ford sold more than 75,000 F-series trucks at an average sales price of $66,451, KBB reports.
New luxury cars reversed this trend a bit, with prices dropping by $216 from November to December, when the average sales price of a new luxury vehicle was $66,660, with many selling below MSRP. But looking at the year as a whole, strong luxury vehicle sales are responsible for much of the average sales price increases seen last year.
Electric vehicles remain expensive, with an average sale price of $61,448. However, EV prices actually fell by almost $3,600 between November and December 2022. This was in large part due to heavy discounts offered by Tesla--which accounts for 65 percent of US EV sales--as it tried but failed to meet growth targets.
Hey, at least hybrids got cheaper in 2022
KBB also breaks down the average sales price data by different classes and OEMs. The data shows that the biggest sales price increases year-on-year have been for full-size cars (up 12.6 percent to $48,314), entry-level luxury cars (up 11.5 percent to $56,168), and vans (up 10.1 percent to $52,885).
At the other end of the spectrum, hybrids saw sales prices drop by two percent between 2021 and 2022, with the average December sale price of $32,564 representing something of a bargain, even before you consider these vehicles' restrained approach to fuel consumption. Buyers of high-end luxury cars also saved a bit by waiting until December; an average purchase price of $119,660 was 1.3 percent lower than prices in December 2021.
Among the different makes, double-digit year-on-year transaction prices were seen at Fiat (up 25.5 percent to $34,587), BMW (increased by 12.5 percent to $71,815), Ford (increased by 12 percent to $56,756), Dodge (increased by 11.7 percent to $52,285), Volkswagen (increased by 11 percent to $39,720), and Jeep (increased by 10 percent to $54,712).
Meanwhile, average transaction prices dropped the most year-on-year at Rivian (down 13.7 percent to $65,180) and Cadillac (down 12.5 percent to $69,227).

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