A nearly two-year trend was broken in March 2023 when the average price Americans paid for a new vehicle fell below the manufacturer’s suggested retail price (MSRP) for the first time in 20 months, according to data released today by Kelley Blue Book, a Cox Automotive company. The average transaction price (ATP) of a new vehicle in the United States declined in March 2023 to $48,008, a month-over-month decrease of 1.1% ($550) from a downwardly revised February reading of $48,558. March 2023 transaction prices remained up 3.8% ($1,784) compared to year-ago levels. Meanwhile, auto manufacturer’s incentive spend rose to the highest level in 11 months at 3.3% of the ATP in March 2023, averaging $1,516.
According to Kelley Blue Book calculations, new-vehicle ATPs have been above the average MSRP (also known as the sticker price), for 20 months, but last month brought long-awaited good news for buyers as that trend finally changed. In March 2023, transaction prices continued to trend downward and the average price consumers paid fell to $171 below the average sticker. For comparison, a year ago in March 2022, the average ATP was nearly $1,000 over MSRP. Sales volumes were up month over month by 20% and up 8% year over year in March 2023, thanks partly to improved supply, a better mix of lower-priced models and strong fleet sales.
“The latest transaction data from March revaels new-vehicle prices continued a downward trend through the first quarter of 2023,” said Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive. “Both luxury and non-luxury prices were down month over month. We’ve been anticipating transaction price declines, as inventory has been steadily improving and choice has expanded. More vehicles on dealer lots – and on their competitors’ lots – means dealers simply don’t have the pricing power they did six months ago.”
Average Prices for Non-Luxury Cars Decline
The average price paid for a…
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