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Posts Tagged ‘auto prices’

Consumers Increasingly Frustrated, Dissatisfied by Recalls

Satisfaction levels falls to lowest level in over a decade.

by on Aug.25, 2015

More and more Americans are finding automotive recall notices in their mailboxes.

Have you received a recall for your car, truck or crossover? Maybe several? If so, chances are you’re growing frustrated and dissatisfied as a result.

A new study finds that, despite an overall increase in quality, the epidemic of recalls that reached an all-time record of 64 million vehicles last year has left Americans less happy with the cars and trucks they drive than at any time in more than a decade. And with the spate of new recalls showing little sign of slowing, the situation isn’t likely to improve anytime soon.

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“While it is true that all cars are now much better than they were 10 to 20 years ago, it is alarming that so many of them have quality problems,” said Claes Fornell, chairman and found of the American Consumer Satisfaction Index.

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Car Sales Still Hot, Even as Summer Cools Down

Month likely to bring best sales - and highest prices - for 2014.

by on Aug.22, 2014

New products - such as the redesigned Toyota Corolla - are helping push car sales higher.

Robust sales of new vehicles during the early summer months have continued in  August, with demand for new cars, trucks and crossovers on pace to surpass May for the  highest levels in 2014, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

That echoes the findings of another new study showing that U.S. motorists have run up record levels of automotive loan debt this year.  John Humphrey, senior vice president of the global automotive practice at J.D. Power, notes that continued high levels of consumer expenditures on new vehicles demonstrate continued improvement of the health of the industry.

Beyond the Headlines!

“We expect consumer spending on new vehicles in August to approach $39 billion, the highest level on record for the month of August and second-highest month ever behind July 2005 when it was $39.7 billion,” said Humphrey. “The record consumer spending is fueled by both high sales volumes and high transaction prices.”

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Luxury Cars, Japanese Brands Gain Big During August’s Sales Surge

Transaction prices top all-time record.

by on Sep.04, 2013

The traditionally strong selling season has proved hotter than expected this summer.

Japanese carmakers succeeded in picking up market share during August’s automotive sales boom, while surging demand for luxury cars, trucks and crossovers helped push up the vehicle prices to record levels across the board.

A sharp upturn in recent months has hit consumers squarely in the pocketbook. According to a report by TrueCar.com, the Average Transaction Price – what consumers pay factoring in both incentives and options – surged 3.2% year-over-year to $31,252.

That hasn’t kept buyers out of showrooms, however, with the industry expected to have garnered sales that, on an annualized basis would have come in at or slightly above 16 million, according to industry analysts.  Most have been raising their forecasts sharply in recent months as showroom traffic continues to defy concerns about the unsteady economy.

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“The market is continuing to pick up steam, our sales momentum is on record pace and we have two major new products hitting the market in the next few weeks,” said Steve Cannon, president and CEO of MBUSA, which saw the Mercedes-Benz brand post a 21% increase for August to stay ahead of BMW.

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Average American Can No Longer Afford the Typical New Car

Washington, D.C. the only city with high enough household income.

by on Feb.27, 2013

Can you afford this 2013 Ford Fusion -- or any other typical 2013 model? Maybe not, finds a new study.

Looking to buy a new car, truck or crossover? You may find it more difficult to stretch the household budget than you expected, according to a new study that finds median-income families in only one major U.S. city actually can afford the typical new vehicle.

The typical new vehicle is now more expensive than ever, averaging $30,500 in 2012, according to TrueCar.com data, and heading up again as makers curb the incentives that helped make their products more affordable during the recession when they were desperate for sales.

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According to the 2013 Car Affordability Study by Interest.com, only in Washington, D.C. could the typical household swing the payments, the median income there running $86,680 a year. At the other extreme, Tampa was at the bottom of the 25 large cities included in the study, with a median household income of $43,832.

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Yes, You’re Likely Paying More for that New Car

Makers curb incentives, raise prices.

by on Aug.01, 2012

Does the price on that Munroney Sticker seem a little higher than you might have expected?

Yes, you probably will pay more for that new car, truck or crossover you’ve been eyeing.  With U.S. sales rising and factories, in many cases, stretched to the limit manufacturers have been curbing incentives and nudging prices higher, according to industry analysts.

The good news is that whatever you buy, your next new vehicle is likely to be significantly better-equipped than the product it replaces, reports J.D. Power and Associates.

Anyone watching the Olympics might get the impression this is a great time to buy, at least if a low price tag is the objective.  Chevrolet, in particular, has been heavily promoting its “Total Confidence Pricing” program, implying that all buyers are getting an especially low-ball number.  Other makers have been pitching low-interest loans and other givebacks to get shoppers into showrooms.

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But the deals aren’t as good as they might first seem, according to Jesse Toprak, chief analyst with TrueCar.com.  “Even though automakers may give the impression that they are ramping up incentives spending….(they) are increasingly moving away from cash incentives and pushing finance and lease programs,” he said.

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New Car Prices Hit All-Time Record

Torrid pace not likely to slow much anytime soon.

by on Apr.10, 2012

Strong demand for the Elantra has helped drive up the price of the typical Hyundai product this year.

Remember “sticker shock”?  After several years of heavily discounting their products in a desperate bid to keep assembly lines rolling, automakers are finding themselves back in the driver’s seat once again – pushing prices to record levels.

And it’s “not a blip,” warns one senior analyst, who expects the trend to continue for several years. The good news for shoppers is that trade-ins are also yielding better prices – and while that new car, truck or crossover may command more money than ever before it’s also likely to include significantly more features and markedly better fuel economy than the vehicle it replaces.

The average new vehicle sold in the U.S. in March cost $30,748, according to data tracking service TrueCar.com.  That was up from $28,771 a year earlier and marks an all-time record.

In the Know!

“It’s not a blip. It’s a trend we’ve been seeing for months,” said Jesse Toprak, TrueCar’s chief automotive analyst.  That’s despite the fact, he says, that “This might seem counter-intuitive at a time you might expect to see people buying cheaper cars because fuel costs are rising so fast.”

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Sales Up but Transaction Prices Slip

But customers continue moving up-market.

by on Feb.03, 2012

With products like the Elantra flying out the door, Hyundai (and sibling Kia) had the lowest industry incentives last month - but also the lowest average transaction prices.

Trend or just a temporary setback?  In recent months, buyers have been steadily moving up-market while also adding significantly more content to the vehicles they buy.  Along with cutbacks in the typical industry incentive package that has rapidly driven up the price motorists pay – the average transaction price, or ATP, in industry lingo.

But while January saw a surge in sales, preliminary data suggest they may also be reining in their spending by focusing on lower-priced, less lavishly-equipped models.

The Final Word!

Including cars, light trucks and crossovers, the typical motorist spent $30,512 in January, according to car pricing information tracked by TrueCar.com, a 0.6% decline from December.  But while that’s a notably reversal of recent trends, it doesn’t appear to signal an end to the industry’s current upward momentum, analysts stress.

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Americans Paying Record Prices for New Cars

Used cars not far behind.

by on Jun.02, 2011

Ford has taken three price hikes this year, one reason it had the highest average transaction price of all major makers in May, analysts report.

There are plenty of reasons why new car sales took a tumble last month – everything from a weak economy to a shortage of some popular Japanese vehicles.  But pricing also appears to have been a significant issue, according to industry analysts, with Americans now paying more than ever for new cars, trucks and crossovers.

The average transaction price – what a typical customer actually pays, as opposed to sticker price or the low come-ons you might see advertised – surged to $29,817 in May, according to the data tracking service TrueCar.com.  That was up a full $608, or 2.1%, from May 2010 and an increase of $215, or 0.7% over April of this year.

Insight!

Significantly, prices rose sharply even though many buyers began shifting from larger to smaller vehicles in a bid for better mileage, analysts noted.  Traditionally, U.S. motor vehicle prices are closely linked to the size of an automobile.

And while some potential buyers are rethinking their options, used car prices also are heading skyward.

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Ford Raises Prices – Again

Consumers getting socked this spring.

by on May.31, 2011

Ford has now raised prices on products like the new Explorer three times since January.

It’s a tough spring for U.S. car buyers.  Not only are many popular models in short supply but prices are heading up – fast.

The latest maker to bump up sticker prices is Ford, which says it will tack another $124, or 0.4%, onto the sticker of its average model.  That might not cause much pain were it not for the fact that it’s the third time since January Ford has raised prices, its average vehicle now costing $375, or 1.3%, more than at the end of 2010.

Ford officials point the finger at steel, rubber and other commodities, where costs have risen sharply in recent months.

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Most major makers have been raising prices this year, in part due to commodity price hikes but also because the industry is finally trying to regain some pricing momentum after several years of painful restraint.  Manufacturers were loath to risk angering consumers during one of the worst sales downturns since the Great Depression.

“This time, the price hikes are likely to stick,” said Rod Lache, analyst with Deutsche Bank.

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Auto Prices Spiking as Incentives Tumble

Japanese parts shortage masks other increases.

by on May.16, 2011

Prices of the old Honda Civic were rising even before the launch of the 2012 model.

Good new or bad, it depends on whether you’re making or selling a car, but one thing indisputable is that the price of the typical new car, truck and crossover has been rising fast this year.

Motorists, used to finding great deals during a long and deep recession, will likely be surprised to see vehicles not just costing more than a year ago, but in some cases several thousand dollars more than just a few months ago, based on industry tracking data.

The biggest and most immediate factor is the vehicle shortage created by the natural disaster that struck Japan on March 11.  But makers are also beginning to pass on some of the higher costs they are paying for essential commodities and – in some cases, simply betting that an improving U.S. automotive market will allow them to reduce incentives and raise prices.

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“The current environment will set the industry up for very strong pricing,” said Rod Lache, auto analyst with Deutsche Bank. In April, he estimated, U.S. automakers were already getting from $700 to $1,000 more than they did the year before.

The makers will take the extra money any way they can, though they have generally held back on outright price increases.  Toyota, for example, put in place a relatively modest hike, at the beginning of May, running to just over 2%.  But according to data from TrueCar.com, some of the maker’s models, such as the Prius, are delivering Average Transaction Prices, or ATPs, of as much as $3,000 more than what they went for at just the beginning of 2011.

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