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        home > news > Automakers > U.S. Buyers Paying $2K More for New Cars in 2021

        U.S. Buyers Paying $2K More for New Cars in 2021

        Analysts reveal average transaction price jumped 5.4% in May.

        Michael Strong
        Michael Strong , Managing Editor
        June 22, 2021

        In few spaces are the principals of supply and demand more in play than the automotive industry, where demand is strong and supply is down — prices have jumped by more than $2,000.

        Due to lower inventory levels and other factors, the average transaction prices are more than $2,000 higher than last year.

        According to analysts at Kelley Blue Book, the average transaction price — i.e. what the consumer paid — for a new vehicle last month was $2,125 more than May 2020. It’s a 5.4% increase year-over-year, and the hikes are even month to month as they were up 1.2% between April and May this year. Overall, May new vehicle sales rose 36%, according to TrueCar.

        The average price paid for a new vehicle hit a new high-water mark in May at $41,263. Increases were pretty much across the board, although not for every automaker. Tesla and Nissan, which were down 8.8% and 0.4% respectively, were the only two with drops. 

        “Last month’s average transaction price performance highlights an all-time high in year-over-year growth for the month of May,” said Kayla Reynolds, industry intelligence analyst at Cox Automotive. “Many manufacturers reported year-over-year gains in average transaction prices. The largest increase came from Mitsubishi, up 12% from this time last year.”

        New vehicle sales were up 36% in May.

        Some getting bigger money than others

        As mentioned, Mitsubishi is seeing the biggest overall jump in average transaction prices with the 12% rise year-over-year. However, Stellantis, Honda and General Motors all enjoyed double-digit leaps in there May results compared with a year ago. Those results include all of their divisions, including the luxury brands.

        Ironically, Mitsubishi reported the biggest jump, but it also has the lowest — by far — average price, coming in at $25,221. No other automaker was even in the $20,000 range. The next closest was Mazda ($30,914) then Hyundai/Kia ($31,118). 

        Conversely, luxury makers Daimler (i.e. Mercedes-Benz), BMW, Tesla and Volvo all topped $50,000 with Daimler the clear “winner” at $65,396. However, just because it cost more, doesn’t mean it saw the biggest jump, as Mitsubishi’s results indicate.

        The average transaction price of a new vehicle was $41,263 in May.

        Biggest jumps by percentage

        Despite the large gap in average transaction prices for luxury and non-luxury segments in May 2021, non-luxury vehicles had a larger year-over-year price increase at 4.9% (up $1,805), while luxury vehicles climbed 2.9%, or $1,597, from this time last year. 

        Standard full-size SUVs and pickup trucks contributed to the growth among non-luxury segments, the firm noted. The third and fourth highest-priced models within the segment include the GMC Yukon XL ($79,695) and Yukon ($77,031), both priced substantially above the industry and segment average.

        Those full-size vehicles were not only pricey, they also saw year-over-year increases of more than 10%. However, they did score the biggest increase in ATPs compared with last May. That honor went to … minivans? Yup. The station wagons of the ’90s — and beyond — saw their average jump 15.4% with an average price of $42,105, which is almost $6,000 higher than last May. The biggest drops came from high-performance cars at 13.2% and EVs at 10.8 percent.

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        One response to “U.S. Buyers Paying $2K More for New Cars in 2021”

        1. Karl says:
          June 22, 2021 at 8:37 pm

          It’s a seller’s market, and the sellers certainly understand the principle (of supply and demand).

          Reply

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