The average price paid for a new vehicle in the United States in September 2022 was lower than August’s record but remained firmly above $48,000.
According to new information provided Friday by Kelley Blue Book, a Cox Automotive subsidiary, the new-vehicle average transaction price fell to $48,094 in September from the previous peak of $48,240. Prices in September decreased by 0.3% or $146 from August but increased by 6.1%, or $2,775 from September 2021.
Although what people paid for a new vehicle fell slightly, new-vehicle average transaction prices exceeded the typical manufacturer-suggested retail price for a record-breaking 16th month in a row.
“Interest rates and average monthly payments were up in September, which means affordability worsened,” said Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive. “With prices still well above MSRP and incentives from automakers still low, sales in September continued to struggle as consumers weighed their vehicle-buying options.”
Luxury sales driving prices higher
One of the main reasons for sky-high prices remains strong luxury vehicle demand, which is feeding the escalation in average prices. Luxury vehicle market share as a percentage in overall sales remains historically high, increasing to 18% in September from 17.6% in August. The average price for a new luxury car in September 2022 was $65,775, $60 less than the previous month, when the price reached a record high of $65,835.
While prices are getting closer to or below sticker pricing in several premium segments, buyers continue to spend more than manufacturer’s suggested retail price for new luxury vehicles. Mercedes-Benz and Jaguar led the segment, transacting between 2% and 4% above list price. The luxury brands selling 1% or more below manufacturer’s suggested retail price in September included Audi, Alfa Romeo, Infiniti, Lexus, Porsche and Tesla.
Pricing declines slightly
The average price paid for a new non-luxury vehicle in September was $44,215, down $256 month over month. Buyers typically spent $829 more than the sticker price, a modest drop from August. For the most part, non-luxury brands’ prices were constant or fell in September. Ford, Honda and Toyota displayed the least pricing strength in the non-luxury market, selling at least 1% below manufacturer’s suggested retail price in September. However, Buick, Mazda and Dodge transacting between 2% and 4% above sticker price last month.
Prices declined for electric vehicles last month, falling $1,162, or 1.8%, from August, but increased by 9.7% from September 2021. According to Kelley Blue Book estimates, the typical new EV cost $65,291, which is significantly higher than the industry average and is more in line with luxury costs than mainstream prices.
Incentives remain low
Feeding spiraling prices is manufacturers’ historically low level of incentives. In September 2022, incentives fell further to a record-low 2.1% of the average purchase price. Incentives were 5.2% of average transaction price in September 2021. At 4.4% of average transaction price, full-size and luxury vehicles had the biggest incentives in September. The lowest incentives, less than 1% of average transaction price, were found in high-performance automobiles, vans, electric vehicles and premium full-size SUVs/crossovers.
As you might expect, brands with greater amounts of inventory provided better offers in September, with higher-than-average incentives and inventories for the Stellantis brands overall. Stellantis’ incentives in September averaged 4% of average transaction price, down from 4.4% in August, however this is relatively modest when compared to other months.
Used vehicle pricing slows
Cox Automotive also reported that used vehicle price growth is sluggish. The average listing price for a used vehicle was $28,237 at the end of September, up from the revised $28,064 at the end of August. That price is only $1,686, or 6%, ahead of a year ago. At the end of September, there were 50 total days’ supply of used vehicles, down from 52 days’ supply at the end of August. Days supply in September was eight days higher than it was a year earlier. But since mid-January, used car inventories have been at or near this level.