New-vehicle average transaction prices (ATPs) decreased to $46,085 in February 2022 after reaching a record high in December 2021, according to new data released by Kelley Blue Book, a Cox Automotive company.
Prices fell 0.5% ($253) month over month due to fewer luxury vehicles being sold in February, but prices remain elevated compared to one year ago, up 11.4% ($4,719) from February 2021.
New-vehicle inventory edged slightly higher while customer demand remained strong, and according to the Dealertrack Credit Availability Index, auto credit access improved again in February. These conditions enabled dealers to continue selling inventory at or above the manufacturer’s suggested retail price (MSRP).
“Consumers are paying near top dollar for new vehicles as prices remain high and incentives fall to a record low,” said Michelle Krebs, executive analyst for Cox Automotive. With prices for oil and gas, along with commodities like metals used to build vehicles, soaring due to Russia’s invasion of Ukraine, automakers may be compelled to try to offset their increasing costs by raising vehicle prices. The Ukraine situation is causing additional disruption to the automotive supply chain which makes the likelihood of growing inventory, which remains stuck at low levels, less of a sure thing.”
The average price paid for a new non-luxury vehicle last month was $42,467, down $227 from January and marking the fourth consecutive monthly decrease. However, while the average MSRP on a non-luxury vehicle has decreased over the past four months, car shoppers still are paying on average more than $900 above sticker price. Consumers have paid more than MSRP for each of the last nine months, whereas one year ago, non-luxury vehicles were selling for more than $1,500 under MSRP.
Luxury vehicle sales fell to 16.3% of total sales in February, down from 16.5% of total sales in January and down from 18.4% of total sales in December 2021, which helped to drive overall ATPs to a record high of $47,064 at the end of last year. In February 2022, the average luxury buyer paid $64,626 for a new vehicle, down $183 month over month but still more than $2,500 above sticker price. For comparison, luxury vehicles were selling for more than $2,400 under MSRP one year ago.
New-vehicle average transaction price changes month-over-month were mixed by segment, with cars and trucks increasing and SUVs and vans decreasing. With an ATP of $54,920, trucks saw the largest increase of $622, followed by cars ($41,243 ATP) with a $185 increase. SUVs ($44,855 ATP) decreased by $605, and vans decreased by $113 to reach an ATP of $48,068. Meanwhile, vans still had the lowest incentives (expressed as a percent of ATP) at 1.6%. Incentives dropped to a record low level in February, averaging only 3.6% of the average transaction price.
About Kelley Blue Book
Founded in 1926, Kelley Blue Book, The Trusted Resource, is the vehicle valuation and information source trusted and relied upon by both consumers and the automotive industry. Each week the company provides market-reflective values on its top-rated website KBB.com, including its famous Blue Book Trade-In Values and Kelley Blue Book Price Advisor tool, which provides a range for what consumers can reasonably expect to pay for a vehicle in their area. Car owners looking to sell immediately can also get a redeemable, transaction-ready offer with Kelley Blue BookSM Instant Cash Offer. The company also provides vehicle pricing and values through various products and services available to car dealers, auto manufacturers, finance and insurance companies, and governmental agencies. Kelley Blue Book is a Cox Automotive brand.
About Cox Automotive
Cox Automotive Inc. makes buying, selling, owning, and using vehicles easier for everyone. The global company’s more than 27,000 team members and family of brands, including Autotrader, Dealer.com, Dealertrack, Kelley Blue Book, Manheim, NextGear Capital, VinSolutions, vAuto and Xtime, are passionate about helping millions of car shoppers, 40,000 auto dealer clients across five continents and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with annual revenues of nearly $20 billion.