New-vehicle average transaction prices (ATPs) dipped to $46,404 in January this year, according to new data released today by Kelley Blue Book, after reaching a record high in December 2021.
Prices dropped 1.8% ($839) month over month mostly due to fewer luxury vehicles being sold last month. Still, prices remain elevated compared to one year ago, up 12.5% ($5,155) from January 2021.
According to the release, dealers continue to hold prices at or above the manufacturer’s suggested retail price (MSRP) as the new-vehicle supply holds steady at the same level since Thanksgiving and as customer demand remains strong.
“The surge in new-car prices appears to have peaked,” said Michelle Krebs, executive analyst for Cox Automotive. “Yet, while we expect vehicle supply to improve, it will continue to be tight particularly through the first half of the year. Because of this, we expect prices to remain high for the foreseeable future, but car shoppers can rest assured we don’t anticipate any more record highs.”
The average price paid for a new non-luxury vehicle last month was $42,859, a decrease of $294 and marking the third consecutive monthly dip.
On the contrary, 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 eight months, whereas one year ago, non-luxury vehicles were selling for more than $1,600 under MSRP.
Luxury vehicle sales also dropped to 16.3% of total sales in January, a decrease from 18.4% of total sales in December last year, which helped to drive overall ATPs to a record high at the end of last year.
In January this year, the average luxury buyer paid $64,635 for a new vehicle, down $804 month over month but still more than $1,300 above sticker price. For comparison, luxury vehicles were selling for more than $2,400 under MSRP one year ago.
New-vehicle average transaction prices saw an increase in all segments except vans in January 2022. With an ATP of $41,169, cars saw the largest price decrease of $1,263, followed by SUVs ($45,512 ATP) with a decrease of $913 and trucks ($54,331 ATP) with a $483 decrease.
Meanwhile, vans rose by $1,308 to reach an average transaction price of $48,207 and had the lowest incentives (expressed as a percent of ATP) at 1.7%. Overall incentives continued to hold at the record low level of 3.9% set in December 2021.
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, Dickinson Fleet Services, 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.