Saturday, October 1, 2022
News Average New Car Transactions Have Passed $45,000 for the First Time in...

Average New Car Transactions Have Passed $45,000 for the First Time in the US

Car prices have been rapidly going up for a while, and they might not slow down anytime soon

  • The average new car sold for $45,031 in September in the US

  • This is the sixth consecutive record-breaking month

  • The pandemic increased the popularity of trucks and SUVs, which are more expensive than sedans

For the sixth consecutive month, the average car price in the US has been the higher than ever before.

In September, the average cost of a new car sold in the United States was $45,031, which is $1,676 more than in August and $6,308 more than in September of 2020, a 14% increase year over year.

Many factors can explain this, such as the ever-growing popularity of trucks and SUVs, which are more expensive than sedans and hatchbacks, as well as the push towards electrification, since electric cars tend to be priced higher than gasoline models, but the most important factor is the pandemic.

Indeed, the pandemic has a big role to play in this price increase because it affects it in many different ways.

The component shortage that affects the whole automotive industry has led to automakers prioritising vehicles with the highest margins in order to make a bit more profit on every sale, thus an increase in the availability of more expensive models, accompanied by more difficult access to more affordable cars. Also, the shortage of vehicles has led dealers to remove incentives and often ask for more than the MSRP.

Also, the pandemic has affected poor people more than rich people, which is why certain luxury brands have seen increased sales.

The current situation sees an increase in popularity of luxury cars, trucks and SUVs, while at the same time witnessing a slump in affordable car sales and the removal of dealer incentives.

Its no wonder then that the average car price is going up and it will probably take a while for the market to stabilise again.

 

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