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Tuesday, 11 January 2022 16:27

Average New-Vehicle Prices Driven Further into Record Territory

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New-vehicle average transaction prices (ATPs) increased further into record territory in December to reach $47,077, according to new data released Jan. 11 by Kelley Blue Book.

Prices are sharply elevated from last year, up nearly 14% ($5,742) from December 2020 and up 1.7% ($808) month over month. New-vehicle inventory levels remain tight, and with sufficient consumer demand, dealers continue to hold prices at or above the manufacturer's suggested retail price (MSRP).

 

While prices were at record highs in December, the sales pace remained historically slow. However, sales volume edged up to 1,219,034 units for the month, after six months of declines and hitting the year's all-time low in November.

 

"December typically is the best month for luxury vehicle sales, and 2021 followed that trend in a big way," said Kayla Reynolds, analyst for Cox Automotive. "The result was another record in overall average transaction prices, completely driven in December by the increase in luxury vehicle sales." 

 

Luxury vehicle sales, which normally increase in November and December, comprised 18.4% of total sales in December, helping to drive ATPs higher. For comparison, luxury sales comprised only 16.9% of the market six months ago in June, and five years ago in December 2016, luxury sales accounted for only 15.5% of the U.S. market.

 

In December 2021, the average luxury buyer paid $64,864 for a new vehicle, a record-setting sum more than $1,300 above sticker price. For comparison, luxury vehicles were selling for more than $3,000 under MSRP one year ago.

 

The average price paid for a new non-luxury vehicle last month was $43,072, slightly down from the record high set in November but still more than $900 over sticker. For each of the last six months, the average price paid by consumers was above the MSRP.

 

New-vehicle transaction prices continue to track higher in part because...


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