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Wednesday, 10 August 2022 10:57

New-Vehicle Prices Set Record in July as Inventory Improves, Luxury Share Remains Elevated

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The average price paid for a new vehicle in the U.S. in July topped June's record and kept the average transaction price (ATP) solidly above the $48,000 mark, according to new data released Aug. 10 by Kelley Blue Book, a Cox Automotive brand.

The Kelley Blue Book new-vehicle ATP increased to $48,182 in July, beating the previous high of $48,043 set the month before. July prices rose 0.3% ($139) from June and 11.9% ($5,126) from July 2021.

 

New-vehicle inventory days' supply held steady in the mid-30s in July, where it has been consistently since the final months of 2021. Surprisingly, days' supply the end of July was 27% higher than it was in 2021, when inventory shortages first started to impact the market, demand was even higher and days' supply dropped into the 20s. Still, with roughly 1.1 million units in inventory in the U.S., new-vehicle inventory remains significantly below levels seen in 2020 and 2019. 

 

With tight inventory and sufficient demand, transaction prices remain elevated. Most dealers continue to sell vehicles above the manufacturer's suggested retail price (MSRP).

 

Honda, Kia, Land Rover and Hyundai continue to show the most price strength in the market, transacting between 5% to 8% over sticker last month.


Ram, Volvo, Lincoln, Buick and the smaller Italian brands, Alfa Romeo and Fiat, showed the least price strength in July, selling 1% or more below MSRP.

 

"It's still a sellers' market," said Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive. "New-vehicle inventory levels are better than a year ago, but remain historically low, and that's keeping new-vehicle prices elevated. Still, even though average prices are at a record level, there are affordable vehicles out there. Compact cars and SUVs and subcompact models typically transact for 30% to 40% below the industry average."

 

The average price paid for a new non-luxury vehicle in July was $44,431, up $363 from June, and a new record for non-luxury vehicles, beating out the high set the prior month. Car shoppers in the non-luxury segment paid on average $875 above sticker price, a decrease from the prior month. Still, shoppers are...


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