New car prices hit an all time high

Record heat isn’t only affecting the climate. An economy still on the boil is driving average transaction prices (ATP) for new cars to record highs according to data from Kelley Blue Book. It was only this month we cited KBB’s data from May about an ATP of $47,148 as being a prime driver of vehicle repossessions this year. In June, consumers continued showing a willingness to pay even more, KBB research pointing to an ATP of $48,043, which is $895 per car on average more than the month before. It obliterates the previous high of $47,202 from December 2021 and marks the first time ATP for a new car in the U.S. has crested $48,000. In June of last year, ATP was $42,663, which is 12.7% less than this year’s number.

On average, car buyers overall have paid around $1,000 more than MSRP every month this year, the luxury segment in general and a few mass market brands driving the trend. The ATP for a luxury vehicle in June was $66,476, a record, the luxury segment’s share of overall vehicle sales hitting 18.2%, the second-highest share on record after the segment’s 18.4% share in December 2021. What a difference a year makes: In June 2021, upscale buyers paid $825 below MSRP on average, which has flipped to $1,097 over MSRP on average this June and set yet another record. The ATP for a non-luxury vehicle $43,492, a new record. Brands like Honda and Kia are selling for healthy single-digit percentages over MSRP, whereas Buick, Lincoln, and Ram are leaving dealer lots roughly 1% below MSRP.

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