This article was written by Larry Printz for TheDetroitBureau.com
DETROIT, MI (01.14.22) – New data released Wednesday by Kelley Blue Book shows that the average new-vehicle transaction price rose to $47,077 in December 2021, a new record.
That’s a 1.7% increase — $808 — from November, and a 14% increase — or $5,742 — from December 2020. The high prices stem from continued strong demand, low vehicle inventories and dealers charging at or above the manufacturer’s suggested retail price (MSRP) for certain vehicles.
Luxury vehicle sales driving higher prices
The types of vehicles sold also played a role in raising the average price: 18.4% of last month’s sales came from luxury cars, higher than the 16.9% share they held in June, or the 15.5% share they held in December 2016.
“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 car buyers paid an average of $64,864, more than $1,300 above sticker price. A year ago, these buyers were paying more than $3,000 under MSRP.
Other vehicles prices rising as well
Yet it wasn’t just luxury buyers who were paying more. Non-luxury vehicles cost an average of $43,072, down from the record high set in November 2021, but still more than $900 above sticker price, a trend that has been consistent during the past six months.
The higher cost is being driven by the shrinking number of sedan sales, which tend to be more affordable than SUVs or trucks. Whereas the average price of a sedan in December 2021 was $42,460; SUVs averaged $46,075; vans $46,908; and trucks $55,049.
Some pricing anomalies arise
The price of all vehicles rose year-over-year, but some prices fell from November to December, with entry-level luxury cars and high-performance cars seeing a 1.7% price decline, and sports car prices falling 1.9%. But electric vehicle prices rose 13.9% from November to December, luxury midsize crossover SUV prices increased 3.3% and luxury subcompact SUV prices increasing 2.5%.
Among brands, Mitsubishi’s prices rose the most year over year, increasing 33.1% from December 2020 to December 2021. Other brands seeing sharp increases include Cadillac at 25%, Infiniti at 20.5%, Chevrolet at 19.6%, Acura at 19.2% and Jeep at 17.9%.
Month to month, Tesla’s average transaction price rose 16.9%, more than any other brand followed by Cadillac at 11.8%. Other brands saw far smaller price increases, mostly in the low single digits. And some brands’ average transaction price decreased, such as Mazda, down 3.7%; Rivian, down 3.6%; and Jeep down 2.6%.