2023 Cadillac Escalade-V -- Image Credit: James Riswick
Buyers have paid $1,000 over MSRP every month this year
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.
Even the green stuff is making more green. KBB says the average transaction price for a battery-electric vehicle was more than $66,997, climbing $2,444 over May. Tesla led the way among all ranked automakers for a month-over-month increase in ATP at 5.3%, followed by Ford at 4.7% and Subaru at 4.1%. No other manufacturer got above 2.5%. Hybrid and alternative energy models went for a $39,040 ATP in June, a massive $3,593 jump over May; this segment's a bit of a cryptid, however, since it only includes models that launched as hybrid-only, not vehicles that offer hybrid options or became hybrid-only, and fuel cell vehicles.
Looking more closely, there are some extremely relative bargains to be had. Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive, said, "While prices for the industry are, on average, higher than MSRP, there are some non-luxury segments that are more affordable such as compact cars and compact SUVs/crossovers. These segments are selling for more than 30% less than the industry average transaction price." And the ATP for a luxury car — as opposed to a crossover or SUV — is down 6.4% to $74,032. Happy shopping.