Summary:
The average transaction price (ATP) for new vehicles in the U.S. has surged from approximately $32,000 a decade ago to nearly $50,000. As of July, the ATP stands at $48,401, a slight decrease from June’s $48,424 and down from last year’s $48,507. This represents a drop of 3.1% from the peak of $49,929 in December 2022.
Recent trends indicate a positive shift for car buyers. Analysis from Cox Automotive reveals that the average time needed to pay off a car loan has decreased to 37 weeks in July, the shortest in three years, with typical monthly payments now averaging $753, down by 1.5%. Solid inventory levels have also contributed to lower prices, with 2.91 million new vehicles available at the beginning of July, a 52% increase from the previous year.
In terms of vehicle categories, subcompact cars remain the most affordable, with an ATP of $23,031, a 3.9% drop from June. The compact car segment has an ATP of $26,798, showing a slight increase. However, high-end luxury cars have seen price increases, with their ATP rising to $114,181, a 2.8% month-over-month rise.
Incentives for car buyers have also increased, now averaging 7% of the average transaction price in July, up from 6.4% in June and a notable 59.1% increase year-over-year. Most major brands, except Ram, reported higher incentives, signaling a favorable market for consumers. Overall, the car market shows signs of stabilization, providing some relief to potential buyers amidst rising costs.
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