Current:Home > ScamsAuto shoppers may be getting some relief as 2023 finally sees drop in new car prices-LoTradeCoin
Auto shoppers may be getting some relief as 2023 finally sees drop in new car prices
View Date:2024-12-24 00:01:29
Car buyers are getting a respite in terms of rising prices on new vehicles.
On Wednesday, Kelley Blue Book released July pricing data that showed the smallest year-over-year price increase in the last decade, prompting Research Manager Rebecca Rydzewski to write, “New-vehicle price inflation has all but disappeared in 2023.”
According to Kelley Blue book data, the average price Americans paid for a new car was 0.4% higher than one year ago. The average transaction price of a new vehicle in July was $48,334, about $199 higher than it was in the year-ago period.
Reasons to head to a showroom
In more good news, data showed that compared with the start of the year, average transaction prices are down 2.7%, or $1,335, the largest January to July drop in the past decade, Kelley Blue Book data showed.
“New-vehicle prices, primarily driven by cuts in luxury and electric vehicles, are decreasing as inventory is steadily improving," Rydzewski said. "With higher inventories and higher incentives helping to keep downward pressure on prices, there certainly are good reasons for shoppers to be heading back into the market.”
In July, most carmakers increased the amount of incentives offered on new cars for the 10th consecutive month to the highest level since October 2021, averaging $2,148, or 4.4% of the average transaction price. One year ago, average incentive spending was 2.4% of the average transaction price, Kelley Blue Book data showed.
GM to keep its discounts low
But don't count on General Motors offering big discounts anytime soon, said CFO Paul Jacobson on Wednesday. He spoke at the J.P. Morgan 2023 Auto Conference, which was web streamed to the media.
"We’ve spoken pretty consistently over the last several months about potentially incentives normalizing, but it’s a new normal compared to before," said Jacobson, who's known to make public investments in GM to signal confidence in its profits to Wall Street.
GM is tweaking its distribution model so that it has more inventory than in recent years, but it is not returning to the past levels of flooding dealerships and then having to offer big discounts to move new cars.
“We’re tweaking our distribution models to make sure we get vehicles to market when it matters so that it’s there for consumers to streamline that process,” Jacobson said. “What you’ve seen year-to-date, and this continued in July, was the pace of GM incentive increases is significantly lower than what we see across the industry.”
He did not provide any figures, but he said GM will continue to match supply to demand to maintain its profit margins.
What is the average price of a car in the US?
In July, the average price paid for a new non-luxury vehicle was $44,700, a half-percentage point increase compared with the year-ago period and down by $471 compared with June.
But unlike five years ago, only the Mitsubishi Mirage subcompact car had an average transaction price below $20,000 at $19,205. In July 2018, there were a dozen vehicles below $20,000, Kelley Blue Book data showed. Many small vehicles including the Hyundai Venue, Kia Rio, Nissan Versa and Toyota Corolla are all transacting well over $20,000, it showed.
By contrast, there were 32 vehicles in the Kelley Blue Book database selling for an average price above $100,000 in July, and that excludes the uber luxury cars such as Ferrari, Lamborghini and Rolls-Royce. In July 2018, there were only 12 vehicles in the over $100,000 category.
But the average price paid for a luxury vehicle in July was down almost 3% year over year at $63,552.
Discontinued car models:What cars are being discontinued? List of models that won't make it to 2024
In the EV segment, increased inventory and price cuts by market leader Tesla have brought average transaction prices down there too.
In July, the average EV transaction price was $53,469, down from $53,682 in June and down 19% from the recent peak of $66,000 in June 2022. The average incentive on EVs was $3,755.
“Tesla prices are down nearly 20% versus a year ago, and other EV models, such as the Ford F-150 Lightning, have been following Tesla’s lead," Rydzewski said. "While automakers report losing money on electric vehicles, they continue to aggressively pursue EV growth strategies.”
Contact Jamie L. LaReau: [email protected]. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.
veryGood! (519)
Related
- California teen pleads guilty in Florida to making hundreds of ‘swatting’ calls across the US
- Uncomfortable Conversations: How do you get your grown child to move out?
- Jacksonville Jaguars to reunite with safety Tashaun Gipson on reported one-year deal
- From Biden to Gabbard, here’s what Harris’ past debates show before a faceoff with Trump
- World leaders aim to shape Earth's future at COP29 climate change summit
- California's cracking down hard on unhoused people – and they're running out of options
- Georgia No. 1 in preseason AP Top 25 and Ohio State No. 2 as expanded SEC, Big Ten flex muscles
- Diamond Shruumz recall: FDA reports new hospitalizations, finds illegal substances
- RHOBH's Kyle Richards Shares Reaction to BFF Teddi Mellencamp's Divorce
- Chiefs WR Marquise Brown ‘will miss some time’ after dislocating a clavicle in 26-13 loss at Jaguars
Ranking
- College Football Playoff ranking release: Army, Georgia lead winners and losers
- Sifan Hassan wins women’s marathon at Paris Olympics after trading elbows with Tigst Assefa
- Crews begin demolishing Texas church where gunman killed more than two dozen in 2017
- Road rage fight in Los Angeles area leaves 1 man dead; witness says he was 'cold-cocked'
- Channing Tatum Drops Shirtless Selfie After Zoë Kravitz Breakup
- Britney Spears and Megan Fox are not alone: Shoplifting is more common than you think
- US surgeon general was warned by his mom to avoid politics, but he jumped into the fray anyway
- 'Catfish' host Nev Schulman breaks neck in bike accident: 'I'm lucky to be here'
Recommendation
-
Quincy Jones laid to rest at private family funeral in Los Angeles
-
Powerball winning numbers for August 10 drawing: Jackpot now worth $212 million
-
American gymnast Jordan Chiles must return bronze medal after court mandates score change, IOC says
-
After fire struck Maui’s Upcountry, residents of one town looked to themselves to prep for next one
-
Blake Snell free agent rumors: Best fits for two-time Cy Young winner
-
Gypsy Rose Blanchard reveals sex of baby: 'The moment y’all have been waiting for'
-
Miley Cyrus cries making history as youngest Disney Legend, credits 'Hannah Montana'
-
Boxer Imane Khelif files legal complaint over 'cyber harassment,' lawyer says