Despite the coronavirus (COVID-19) pandemic and its severe economic fallout, consumers are continuing to pay more for new cars and trucks. Kelley Blue Book (KBB) reports that the average transaction price (ATP) for a new vehicle last month was $38,723, up 2.5 percent over September 2019.
The pandemic shut down auto assembly plants for several weeks, resulting in a significant reduction in available new car inventory. Sara Richards, a KBB analyst, reports that month-to-month price increases appear to be slowing and end-of-year deals might be attractive.
“This may indicate supply challenges experienced over spring and summer have been corrected and OEMs are finally able to build up stock,” she said. “If automakers seek to recover sales lost earlier in the year, incentives could climb dramatically, and transaction prices could remain flat or even dip in the future.”
The KBB report shows that Honda, Fiat Chrysler (FCA), Ford, Hyundai, Kia, Subaru, and Toyota reported strong gains, with year-over-year prices rising 4 percent. Consumers paid more for the Toyota RAV4, which saw the average price go up 18 percent, largely due to a model year redesign that appears to have resonated with car buyers.
The average Toyota sold for $36,970 last month, but Volkswagen Group, which includes Porsche and Audi, had a higher ATP of $42,077. Hyundai Kia had the lowest ATP in September at $28,957.
Factors affecting price
The price consumers pay for a car or truck isn’t just a product of the sticker price and a dealer’s willingness to negotiate. It also has to do with the options and trim packages a buyer chooses, which can increase the price of a vehicle by several thousand dollars.
The type of vehicle can also determine the price. Subcompact cars tend to be the cheapest vehicles and have fallen out of favor with consumers in recent years. This class of car actually went down in price, falling 3.2 percent in September.
However, full-size SUV remains highly popular and very expensive. The September ATP for these vehicles was $66,800 -- a 6 percent increase over September 2019.
If you’ve been considering an electric vehicle, September would have been a good month to purchase one. The average price was 2 percent less than a year ago and nearly 1 percent less than in August.