Car buyers may be going through the same emotions as home buyers – frustrated by fewer choices but encountering higher prices.
Cox Automotive reports U.S. new vehicle sales in August will likely show that the substantially slower pace of new-vehicle sales that started a year ago continues as there has been little change to new car inventories. The report predicts August's new car sales at a seasonally adjusted annual rate (SAAR) of 13.3 million, only slightly higher than last year’s 13.1 million level.
While the sales volume is expected to slow from July’s rate, prices don’t seem to have slowed that much. The Bureau of Labor Statistics has reported new vehicle prices in July were 0.6% higher than in June and were up 10.4% over July 2021.
But not all vehicle prices are climbing at the same rate. In both the new and used car markets, prices of fuel-efficient cars – especially electric vehicles – are growing faster than other categories.
EV prices are up 54.3%
An analysis by iSeeCars shows electric car prices saw an increase of 54.3% in July over the same month last year while gas-powered cars were up just 10.1%. The company analyzed the prices of over 13.8 million one to five-year-old used cars sold between January and July 2021 and 2022 to determine the price growth of electric cars compared to conventional fuel vehicles.
“Until recently, mainstream electric vehicles typically depreciated rapidly due to improvements in battery technology and a lack of demand in the secondary market,” said iSeeCars Executive Analyst Karl Brauer. “However, soaring gas prices, improvements in public charging infrastructure, and a lack of inventory for new EVs have led to soaring demand for used electric vehicles.”
New EVs aren’t exactly cheap, either. Industry sources show the average electric car price in the U.S. rose to $66,000 in June – a more than 13% increase year over 2021. Despite the rising sticker price, consumers apparently have not been deterred.
If you’ve been checking out EVs, you aren’t alone
Kelley Blue Book (KBB) reported this week that its survey of both mobile and desktop users found strong interest in EVs, as well as other fuel-efficient vehicles. It also found many consumers were checking out less-popular sedans with less-expensive sticker prices.
With an expected slowdown in vehicle sales this month, the approaching Labor Day weekend – traditionally a time for big auto sales events – might offer more opportunities for consumers ready to purchase a car or truck.
“Relative to pre-pandemic times we’re still well down on new and used car supplies,” Brauer told ConsumerAffairs. “However, there’s been some pressure relief on inventory in recent months and we’ll likely see more Labor Day sales activity than we’ve seen in the past two years.”