Average New Car Price Nears $50,000 as Truck and Luxury Sales Boom
Americans are willing to pay more and more for new cars, and banks are happy to provide the loans.
The number of cheap new cars isn't just going down, the price Americans are willing to pay for a new vehicle is going up. In December 2022, the average price of a new car sold in the United States hit $49,507, which is 5% higher than in December 2021, according to KBB. That's damn near $50,000.
The drivers of this upward trend are primarily truck and luxury vehicle sales. The average new pickup in the U.S. sold for over $59,000. Luxury vehicle sales likewise represented 18.6% of all new car sales and the average transaction price was around $66,660. Even normal cars are selling for more than ever, though. The average sale price of a non-luxury vehicle hit $45,578, a record high.
Prices are generally cooling in the grand scheme of things—especially when it comes to used cars. Supply chain restrictions that limited new vehicle production and made used cars more desirable have been easing for months. As a result, we're beginning to see a return to sanity when it comes to out-the-door prices at dealerships. The same can't be said for low-production enthusiast cars like the Chevy Corvette Z06, Toyota GR Corolla, or high trims of the new Nissan Z, but that's another story.
Part of the reason Americans can pay more for new cars is that they're financing cars more than ever. Loan terms are likewise stretching out to keep monthly payments low. As a result, it's easier than ever for an individual to buy more car than they could otherwise realistically afford. Auto loan debt is at a record high, according to Experian.
From automakers' perspectives, cheaper cars are less profitable and becoming gradually less popular. It hasn't stopped some from revealing inexpensive models, though. Chevy recently revealed its new Trax which has an MSRP of around $20,000. Ford likewise took the new car market by storm with the Maverick, which has a similar asking price. Nissan also still sells the Versa for $16,725.
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