The average new car in America at the end of July was priced at $41,729. That’s up from $40,999 at the end of June, according to Cox Automotive. Cox Automotive is the parent company of Kelley Blue Book.
Sticker Matters When Everyone’s Paying Sticker
This summer, the rising number is particularly relevant as Cox Automotive data showed that the average buyer paid 99.9% of sticker price in June. July data on actual transaction prices is not yet available, but there’s little reason to expect a big change.
The near-$42,000 sticker price heading into August is 9% higher than the same figure in 2020 and 12% higher than 2019’s last pre-pandemic average price.
Prices are rising fastest on the most affordable cars. Non-luxury car buyers paid $38,583 – an increase of $946. Luxury car buyers paid an average of $60,069 – a $600 increase from one month earlier.
Supply Might Be Stabilizing
A combination of limited supply and increasing demand drove prices higher. A worldwide shortage of microchips, used by the dozen in modern cars, has forced automakers to pause or slow production of many vehicles. Meanwhile, Americans nervous amid the COVID-19 pandemic have been driving more and avoiding public transit.
The supply side of that problem may finally be stabilizing, if not getting better. Dealerships had an average of 31 days’ worth of cars to sell at the end of July, compared to 29 days one month earlier.
But the slight inventory increase came without a major increase in actual production. That suggests that it’s happening not because automakers have been able to build more cars, but because fewer Americans are buying them at these increasing prices.
Over $42k Next Month Seems Likely
That price number is likely to see a slight increase in August from inventory changeover as well. Many 2022 models hit the market in summer. Dealers have pushed out most of their leftover 2021 inventory to make room and will likely be left with mostly the higher-priced 2022 models to sell.
