The average new car in America sold for $48,094 in September. That’s $146 less than the average in August.
It’s a modest drop. But it’s the first time in five months that prices haven’t set a new record high. Prices are still 6.1% ($2,775) higher than they were one year ago.
New Cars Still Hard to Afford
September marked the 16th consecutive month that the average car has sold above sticker price.
“Interest rates and average monthly payments were up in September, which means affordability worsened,” said Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive. “With prices still well above MSRP and incentives from automakers still low, sales in September continued to struggle as consumers weighed their vehicle-buying options.”
Related: The Supply of New Cars May Recover Just as No One Can Afford Them
Cox Automotive is the parent company of Kelley Blue Book.
Luxury Cars in Demand
Demand for luxury cars has partially driven the increase in prices. Luxury vehicles made up 18% of the new cars Americans bought last month – a near-record.
Luxury buyers paid an average of $65,775 – down just $60 from August.
Shoppers outside the luxury market had better luck. The average non-luxury buyer paid $44,215, down $256 from August.
Prices Coming Down, But Not Because of Incentives
Discounts remain historically hard to find. Incentives made up just 2.1% of the average sale in September – the lowest figure we’ve ever recorded. One year ago, that same figure was 5.2%.
Some Brands, Segments More Affordable Than Others
The story isn’t the same for every type of car.
The average subcompact car sold for a price almost 12% higher than a year ago. Automakers have been abandoning the subcompact market, canceling their least-expensive models as Americans prove willing to pay more for transportation. The midsize and compact SUV segments – the two types where consumers have the most choices – rose just 5.2% over the year.
The trend also changes from brand to brand. Most non-luxury brands had stable pricing or declines in September. Buick, Mazda, and Dodge all sold most cars for between 2% to 4% over sticker price last month, while Ford, Honda, and Toyota sold for an average of 1% or more below MSRP in September.
