As July opened, the average new car in America carried a sticker price of $41,263. That’s the highest number on record, according to Kelley Blue Book data, and the first time the figure has crested $41,000.
The average listing price was 7% above where it sat one year ago and 12% above pre-pandemic numbers from 2019.
Record Low Supplies
The reason? Low supply.
A worldwide shortage of microchips has forced automakers to slow the production of many models. That has left dealers with the lowest supply of new cars to sell since record-keeping began in 1976.
Luxury Car Prices Down, Affordable Car Prices Up
The average sticker price for a non-luxury vehicle rose by $353 during the month of June. It sat at $37,637 in early July.
The price of the average luxury vehicle fell slightly, starting July at $60,659.
New Car Affordability Falls to Record Lows
New car affordability also took a hit in June.
Increasing car prices don’t always mean cars are growing less affordable. Increasing wages and government programs can mean that Americans have more money to spend even though prices have risen.
That was not the case in June.
The Cox Automotive/Moody’s Analytics Vehicle Affordability Index measures how long it takes the average wage earner to pay off the average car. Cox Automotive reports, “The number of median weeks of income needed to purchase the average new vehicle in June increased to 37.0 weeks in June.” That’s the longest figure since the index began in 2012.
Cox Automotive is the parent company of Kelley Blue Book.
The news was almost entirely bad for new-car shoppers. “The price paid moved higher, incentives declined, and estimated median incomes fell,” Cox explains. “Offsetting some of the inflation, the average financing rate decreased, which helped to limit what would have been an even higher increase in the monthly payment.”
