Average new car price surpasses $ 34,000 for the first time ever
The average price of a new car hit a record high of $ 34,217 in October 2019. This incredible rise from the previous record of $ 33,924, set in December 2018, shows a steady increase in the prices of new car transactions, although the sales volume continues to decline. Year after year. This raises the question of what is driving this increase in vehicle prices?
According to JD Power and LMC Automotive, the increase in the average transaction price has a lot to do with which vehicles customers prefer. In October 2019, 72% of new car sales were actually SUVs and trucks. The market share of SUVs and trucks is up 2.4% compared to October 2018 and shows the continued decline in real car purchases.
Another interesting data point discovered by JD Power and LMC Automotive is the distribution of purchases for different price points. âSales of vehicles under $ 30,000, which represent 46% of the market, are down 7%, while sales of vehicles over $ 30,000 are up 6%. Now, that doesn’t mean more people are buying luxury vehicles, but rather demonstrates the dominance of SUV sales. JD Power and LMC go on to explain: âThe average transaction price of cars (up 4% to $ 27,739) is increasing at a faster rate than trucks / SUVs (up 3% to $ 36,474) .
With the average price of a car well under $ 30,000 and about $ 10,000 less than the average price of an SUV or truck, it is clear that new cars do not increase the average price of cars. vehicles. Instead, the growing consumer demand for SUVs and trucks skews the data towards this high end simply because an SUV typically has a higher starting price than a comparable car.
When we see that the average price of a new car in October 2019 was over $ 34,000, you can think of everyone buying a new BMW or Mercedes. Instead, they swap midsize sedans for an SUV and, say, spend a bit more on an X5 than on a 5 Series.