The average price of new cars hit a record high of $47,077 in December

The auto industry is on a roll, but it’s bad for consumers.

Auto dealers have record inventories. (Jeff Gritchen/MediaNews Group/Orange County Register via Getty Images)

The average price paid for a new vehicle set a ninth consecutive monthly record in December of $47,077, according to Kelley Blue Book.

Incentives for new cars hit their lowest level in five years. (Jeff Gritchen/MediaNews Group/Orange County Register via Getty Images)

Low inventories caused by ongoing supply chain issues combined with strong demand driven by an improving economy reduced incentives to a five-year low and caused automakers to prioritize production of their models the most profitable.

Lots of many dealerships are almost empty, forcing operators to park the vehicles they have in strategic positions.

Lots of many dealerships are almost empty, forcing operators to park the vehicles they have in strategic positions. (Jeff Gritchen/MediaNews Group/Orange County Register via Getty Images)

“December is typically the best month for luxury vehicle sales, and 2021 has followed that trend in a big way,” said Kayla Reynolds, analyst for Kelley Blue Book owner Cox Automotive. “The result was another record average transaction price, driven entirely in December by increased sales of luxury vehicles.”

Prices paid for luxury models rose from $61,455 in November to $64,864 in December, while sale prices for non-luxury vehicles rose from $43,144 to $43,072.

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The average price increase over the year was $6,220, compared to $3,301 in 2020 and $1,799 in 2019.

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