The average price consumers paid for a new vehicle in the U.S. fell below the manufacturer’s suggested retail price in March 2023 to $48,008, breaking a 20-month trend and representing a month-over-month decrease of 1.1 per cent ($550), according to Kelley Blue Book.
“The latest transaction data from March reveals new-vehicle prices continued a downward trend through the first quarter of 2023,” said Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive. “Both luxury and non-luxury prices were down month-over-month.”
Rydzewski said they had anticipated transaction price declines since inventory was improving and vehicle choice had expanded. She added that more vehicles on dealer and competitors’ lots resulted in less pricing power for dealers compared to what they had six months ago.
As for yearly changes, KBB said the new vehicle average transaction price fell $171 below the average MSRP in March 2023, compared to a year earlier when that average was nearly $1,000 over the sticker price.
The company also noted that sales volumes increased MOM by 20 per cent, and were up 8 per cent year-over-year in March 2023. Again, that comes thanks in part to more supply and a good combination of lower-priced models and strong fleet sales.
Meanwhile, OEM incentive spending rose to the highest level in a year, at 3.2 per cent of the average transaction price in March 2023, which KBB said averaged $1,516.
“Incentives and inventory tend to move in tandem — when one moves up, so does the other,” said Rydzewski. “Right now, in-market consumers are finding more inventory, more choice, and dealers more willing to deal, at least with some brands. Yet, even as deals improve, unfortunately auto loan rates remain very high, ultimately making new-vehicle affordability an issue for many households.”
