A buyer’s market for cars and trucks is just around the corner
- The average price of a new car or truck is $46,425, while The 49 day supply has been stable since January, said Cox Automotive.
- At least you can afford to drive, with gas averaging $3.68 a gallon.
- Chevy is pushing for a starting price of around $30,000 for its Equinox EV, shown above at the Detroit auto show last week and due to arrive next year.
Used vehicle prices fell 0.1% in August, according to the Commerce Department, one of the few bright spots in the consumer price index, which hasn’t fallen as quickly as economists had predicted it, stoking fears that materialized on Wednesday when the Federal Reserve raised interest rates. rates an additional three-quarters of a point.
Higher prices for new cars and trucks, up 0.8%, contributed to an overall annual inflation rate of 8.3%, down slightly from 8.5% in July.
“Pricing is a little deceptive,” says Michelle Krebs, executive analyst at Cox Automotive. “Price growth is down, but prices remain high.”
New car prices seemed high to many middle-class consumers when the average transaction price (ATP) exceeded $36,000 before the COVID-19 pandemic. When automakers opted to hold on to their limited-supply computer chips for more expensive models, ATPs jumped by about a third.
In Cox Automotive’s report for August, the average listing price was $46,425 for a new vehicle, down slightly from the previous week, but the product line kept prices high. According to the August CPI report, new vehicle prices were up 10.1% from August 2021, and used vehicles would cost you 7.8% more than a year earlier. Cox Automotive’s average August listing price for a used vehicle was what you might expect to pay for, say, a new, fully-equipped Honda Civic – $28,061.
Gasoline and diesel prices, fortunately, are not locked in high places. The Commerce Department’s Bureau of Labor Statistics gasoline index fell 10.6% in August (see table below). According to AAA, the national average for a gallon of regular unleaded, which peaked at $5.016 on June 14, had fallen to $3.707 a gallon by September 13, the day the CPI was released in August.
Higher new car prices may be a way to achieve parity between older internal combustion vehicles and electric vehicles, which sell for an average of $66,000.
Although Telsa and Ford with its F-150 Lightning EV recently had to concede price increases due to critical parts and material shortages, many more modestly priced models are on the way. General Motors appears to be taking advantage of its Ultium one-for-all BEV architecture, for example, as company president Mark Reuss recently announced that a Chevrolet Equinox EV starting in “the low $30s” would arrive next year. next. Even well equipped, it should stick somewhere below the current ATP for all models.
More important for new car buyers, Cox Automotive says deliveries of key models are coming. In the pre-coronavirus era, an 80-day supply was about optimal for high-volume models, and some full-size pickups, for example, often exceeded the 100-day supply.
The average is now 49 days of supply, says Cox Automotive. It’s been fairly stable since January, although a good 30% from last year means dealer lots are no longer empty. Improving supply means the potential for an old-fashioned game with car sales staff and their managers, and it’s conceivable that some high-volume brands could go from a shortage of supply to a feast with leftovers for consumers.
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