U.S. new car prices hit record high

Average new-car transaction prices in the U.S. jumped 2 per cent year-over-year in October,  compared to the same period in 2016, according to the analysts at Edmunds.

The increase represents an all-time high for the month due in large part to a strong demand for trucks and SUVs.

“The shift away from passenger cars in favour of trucks and SUVs is impacting all facets of the auto market,” said Jessica Caldwell, executive director of industry analysis for Edmunds.

“Interest rates are rising and bigger vehicles have higher price tags, but so far car shoppers don’t seem to be shying away from putting more money down or having a higher monthly payment to drive the vehicle they want,” she said.

The average new-car transaction price sits at $35,428. The average down payment on a new car in October was $3,966 — up $374 compared to the same period last year.

But even as new car sales have improved, automakers are still trying to clear out old 2017 inventory from the dealership lot. To do this, dealers will need to be more aggressive in order to move their stock and this may require that they provide consumers with a significant discount on passenger cars.

“With two months left in the year and this much inventory remaining, we expect to see some very creative year-end sales events to entice car shoppers,” said Caldwell.

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