Strong luxury sales last month helped drive average new vehicle prices in the United States up further—with new-vehicle average transaction prices (ATPs) reaching $47,077, according to Kelley Blue Book.
In a news release, the company said prices were up significantly from 2021—nearly 14% or US$5,742 from December 2020, and up 1.7% (US$808) month-over-month. The update comes as challenges with new vehicle supply remain while consumer demand is up, allowing dealers to hold prices at or above the manufacturer’s suggested retail price (MSRP).
“December typically is the best month for luxury vehicle sales, and 2021 followed that trend in a big way,” said Kayla Reynolds, an analyst for Cox Automotive. “The result was another record in overall average transaction prices, completely driven in December by the increase in luxury vehicle sales.”
However, during this period of record highs, KBB notes that the sales pace remained “historically low”—although sales volume did rise to 1,219,034 units in December 2021. That sales increase came after six months of declines.
Luxury sales represented 18.4% of total sales in December 2021, which in turn helped boost ATPs higher. In June 2021, they represented only 16.9% of the U.S. market, and five years ago, in December 2016, it was 15.5% of the U.S. market.
“In December 2021, the average luxury buyer paid $64,864 for a new vehicle, a record-setting sum more than $1,300 above sticker price,” said KBB. “For comparison, luxury vehicles were selling for more than $3,000 under MSRP one year ago.”
During the December period, the average price paid for a new, non-luxury vehicle was US$43,072, which was down from the November 2021 record, but still more than $900 over the sticker price.
“New-vehicle transaction prices continue to track higher in part because more affordable sedans are taking a smaller share of the market,” said KBB. “In December 2021, cars ($42,460 ATP) on average were more affordable than new SUVs ($46,075 ATP), trucks ($55,049 ATP), and vans ($46,908 ATP). However, market share for cars reached one of the lowest levels ever at 22.7%.”
In December 2018, it was nearly 30%. And cars had higher incentives in December 2021, at 4.5% (expressed as a percentage of ATP).
Overall, KBB said industry incentives declined to a record low in December 2021—to an average of 3.9%.