New cars continue to be priced well above MSRP, even as the supply chain slowly improves, and despite rising economic concerns that typically dampen consumer demand for large ticket items.
A new iSeeCars study found manufacturer pricing for new cars has increased 7.6 percent in the past year from an average MSRP of $38,707 in February 2022 to $42,608 in February 2023.
Despite this increase, the average dealer listing price for new cars has increased 6.5 percent in the past 12 months, rising from $42,551 to $45,996. This means today’s average new car price is 8.8 percent over MSRP, on top of the higher MSRPs compared to a year ago.
“There’s no denying it – new cars are expensive!” said Karl Brauer, executive analyst at iSeeCars. “The manufacturers keep raising their prices and then the dealers raise them again, to the point where the average new car is priced above $45,000.”
There are two pieces of encouraging news for consumers. First, average MSRP seems to have either peaked or plateaued in January 2023, coming down slightly in February. Second, the pricing increase over MSRP peaked back in July of 2022, at 10.2 percent over MSRP. Relative pricing has fallen ever since, with average new car prices now 8.8 percent above MSRP.
“The difference between dealer pricing and MSRP should continue to fall as the supply chain improves, though getting back to MSRP for most models may not happen this year,” said Bauer.
“All but two of these high-priced models are luxury vehicles, reflecting the ongoing confidence and willingness of luxury buyers to spend whatever it takes to get the vehicle they want,” said Brauer. The two non-luxury vehicles are the Jeep Wrangler and Jeep Wrangler Unlimited, SUVs with consistently high demand and passionate buyers.
|New Cars Priced Highest Over MSRP, February 2023 – iSeeCars Study|
|Rank||Model||Avg MSRP||Avg Price||Price – MSRP % Difference|
|5||Jeep Wrangler Unlimited||$45,386||$55,347||21.9%|
|10||Lexus RX 350h||$49,339||$59,347||20.3%|