The average new vehicle sold in March in the United States reached an all-time high of $30,748, up from $28,771 a year earlier.
Even though average car prices are going up, buyer preferences may also be shifting in a non-traditional direction towards smaller and cheaper cars.
Sub-compact and compact car sales, for example, are growing in the U.S. and could largely be attributed to rising gas prices. Boosting the average price of a new car sold could also be the premium that hybrids and EVs are demanding. Regardless, automakers are well aware that buyers are looking at smaller cars and variants such as the upcoming Abarth 500 Convertible are coming to America to satisfy consumer demand.
“It’s not a blip. It’s a trend we’ve been seeing for months,” said Jesse Toprak, TrueCar’s chief automotive analyst. “This might seem counter-intuitive at a time you might expect to see people buying cheaper cars because fuel costs are rising so fast.”
According to data in the report, nearly one in four cars sold in March were in the small car category, compared to December when barely one in six vehicles sold was a small car.
Another contribution to the rising average price of a new car sold is the fact that buyers are willing to add all the available options and upgrades since they plan on keeping their vehicle longer. Buyers are now holding onto their vehicles for an average of 57 months.
Finally, supply and demand are on a more even level now that many automakers have cut production in order to save costs. When automakers had more vehicles sitting on the lots, they were more likely to offer big incentives and discounts to sell cars. Now there is even a shortage of certain models which allows dealerships and to charge markups.
[Source: The Detroit Bureau]