New Car Transaction Prices Leveling Off
Prices had been rising over the past four years.
Web2Carz Senior Writer
Published: August 9th, 2012
It's unclear what's causing the leveling, especially since incentive amounts are remaining low, but perhaps pent-up demand is easing a bit.
ew-car prices appear to be leveling out, according to a report in the Chicago Tribune.
Prices had been rising as the industry recovered from the recession, but according to data from J.D. Power and Associates, the average transaction price for a new car is now at $28,013, down from last year's $28,337.
That's after the average transaction price rose by 11 percent over the last four years.
It appears that lower cash incentive amounts from manufacturers have been behind the leveling in sales prices—in 2008, the average amount per car was $3,018, while last year it was $2,686.
Demand rose after 2008 as consumers returned to market to replace aging cars, and that, combined with automakers holding the line on incentives caused average prices to rise. It's unclear what's causing the leveling, especially since incentive amounts are remaining low, but perhaps that pent-up demand is easing a bit.
What this means for the industry going forward is unclear—on the one hand, stabilizing prices might drive deal-seekers to dealers but on the other, a lower average transaction price could impact the maker's bottom lines.
[Source: Chicago Tribune]