Average Transaction Price for New Vehicles Hits Record

Despite the surge in interest rates for auto loans, the average transaction price (ATP) for a new car continues to climb, hitting a record high of $45,844, up by 14.5% from a year ago, according to estimates by J.D. Power. Deliveries of new vehicles, however, have plunged 18% from a year ago due dwindling supplies from chip shortages and the record low incentives offered by manufacturers and dealers. 

Since 2019, the price of a car has gone up astronomically, averaging more than $10,000 a vehicle. Adding to the supply problem, many of the manufacturers like Ford, are not taking orders for several of their models for 2022. The company stopped taking orders and reservations for the 2022 Maverick baby-truck (hybrid), the F-150 Lightning (EV), and the Mustang Mach-E (EV). 

In light of spiking oil prices, a shift of motorist behavior towards buying more fuel-efficient vehicles and compact SUVs have also caused a shortage of supplies. Yet, dealers are benefitting as their profits per car have soared due to these various factors. 

Meanwhile, the average interest rate on new vehicle loans rose to over 5% in June and the average monthly payment jumped by 12.8% from June of last year. 

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