Average Price for New Car Surpasses $30k
With auto sales finally returning to pre-recession levels last year, carmakers are finally finding themselves in a position in which they can raise prices. As a result, the average sticker price for new vehicles sold in the US last month reached an all-time high, according to a report from TrueCar.com. Americans who bought new cars in March paid an average of about $30,750, up almost 7 percent from the average price of $28,700 paid for new vehicles in March 2011.
A number of analysts are projecting that prices will continue to rise over the next few years, as carmakers roll out new models with high-tech features and significantly improved gas mileage. Auto sales have been surging in recent months despite a rapid surge in gas prices that might be expected to cause a slowdown in sales. Unlike the price peaks of 2008, the current trend in gas prices is coming at a unique time, when the auto industry is finally capable of handling sharp growth in demand for fuel-efficient vehicles. As a result, a large number of US consumers have decided to take the plunge and buy a gas-saving new car rather than continuing to sink money in gas for their car that’s already paid off.
Much of the surge in new gas prices can be attributed to the reduction in incentives and discounts dealers have felt pressure to offer to close sales throughout the recession. Over the last two decades or so, Detroit’s Big 3 automakers coveted sales above all else, offering massive rebates to lure buyers in. But during the recession Ford, GM and Chrysler went through reorganizations that cut capacity, taking some of the urgency out of moving cars quickly.
Another trend pointed out in the TrueCar.com report is an upswing in the number of small cars being sold as cash-strapped drivers trade in their gas-guzzling trucks for more fuel-economic subcompacts. Back in December, only about 16.5 percent of new cars sold were in the small car category, which accounted for almost a quarter of car sales in March. And these fuel-efficient vehicles are also loaded with features and designed very stylishly, prompting analyst enthusiasm that the trend in prices will continue.