Automakers push prices higher and higher, the average selling price of a new car sold in the U.S. last month being $30,748, marking an all-time record.
This process is expected to continue for several years, but the good news is that trade-ins are also yielding better prices. This means that even if your car costs more, it’s also likely to include significantly more features and markedly better fuel economy than the vehicle it replaces. The average new vehicle sold in the U.S. in March cost $30,748, compared to $28,771 in 2011.
“It’s not a blip. It’s a trend we’ve been seeing for months,” said Jesse Toprak, TrueCar’s chief automotive analyst. That’s despite the fact, he says, that “This might seem counter-intuitive at a time you might expect to see people buying cheaper cars because fuel costs are rising so fast.”
The main reason for the spicy car prices, may be the fact that there’s a better equilibrium between supply and demand. March auto sales reached an annualized rate of around 14.5 million, compared to the decade-old industry peak of around 17.1 million. To boost sales many makers slashed production capacity, a different move from years past when they would’ve been tacking on massive rebates and other incentives.
“The long-term trend is gradual price increases continuing for several more years as sales recover to 15 million and even 16 million,” forecast TrueCar’s Toprak. “But the pace (of the increase) we’ve seen over the last several years isn’t sustainable.”