Average new car price hit record $47,077 in December
Demand for new vehicles continues to outstrip supply amid supply chain issues
The car business is on a streak, but it's bad one for consumers.
Auto dealerships have record low inventories. (Jeff Gritchen/MediaNews Group/Orange County Register via Getty Images)
The average price paid for a new vehicle set a ninth-straight monthly record in December of $47,077, according to Kelley Blue Book.
New car incentives have hit five-year lows. (Jeff Gritchen/MediaNews Group/Orange County Register via Getty Images)
Low inventories caused by ongoing supply chain issues combined with high demand driven by an improving economy have reduced incentives to a five-year low and driven automakers to prioritize production of their most profitable models.
Lots at many dealerships are nearly empty, forcing operators to park the vehicles they have in strategic positions. (Jeff Gritchen/MediaNews Group/Orange County Register via Getty Images)
"December typically is the best month for luxury vehicle sales, and 2021 followed that trend in a big way," said Kayla Reynolds, an analyst for Kelley Blue Book owner Cox Automotive. "The result was another record in overall average transaction prices, completely driven in December by the increase in luxury vehicle sales."
Prices paid for luxury models popped from $61,455 in November to $64,864 in December while nonluxury vehicle sale prices ticked down from $43,144 to $43,072.
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The full-year average price increase was $6,220, up from $3,301 in 2020 and $1,799 in 2019.