Although people are paying less than the sticker price for their new cars, they are also getting less for their old cars.
According to media reports, new car buyers in the USA are now able to purchase vehicles for less than their sticker price, something which was impossible just a year ago.
Reports state that due to the extremely tight inventories, 80% of car buyers last year paid more than the Manufacturer’s Suggested Retail Price (MSRP). However, today this has reduced to just 36%. Customers paid an average of $700 over MSRP in Spring last year, but by December, this average had come down to $300 less than the sticker price.
Having said that, it is still far less than the $2600 average customers saved when buying a car in December 2019. Reports state that in December 2022, the average transaction price was just under $50,000 – 26% more than the average in December 2019.
One of the main reasons for the record-high averages was the industry’s inventory shortage, which first began in early 2021. However, the inventory of new cars and car parts is said to have improved over the past year, which has helped bring down the average costs. Reports state that although the supply of new cars has increased by 83% or 8,00,000 units since the start of this year, it is still behind by more than 1 million vehicles compared to pre-pandemic inventory levels.
Also, automakers today are concentrating the supply of chips towards their expensive models, which have higher sticker prices and more profitable offerings. This should also allow automakers to start offering various incentives to attract buyers, which had been almost discontinued last year.
Reports mentioned that although people are paying less than the sticker price for their new cars, they are also getting less for their old cars, the value of which has drastically fallen over the last 6 months.
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