The median weeks of income needed to afford a new vehicle in the U.S. is now 43.0 weeks
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by Brad Anderson
July 19, 2023 at 18:29
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The average transaction price for new vehicles purchased across all brands in June hit $48,808 in June, representing a 0.3% increase from May 2023 and a 1.6% increase from June 2022. Fortunately, the median income for U.S workers has also increased, offsetting the slightly higher prices.
Data from Cox Automotive reveals that the number of median weeks of income needed to purchase the average new vehicle in June was 43.0 weeks. This is the lowest level since September and came thanks to a 0.3% increase in median income. While the average transaction price only rose by 1.6% since last year, there were some segments of the market where prices have soared by a much more significant margin.
Read: Average New Car Prices Dipped 0.6% In January, But Luxury Cars Take Larger Market Share
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For example, the average transaction price of a high-performance car as defined by Cox Automotive has jumped 22% over the past 12 months from $110,289 to $134,568. Additionally, the price of vans has spiked by 20% from an average of $51,302 to $61,544. The average transaction prices of luxury full-size SUV/crossover and entry-level luxury cars have also increased by 10.3% and 8.6% respectively.
There is good news for those looking to buy an electric vehicle, however. The average transaction price of a new EV has dropped 19.5% year-over-year to $53,438. This is primarily because the ATP of the industry’s best-seller EV maker, Tesla, has dropped by 18% year-on-year from $67,242 to $55,106.
“The fact that average transaction prices are up a meager 1.6% year over year in June is notable,” Cox Automotive executive analyst Michelle Krebs said. “A year ago, the industry was looking at transaction prices that were consistently up 10% to 12%. With no inventory in place, it was inflation gone wild. Now, as inventory has been consistently building and supply and demand are finding a balance, the price gains seem to be well under control. Average transaction prices are down from the start of the year. That’s good news for shoppers.”
