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The average new car sold for $47,148 in May. That’s not quite the record high prices hit last December. But it’s close — May saw the second-highest prices on record.
The average sale price increased by $472 from April. Another increase like that this month would break the record. But we may not see that this summer.
“Prices for both new and used vehicles are showing signs of stabilizing, and price growth will likely decline over the course of the summer as the anniversary of the ‘big squeeze’ in inventory passes,” said Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive. “However, no one should expect price drops, as tight supplies in the new market will hold prices at an elevated level into 2023.” (Cox Automotive is the parent company of Kelley Blue Book.)
Experts believe the global microchip shortage currently squeezing inventories will ease later this year.
Everyone’s paying over sticker
If you bought a car last month, you probably paid over the manufacturer’s suggested retail price.
Non-luxury buyers paid an average of $1,030 over sticker price. Luxury buyers paid $1,071 over what the price tag said.
Read: 10 top hybrids for less than $30,000
Even with high prices, luxury cars are flying off lots
Inflation and high gas prices have more Americans searching for affordable small cars — but not all of us. Luxury vehicles made up 17.3% of the cars Americans bought in May — a historically high number and essentially flat compared to April.
For comparison, luxury share in May 2021 was 15.9% and, pre-pandemic, luxury share in May 2019 was 13.1% of the total market.
See: 1 in 3 Americans earning $250,000 or more say they live paycheck to paycheck — are they really?
Only two types of vehicles getting cheaper
Prices went up for nearly every segment of the new car market. Trucks saw the largest increase, going up $888 on average. Van and minivan prices increased by $726 in May, while SUV prices rose by $526.
Car prices, however, dropped slightly — buyers paid $179 less on average.
Electric vehicles also saw their average sale price drop, though that news comes with an asterisk. Buyers aren’t paying less for the same electric vehicles. The drop comes because more manufacturers are introducing EVs, some with lower price tags.
Read next: The truth is out there: We beat up all of the fears and myths about electric cars
The average price for a new electric vehicle — over $64,000 — is well above the industry average and more aligned with luxury prices than mainstream prices.
This story originally ran on KBB.com.
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