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Average new-vehicle transaction price hits a whopping new peak in December

Elevated prices for products and higher borrowing rates led to record high transaction prices for new vehicles in December, with the average cost in the U.S. rising to a record $49,507, according to data from Kelley Blue Book released today. The report notes that ATPs — average transaction prices — have climbed above suggested retail prices — MSRPs — for more than a year. Sales volumes were up in December on a year-over-year basis by more than 5%, a situation Kelley attributed to improved supply. Overall sales for 2022, however, were off 8% year over year. “The transaction data from December clearly indicates overall prices showed no signs of coming down as we headed into year-end,” said Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive. “Luxury prices fell slightly in December, but non-luxury transaction prices were up. Truck sales were particularly strong last month, and with many trucks selling for more than $60,000, a new record was all but inevitable.” Industry analysts claim the most obvious headwinds in the new car market are generated by higher interest rates, forced by the Federal Reserve's rate hikes intended to tame inflation, and by generally limited inventory. A recent report from J.D. Power showed that the average monthly payment for a new vehicle loan in December was $718, up $47 from a year ago. But 16% of consumers in December took out loans with monthly payments of over $1,000. Consumers think vehicles, and electric vehicles especially, are way too expensive. Fortunately, manufacturersÂ’ incentives, all but extinct in the past two years, are returning, especially in the electric-vehicle and luxury market, the Kelley data suggest. Plus, "With the new tax credits on the way, electric vehicle ATPs will drop lower for qualifying vehicles,” Rydzewski said. Non-luxury brands, such as Honda and Kia, showed particularly strong performance in December, with the average price paid at $45,578 — a record high and an increase of $994 month over month. Meanwhile, the average luxury buyer paid $66,660 for a new vehicle last month. Mercedes-Benz and Land Rover showed the most price strength in the luxury market, transacting between 2.6% to 6.5% over sticker price. But luxury brands Audi, BMW, Infiniti, Lexus, Lincoln, and Volvo showed the least price strength with some discounting in effect, selling 1% or more below MSRP in December, according to the survey.

Weekly Recap: Kia leads Korea's quality surge

The rapid rise of Korea's auto brands in the US market has been apparent on the sales charts for several years, and now it's showing up in an area that's just as crucial: quality. Kia and Hyundai earned the highest rankings among mainstream brands in the J. D. Power Initial Quality Study released on Wednesday. The study tracks problems owners report during the first 90 days they own their car. Kia reported 86 problems per 100 vehicles, or fewer than one problem per car sold, to take second in the rankings behind luxury sportscar-maker Porsche (80). Kia's score improved by nearly 20 percent compared with the 2014 study. "The big industry story is Kia," Renee Stephens, vice president of U.S. automotive quality at J.D. Power, said in a video statement, noting Kia's infotainment systems were the key reason for its improved performance. Hyundai was fourth for the second straight year, though its score actually worsened by one, to 95. Even with Hyundai's slight dip, Korean quality increased 11 percent, according to the study, which far outpaced American and European companies' three-percent increases. Japanese brands improved one percent. Hyundai Motor Co. (parent company of the Hyundai and Kia brands) captured four individual vehicle awards, which tied for the most with General Motors, Nissan, and Volkswagen. "The Korean brands have really taken off," Stephens said. "There's movement in the industry, and the patterns are shifting." Another luxury brand, Jaguar (93 problems), slotted in between Hyundai and Kia in third place. Infiniti was fifth, followed by BMW. Chevrolet was the highest domestic brand, taking seventh place, followed by Lincoln, Lexus, and Toyota, which were all well above the industry average of 112 problems per 100 vehicles. OTHER NEWS & NOTES Kirk Kerkorian dead at 98 Kirk Kerkorian, a billionaire activist investor who wielded enormous influence on the Detroit Three car companies in the 1990s and 2000s, died Monday. He was 98 years old. Kerkorian made headlines in 1995 for trying to take over Chrysler – with the help of former chairman Lee Iacocca – before being fended off by Chrysler management. His takeover attempt ultimately pushed Chrysler to be sold to German giant Daimler. He tried to buy Chrysler again in 2007 when Daimler put Chrysler on the market, but Kerkorian fell short and the automaker was sold to private equity firm Cerberus.

Subcompact Crossover Comparo Roundtable | Autoblog Podcast #599

This week, we've got a special episode of the Autoblog Podcast, wherein you'll hear the extended version of the roundtable discussion from our Subcompact Crossover Comparison. In it, Editor-in-Chief Greg Migliore is joined by Consumer Editor Jeremy Korzeniewski, Senior Editor, Green, John Beltz Snyder and Associate Editor Joel Stocksdale. After extensive testing (and filming) in Northern Michigan, our editors break down what they liked and loathed about the Honda HR-V, Hyundai Kona, Jeep Renegade and Kia Soul. Grab a cup of coffee with us, and enjoy. Autoblog Podcast #599 Get The Podcast iTunes – Subscribe to the Autoblog Podcast in iTunes RSS – Add the Autoblog Podcast feed to your RSS aggregator MP3 – Download the MP3 directly Feedback Email – Podcast@Autoblog.com Review the show on iTunes Related Video: