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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.

These are the top luxury cars bought by people entering the segment for the first time

Let's say you just got a big promotion at work or the kids are moving out of the house, and you finally have some extra money. You decide to blow it all at once and treat yourself by upgrading your ride. Naturally, you look to a luxury automaker. What do you choose?
Models like the Audi A3 and Mercedes-Benz CLA-Class may be tailor-made to introduce buyers to the premium segment, but a new study finds that they don't garner the highest rates of non-luxury customer conquests. It turns out that a Volvo leads among folks moving up to a premium brand, and it isn't even one that's made anymore, at that.
A recent study by Polk and IHS Automotive looked at what models had the highest rates of buyers upgrading from a non-luxury segment. The information comes from its new vehicle registration data through April 2014. All ten top models boasted conquest rates of over 50 percent, but the Volvo C70 led the field with 68.01 percent of its customers coming from non-premium brands.

Audi introduces leaner, fitter second-generation Q7

After a long run on the market, Audi has finally signaled the end of the first-generation Q7 with the introduction of the long-awaited second-gen version of the brand's first crossover. The 2016 Q7 is a far lighter machine than the vehicle it replaces, thanks to ample use of hot-shaped steel and aluminum. Beyond that, the Volkswagen Group's MLB platform will allow the fullsize Audi to accommodate a range of engines, including more potent versions of the US market's 3.0-liter, supercharged V6 and 3.0-liter TDI. On top of that, the next-gen Q7 will also be available as a diesel plug-in hybrid, complete with a version of the brand's Quattro all-wheel-drive system. The Q7's new design, meanwhile, gives the car an almost wagon-like appearance and profile. The "Singleframe" grille is wrapped in an aluminum-looking surround, not unlike Audi's smaller RS Q3. Audi's cleanly styled headlights flank it, while the large taillights aren't as aggressively angled as Audi's other crossovers. The cabin is lavish, featuring a typically stylish design with plenty of tech. A 12.3-inch TFT display takes the place of a conventional instrument cluster, while the center stack is crowned by its very own display. Even the HVAC display controls are handsome. You can see exactly what we mean in our gallery of live images of the new Q7, straight from the floor of the 2015 Detroit Auto Show.