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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.

Kia Forte Koup is dead, long live the Honda Civic

A combination of cheap gas and high demand for crossovers means customers looking for a small, economical coupe are few and far between. Cars Direct confirmed that due to slow sales, Kia is killing off the Forte Koup after moving all 2016 models. That leaves the Honda Civic coupe standing alone in a segment that was formerly rich with competition. The only other option is moving into larger, less practical models like the Subaru BRZ, Chevrolet Camaro, and Ford Mustang. Koup sales must have been a small portion of the Forte's overall volume, as the model had its best year ever in 2016. Kia sold more that 100,000 Fortes and is making even bigger gains through the first quarter of 2017. It seems Kia's decision to cancel the Koup has been a long time coming. It was the only variant of the Forte lineup to not receive a significant refresh for 2017. Looks aside, it was hard to make a case for the Koup when going head to head against the Civic. In almost every category, the Honda beats the Kia. The Civic is slightly less expensive, more fuel efficient, and more powerful. The interior was roomier and far more refined, and at the back end the Civic will have a better resale value. It's hard to make a case for a car that's really starting to show its age. Now might be the best time to buy one, as dealers are sure to offer incentives to move the aging models off the lot. Related Video: News Source: Cars Direct Kia Coupe kia forte kia forte koup

Senator calling for answers from Hyundai and Kia over MPG debacle

Hyundai and Kia have already gone public with plans to make good on the inflated fuel economy claims scandal that has rocked both companies in recent weeks. But one US senator, Jay Rockefeller (D-WV), is skeptical that the general public will see much good from the proposal, and he's looking for answers.
To recap: Hyundai/Kia have agreed to compensate owners of 900,000 affected vehicles for real versus previously claimed fuel mileage (as well as adding in a one- fifteen-percent premium), by way of pre-loaded debit cards. It has been speculated that this payout could crest $100 million by the time the Korean automakers are done writing checks.
Said Rockefeller to The Detroit News, "While I believe this is a positive step, I am concerned that many affected customers may not learn about the program or may find it burdensome to participate in the program." Rockefeller would reportedly like to see a monitoring system for the paybacks more clearly defined, with the goal being as many wronged car buyers as possible getting the recompense that they're due.