Heading 1: Consumers Continue to Pay Less Than MSRP for New Vehicles

Despite rising prices, consumers in the United States have continued to pay less than the manufacturer’s suggested retail price (MSRP) for new vehicles. According to an analysis from Kelley Blue Book, the average transaction price (ATP) for a new vehicle in May 2023 was $410 below the advertised sticker price. This marks the fifth consecutive month that consumers have paid less than MSRP, with the gap widening from May 2022 when the average ATP was $637 above MSRP.

Heading 2: Average Transaction Price of New Vehicles in the US Rises in May

While consumers are paying less than MSRP, the average transaction price of a new vehicle in the US rose by 0.5% ($251) over April 2023 to hit $48,528. This represents a 3% ($1,393) increase over May 2022. Despite the rising prices, sales volumes in May were up month over month by 0.7% and 22.1% year over year. This was due in part to higher inventory levels and a “healthy dose of fleet deliveries.”

Heading 3: Increased Incentives Help Consumers Find Deals Below Sticker Price

According to Cox Automotive’s Rebecca Rydzewski, the modest new-vehicle price increase in May was offset by increased incentives, allowing many buyers to find deals below sticker price. This is good news for consumers as manufacturers are seeing higher inventory and increased competition and need to push sales to keep inventory moving.

Heading 4: Non-Luxury and Luxury Segment Prices

Consumers shopping in the non-luxury segment spent an average of $44,960, a $158 increase compared to April and a 3.7% rise year over year. Meanwhile, the average luxury buyer paid $64,396 for a new vehicle in May 2023, representing a $239 increase from April this year. Demand for luxury vehicles remains the primary reason for elevated new-vehicle prices, accounting for 18.4% of total sales.

Heading 5: EV Prices and Sales

In terms of EVs, the average price paid in May was $55,488, down 14% or $9,370 compared to one year ago. Automakers are trying to find a balance between pricing and profitability when it comes to EVs. EV sales in May are estimated to have increased by 4.7% compared to April and are up 44% year over year. This may be due to a combination of tax credits and manufacturer incentives that are encouraging sales.

Heading 6: Conclusion

In conclusion, consumers in the US are continuing to pay less than MSRP for new vehicles, despite rising prices. Increased incentives are helping buyers find deals below sticker price, and sales volumes are up month over month and year over year. While luxury vehicles remain a primary driver of elevated new-vehicle prices, EV prices have decreased, and sales have increased due to tax credits and manufacturer incentives.