These are the car brands most likely to sell above and below MSRP

0

There’s no doubt that these are tough times for auto shopping. Factory production, and in turn dealer inventory, has yet to fully catch up with demand, which continues to drive prices up beyond reason, especially on the most sought-after models in the shortest stocks.

The easiest solution is to just sit on the sidelines and wait for the new-vehicle market to stabilize, which some analysts predict won’t happen until next year, and maybe even later. But some motorists may not be able to wait that long, whether because their current ride is older and expensive in repair bills to keep running, or they’re driving one that’s about to die. be rented or life changes require another type of vehicle.

Here’s the situation new-vehicle buyers face as summer 2022 approaches:

According to Kelley’s Blue Book, the average transaction price for a new vehicle in the United States reached $46,525 last month, up 13% from a year earlier. Market forces aside, the rise can be partly attributed to Americans’ love of luxury vehicles, sales of which accounted for 17.4% of total sales in April, up from their level of March by 16.7%.

As it stands, KBB says new cars, trucks and SUVs continue to sell for transaction prices that exceed their MSRPs (Manufacturer’s Suggested Retail Prices) of $862 on average among mainstream brands. and $1,865 for luxury brands. A year ago, KBB says these were going for over $1,000 less than their listed prices.

Unsurprisingly, the value of automaker sales incentives, when offered, averaged just 2.8% of transaction prices, which is a record high.

Edmunds.com says buyers are paying higher percentages of their income to leave a dealership’s lot in a new vehicle, at an average of $648 per month, which is the highest on record. The amount financed also reached all-time highs at $39,340 during the first quarter of 2022, with average installments of $6,026, representing a 27% year-over-year increase. The average loan term now stands at around 70 months, with longer periods often used to keep monthly payments low.

Those looking to strike any type of deal should likely buy from dealerships other than Honda, Land Rover and Mercedes-Benz, which KBB said had the highest transaction prices relative to MSRP, in average between 5.8 and 8.0% compared to the sticker. On the other hand, budget-conscious motorists might want to visit a Fiat, Lincoln or Ram dealership, which was selling their wares about 1% below MSRP in April.

Among brands, transaction prices rose at the highest rates last month at Volvo (+7.0%), Land Rover (+6.8%), Jaguar (+3.0%), Nissan (+ 2.8%), Infiniti (+2.7%), Volkswagen (+2.6%), Ford (+2.4%), Jeep and Porsche (+2.3%), Subaru (+2.2 %) and Genesis (+2.0%). Savvy shoppers should note that the brands that saw the largest off-gate price declines last month were Mazda (-6.6%), Fiat (-6.4%), Cadillac (-3.8%) , Toyota (-3.5%), Tesla (-2.4%) and Buick (-2.2%).

Whether the situation will improve or worsen in the future remains, of course, a question mark. We have yet to see how the US auto industry will be affected by rising interest rates, compounded by falling investment values. And that’s on top of ongoing component shortages due to China’s COVID-19 lockdown, ongoing transportation issues, and war in Ukraine. As Bette Davis so aptly put it in the movie All About Eve, “Fasten your seatbelts, it’s going to be a bumpy night.”

Share.

Comments are closed.