13 Jan 22
News

U.S. new-car price hits record $47,000

In December, a new car in the U.S. cost on average $47,077. That is a record. Not only is this up more than $700 compared to November, but it is also up more than $7,000 compared to spring 2021. 

The lamentations are familiar by now: the pandemic and the resulting chip shortage and supply-chain problems  have severely limited supply, while resurgent demand pushes prices up from the other side of the equation. 

The prices were calculated by Kelley Blue Book (KBB). Figures for the last three years show two things: recent increases have indeed been very dramatic; but the price rise precedes the chip shortage. The average new-car price increased by $1800 in 2019, $3300 in 2020 and a whopping $6220 in 2021. 

It is as yet unclear when this unprecedented situation – with demand completely outstripping supply – will come to an end. Until it does, prices will continue to trend up. Meanwhile, dealers and OEMs are benefiting from the situation, by prioritising higher-end models and eliminating discounts and other incentives.  

As a result of increasing new-car prices, consumers are turning en masse to used cars – which as a result are also rapidly increasing in value. In December, the average used car in the U.S. cost $27,500. The average price for used EVs was 27% higher than in March 2021. 

Image: Shuttterstock

Authored by: Frank Jacobs