As the semiconductor chip shortage continues to force production cuts, causing inventory to dwindle, average new car prices continue to reset records with each passing month. This phenomenon also applies to both Ford and Lincoln vehicles, particularly SUVs, with many models selling for more than MSRP. So it should come as no surprise that average new car prices once again reached unprecedented heights in the month of August, marking the fifth straight month they’ve set a new record, according to new data from Kelley Blue Book.
The average transaction price (ATP) for a new vehicle rose to $43,355 in August, which is $685 (1.6 percent) higher than July and $3,789 (nearly 10 percent) more than one year ago. August’s strong ATP can be partially attributed to improved sales of luxury vehicles, which commanded 16.2 percent of the total market in August, compared to 14.4 percent in July. Ford Motor Company’s ATP actually declined slightly – 0.7 percent – month over month, but rose 13.5% year over year, from $45,713 to $51,897.
Interestingly, however, new vehicle sales have dropped for four consecutive months now. Automakers sold a total of 1,092,302 new vehicles in August, the lowest since April of 2020 and one of the worse results in the last ten years. This trend can be directly attributed to low inventory, high prices, and fewer incentives. Incentive spending dropped to 5.6 percent of ATP in August, down from 5.9 percent in July and 10.1 percent in August of 2020.
“The automotive industry is still reeling from the extraordinary circumstances of the last year and a half, setting new records seemingly left and right,” said Kayla Reynolds, an analyst for Cox Automotive. “With the ongoing inventory challenges that auto manufacturers are facing across the board, coupled with historically low incentive spending, car shoppers end up being the ones paying the price, quite literally. New-car prices just continue to climb, month after month.”