Through the first four months of the year, Ford average transaction pricing was on the decline, dropping an even one percent month-over-month to $54,101 in April, which was $524 less than March. That number is still rather high by historical standards, but it did give some hope that things were beginning to get a bit back to “normal” following years of sharp increases in new vehicle pricing. Unfortunately, that trend didn’t continue in May, as Ford average transaction pricing rose for the first time in months, according to new data from Kelley Blue Book.
Last month, Ford average transaction pricing rose 3.4 percent month-over-month to $56,013, which also represents a 9.1 percent increase year-over-year. This outpaced the entire industry by a considerable margin, as overall, new vehicle ATP grew by just 0.5 percent month-over-month and three percent year-over-year to $48,528. As for non-luxury vehicles in general, pricing grew by 3.7 percent or $158 to reach $44,960. However, among those brands, Ford and Kia paced the market with the highest overall month-over-month increases and the only two that crested the three percent mark.
There is some good news among this data, however, starting with the fact that May represents the fifth straight month that overall new vehicle ATP remained below the manufacturer’s suggested retail price (MSRP). Incentive spending also continues to grow – this time to 3.9 percent of ATP – or $1,914 – the highest it’s been in a year, which could mean good things for consumers moving forward.
“The modest new-vehicle price increase in May was offset by increased incentives, so many buyers were able to find deals below sticker,” said Rebecca Rydzewski, research manager of Economic and Industry Insights for Cox Automotive. “This is good news for consumers as manufacturers are seeing higher inventory and increased competition and need to push sales to keep inventory moving.”