New-Car Transaction Prices Reach Record High

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Jan. 4, 2017—The estimated average transaction price (ATP) for light vehicles in the U.S. was $35,309 in December 2016, an all-time record high. New-car prices have increased by $521 (up 1.5 percent) from December 2015, while rising $166 (up 0.3 percent) from last month, according to a Kelley Blue Book report.

"Even though transaction prices are at an all-time high, incentives have grown similarly to counterbalance the increased prices," said Tim Fleming, an analyst for Kelley Blue Book. "Higher average transaction prices are reflective of the rapid shift in consumer demand away from cars and into trucks and utility vehicles, which are more expensive.”

Fiat Chrysler rose 3 percent in December 2016, with increases coming from its Chrysler, Dodge and Jeep brands. Chrysler was up 10 percent because of the Pacifica minivan, and Dodge was up 5 percent on a lower mix of its compact car, the Dart, and strong performance from the Charger. Jeep was up 2 percent, because of its refreshed Grand Cherokee, which was up 3 percent.

Another strong domestic automaker, Ford Motor Company, experienced a 3 percent improvement, due to the Explorer, which was up 11 percent. The refreshed Escape also was up 3 percent, while the updated Fusion rose to 4 percent.  

“Should the sales mix of cars to SUVs reach a stable point in the near future, actual transaction price growth could match or fall just short of inflation,” Fleming said.

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