The average new-vehicle transaction price is still $48,763, according to Kelley Blue Book. Before the pandemic, the average new vehicle sold for $37,876.
Brand-new Nissan vehicles sit on a sales lot in Richmond, Calif., on July 9, 2021. Car prices surged during the pandemic, and despite coming down from their peak, they still remain higher than a few years ago.
At an auto show this year, Noah and India Grabisch of Laurel, Md., were looking at new SUVs, which they liked. But an $86,000 price tag for a Chevrolet Suburban?The used-car market doesn’t provide much relief either. Retail used-vehicle prices now average $26,510. Consider what happened at Nissan, which continued to struggle with supply chain challenges throughout 2022. In response, it cut production of one of its cheapest cars, the Nissan Versa, by 78%. Nissan also reduced sales of two other cheap models, the Sentra and the Kicks.production of those.
Because those $60,000 vehicles are significantly more profitable than the $25,000 ones, this shift is very, very lucrative for car companies. And they’re especially focused on fat margins, instead of big volumes, because they’re investing heavily in new electric vehicles . Meanwhile, because automakers cut production of cheap, no-frill sedans, people looking for cheaper late-model used cars are now out of luck.
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