Reuters reports that automakers and automotive dealers are reaping the highest auto sale transaction prices in more than 15 years for vehicles sold in the U.S. CNW Marketing Research attributes this phenomenon to increased demand for a smaller number of available new vehicles. Early April 2011 sales figures indicate that new cars and trucks sold at 87 percent of manufacturers suggested retail price (MSRP).
The highest transaction price since 1996
CNW issued a report in which the auto sale transaction price increase is studied in detail. According to the report, the U.S. new vehicle market is projected to sell 1.11 million units this month, up 14 percent from April 2009.
“Dealers are the primary beneficiary of these dwindling discounts since they are using fewer of their own dollars to close a deal than was necessary just a few years ago,” said CNW.
The scant 13 percent discount from MSRP is compared to 23 percent under MSRP in April 2010. At that time, new car sales and used car sales in the U.S. were at a 27-year low. The ongoing Japanese nuclear crisis is expected to have a large affect upon the availability of auto parts for some time, which will in turn decrease production of new vehicles. Experts predict the gap between auto transaction price and MSRP will continue to shrink as shortages continue and consumer credit continues to loosen.
Used cars are even harder to come by
With the lack of discounts on new cars, the demand for used cars has increased, particularly for light, fuel-efficient cars and trucks. Less than 40 days worth of small used cars are currently available in the U.S. market, reports CNW. That’s half the stock of what was available in April 2010 and 10 days fewer than in January 2011.
The subprime market for new vehicles has risen considerably, however. The percentage of new car customers with subprime credit scores has skyrocketed from April 2010 to the present, up 92 percent.
Average transaction prices and incentives
According to TrueCar.com, the average auto transaction price for light vehicles in March 2011 was $29,334 in the U.S., up $267 from the previous month. In turn, the average dealer incentive was $2,432 in March, down $366 (13.1 percent) from March 2010, a sign that automakers have learned some harsh lessons from the previous auto industry collapse.
How to get the lowest auto transaction price
Republished by Blog Post Promoter