Average new vehicle transaction prices inch up in July

When the COVID-19 pandemic shut down vehicle production in April through June, sales took a hit, and no one knew how long it would take for the industry to bounce back. That recovery may have started, with new-car sales continuing to improve, transaction prices increasing and “for the first time since March, automaker revenue for new vehicle sales will be up month-over-month,” said Eric Lyman, chief industry analyst for ALG , a subsidiary of TrueCar . Average transaction prices are projected to increase 3.3%, or $1,172, year over year, according to TrueCar’s ALG forecast released Monday. The average price of $36,239 is 0.6% below June 2020. “While average transaction prices continue to tick up each month when compared to the same period last year, we‘re seeing a slow decline in transaction prices month over month since May, as manufacturers slowly pull back incentives and inventory levels shrink for certain models,” Lyman said. Transaction prices go hand in hand with vehicle sales, which TrueCar projects will reach 1.19 million units in July , a 6.9% increase from June but an 18% YoY decline, when adjusted for the same number of selling days, according to a forecast released late last month. July’s preliminary average APR on new cars is 4.4%, Nick Woolard, director of OEM and Affinity Partner Analytics at TrueCar, told Auto Finance News . Limited inventory is hitting some brands harder than others. Kia ’s YoY average transaction price is expected to decline 1.3% to $24,844 in July but stay aligned with June’s average, largely due to “low inventory levels on their high-demand Telluride, one of the most expensive vehicles in their lineup,” Woolard said. “Brands with more plentiful inventory levels on popular models, such as Ford, are successfully increasing their transaction prices year over year.” Ford ’s average transaction price is projected to increase 9.8% YoY to $43,769, a month-over-month increase of 0.5%. Hyundai has the highest expected increase from the prior year quarter at 10.9% to $28,735, a 0.1% increase from last month. The increases are in part due to manufacturers’ “strategic incentive spending,” Lyman said. Spending is expected to increase, on average, 2.8% from this time last year to $3,813, a 6.5% decrease from June. The manufacturer with the highest YoY increase in expected incentive spends is Honda , with a 24.9% YoY increase to $2,491, a 5.6% decrease from last month. Auto Finance Summit, the premier industry event, returns October 20-22, 2020, as a virtual experience. The virtual experience will offer the same quality networking and education as past events, all through an online platform. To learn more about the 2020 event and register, visit www.AutoFinanceSummit.com .

Average new vehicle transaction prices inch up in July

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