The average vehicle last month cost $32,184 ― up 1.2% from September ― and transaction prices will likely rise through year-end, said Kelley Blue Book Senior Analyst Alec Gutierrez.
“We’re seeing the highest vehicle transaction prices that we’ve ever seen in the auto industry,” Gutierrez told Auto Finance News. “As consumers are trying to cope with these higher prices, lenders are having to extend the loans out further and further.”
Gutierrez attributed the higher transaction averages to a rebound in truck and SUV sales; stricter fuel-economy requirements; and stronger safety standards, which require new investment in technologies.
“Consumers are demanding more in an automobile, and that, in general, has driven prices up,” he said.
But higher prices have led more consumers to leasing. Current lease penetration is just north of 24%, which is above the historical norm, Gutierrez said.
