With U.S. consumers buying better-equipped vehicles, transaction prices rose in March compared with last year but dropped slightly from the previous month, according to two automotive data trackers, each with their own set of numbers.
TrueCar estimates the average transaction price was $30,986 in March, up $370 (12%) from March 2013, but down $366 (1.2%) from February.
“Consumers continue to be unmotivated despite (year-over-year) increases in incentives” says Larry Dominique, president of ALG and TrueCar’s executive vice president. “Historically high transaction prices may be testing the boundaries of consumer affordability.”
Kelley Blue Book estimates the average transaction price at $31,995 last month. New-car prices increased by $450 (1.4%) from March 2013, but decreased $185 (0.6%) from February.
“We are seeing continued year-over-year gains in average transaction prices,” says Karl Brauer, senior analyst for Kelley Blue Book. “The increase in prices have been enough to offset rising incentive spend and consumers have consistently shown they are willing to spend top dollar for the best models available.”
Cars.com reports average transaction prices rose over both last month and last year: $29,488 in March, up $73 (0.3%) from February and up $614 (2.1%) from March 2013
In the latest pricing reports, Brauer says Honda is particularly strong with help from its Acura luxury brand, up 5.9% from last year. He gives much of the credit to the recently redesigned Acura MDX CUV.
Acura has struggled in past years due to soft sales compared with some of its competitors, particularly fellow-Japanese-brand Lexus.
Honda also performed well in transaction prices due to a strong mix of its Odyssey minivans and CR-V compact CUVs, Brauer says.
Alone among major automakers, Nissan fell due to its best-selling Altima, which has a transaction price down 4.8% year-over-year, says Alec Gutierrez, a senior analyst for Kelley Blue Book.
“The Rogue (CUV), which was recently redesigned, only shows a small 0.9% gain, while Nissan’s luxury counterpart, Infiniti, is essentially flat,” he says.
Cars.com reports the average incentive in March for light vehicles was $2,714, up $118 (4.5%) from February and $204 (8.1%) from March 2013.
Cars.com says Volkswagen and GM experienced the greatest increases in transaction prices in March, each up 2.2% over February. The two also lead the charge in incentive spending, with GM up 9.8% and Volkswagen up 8.2% over February.
TrueCar estimates the average incentive for light vehicles was $2,773 in March, up $203 (7.9%) from March 2013 and up $71 (2.6%) from February 2014.
“Weak-first quarter sales caused inventory levels to swell, and manufacturers have had to be more generous with their incentive spending in order to accelerate sales, as evidenced by the 8% year-over-year increase,” says Jesse Toprak, Cars.com’s, chief analyst.
“The good news is that consumers continue to prefer well-equipped models, which has helped keep transaction prices up despite the larger incentives,” he says. “We expect incentive spending to continue to increase into the summer in a controlled manner, not with an all-out incentives war.”
Average transaction prices will “stay mostly flat,” he predicts.
