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Vehicle Affordability a Rising Concern

Average manufacturer retail price nearly $50K, with some models exceeding six figures and $75K pickups the norm.

February 23, 2023
Vehicle Affordability a Rising Concern

Average manufacturer retail price nearly $50K, with some models exceeding six figures and $75K pickups the norm.

IMAGE: Torsten Dettlaff

2 min to read


Among today’s new vehicles, the average manufacturer retail price has soared to nearly $50,000, with some vehicles exceeding six figures and $75,000 pickup trucks being the norm.

It’s giving many consumers sticker shock, with affordability becoming one of the greatest challenges facing vehicle buyers.

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The Cox Automotive Industry Insights team examined market shift in pricing over the past five years. The analysis focused on vehicles priced at less than $25,000, which consumers generally regard as affordable, and vehicles priced over $60,000, exceeding the annual income of the average American.

The analysis team took a snapshot of total new-vehicle sales in December 2017 (1.6 million vehicles sold) and five years later on December 2022 (1.3 million sold). They considered three key measures of the two groups (under $25,000 and over $60,000): number of models available at each price point, volume sold, and share of total sales.

They found that in December 2022, 25% of total new-vehicle sales were vehicles with MSRPs over $60,000, compared to December 2017, when that share was 7.8%.

Escalating prices and high interest rates are shutting out shoppers with low credit scores. Now it seems that a new vehicle is a luxury item that only the wealthiest buyers can afford.

Cox reported there were 36 models with MSRPs below $25,000 in December 2017, and that share represented nearly 13% of total new-vehicle sales. In contrast, in December 2022, there were only 10 models with MSRPs under $25,000, and the share of sales plunged to under 4%. In December 2022, buyers with subprime credit scores accounted for just 5% of the market, compared to 13.9% in 2017.

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However, the bigger move was on the more expensive vehicle side. Luxury brands took a greater share of the market, and nonluxury brands made and sold more luxury-priced vehicles. In December 2022, over 25% of new vehicles sold had MSRPs higher than $60,000. Automakers had 90 unique models in that category, with total sales of 323,368. In December 2017, the share of vehicles priced over $60,000 was less than 8%. There were 61 models, with sales of 122,864.

The Cox Automotive/Moody’s Analytics Vehicle Affordability Index found new-vehicle affordability improved slightly in January, as new-vehicle prices stabilized and household incomes improved. But with more interest rate increases on the horizon and a continued focus on high-end buyers, Cox analysts expect vehicle affordability to remain a top concern among vehicle buyers.  

Originally posted on Auto Dealer Today

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