Average New Car Prices Hit a Record High in November

2023 Kia Telluride

Photo: Kia

In general, you can expect the average price of a new car to increase year-over-year. It happens. We were used to it. And then COVID hit, disrupting global supply chains, causing a chip shortage, and sending car prices through the roof. With fewer new cars to buy, people started paying more for used cars, and anyone who wanted a new car was forced to pay a serious premium. Now, almost three years later, the average price of a new car is the highest it’s ever been.

Kelly Blue Book reports that, according to Cox Automotive’s data, the average new car price in November was a record-high $48,681. Which is insane when you think about how many people in this country don’t even make that much money in a year.

But maybe that figure isn’t really reflective of the typical new car buyer’s experience. Surely, the wealthy folks who can afford to splash out on six-figure luxury cars to park at their rich-people homes in their rich-people suburbs are skewing the data. If you just removed the S-Classes and Model S Plaids from the data, then the average price would drop significantly, right?

Wrong. According to Cox’s data, the average price of a new luxury car was $67,050 in November. But the average mainstream car still cost $44,584. Is that less than $67,000? Of course it is. But does it make buying a new car sound any more affordable? Absolutely not.

The only good news is that people who do buy new non-luxury cars are finally able to get them relatively close to MSRP now. Cox says the average dealer markup was only $410 last month. That’s better than it’s been, but still isn’t great.

If you’re hoping to avoid paying above sticker, Cox says to avoid Honda and Kia dealerships. Those brands reportedly sold for an average of six percent and eight percent above MSRP, respectively. Instead, look at Buick, which often sold at a discount.

That said, just because you find a dealer willing to sell you a new car without a significant markup doesn’t mean the cars they’ll have on the lot will be in your price range. With only so many chips to go around, automakers are reportedly choosing to focus on building higher trim levels to increase profits. So the fact that a base-model technically exists is no guarantee that you’ll actually be able to find one at your local dealer.

At some point, automakers will get back to a point where they’re able to build more cars, and new car prices will hopefully return to something resembling what was normal before COVID. Eventually. We hope. It just won’t be this year. For the foreseeable future, new cars will basically just be for rich people.

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