Average New-Vehicle Prices Up 4% Year-Over-Year in May 2020, According to Kelley Blue Book

IRVINE, Calif., June 2, 2020 /PRNewswire/ -- The valuation analysts at Kelley Blue Book today reported the estimated average transaction price for a light vehicle in the United States was $38,940 in May 2020. New-vehicle prices increased $1,618 (up 4.3%) from May 2019, while prices dropped $244 (down 0.6%) from last month.   

"Though new-car sales will be down significantly for the third month in a row, due to the COVID-19 pandemic, average transaction prices have actually strengthened over this period for several reasons," said Tim Fleming, analyst for Kelley Blue Book. "Incentives, deferred payments, and low APR deals are helping consumers stretch out their monthly payments over longer terms. Inventory levels have tightened as the economic recovery has begun, but little new supply has arrived yet from the factories that restarted in May. Finally, the share of pickup trucks has spiked recently, reaching an all-time high in April."

These factors all contributed to the 4% increase in transaction prices in May 2020; however, gains at these levels are not sustainable. If factories are slow to restart and new-vehicle inventories remain low, manufacturers will pare back their incentives, placing pressure on new-vehicle prices. While trucks have been remarkably resilient, their big spike in market share was the result of sales losses in mid-size cars, compact SUVs and minivans. When the market sees sales of these family haulers return will depend on the shape of the economic recovery, but in the meantime, truck manufacturers are likely pushing to get capacity back up quickly to restock their inventories.

Fiat Chrysler led all automakers in May with average prices rising more than 7%. Much of the improvement is attributed to RAM, which has been capturing a growing share of the full-size truck market. In addition, Jeep rose by 5%, thanks largely to the Gladiator. Even though the Gladiator's prices were down significantly from its launch last year, it still carries an average price premium of about $7,500 over the next closest competitor in the mid-size truck segment. The Dodge brand also showed big improvements of about 10% as Caravan sales fell, while its remaining models showed improvements in the 2 to 3% range.

For the second month in a row, prices for cars moved up the most and averaged more than 3% improvement. Solid gains were seen across all non-luxury car segments with subcompact cars gaining the most at 4%, led by the Nissan Versa. In contrast, luxury segments suffered again, making up four of the five segments with year-over-year price declines. Overall, the luxury market saw prices fall slightly while non-luxury brands saw prices rise upwards 5%. The large gains come mostly from the surge in trucks, which have seen a massive increase in share over the past couple of months.

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About Kelley Blue Book (www.kbb.com)
Founded in 1926, Kelley Blue Book, The Trusted Resource^®, is the vehicle valuation and information source trusted and relied upon by both consumers and the automotive industry. Each week the company provides market-reflective values on its top-rated website KBB.com, including its famous Blue Book^® Trade-In Values and Kelley Blue Book^® Price Advisor tool, which provides a range for what consumers can reasonably expect to pay for a vehicle in their area. Car owners looking to sell immediately can also get a redeemable, transaction-ready offer with Kelley Blue Book^SM Instant Cash Offer. The company also provides vehicle pricing and values through various products and services available to car dealers, auto manufacturers, finance and insurance companies, and governmental agencies. Kelley Blue Book is a Cox Automotive brand.

About Cox Automotive
Cox Automotive Inc. makes buying, selling, owning and using cars easier for everyone. The global company's 34,000-plus team members and family of brands, including Autotrader^®, Clutch Technologies, Dealer.com^®, Dealertrack^®, Kelley Blue Book^®, Manheim^®, NextGear Capital^®, VinSolutions^®, vAuto^® and Xtime^®, are passionate about helping millions of car shoppers, 40,000 auto dealer clients across five continents and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with revenues of $21 billion. www.coxautoinc.com

SOURCE Kelley Blue Book

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