SANTA MONICA, Calif., Feb. 1, 2018 /PRNewswire/ — The average price of a new vehicle is expected to drop in January for the first time in five months, according to the analysts at Edmunds, the leading car shopping and information platform. Edmunds estimates that the average transaction price of a new vehicle will dip to $36,115 in January, down $380 from the record high of $36,495 set in December 2017.
Despite this decline, average transaction prices for new vehicles are still expected to be at near-record levels. Edmunds experts estimate the average transaction price of a new vehicle will be three percent higher in January compared to January 2017 and 13 percent higher than the average cost of a vehicle in January 2013. The average down payment on a new car is also estimated to drop slightly to $3,914 in January. However, this figure is up by $302 compared to January 2017 and up $366 from five years ago.
“January is typically a ho-hum month for auto sales following the major holiday blowout sales we see at the end of the calendar year,” said Jessica Caldwell, executive director of industry analysis at Edmunds. “Shoppers at this time of year are driven by necessity, and the disproportionate drop in luxury sales drives down the average price. However, prices will continue to stay at high historic averages as buyers continue to flock to trucks and SUVs, a trend we only see accelerating in 2018.”
Edmunds analysts say that higher incentive spend in January may point to ongoing efforts by automakers and dealers to clear out languishing 2017 model-year vehicles. Incentive spend in January was $3,657, which is a five percent increase from January 2017 and a 36 percent increase from five years ago.
“The industry continued to do a good job of addressing aging inventory in January, but it remains an issue heading into the rest of 2018,” Caldwell said. “The only time the proportion of prior model-year vehicles was higher in January was in 2009, after sales collapsed due to the recession in the closing months of 2008. The good news is that automakers are adjusting their product roadmaps to avoid making the same mistakes they made in 2017. As we move further into the year, we expect to see the industry continue to right-size.”
More insight into recent auto industry trends can be found in the