Average New Car/SUV/Truck Prices Up $573 –Loan Rates Down with 5.7-year Loans

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The price of new vehicles went up reported Kelley Blue Book while the interest rates went down in August, reported Edmunds.com. Typical loans average 5 years and 8 months.

The estimated average transaction price (ATP) for light vehicles in the United States was $34,721 in July 2017 according to Kelley Blue Book.  New-car prices have increased by $573 (up 1.7 percent) from July 2016, while decreasing slightly (down 0.3 percent) from last month.

 “Once again, the declining sales of cars and the growing popularity of SUVs is driving up the average transaction price,” said Tim Fleming, analyst for Kelley Blue Book.  “Despite modest sales growth for SUVs in a down market, transaction prices in these segments are not particularly strong, with compact SUVs up just 1 percent and mid-size SUVs flat.  However, cars could fall to just 35 percent of overall sales in July, and this shifting sales mix is certainly helping increase most manufacturers’ ATPs.”
Meanwhile, interest declined. Rates on new-vehicle loans fell to a six-month low in July as automakers ramped up summer zero-percent finance deals, according to a new analysis from Edmunds, the leading car shopping and information platform. The annual percentage rate (APR) on new financed vehicles averaged 4.77 percent in July, down from 4.96 percent in June. And 11.3 percent of purchasers who financed took advantage of zero-percent financing, up from 9.47 percent in June and 10.2 percent a year ago. The average monthly payment was $509 for a new car with 69.45 months months(5.7875 years) of payments and $383 for used car with 66.90 months (5.575 years) of payments.

“Zero-percent finance deals are common in the summer, but car buyers can save even more this year,” said Jessica Caldwell, Edmunds executive director of industry analysis. “Even though interest rates were lower on average in July than at any time in the past six months, they’re still hovering at highs not seen since 2009. These higher interest rates make zero-percent financing a big carrot for dealers seeking to lure car shoppers.”

Overall, interest rates on auto financing have been higher in 2017 than in recent years. July’s average APR is up 5.6 percent year over year, and is 14.2 percent higher than it was five years ago.

“In today’s declining market, every sale counts,” Caldwell said. “We anticipate automakers will continue to ramp up zero-percent finance offers as we get deeper into the summer sell-down season.”

Manufacturer

July

 2017

Transaction Price (Avg.)*

June

2017

Transaction Price (Avg.)*

July

2016 Transaction Price (Avg.)*

Percent Change June 2017 to July 2017*

Percent Change July

2016 to July

2017*

American Honda (Acura, Honda)

$27,650

$27,683

$27,225

-0.1%

1.6%

Fiat Chrysler (Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, RAM)

$36,834

$37,132

$35,576

-0.8%

3.5%

Ford Motor Company (Ford, Lincoln)

$38,445

$38,731

$37,553

-0.7%

2.4%

General Motors (Buick, Cadillac, Chevrolet, GMC)

$39,274

$39,122

$40,189

0.4%

-2.3%

Hyundai-Kia

$25,310

$25,418

$24,597

-0.4%

2.9%

Nissan North America (Nissan, Infiniti)

$28,421

$28,704

$27,507

-1.0%

3.3%

Subaru

$28,311

$28,256

$28,145

0.2%

0.6%

Toyota Motor Company (Lexus, Toyota)

$31,217

$31,431

$31,243

-0.7%

-0.1%

Volkswagen  Group (Audi, Volkswagen, Porsche)

$38,850

$39,226

$37,968

-1.0%

2.3%

Industry

$34,721

$34,835

$34,148

-0.3%

1.7%

*Kelley Blue Book average transaction prices do not include applied consumer incentives

Fiat Chrysler’s average transaction prices rose nearly 4 percent year-over-year in July 2017, with the Chrysler brand garnering an impressive 8 percent spike on a lower mix of the discontinued 200 sedan.  Jeep climbed 4 percent thanks to stronger sales of the Grand Cherokee.  Additionally, RAM prices grew 1 percent, with Dodge seeing a 2 percent increase.

General Motors’ average transaction prices were down 2 percent in July, with Cadillac emerging as the best performing brand, increasing by 5 percent.  Cadillac benefitted from a more SUV-heavy sales mix in July, estimated at two-thirds of the brand’s sales. On the other hand, Chevrolet decreased by 1 percent on average, with the Silverado declining 4 percent year-over-year.  Buick also dropped by 4 percent, with the Enclave falling 7 percent as Buick sells down the outgoing generation before the new Enclave launches later this year.

Segment

July

 2017

Transaction Price (Avg.)*

June

2017

Transaction Price (Avg.)*

July

2016 Transaction Price (Avg.)*

Percent Change June 2017 to July 2017*

Percent Change July

2016 to July

2017*

Compact Car

$20,403

$20,465

$20,135

-0.3%

1.3%

Compact SUV/Crossover

$28,415

$28,352

$28,065

0.2%

1.2%

Electric Vehicle

$37,976

$37,424

$40,729

1.5%

-6.8%

Entry-Level Luxury Car

$41,989

$42,014

$40,755

-0.1%

3.0%

Full-Size Car

$34,545

$34,425

$34,373

0.4%

0.5%

Full-Size Pickup Truck

$46,441

$46,538

$47,002

-0.2%

-1.2%

Full-Size SUV/Crossover

$60,564

$60,636

$60,418

-0.1%

0.2%

High Performance Car

$91,106

$89,798

$95,617

1.5%

-4.7%

High-End Luxury Car

$96,789

$95,070

$95,904

1.8%

0.9%

Hybrid/Alternative Energy Car

$26,034

$25,934

$26,095

0.4%

-0.2%

Luxury Car

$56,549

$57,140

$57,829

-1.0%

-2.2%

Luxury Compact SUV/Crossover

$43,077

$43,140

$43,809

-0.1%

-1.7%

Luxury Full-Size SUV/Crossover

$81,324

$81,076

$84,216

0.3%

-3.4%

Luxury Mid-Size SUV/Crossover

$54,569

$55,383

$54,164

-1.5%

0.7%

Mid-Size Car

$24,852

$24,984

$24,955

-0.5%

-0.4%

Mid-Size Pickup Truck

$32,317

$32,216

$32,489

0.3%

-0.5%

Mid-Size SUV/Crossover

$37,562

$37,792

$37,461

-0.6%

0.3%

Minivan

$33,096

$33,225

$33,210

-0.4%

-0.3%

Sports Car

$30,803

$30,821

$31,086

-0.1%

-0.9%

Subcompact Car

$16,774

$16,763

$16,375

0.1%

2.4%

Subcompact SUV/Crossover

$24,478

$24,478

$24,591

0.0%

-0.5%

Van

$35,079

$34,666

$34,826

1.2%

0.7%

Grand Total

$34,721

$34,835

$34,148

-0.3%

1.7%

*Average transaction prices do not include applied consumer incentives

NEW-VEHICLE FINANCING TRENDS

July 2017 Change from
July 2016		 5-Year Change
Loan Term 69.45 months 0.8% 7.0%
Monthly Payment $509 1.4% 10.7%
Amount Financed $30,689 1.6% 16.7%
APR 4.77% 5.6% 14.2%
Down Payment $3,621 7.3% 10.0%

 

USED-VEHICLE FINANCING TRENDS

July 2017 Change from
July 2016		 5-Year Change
Loan Term 66.90 months 0.0% 5.8%
Monthly Payment $383 1.3% 4.2%
Amount Financed $21,281 0.9% 11.0%
APR 7.46% 2.3% -7.7%
Down Payment $2,468 6.6% 12.7%