Despite the pandemic, the average price of a new car hit
an all-time high in 2020.
At the end 2020, the average new car cost more $40,000 than it did in the past. This is a dramatic increase over the record of $34,000 we saw in 2019. According to USA Today the rising transaction prices were accompanied with higher down payments and greater borrowing. The average new car cost $40,170 in 2019
The average buyer paid $4,734 in Q4 2020 – almost a record-breaking amount – and was able to finance $35,373, figures that are significantly higher than the same period in 2019. The auto industry saw a decrease in sales, with Toyota experiencing a 11.9 percent sales decline over 2019. What are the top reasons for average car prices rising?
Given Bentley’s record 2020 sale, and Lamborghini’s best-ever six month period from June through December, it is likely that ultra-luxury brands are contributing to the higher end-of-2018 average, even though they may be outliers that cost far more than six figures. While most luxury cars saw overall car sales drop in 2020, utility vehicles still accounted for the largest slice of the pie – BMW’s X3 was the top-selling model, while Lexus RX and the Mercedes-Benz GLC were the top-selling brands. Cadillac isn’t immune. The flagship Escalade was second after the midsize XT5 crossover.
Even among commodity brands the trend towards more expensive crossovers or SUVs is not stopping. The compact Ford Escape SUV sold more than any Blue Oval passenger car, and the Explorer midsize SUV also outsold all other Blue Oval cars. The Buick EncoreGX won the family’s sales crown and the Rogue was second for Nissan. Who is driving up prices, even in the midst of the coronavirus pandemic and other factors?
It seems that it is a wealthier population. Jessica Caldwell is the executive director of Edmunds’ insights and stated to USA Today, that people who buy new cars are financially protected from the pandemic. Caldwell stated that it’s almost as if there are two countries in this country with people who buy new homes and new cars. There are also those who are working in the service sector and struggling.