NEW YORK–The average new car price was $37,200 in the first quarter, up 8.4% from the same period just a year ago, according to JD Power.
About half of car buyers are paying within 5% of the sticker price, according to JD Power, with some even paying above sticker. About two million more car buyers this year will end up paying that close to sticker price than a couple of years ago, the company said.
Meanwhile, wholesale prices for used cars sold at auction are up 26% since the start of this year, according to other data from JD Power. Retail used car prices are up a more modest 7% in the same period.
“That's also a significant jump for this time of year, and the higher wholesale prices are pointing to bigger increases on the way,” noted CNN in its analysis.
"That puts wholesale used prices at the highest level they've ever been," David Paris of JD Power told CNN. "And we are seeing used retail prices accelerating rapidly."
Rise Likely to Continue
Prices are likely to continue to rise, as sales are booming, with March's seasonally adjusted sales rate for new cars hitting the highest level since October 2017.
Other factors are expected to continue to drive rising prices, including:
- Many auto plants around the globe are closed or running at reduced production due to a computer chip shortage. New car production in North America is down about 3.4 million vehicles in the first three months of this year, according to Cox Automotive.
- The used car market is just as tight, with some measures of supply and demand in the sector showing the greatest scarcity on record.
- The job market is improving and offices are reopening and bringing back employees, meaning many are increasing their usage of automobiles.
- Rates are low and many people have additional cash due to the stimulus checks.