Vehicle prices, industry healthy as summer winds down
Posted on Wednesday, September 3, 2014 at 10:07:09 AM
Buying a new vehicle is an expensive proposition, even with affordable auto financing rates and other favorable conditions. However, the past few months have seen strong sales and growth in this industry, as more buyers are getting the right incentives and finding quality deals.
According to Cars.com, the average transaction price, or ATP, for new light vehicles hit its lowest point since February this past August. The ATP was at $29,670, 4.6 percent below the level from August 2013 and 0.4 percent lower than July.
"Consumers still prefer well-equipped vehicles, so even though the vehicles they're buying have lower base prices, they're buying the more expensive versions, which is positive news for OEM profitability," said Jesse Toprak, chief analyst at Cars.com. "We expect a significant boost in sales for the truck segment in the fourth quarter, which should result in an increase in ATPs to finish the year."
Incentives are also a big reason why vehicle sales have been so strong. According to TrueCar, incentive spending levels are actually on par with a healthy automotive industry. The estimate for average light-vehicle incentive in August was $2,772, a 9.3 percent increase on a yearly basis and a 2 percent drop compared to July.