Consumer Reports: New vehicle prices are beginning to trend downward slightly

ByNydia Han and Heather Grubola WPVI logo
Wednesday, May 10, 2023
New vehicle prices are beginning to trend downward slightly
While the average price of a new vehicle was down in April, that number is still more than $48,000.

PHILADELPHIA (WPVI) -- New car prices remain historically high, but after hitting a record high at the end of last year, we are finally seeing a downward trend.

Vehicle prices are easing slightly, going down for the third straight month. While the average price was down in April, that number is still more than $48,000.

The more impactful development for consumers comes in the form of dealer incentives making a comeback.

According to Kelley Blue Book, average new car prices fell below MSRP in March for the first time in almost two years and continued to go down slightly in April decreasing .03%.

That means dealers are willing to negotiate and are once again offering incentives and advertising discounts.

"This is all because production has improved, because the global chip shortage has waned somewhat and there's more vehicles out on the lots for people to shop for," said Michelle Krebs of Kelley Blue Book, a Cox Automotive Company.

And more good news? Electric vehicle prices are really coming down.

"A year ago, they were in the mid $60,000 - they're now down to about $55,000 on average," she said. "That's because there are a lot more players."

Finance experts say even though car prices remain on the high side, if you're financing you may not feel as big of a pinch in your pocketbook.

"The rise in interest rates for car loans is relatively insignificant compared to the rise in car prices," said Mark Hamrick, Senior Economic Analyst at Bankrate. "For a typical new or used car loan, really being a difference of $25-$50 a month."

But be aware those loans are being extended into several years.

"There's the risk that they're underwater, that they owe more on the car than the car is worth," he said.

So should you buy now? Kelley Blue Book analysts suggest new car shoppers are better off waiting for more price drops and bigger discounts, while used car shoppers might want to move more quickly.

Kelley Blue Book also says automakers are building more expensive cars. A recent analysis showing that sales of cars priced at $25,000 or less have fallen by 78% in five years.