The Average New Car Last Month Cost More Than $48,000

New Car Dealers July 11

The average new car price hits a record high, Volkswagen gets a new CEO, Eaton’s working on locking differentials for EVs. All this and more in today’s issue of The Morning Dump.

Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.

The Average New Car Price Cracks $48,000

Car Dealership
Photo credit: “Row of Cars at a Car Dealership” by everycar_listed_photos is marked with CC BY-SA 2.0.

It’s no secret that new cars are more expensive than ever, but that doesn’t stop the numbers from being shocking. According to Kelley Blue Book, the average new vehicle in June cost a whopping $48,043. That’s the highest average transaction price on record, up roughly $895 over May. Granted, this figure is buoyed by several factors. Luxury cars made up roughly 18 percent of new vehicle transactions last month, an unusually high figure that may be indicative of manufacturers’ focus on high-margin models. In addition, the price of the average hybrid vehicle rose $3,593 last month, while the average EV price rose by $2,444. In addition, Kelley Blue Book reports that non-luxury car buyers paid an average of $1,017 over MSRP, while luxury car buyers paid an average of $1,069 over MSRP. Honestly, that’s a tighter spread than I expected, although it’s too soon to say if it’s a sign of markups easing.

The good news is that supply issues seem to be easing slightly. Kelley Blue Book reports that dealerships are seeing on-the-lot inventory in the high 30 day range, up from the mid-30 day range KBB’s been seeing for most of the year. Not only is this a good thing for dealers as consumers may be hesitant to order a car without taking one around the block, it’s also a good thing for consumers as more inventory typically means more room for bargaining. Speaking of bargaining, it seems like some vehicles from American brands are actually coming down to just barely under MSRP.

New vehicles from Honda, Kia, and Mercedes-Benz all sold for between 6.5% and 8.7% over MSRP in June. Those from Buick, Lincoln, and Ram sold for an average of 1% under sticker.

Could this mean light at the end of the tunnel? I’m not so sure, but Kelley Blue Book’s notes about pricing on Buicks, Rams, and Lincolns will be something to keep in mind as the car market continues to change in the future.

Diess Out, Blume In At VW

A white Volkswagen ID.3 electric hatchback rolling off the production line
Photo credit: Volkswagen

A big shake-up happened at Volkswagen on Friday. CEO Herbert Diess has been given the boot in favor of Porsche CEO Oliver Blume, signaling a shift in corporate philosophy that could be a good thing or a bad thing depending on your perspective. See, Diess had grand plans for going all-in on electrification, cutting costs, and building out Volkswagen’s CARIAD software division. Unfortunately, some of those plans seem to have upset a lot of people. Sure, consumers are upset with touch-sensitive everything on the ID.4 and new GTI, but it might not just be consumers who are uneasy about Diess’ vision.

See, Diess’ singular vision was very much of shareholder value and electrified mobility, and Diess didn’t seem afraid to step on toes in pursuit of goals. Wait a second, isn’t this just a 21st-century twist on Ferdinand Piëch’s style? Well, that’s complicated. Piëch has a legacy of singular vision and authoritarianism, but also one of putting product first and cultivating allegiance with Volkswagen’s labor union. Plus, Piëch was family, and family holds a lot of sway at Volkswagen. In fact, the Porsche and Piëch families hold a majority position in Volkswagen, and there’s a good chance they fancied Oliver Blume’s leadership style. See, Blume seems to very much be a car person, nurturing the past while developing the future. Investments in synthetic fuels for classic Porsches and launch of the all-electric Porsche Taycan may offer a sense of where things might be going for Volkswagen. While the glorious product-first Piëch years are likely never to be repeated, it’ll be interesting to see how Blume implements changes at Volkswagen after he becomes CEO in September.

In addition, CFO Arno Antlitz will become Volkswagen’s COO, a reasonable move that gives hope for strong future products. Financial Times reported earlier this year that Antlitz has his sights set on more premium vehicles and margins over volume, which should hopefully rein in some model range cannibalization by way of planned product cuts.

Cupra Reportedly Eyeing America

Cupra Formentor E Hybrid 01 Hq
Photo credit: Cupra

Yes, we have more VW news. According to Australian publication Drive, Volkswagen’s Cupra brand may be considering entering the American market. Back up a second, what is Cupra? Well, if you’re American and read European car mags during the glory days of the aughts, you may remember the red hot Seat Leon Cupra R, a 207-horsepower rocket of a hot hatch. Well, Cupra’s been spun off into its own brand focused on performance electrification at a retail brand price point. If this all sounds like marketing drivel to you, picture Pontiac for a second. Wide track, supercharged 3800 blorgel-orgel exhaust notes, “We Build Excitement,” that sort of stuff. Indeed, Cupra brings a little excitement to mass-market electrified vehicles with models like the Formentor crossover, Born compact hatchback, and hot versions of the Seat Leon hatchback and Ateca crossover.

Anyway, Drive caught up with Cupra global boss Wayne Griffiths at the opening of a Cupra showroom in Sydney, where Griffiths shared some remarkable thoughts on the future of the Cupra brand.

“On top of that, obviously if you want to become a global brand – our reason for coming to Australia – is to prove that we can become a global brand.

“Then obviously you need to look at markets like North America, but that would only be in a second phase.”

Honestly, North America’s been lacking a retail-grade performance brand for a while now. Pontiac’s been dead for more than a decade, Mazda’s abandoned Zoom Zoom, and while Dodge makes some hot stuff, not everyone can afford a Scat Pack or Hellcat. Let’s see how the future of Cupra plays out and cross our fingers that the brand makes it to North America.

Eaton Plans Lockers For EVs

Eaton Mlocker
Photo credit: Eaton

If you’ve ever owned a truck or SUV, you probably know about the importance of a locking differential. By locking the cross-axle torque split, you can move forward with one wheel off the ground, bog across mud, climb loose rocky terrain, and have clearance be your limitation rather than traction. However, electric vehicles have posed a strange problem for the locking differential. Not only do electric motors feature extremely high torque, electric drivetrains are extremely sensitive to friction. While Rivian seems to have a remarkable quad-motor solution, Automotive News reports that famed differential maker Eaton is hatching a plan to put more traditional locking differentials like its MLocker diff in electric vehicles.

Potential EV makers want the MLocker, but they need it to be lighter, more efficient and with less friction — which might sap battery range. Lubrication also is an issue. The differential normally gets a constant bath of axle lubrication — EV makers want lubrication to be sprayed on when necessary.

Honestly, I’m curious to see how spray-on differential lubrication goes. I wouldn’t be surprised if a lubricant thinner than common 80w90 and 75w140 differential oils is used, although a decrease in viscosity raises some durability concerns. Still, Eaton seems to have some very smart engineers on the case, as Mark Kramer, Eaton’s business director for ePowertrain told Automotive News.

“We have a dedicated team of engineers and we have a proving ground in Michigan,” said Kramer, who at 41 is younger than the product.

“We also have a team of engineers in South Korea, a team of application engineers in China and a team in Prague that does testing,” he said. “So we have global resources dedicated to this differential product line.”

Hopefully we’ll start to see locking differentials in EVs soon. Even after new trucks make the switch from fossil fuels to electricity, we shouldn’t have to compromise on the joy of off-roading.

The Flush

Whelp, time to drop the lid on this edition of The Morning Dump. Happy Monday, everyone. It’s the start of a new work week. To take your mind off of the Monday blues, how about we play a little bit of a game? Let’s say you’re given $48,043 tax-free to buy a brand new daily driver. You must use it as your primary vehicle year-round for five years. What are you buying? Honestly, this might sound a bit silly, but I think I’d go with a fully-loaded Toyota Prius Prime in the wonderful teal Toyota calls Blue Magnetism and the Moonstone faux-leather interior. I’d deck it out with rubber mats and paint protection film, then happily drive around on mostly electricity bumping tunes through the JBL audio system. Then again, you might have a much less sensible but far more entertaining pick, which is exactly why I want to hear from you.

Lead photo credit: yonkershonda, licensed under CC BY-SA 2.0

Share on facebook
Facebook
Share on whatsapp
WhatsApp
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit

56 Responses

  1. I’d buy the vehicle that we actually bought in early 2021 (luckily, at a time when prices were still well under MSRP rather than over): a Jeep Grand Cherokee Limited. “Daily driving” at this point is almost nil (hooray for permanent WFH), and 90% of the miles we’ve put on it have come on road trips where it’s a near-perfect vehicle for the drive. I do have some long-term reliability concerns but we intentionally bought what we thought was going to be the last year of the old one rather than the new redesign so hopefully that’ll help. Managed 24-25 mpg on the last couple road trips so while it still feels like a gas guzzler compared to the economy cars I’ve always driven, it’s not that bad (and without it we’d be renting something similarly sized for those trips anyway).

    I think even now I’d have a little money left over from the $48k to put toward one of those trips, too.

    1. People making the average salary have not bought average priced new cars since the Model T. This is not a new thing.

      New cars above entry level (however you define it) have always been for the upper middle class and above.

      1. I make a little under the average salary and we’re a one-income household. We have a nice Subaru for my wife that we picked up used, I can’t not fathom buying a new car with equivalent features without running out finances into the ground. I often wonder how a lot of people out there even get by anymore..

      2. What is relatively new, at least in the U.S., is the average car operator being priced out of the new car market altogether, even at the low end. The average new car buyer in the U.S. has an individual income roughly in the 80th percentile. So the upper 20%, are the demographic able to afford new cars at all, even the cheapest striped down Mitsubishi Mirage or Nissan Versa included. Thus, everything bought is skewing toward the higher end.

        1. That’s not really accurate either.

          Real (inflation adjusted) median household income. Higher since 2016 than at least the previous 30 years.

          https://fred.stlouisfed.org/series/MEHOINUSA672N

          Meanwhile, here are the inflation adjusted base prices of a Honda Civic over the same time frame:
          1982 – $6749 ($20,723 adjusted)
          1992 – $10,553 ($22,287)
          2002 – $14,910 ($24,558)
          2012 – $16,355 ($21,107)
          2022 – $22,550

          Entry level cars are as affordable as ever, if not more so. It’s the top of the market that’s pulling away.

          1. Price it in terms of hours of labor at the minimum and then median wage required to afford the item, and you’ll get a totally different picture. Through hedonic adjustments, the nominal price increase has been greatly understated for decades via Consumer Price Index, for each year.

            1. Consider the 1982 Honda Civic. In 1982 in the U.S., Federal minimum wage was $3.35/hr, median wage was $9.40/hr. The $6,749 Honda Civic in 1982 took 2,015 hours of minimum wage work and 718 hours of median wage work to afford.

              The 2022 Civic has a base MSRP of $22,500. 2022’s Federal minimum wage is $7.25/hr and median wage for 2021 is $22/hr(most recent figure I could find). It costs 3,103 hours of work at minimum wage and 1,023 hours of work at the median wage to afford a new Civic.

              Further, NADA reported that in 2015, the average individual income of a new car buyer was $80,000 a year. For the year, this meant an individual income in the 80th percentile.

  2. I’m going to go with the car I already have. Mini Cooper Clubman JCW. >300hp, AWD, enough room for wife + 2 kids, 30mpg combined and 34+ on the highway. I dunno if I could buy a NEW one for $48K, but I got mine < 1 year used as a dealer demo from the regional rep with 12K miles on it for $35K. Sticker in Feb 2020 on it was $49,500, though.

  3. Seems like any Hybrid or EV that I want will run more than $50K easily. Those aren’t fancy lux vehicles either. Maybe I’m out of touch, but that is crazy high. I figure I can get a ho-hum, but damn acceptable ICE vehicle for less than $30K. Unless gas gets rare, I don’t think it would ever be economically advantageous to pay for one of the $50K+ vehicles. If gas does get rare, those $50K vehicles will go to $80K.

    Going green and keeping your green aren’t going to cross paths in the near future. Those that got their Prius 5 years ago are smiling, but it may be a good 5 to 10 years before it makes sense for me.

    1. Fuel Eco can go screw.
      When I bought my CUBIST 7yrs ago, I knew that driving a BRICK is going to fuck with AERO.

      In reality…
      Regular 4dr sedans are X price, add on leather and other nice shit for X+a, longer nicer still for X+aa. Then get into CUVs for XX, add the bs leather and nice shit for XX+a. Toss in the tech bs and driver / safety bs and ya into XX+aa. Then ya get to CUVs price scary time and eco.. and now ya at XXX (with the tech bs and driver bs and the battery and extra shit to work it.. and ya at XXX+a).

      Nickle here, nickle there (then dealers get shrewd and start raping people who happily pay).. before ya know it ya just walked yaself right up that ladder… wondering why it costs so much.

      In the end… its not worth it at all.

      Its a bit like going on ebay and getting crazy about some item ya see and how ya just gotta have it. Put a bookmark on it.. come back 2 days later, a week later the whole euphoria has drained out and its not interesting.. at all. Ya wonder why… in the fuck did ya want that at all.

  4. I just bought a new car, so I’ve got a gas option for long distance trips. With that in mind I’m picking an EV for my daily. A Ford F-150 Lightning has space to use for any short trip hauling I need back and forth from the Home Depot and putter around town and back and forth to work.

  5. Not exciting but I’d go with an Ioniq 5 SEL in Digital Teal or a RAV4 Prime XSE in Supersonic Red if I’m being practical.

    If I’m still being practical but want a little more pizzaz I’d take an Acura RDX A spec in Apex Blue Pearl.

    If I’m in practical but also vroom vroom mode I’d go with a Golf R in Lapiz Blue Metallic.

  6. If it has to be my *only* vehicle, then probably something boring that can hold 3 kids and a bunch of stuff, like a loaded Pacifica or a midgrade F150.

    If it just has to be *my* daily driver, then a 1LE equipped Camaro 1SS is about $46,000.

  7. I’m not the biggest fan of Cadillac but did you know you can buy a CT4-V for a hair under $48k CAD? That’s pretty fun!

    Okay sure the sensible play would be a PHEV, especially given my driving habits, but I can’t think of any that isn’t painfully sensible – The Rav4 Prime, for example, is a totally logical and reasonable daily driver and I’d rather get stabbed than own one – so let’s go with something slightly dumb.

  8. “I’d go with a fully-loaded Toyota Prius Prime in the wonderful teal Toyota calls Blue Magnetism and the Moonstone faux-leather interior. I’d deck it out with rubber mats and paint protection film, then happily drive around on mostly electricity bumping tunes through the JBL audio system.”

    A good choice but I would go with with the RAV4 Prime in Supesonic Red. This would be more expensive, but I would be doing my patriotic duty by helping to raise the average price of new cars. Apparently, when it comes to car prices, too much is never enough.

  9. A low-friction Eaton electronic locker? I like where this is going. I just hope it quickly becomes available to the home-garage wrencher. Visions of a home built rwd rally car with on-demand electric awd/4wd to navigate that snowy patch/get back outa that damn ditch.

  10. I just spent my theoretical $48k at the start of the month – 2022 Colorado ZR2 diesel extended cab. With a supplier discount and after tax, title, license is came to a hair over $48k. Very happy with it so far, averaging upwards of 25mpg. Now if diesel prices could come down, that’d be great.

  11. While a little over the $48k and used instead of new…My wife and I just purchased a 2021 Acura RDX PMC edition. 1 of 360 in thermal orange and hand built at the Acura performance manufacturing center alongside the NSX. It will probably be as closed as I ever get to owning an NSX; so I am really looking forward to picking it up this weekend.

  12. “Let’s say you’re given $48,043 tax-free to buy a brand new daily driver.”

    That’s a tough one, because I really, really want an ND Miata, but experience tells me that daily-ing the fun car is a good way to get disillusioned. So as a replacement for my Volt…hmm. There aren’t any new PHEVs/EREVs that give you the driving range of the Volt except the hideous Rav4. Maybe if Mazda ever built the EREV version of that MX-30 thing? 100 miles of electric range with a little rotary backup generator sounds pretty rad. Hopefully I’d have enough left over for a cheap fun car.

  13. Local dealer had a couple id.4s on the lot for like $45k. That’s probably the way to go. Before gas got crazy Pacifica hybrids could be had new for low 40s, but nothing under $50k last I looked, which, considering what I’ve been hearing about recalls and reliability, is shocking

  14. Easy choice bc we did just this in May before the interest hikes.

    Ordered a 2022 Bronco Sport Badlands in January. With incentives and x-plan pricing. We got ours built our way for $37k out the door. Tank of a off roader for under $40k and got 1.9% for 60.

    Same with my Arteon. Last October bought a $45k car for $40k. Put half down in equity and financed the remaining $20k for 0% for 72.

    Car markets is hard to get deals , but I am proof it happens.

  15. If someone gave me forty-eight grand, there’s no way I’m spending it on a car. That much should just about cover the carport/shed/garage extension with rooftop patio that I envision in my head. I’d rather have 2 more covered parking spaces than another car.

  16. “The average new car price hits a record high, Volkswagen gets a new CEO, Eaton’s working on locking differentials for EVs. All this and more in today’s issue of The Morning Dump.”

    Eaton’s is back? What department will they be selling differentials in? I’m guessing not menswear….

  17. I daily a Prius right now (just hit 20k in less than a year since I bought it) and as a result I am 99% onboard with your suggestion. The 1% being the teal. I would take almost any color other than teal, but with 48k burning a hole in my pocket I should have no problem finding one in a color I like.

  18. “Let’s say you’re given $48,043 tax-free to buy a brand new daily driver. You must use it as your primary vehicle year-round for five years. ”

    For US$48,000, I would get a Kia EV6… the RWD ‘Wind’ version. Has more than enough range and space for me. And it beats out the Tesla Model 3 since the EV6 is a hatchback and the 3 isn’t. It also has more EPA-rated range compared to the Tesla for the same money.

  19. I’d go with a 2022 Toyota Corolla Hatchback XSE in Blue Flame with a Black roof, with the 6 speed manual, and anything left over would either pay bills or go into the bank until something cool, cheap, and used that piqued my interest came up for sale.

  20. I’d probably go with a loaded Prius Prime as well. I think the origami Prius is phenomenally ugly, but I could almost get to work on electric, charge on the free chargers at work (And get to park in the front row), then return home on mostly electric.

    I’ve ridden in my sisters non-prime origami Prius and it seems very nice. Much nicer than my ex-wife’s second generation Prius and it’s hard, bland plastic slathered interior or her bloated Prius V she replaced it with when the battery committed Seppuku at year 11.

    The RAV4 Prime would probably be a more sensible choice for overall space, but I just can’t join the crossover uniformity vehicle horde.

  21. Already bought it: Neptune blue 6MT GR86 for under $30k including delivery. With a bike hitch, it’s surprisingly practical. Anything I’d like more would be a lot more than the average, so I’d save or donate the rest.

    1. I believe he said ‘new’ so the CX-9 might be new to you, it isn’t new unless it’s been on a lot for two years. Me? I’m usually pretty imaginative but it’d have to be a F-150 XL Super Crew 4WD with the EcoBoost V-6. Cloth seats, rubber floors. Perfect for a man with 2 hairy Goldens. All for the low low price of 48 grand.

Leave a Reply