A report shows that under-$30,000 new cars and late-model affordable used vehicles are becoming ...
[+] harder to find. A year ago, we reported that the sub-$20,000 vehicle, whether new or used, was fast becoming extinct, with only three new models remaining with base prices below that mark. That number is expected to drop to zero shortly, with the Mitsubishi Mirage and G4 and the Nissan Versa expected to be dropped from their respective lines moving forward.
On top of that, a recent report suggests sub-$30,000 vehicles may likewise be headed to the salvage yard in the not-too-distant future. The latest industry Insights Report conducted by Cars Commerce shows a marked increase in models on dealers’ lots that are breaking the $30K barrier, as the average transaction price for all new vehicles stands at around $49,000. According to Rebecca Lindland, the company’s senior director of industry data and insights, even with production having bounced back from pandemic-era shortages, dealers are instead concentrating their efforts on selling higher-profit mid- and high-priced models, stocking about two-thirds fewer new vehicles priced under $30,000 today than they were back in July 2019.
Perhaps not surprisingly, automakers are helping salve rising prices with more-generous cash rebates, cut-rate financing and discounted leasing offers. Kelly Blue Book reports that incentives recently rose to around 7.0% of the average transaction price, which is the highest level recorded in over three years and is around 60% higher than it was a year ago.
Cash-back offers as rich as $5,000-$10,000 are becoming relatively common among slower-selling models, especially full-electric vehicles, where incentives are amounting to an average 12% of their transaction prices. On the pre-owned side of a dealer’s lot things are a bit brighter for consumers, with used-car prices having decreased by 6% over the past year, and dealers’ inventories of sub-$30,000 models rising by 9% as the market settles back to pre-COVID supply and demand forces. At that, those looking for lower-mileage 1-3-year-old used cars are finding slimmer pickings, with models priced between $30,000 and $49,000 becoming 15% scarcer in the past 12 months.
Slumping lease rates during the pandemic are apparently coming back to manifest a shortage of late-model used vehicles. And in the over-$50,000 used vehicle segment, Lindland notes that the average transaction price is now $77,000, which is higher than the typical going price for a brand new luxury model. Fed Cuts Interest Rates For First Time In 4 Years: Here’s What It Means For You iOS 18: Apple Just Gave iPhone Users 33 Reasons To Update Now Samsung Rolls Out Major Feature Update To Millions Of Galaxy Phones In addition, the Cars Commerce report notes that the shrinking universe of used vehicles going for less than $20,000 now have an average 93,000 miles on their odometers.
That represents a one-third increase over the past five years, likely a byproduct of owners holding onto their rides for longer periods due to ongoing affordability issues with both new and used models. What’s more, a recent study of used-vehicle prices conducted by the automotive marketplace iSeeCars.com found that some models that are in particularly high demand are actually increasing in value.
These include the Porsche 718 Cayman that saw a 21.4% price boost over the past year, the Volvo S90 (+16.3%), Chevrolet Camaro (+8.
4%), BMW 2 Series (+6.6%) and the Mitsubishi Outlander Plug-In Hybrid (6.4%), among others.
On the other side of the ledger, used EV prices have been falling the most rapidly among all market segments, according to iSeeCars, at what amounts to an average 25% drop over the past year. The biggest losers in this regard include the Tesla Model 3, losing 24.8% of its value, followed by the Kia Niro EV (-21.
0%), Nissan Leaf(-20.2%), the Chevrolet Bolt EV (-18.3%) and the Tesla Model S (-13,4%).
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