New Cars, Trucks and SUVS Less Affordable Than Ever

Dealers are charging at or above sticker price for most new cars.

New data released Wednesday by Kelley Blue Book shows that the average new-vehicle transaction price rose to $47,077 in December 2021, a new record.

That’s a 1.7% increase — $808 — from November, and a 14% increase — or $5,742 — from December 2020. The high prices stem from continued strong demand, low vehicle inventories and dealers charging at or above the manufacturer’s suggested retail price (MSRP) for certain vehicles. 

Luxury vehicle sales driving higher prices 

The types of vehicles sold also played a role in raising the average price: 18.4% of last month’s sales came from luxury cars, higher than the 16.9% share they held in June, or the 15.5% share they held in December 2016.

“December typically is the best month for luxury vehicle sales, and 2021 followed that trend in a big way,” said Kayla Reynolds, analyst for Cox Automotive. “The result was another record in overall average transaction prices, completely driven in December by the increase in luxury vehicle sales.”

Tesla Model 3 - RHD
Tesla’s average transaction prices rose more than any other brand from November to December 2021

Luxury car buyers paid an average of $64,864, more than $1,300 above sticker price. A year ago, these buyers were paying more than $3,000 under MSRP.

Other vehicles prices rising as well

Yet it wasn’t just luxury buyers who were paying more. Non-luxury vehicles cost an average of $43,072, down from the record high set in November 2021, but still more than $900 above sticker price, a trend that has been consistent during the past six months

The higher cost is being driven by the shrinking number of sedan sales, which tend to be more affordable than SUVs or trucks. Whereas the average price of a sedan in December 2021 was $42,460; SUVs averaged $46,075; vans $46,908; and trucks $55,049.

All-new F-150
Consumers paid an average of $55,049 for their new truck in December 2021.

Some pricing anomalies arise

The price of all vehicles rose year-over-year, but some prices fell from November to December, with entry-level luxury cars and high-performance cars seeing a 1.7% price decline, and sports car prices falling 1.9%. But electric vehicle prices rose 13.9% from November to December, luxury midsize crossover SUV prices increased 3.3% and luxury subcompact SUV prices increasing 2.5%.

Among brands, Mitsubishi’s prices rose the most year over year, increasing 33.1% from December 2020 to December 2021. Other brands seeing sharp increases include Cadillac at 25%, Infiniti at 20.5%, Chevrolet at 19.6%, Acura at 19.2% and Jeep at 17.9%. 

Month to month, Tesla’s average transaction price rose 16.9%, more than any other brand followed by Cadillac at 11.8%. Other brands saw far smaller price increases, mostly in the low single digits. And some brands’ average transaction price decreased, such as Mazda, down 3.7%; Rivian, down 3.6%; and Jeep down 2.6%.

2022 Mitsubishi Outlander PHEV
Mitusbishi’s prices rose more than any other brand’s year-over-year.

Monthly payments are rising as well

The higher transaction prices are rising the average monthly payment as well. According to, consumers shelled out an average of $636 a month for their new ride in the fourth quarter of 2021 — a new record high. That’s up from $614 in the third quarter of 2021 and $581 in the fourth quarter of 2020. 

Like Cox, Edmunds analysts point to rising luxury vehicle sales for the higher prices. But they also say that buyers are increasingly moving away from leasing, with new vehicle lease penetration fell to 23% in December 2021, down from 31% in December 2019. Meanwhile, dealer-financed purchases are increasing, particularly among luxury brands, which saw financing penetration rising anywhere from 9%-to-19% year over year in the fourth quarter.

Buying a car
Consumers are turning away from leasing, as manufacturer incentives are declining, leading to higher monthly payments.

“Leasing and luxury historically have gone hand in hand, but that trend is drifting away as automakers have less reason to incentivize leasing amid inventory shortages,” said Jessica Caldwell, Edmunds’ executive director of insights.

Buying used brings some relief, but not as much as you’d suspect. 

Used vehicles are expected to break a record, with the average monthly payment for used vehicles climbing to $520, an increase from $500 in the third quarter of 2021 and $437 in the fourth quarter of 2020. 

If you do decide to finance your new ride, be it new or used, be sure to shop around for the best rates.

“If you’re looking to finance your next car purchase, know that interest rates are on your side,” said Ivan Drury, Edmunds’ senior manager of insights. “Make sure to shop around for your auto loan the same way you’d shop around for your vehicle.”