New Vehicle Prices Grew 3% in 2018

The average transaction price for a new vehicle in the U.S. was $37,577 in December 2018, a 1.3% increase from the same time in 2017, according to a Kelley Blue Book report.

The increase seen in December was a continuation of the gains seen through most of 2018, noted KBB Analyst Tim Fleming.

The average price for a new car in 2018 was $36,000, which represented a 3% increase year-over-year. This rise in average transaction price is particularly noteworthy due to the fact that it comes at a time when interest rates are rising and incentives amounts are plateauing in the U.S.

Factors driving the increase in transaction price are tax reform, low unemployment, and a ramp up in higher-priced Tesla vehicle production, according to Fleming.

The OEMs that saw the biggest rise in average transaction price on a year-over-year basis were Fiat Chrysler and Subaru. The continuing strength of the SUV and truck segment was a main contributor for the success of these two OEMs, according to KBB, as SUV models typically carry a higher price tag than car models, driving up average transaction prices.