Car sales are struggling, and here may be a reason why: Vehicle prices are trending up, a new analysis shows.
The estimated average transaction price for light vehicles in the United States was $34,721 in July 2017. New-car prices have increased by $573 (up 1.7 percent) from July last year, while decreasing slightly (down 0.3 percent) from last month, according to Kelley Blue Book.
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“Once again, the declining sales of cars and the growing popularity of SUVs is driving up the average transaction price,” Tim Fleming, analyst for Kelley Blue Book, said in a release. “Despite modest sales growth for SUVs in a down market, transaction prices in these segments are not particularly strong, with compact SUVs up just 1 percent and mid-size SUVs flat.”
Fleming said cars could fall to just 35 percent of overall sales in July.
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Fiat Chrysler’s average transaction prices rose fastest, nearly 4 percent year-over-year in July 2017. Jeep climbed 4 percent thanks to stronger sales of the Grand Cherokee.
General Motors’ average transaction prices were down 2 percent in July, with Cadillac emerging as the best performing brand, increasing by 5 percent, the report said.
Cadillac benefited from a more SUV-heavy sales mix in July, estimated at two-thirds of the brand’s sales. On the other hand, Chevrolet decreased by 1 percent on average, with the Silverado declining 4 percent year-over-year.