Big incentives are enticing a growing number of US new car buyers into better equipped and higher priced models, according to CNW Marketing Research.
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In April, the average sticker price of vehicles sold to consumers topped $US28,000 for the first time in history, up nearly 9% from a year ago. Even after massive incentives, the price of vehicles climbed more than 4%.
Industry wide, however, sticker prices for comparable vehicles are up only 1.1% indicating a richer mix of models is being bought.
“The vast majority of new-car buyers are using a significant part of record incentives as a way to move up a notch or two in the vehicle they select,” said CNW president Art Spinella. “For every $1,000 worth of incentives, consumers are spending at least a third on upgrades ranging from leather seats to custom wheels. The rest is being used as additional down payment in order to lower monthly payments.”
One important and disturbing trend has been reversing course, however. For nearly a decade prior to June of 2000, the inflation-adjusted income of new-car buyers was in the $60,000 to $63,000 range. This rose dramatically as the US economy wobbled and left the motor industry selling to higher income consumers. The average income ballooned to more than $75,000 in October of last year.
That figure subsided to slightly over $69,000 in April, but remains 12% higher than a year ago.
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