Automotive industry researcher reported that its price index for new vehicles decreased 0.8% from 99.4 in May to 98.6 in June.

Similar in purpose to the consumer price index, the Edmunds price index measures the average changes in retail prices for new vehicles with fixed options over time in order to analyse trends.

Edmunds believes that the decrease was primarily the result of the petrol price hike, which inhibited demand for the large truck, minivan, and large SUV segments; their indices fell 3.0%, 2.1% and 1.5% respectively. Compact SUVs experienced the largest increase, 1.1%, followed by luxury sport cars at 1.0%.

“Larger vehicles lost sales momentum when consumers saw gas prices climb, and the interest rate hike seems to be having a psychological effect of its own,” said Jane Liu, vice president of data analysis for

“Consumers are responding to high-profile financial trends when making car shopping decisions despite the fact that both these events have minimal financial implication for most people. However, if interest rates continue to rise, subvented APRs and leases will become much more expensive for automakers. In that event, it will become even more important that they optimise the cost-effectiveness of their incentives programmes.”

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In June 2004, the sales-weighted average new vehicle sticker price was $US29,220, $35 lower than in May 2004 but $634 higher than in June 2003. The sales-weighted average net price was $24,501 – 16.2% below MSRP, the greatest difference since August 2003. Large SUVs currently have the largest discount of any category at 21.8%, while luxury sport cars have the smallest at 6.6%.