- The average price of new cars in February was $45,296, compared to an MSRP of $41,637, a new study shows.
- It is estimated that 31% of new vehicles were sold above MSRP last month.
- Here are some tips for consumers to avoid paying a premium for their new car.
If you’re in the market for a new car, be prepared for the possibility of paying more than the sticker price.
The average new car price in February was $45,296, compared to an MSRP of $41,637, according to the iSeeCars report. An estimated 31% of new vehicles were sold above MSRP last month, according to a joint forecast from JD Power and LMC Automotive. That’s down from a high of 48% last July.
On average, new cars are priced 8.8% above the manufacturer’s suggested retail price, or MSRP, according to new research from iSeeCars.com. While that’s down from a peak of 10.2% in mid-2022, the 10 models with the biggest difference are all at least an average of 20% above MSRP.
More from Private Finance:
Consumers lost $8.8 billion to fraud in 2022, FTC says
Here are debts that cannot be discharged in bankruptcy
Some newlyweds may risk a “marriage tax”
“The manufacturers keep raising their prices, and then the dealers raise them again,” said Karl Brauer, executive analyst at iSeeCars.
“The difference between dealer prices and MSRP should continue to decrease as the supply chain improves, although a return to MSRP is not possible for most models this year,” Bauer said.
As for which cars are priced the most above MSRP: Most of them are luxury models, according to iSeeCar’s survey.
First up for the highest premium is the Genesis GV70, whose average price of $56,476 is 27.5% over an MSRP of $44,299.
It’s followed by the Jeep Wrangler, which is priced 23.9% above MSRP ($44,396 vs. $35,827). The Jeep Wrangler Unlimited is the only other non-luxury vehicle in the top 10, with a price of $55,347 21.9% above an MSRP of $45,386.
Of course, not all cars come with a huge price premium.
For example, the Chevrolet Silverado 1500 comes in at an average price of $50,116, which is 1.9% below an MSRP of $51,103. Or the Malibu — also a Chevrolet — is priced at $27,887, just 1.1% above the MSRP of $27,597.
In addition to rising prices for new cars, interest rates have been steadily rising over the past year, making the cost of financing a car more expensive.
The average interest rate on a new car loan is 6.3% for 60 months (five years), according to Statista. That’s up from about 4% a year ago. Monthly payments average about $722, according to the JD Power and LMC Automotive/LMC report. That’s $59 higher than a year ago.
While these prices may seem prohibitive, buyers who take a little time to shop around may be able to find a car whose price is more palatable.
“If you have time to look for deals or go further than your local dealer, you may be able to find a deal,” said Joseph Yoon, consumer insights analyst at Edmunds.
“It’s when you need a car right away that you run into trouble because you can’t tap into patience,” Yoon said.
In addition, it is worth considering more than one model.
“If you can identify multiple models that will meet your needs, you’ll be in a much better position than if you’re fixated on a specific make, model, color and option package,” Brauer said.
“It’s easy to fall in love with a single vehicle, but most consumers, if they’re honest, understand that more than one model will meet their automotive needs,” he added.