New Car Shoppers Finally Get a Break

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The Balance

That’s how much prices for new motor vehicles rose in January, a distinct break from months of sharp increases and a sign that car shoppers could start to see some relief on the lot. 

No change in price is a major departure from the nine straight months when the cost of new vehicles rose, in most cases at least 1%, thanks to a computer ship shortage that’s slowed down manufacturing. The cumulative impact means new vehicles are 12.2% more expensive than a year ago.

The relieving signal for new vehicles was an outlier in the Bureau of Labor Statistics’ report on the Consumer Price Index Thursday, which showed that costs continued to rise for most items, pushing overall inflation in January to 7.5%, the highest since 1982. Prices for new trucks rose a slight 0.2%, while those for new cars fell an equal amount, canceling each other out in the bureau’s report.  

Kelley Blue Book, an auto industry data company, noted a similar trend this week—their data showed a 1.8% decrease in the average price people paid for new vehicles in January, to $46,404, mainly because fewer luxury vehicles had sold. 

"The surge in new-car prices appears to have peaked," Michelle Krebs, executive analyst for Cox Automotive, said in a statement. "We expect prices to remain high for the foreseeable future, but car shoppers can rest assured we don't anticipate any more record highs."

The flattening car prices could be a sign that manufacturers are finally starting to get the semiconductor chips they need, Edward Moya, senior market analyst at OANDA, wrote in a commentary. 

Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.

Article Sources

  1. BLS Beta Labs. "BLS Data Viewer." Accessed Feb. 10, 2022.