New-vehicle incentives and retail prices both increased in May compared with a year ago, according to actual retail transaction data from the Power Information Network (PIN), LLC, an affiliate of J.D. Power and Associates.
The average new-vehicle incentive amount in May (including all incentive categories) was $2,879 — up almost 7 percent vs. April, and up 2 percent compared with May 2003. Despite these increases, new-vehicle retail prices (less rebates) rose as well.
The average price consumers paid for a new vehicle in May was $25,651 — up from $25,415 in May 2003. The average price of $25,651 is based on new cars selling at an average of $23,103 and new trucks at $27,621 — each up 0.5 percent from May 2003.
“Incentives are certainly robust and continue to escalate, but the manufacturers are managing to slightly increase their actual prices,” said Tom Libby, director of industry analysis at PIN.” Used-vehicle prices rose more than new-vehicle prices in May.
Increased prices indicate a strengthening of the used-vehicle market. Used-vehicle prices increased to $15,607 in May — up 3.6 percent year-over-year. Prices of used light trucks climbed 5.3 percent, and used cars increased 2.5 percent.