Many buyers in 2021 are paying more for new vehicles compared with last year as incentive spending drops and average transaction prices (ATP) rise, and this trend could increase as the global microchip shortage continues to affect production for many models. Ford cited an average transaction price of $43,600 in April.
This is the result of low inventory and high demand for new vehicles causing automakers to reduce incentives. With fewer vehicles on dealer lots but strong consumer appetites for new cars, automakers are rolling out fewer incentives. Spending fell by nearly 16 percent during the first quarter.
Many auto executives believe that the chip shortage will worsen in the second quarter of 2021, which could further impact inventories and drive prices even higher. In the second half of the year the supply and demand could start to balance out. If you can hold off on your new-vehicle purchase for a few more months, your wallet might thank you.
Read the article at Autoblog.
