New Car Prices Remain Elevated despite the Rise in Interest Rates and Fears of Overproduction

In June 2023, the average price of a new car rose to $46,265, 5.8% over Jun-22 and 8.5% above MSRP.  The strong demand for new vehicles and inflation has driven manufacturers to increase average MSRP by over 10% in the last year.  Despite the seemingly strong new vehicle market, UBS expects car production to exceed sales by 5 million vehicles, leading to price cuts near the end of the year.

Sources: UBS, iseecars.com