Ending Soon! Save 33% on All Access

In March, Cars Sold Below Sticker Price for First Time in 2 Years. Will Prices Continue to Drop? The average amount that Americans spent on a new car last month was $171 below the average sticker price.

By Madeline Garfinkle

Opinions expressed by Entrepreneur contributors are their own.

Marko Geber | Getty Images

The pandemic changed the consumer shopping experience for nearly everything, and cars were no exception. Throughout 2020 and 2021, supply chain constraints and increased demand caused an uptick in the price of vehicles, with the average cost of new cars increasing by $2,140 in 2020 and then $3,420 in 2021, according to Statista.

However, a new report found that the upward trend may finally be over.

In March, new vehicles sold below their sticker price for the first time in 20 months, according to data from Kelly Blue Book, and consumers paid an average of $171 less than the average sticker for new cars. A year ago, consumers were paying approximately $1,000 above sticker price.

"The latest transaction data from March reveals new-vehicle prices continued a downward trend through the first quarter of 2023," Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive, said in the report. "Both luxury and non-luxury prices were down month over month. We've been anticipating transaction price declines, as inventory has been steadily improving and choice has expanded."

Related: Porsche Listed a $148,000 Car for $18,000 By Mistake — Here's What Happened (No, They Didn't Cancel All of the Reservations).

However, while buyers of both luxury and non-luxury cars paid less on average as compared to the month prior, buyers of electric vehicles paid about $313 more in March than in February.

"March's upward movement of EV average transaction price was a bit of a surprise, since Tesla, the automaker with the largest share of EV sales, has cut prices three times in recent months," the report noted. "However, EV sales from Mercedes, Rivian, Lucid and other brands have increased at the same time, offsetting lower-priced Tesla products."

The market for electric vehicles has increased over the past decade and is expected to keep rising, according to the Bureau of Labor Statistics. In 2011, electric vehicle sales accounted for only 0.2% of the market as compared to 4.6% in 2021, per the data. The report predicts that electric vehicle sales could account for up to 40% of all car purchases in the U.S. by 2030.

Related: Tesla Reports Record Deliveries for the First Quarter of 2023 Following Price Cuts

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

TikTok Reportedly Laid Off a 'Large Percentage' of Employees as the App's Fate in the U.S. Remains Unclear

Laid-off TikTok employees were notified Wednesday night through Thursday morning.

Business News

Four Seasons Orlando Responds to Viral TikTok: 'There's Something Here For All Ages'

The video has amassed over 45.4 million views on TikTok.

Business News

More People Are Exploring Entrepreneurship Because of This Unexpected Reason

More new business applications were filed in 2023 than in any other year so far.

Personal Finance

This Investment Bundle Includes a Trading Course and Stock Screener Tool for $150

Approach the stock market with an increased understanding.

Growing a Business

5 Strategies to Know As You Scale Your Business

Scaling a service-based company requires a comprehensive approach that goes beyond simply increasing revenue. It requires careful planning, strategic decision-making and a deep understanding of market dynamics.