Auto Innovators and Ford comment on vehicle pricing trends

In response to the reasoning behind an upcoming Congressional committee hearing, the Alliance for Automotive Innovation (Auto Innovators) refutes the stance that safety technologies are the cause of more expensive vehicles in today’s market.

In September, the average transaction price (ATP) of a new vehicle in the U.S. was $50,080 for the first time, according to estimates by Kelley Blue Book (KBB).

KBB says new vehicle prices have risen steadily for more than a year, with the pace of the increases accelerating in recent months; however, despite higher prices, retail sales continue to maintain a healthy pace.

Auto Innovators’ Editorial Board argues in an Autobody News op-ed that higher vehicle prices are largely based on consumer preference for larger vehicles.

“New-vehicle affordability is a difficult issue to sort out, but improved safety equipment isn’t the reason prices have risen by more than 30% since before the pandemic,” the article states. “While those technologies certainly contribute to rising collision repair costs — and auto insurance premiums by extension — they also offset those costs in aggregate by preventing collisions and mitigating more serious crashes through automatic emergency braking and obstacle avoidance.

“If the senators want to dive into the reasons vehicles have grown so expensive, they might first look to consumers’ purchasing preferences, which for more than a decade have eschewed smaller, more economical sedans in favor of larger and larger pickups, SUVs, and crossovers. And senators also might want to examine whether there is any kind of causal relationship between a 30%-plus rise in vehicle prices since 2019 and the record profits enjoyed by many automakers and dealerships during that period.”

Ford U.S. Sales and Dealer Relations Director Rob Kaffl recently shared that, after considering consumer preferences, the automaker realized “leaning into affordability” is key to help grow its market share.

“While some competitors struggled with high price points, we saw expanded interest in our entry-level trims across our lineup,” he wrote. “Combined sales of our more accessible models — the Maverick XL, Ranger XL, and Bronco Sport Big Bend — climbed 26.4%, completely bucking the industry trend. While affordability played strong in November, we have seen this trend playing throughout the year, with sales of Maverick XL, Ranger XL, and Bronco Sport Big Bend up 12.7%.”

“The real insight is in the trim mix: sales of the entry-level Maverick XL skyrocketed 76.2%,” wrote Kaffl. “We saw the same story with the Ranger, where the base XL trim jumped 48.0%. Even with our larger SUVs, the value is driving volume.”

Erin Keating, Cox Automotive executive analyst, noted in October that the best-selling vehicle in the U.S., a Ford pickup truck that often costs more than $65,000, is one factor contributing to increasing prices. According to Ford, its F-Series is America’s best-selling truck.

“Today’s auto market is being driven by wealthier households who have access to capital, good loan rates, and are propping up the higher end of the market,” she said. “Tariffs have introduced new cost pressure to the business, but the pricing story in September was mostly driven by the healthy mix of EVs and higher-end vehicles pushing the new vehicle ATP into uncharted territory. We’ve been expecting to break through the $50,000 barrier. It was only a matter of time… That’s today’s market, and it is ripe for disruption.”

Kaffl observes that, for consumers, the value of a vehicle is also based on choice at the pump.

“While the industry saw electric vehicle sales slide, our powertrain diversification strategy paid off,” he wrote. “We hit a record 16,301 hybrid sales in November — up 13.6% — proving that when you give customers the option of gas, hybrid, or electric, they reward you with loyalty.”

Ford Blue Advantage certified pre-owned vehicle sales increased by 9% through November, according to the OEM.

S&P Global Mobility reported in May that the number of passenger cars on U.S. roads had dropped below 100 million for the first time since the early 1970s.

“This decline is part of a gradual transition, with car registrations now making up only about 20% of the market for several years,” S&P wrote. “The vehicle fleet continues to demonstrate impressive resilience even as it faces stress from high new and used prices and economic uncertainty, compounded by challenges in the automotive supply chain.”

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