If you're looking for a new car, get ready to open your wallet a little wider. According to automotive analytics firm TrueCar.com, supplies are tight and incentives are down, leading to the highest new-car transaction prices in recent memory.
The company, which forecasts automotive pricing trends, announced that the average transaction price for a new vehicle last month was $29,817 – up $215 over April – and a hefty $608 over last May. TrueCar.com says that's the highest average transaction price it has ever seen.
"Average transaction prices reached their highest levels ever recorded," said Jesse Toprak, TrueCar.com's vice president of industry trends and insights. "Even though consumers continued to move towards smaller vehicles, they also chose highly-contented vehicles that are higher priced, keeping transaction prices high."
But there's another reason for the high prices: a lack of incentives. According to TrueCar.com, incentives are at their lowest level in nine years thanks to short supply. This is mostly due to the recent Japanese earthquake, which caused production delays for many automakers. The average new-car incentive last month was just $2,017 – down 13 percent over April, and nearly 30 percent over last year.
Of the major automakers, General Motors posted the highest average transaction price in May 2011, coming in at $33,883, followed by Ford at $32,885. While Toyota's average new-car transaction remained lower at around $26,000, the Japanese automaker posted the highest jump from April to May – mostly due to a significant reduction in incentives. On average, Toyota offered just $877 per vehicle last month, less than half of its April incentives. That's almost $2,000 below Chrysler, which led major automakers in May with an average incentive of $2,706.
So if you're in the market for a new car, don't expect to get a great deal right now – the car companies aren't doing much bargaining. With vehicles still in short supply, you may be lucky just to find exactly what you want.