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New Vehicle Transaction Prices, Discounts Continue to Increase

August 16, 2004

SANTA MONICA, Calif. — The Edmunds Price Index for new vehicles increased slightly, from 98.6 in June to 98.7 in July, reported Edmunds.com, while the average discount from MSRP was a record $4,982, or 16.8 percent.

In July, the sales-weighted average new vehicle sticker price was $29,746, $525 higher than in June 2004 and $756 higher than in July 2003. The sales-weighted average net price, which is transaction price less incentives, was $24,764, $263 higher than in June 2004 and $585 higher than in July 2003.

"New models are being introduced at higher price points, but the competitiveness of the market is dramatically pushing down net prices, resulting in a record average discount," said Dr. Jane Liu, vice president of data analysis for Edmunds.com.

In July, minivans saw the largest increase in their price index at 1.7 percent, followed by large cars at 1.1 percent and compact cars at 0.6 percent.

"Recent sales have been particularly strong for minivans and compact cars, even considering that summer is typically their high-volume sales season," said Liu.

All SUV segments — including luxury SUVs, which traditionally have been immune to the issues affecting SUV popularity — experienced record-setting discounts in July.

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