New Honda Prices Increase 10% Over the Last Year
Japanese automaker Honda has one of the most exciting lineups this year. Unfortunately, Honda prices have reached an all-time high. The entire American auto industry is experiencing price hikes. Honda is near the top of the list of brands that have increased in price.
The average Honda price
Back in 2020, the average transaction price of a vehicle made by American Honda was $29,412. This average transaction price includes Acura models manufactured by American Honda. This May, the average transaction price of an American Honda vehicle was $32,564.
While this may not seem like a huge increase, the difference is $3,152 or 10.70%. To put that number into perspective, this is higher than the average car tax rate in America. But what does this price increase mean to consumers?
Do higher Honda prices mean better Honda vehicles?
To say Honda’s impressive lineup is the reason for the increase seems like an excuse. However, whether the brand’s current lineup justifies a price increase is up to the consumer. The fact is, the company currently has some great vehicles on the market.
The 2022 Honda Odyssey is an amazing family minivan. It has enough cool features to entertain the kids and comes with a ton of standard safety features. However, the 2022 Odyssey didn’t change much from its predecessor but retained consumer interest at a slightly higher price.
This is the case for most of the automaker’s models. While the brand hasn’t drastically improved as a whole over the last year, there have been slight new developments and improvements to its lineup. Apart from a shift away from manual transmissions, some styling updates, and more safety features, the brand hasn’t undergone any significant change to warrant such an increase.
What’s the current Honda best-seller?
The Honda CR-V is currently America’s favorite Honda. Despite the increase in average price, sales are up over 10,000 units for the CR-V. Ironically, the CR-V hasn’t undergone many major changes to justify an increase in price or sales.
The newest Honda CR-V uses the same inline four-cylinder engine as the prior model year. The fuel efficiency has just barely improved. The current CR-V is essentially the same vehicle as the previous model year, yet the CR-V is seeing better sales across the board as the brand’s current most popular model.
Explaining the rise in demand and price for Honda vehicles
The automaker’s rise in both demand and price is a real head-scratcher. While raising the average price of its vehicles during this sudden peak in demand makes for great capitalism, it’s hard to explain. It isn’t easy to pinpoint why consumers rally behind the company more than last year despite a significant price bump.
As a matter of fact, Honda has increased their price by over two times the amount that competitors Toyota and Mazda did. The simplest explanation is the state of the American economy. During last year’s second quarter, it seemed as if the world was going to end.
COVID-19 was hitting the U.S. hard, and many Americans began to lose their jobs due to the global pandemic. Now, in the second quarter of 2021, jobs have rebounded, and the country is beginning to reach some semblance of normalcy. Americans have more spending money thanks to an economic recovery, and Honda’s price increase is perfectly timed. Many consumers have retained brand loyalty, and pandemic or no pandemic, they will remain fans of the wildly popular brand.