Edmunds: Vehicle prices remain high this Labor Day weekend

If this were a normal year, Labor Day would traditionally kick off the start of end-of-model-year vehicle clearance sales. Consumers can often find good deals as dealerships are eager to sell their remaining inventory to make room for next year’s models. But this hasn’t been a normal year in the car business.

Most automakers could not build as many vehicles as planned because of a lack of semiconductor chips, which are essential components of a modern vehicle. New vehicle inventory is a third of where it would normally be at this time of year. As a result, car shoppers on Labor Day weekend will face higher prices and a limited selection whether they are shopping for new or used.

“Inventory won’t likely be back to normal levels until next year — if they ever do at all,” said Jessica Caldwell, executive director of insights at Edmunds. “It seems as if automakers are rethinking their production and inventory strategies given they have sold fewer vehicles but at higher prices, so inventory may look different in the near future.”

Average transaction prices continue to be at record highs, according to Edmunds data. In June, the average transaction price for a new vehicle was $42,331, an increase of 8.6% from last year.

“The lack of new car inventory has created a lot of pressure on the used market as consumers are seeking out less expensive options,” Caldwell said. As a result, the average used transaction price in June was $26,457, up 27% from a year ago.

It’s a tough time to buy a car. But the good news is that we’ve combed through the latest transaction data to find five new vehicles with a combination of high discounts and above-average inventory to make your search easier. We’ve organized them in order of percentage off the manufacturer’s suggested retail price.

EXTRA-SMALL SUV: 2021 JEEP RENEGADE

Average MSRP: $29,671; average discount: $4,108 (14% discount)

What our editors say about the Renegade: “Every trim, and especially the rough-and-tumble Trailhawk model, looks and feels cool. It’s shaped like a small-scale version of the Wrangler, with exaggerated lines and features that give it both a cute and rugged appearance. While it’s not especially fun to drive in most trims, the Trailhawk offers a decent amount of off-road capability that nothing else in the class can match.”

EXTRA-SMALL SUV: 2021 BUICK ENCORE GX

Average MSRP: $29,833; average discount: $3,049 (10% discount)

What our editors say about the Encore GX: “The Encore GX is anonymously styled, but the Sport Touring package gives buyers the ability to have their GX stand out from the crowd a bit. The Encore GX also wins points for its handsome interior and wide variety of safety and technology features. The turbocharged three-cylinder gives it some personality, especially with the ample low-end torque making you feel like it’s faster than it actually is.”