“We Lowered the Price of Everything”: The Hard Truth About Vehicle Prices Under President Biden

Former President Joe Biden spoke to a group this past week. The audience and the main point of his speech were unrelated to automobiles, but roughly halfway through his speech, the discussion turned to the economy. President Biden said, 

We lowered the cost of everything. From healthcare to the cost of college, junk fees, airline tickets, and credit cards.

We’re not experts in the economy, but according to educationdata.org, the average cost of a college education, both private and public, rose each year during President Biden's term. It's also easy to find charts showing healthcare costs went straight up during President Biden's term. 

We will focus our attention on vehicles, but it is very easy to find data that calls BS on President Biden’s statements regarding consumer costs during his term. 

The statement “We lowered the cost of everything…” includes the consumer product that costs most Americans the most in their budgets: vehicles. That statement is factually false. Let’s examine the price of vehicles under President Biden.

You can watch the video of President Biden's speech and find the comments we are referring to at the 10:08 timestamp.

Average Transaction Price of Automobiles
The way that the automotive business tracks price trends in the auto industry is what’s called “average transaction price.” We usually just say “ATP.” This is not a measurement of MSRP changes, but what consumers actually pay, on average, for vehicles. There is a total ATP and also ATPs for a long list of vehicle segments. This is helpful, since the price of luxury trucks and high-performance luxury cars has very little to do with the price of compact crossovers to those shopping for a RAV4 or a CR-V. There are also ATPs for things like “EVs” and every brand has an average ATP as well.

ATP is very useful for observing trends. One can argue how ATP should be created or if MSRP and incentives are a better gauge of spot prices, but as long as one calculates ATP the same way, month after month, year after year, decade after decade, it is a very valuable tool to see how vehicle prices rise and also fall.

Cox Automotive has the very best ATP data. It is an open and available source, meaning you don’t have to be an industry insider or pay to see the Cox Automotive ATP data. The group publishes updates every month, and sometimes, they do focus stories in addition to the overall discussion, for example, about electric vehicle ATPs in the context of how that type of powertrain is trending.

Here is a chart from Cox Automotive that shows the ATP of all vehicles over time. We have inserted the red arrows to show the time span of President Biden’s time in office as President.

As you can see, the ATP of automobiles rose alarmingly during President Biden’s term. Prices didn’t decline, they shot straight up. In fact, ATPs at two points during President Biden’s term are still the historic highs, even though President Trump has not been in office for about 10 months. It is pretty obvious that President Biden is conveniently leaving out the single highest cost consumer product that Americans purchase when he says that “We lowered the price of everything…”

Vehicle Affordability During President Biden’s Term
Another metric used by economists and those who track vehicle prices in the auto industry is the Cox Automotive/Moody’s Analytics Vehicle Affordability Index. This index is very helpful because it rolls in the average price of new vehicles, plus the cost of financing, and changes to the average earnings of Americans into one graph. Instead of the total price of a new car, this index tracks the number of weeks of income needed to purchase the average new vehicle.

As you can see, the affordability of new cars was much worse during President Biden’s term, well outside of the historical norms, and vehicles have again returned to a much more affordable level under President Trump.

Used Car Prices Under President Biden
Not all Americans buy a new car. Many of us instead opt to sidestep the steep depreciation hit of a new car and instead buy used. Cox Automotive also tracks used car costs. Here’s a helpful graph to show the trends in used car prices. We’ve taken the liberty of inserting the arrows again to make President Biden’s term easy to see. Like with new car prices, used car prices spiked under President Biden and dropped as he left office.

Conclusion - Vehicle Prices Leapt During President Biden's Term
You can look at the data and draw your own conclusions about vehicle prices in America. We won’t offer any opinions in this story whatsoever, preferring to stick strictly to the facts. Were there extenuating circumstances that caused the prices of vehicles to go up during President Biden’s term? If so, he didn’t offer any excuses in his speech. Tell us in the comments below if you think President Biden’s statement is accurate or false as it relates to the single most expensive consumer product Americans buy. 

The charts in this story are from Cox Automotive and are copied as Cox printed them. We have only added the red text and arrows. 

John Goreham is the Vice President of the New England Motor Press Association and an expert vehicle tester. John completed an engineering program with a focus on electric vehicles, followed by two decades of work in high-tech, biopharma, and the automotive supply chain before becoming a news contributor. He is a member of the Society of Automotive Engineers (SAE int). In addition to his fourteen years of work at Torque News, John has published thousands of articles and reviews at American news outlets. He is known for offering unfiltered opinions on vehicle topics. You can connect with John on LinkedIn and follow his work on his personal X channel or on our X channel. John employs grammar and punctuation software when proofreading, and he sometimes uses image generation tools.