Despite the challenges, automakers are demonstrating resilience by working overtime to clear bloated inventory levels and finish out 2024 strong. According to Kelley Blue Book (KBB) data, the average transaction price (ATP) paid for new vehicles in October was $48,623, and incentives rose to 7.7% of the ATP.
October’s average transaction price results increased slightly from September’s $48,423 ATP and 1.7% in October year-over-year. Due to increased inventory, new vehicle prices in the U.S. have stabilized at around $48,500 for over a year.
Additionally, new-vehicle sales incentives increased by 7.7% of ATP in October, up from 7.2% in September, a 6% increase month over month. Compared to last year, incentives have increased overall by 60%, helping automakers remain competitive as they strive to hit their 2024 sales targets.
In October, eight mainstream automakers had average incentive prices above 10% of ATP as they worked to move metal. Ram notably had one of the highest incentive packages in the industry. In contrast, Porsche, Toyota, Land Rover, and Cadillac had the least.
In the U.S. market, full-size pickups, compact SUVs, and Midsize SUVs make up the top three vehicle segments, accounting for more than 45% of all vehicle sales. The trend for average transaction prices varied across all key vehicle segments:
- Full-size pickups ATP declined slightly by 1.3% to $65,389.
- Compact SUV ATP was $36,769, approximately 30% below the industry average, with incentives at 9.4%.
- Midsize SUV ATP averaged around $48,977, close to the industry average, with incentive landing at 8%.
In October, electric vehicle (EV) ATPs were $56,902, a minor decrease from September but 0.9% higher year over year. Incentives for EVs rose significantly by 13.7% of ATP, up from 11.6% in September, making EVs more affordable for consumers.
Moreover, the ATP for Tesla, arguably the EV industry leader, dropped to $56,705 due to lower Cybertruck prices, which fell below $100,000 to $98,495. Tesla’s sales have declined, dropping to 4,254, the weakest results since June.
The growth of ATP and the increase in incentives across the board indicate a competitive market. As automakers make their final efforts to finish 2024 strong, dealers and consumers should anticipate that manufacturers will maintain or even increase their seasonal incentives to attract potential buyers.
