On the Dash:
- July ATP reached $49,855, the highest level of 2026, while remaining below the December 2025 record.
- Lower-priced segments are gaining sales share, helping keep overall new-vehicle price growth below historical averages.
- EV and Tesla prices increased in July as incentives declined, pointing to less reliance on discounts.
The average transaction price (ATP) of new vehicles climbed to $49,855 in July, according to Kelley Blue Book. This represents a 1.9% year-over-year increase and a 0.2% increase from June.
Typically, July sees a 0.1% monthly decline in ATP, making this increase particularly noteworthy. Despite this rise, ATP remains below the record high of $50,612 set in December 2025.
Sales performance
New-vehicle sales fell 1.5% year over year and were largely unchanged from June. The sales mix continues to limit broader price inflation, as buyers increasingly favored lower-priced segments in July. Notably, subcompact SUVs, compact cars and midsize cars posted year-over-year sales gains, while demand for full-size pickups, full-size SUVs and several luxury segments softened. This shift toward less expensive vehicles is helping keep industry-wide transaction-price growth below historical averages.
The average new-vehicle manufacturer’s suggested retail price (MSRP) reached $51,621, up 1.9% year over year but down 0.1% from June. The long-term average annual MSRP increase is 3.4%, indicating that current price inflation remains below historical norms. Incentive spending has decreased to 6.4% of ATP, down from 7% in June and 7.3% a year ago. July saw the lowest level of incentives since January, though incentives remained elevated in key segments such as full-size pickups (8.6%), compact SUVs (7.8%), and midsize SUVs (6.8%).
The five largest market segments accounted for 64% of total industry sales. The average transaction prices for these segments were as follows:
- Midsize SUVs at $50,144 (up 2.4% year over year),
- Compact SUVs at $37,745 (up 2.7%)
- Full-size pickups at $66,980 (up 2.8%)
- Subcompact SUVs at $31,052 (up 1.1%)
- Compact cars at $27,904 (up 2.6%).
Inventory and pricing pressure
Cox Automotive Executive Analyst Erin Keating noted that incentive spending is only one factor influencing July’s pricing. With more 2027 model-year vehicles arriving at dealer lots, new models with updated features and higher sticker prices are increasing upward pricing pressure. However, buyers’ continued preference for affordable segments is offsetting some of the upward pressure on ATPs and MSRPs.
The ATP for EVs reached $56,126, up 1.2% from June and 1.6% from a year ago, marking the first year-over-year EV price increase since December 2025. Additionally, EV incentives decreased to $6,626, down 9.1% from June and 24.3% from a year ago, representing 11.8% of EV ATP compared to 15.8% the previous year. Despite the decrease, EV incentives remain well above the industry average of 6.4%.
