Your #1 source for auto industry news and content

New car prices dip in December as buyer’s market returns

New car prices continued to fall in December as auto market conditions shift to favor buyers over sellers

New car prices continued to fall in December as the automotive market remains on track to hit pre-pandemic norms in the near future.

According to Cox Automotive, new vehicle transaction prices in the last weeks of 2023 averaged $48,759, rising slightly after a cooldown in November but falling 2.4% from the year before. The price drops in December, the fourth consecutive month with a year-over-year new car price decline, underlines how rapidly trends in the automotive market have changed course.

One of the key takeaways from December was that incentives and discounts are now back in full force. Incentives accounted for 5.5% of new car prices by the end of 2023, compared to only 2.7% in late 2022. Luxury vehicles saw even higher shares of incentives, which comprised 8% of average transaction prices in the segment.

Electric vehicles were most impacted by falling new car prices, although some of this is due to the current industry landscape. Tesla continues to dominate the EV market, meaning the company’s decisions tend to dictate how the segment performs. New battery-powered vehicle prices declined 17.7% throughout 2023 and averaged $50,798 for the month of December. However, nearly all of this drop is due to Tesla, which has focused on aggressive price cuts for more than a year. While other automakers have been more reticent to adjust MSRPs on electrified models, the Elon Musk-led company has almost single-handedly shifted cost expectations for EV buyers in as little as a year.

Between falling new car prices and incentives, most vehicles are now retailing below their MSRP. “When we look at price strength, the pandemic created a seller’s market in which new vehicles were transacting above manufacturers’ suggested retail price in 2022,” commented Cox Automotive Executive Analyst Michelle Krebs. “That market is all but gone now, as higher inventory has led to higher incentives and discounts…and vehicles are now typically selling for under MSRP. The shift from a seller’s market to a buyer’s market is well underway.”

Stay up to date on exclusive content from CBT News by following us on Facebook, Twitter, Instagram and LinkedIn.

Don’t miss out! Subscribe to our free newsletter to receive all the latest news, insight and trends impacting the automotive industry.

CBT News is part of the JBF Business Media family.

Colin Velez
Colin Velez
Colin Velez is a staff writer/reporter for CBT News. After obtaining his bachelor’s in Communication from Kennesaw State University in 2018, he kicked off his writing career by developing marketing and public relations material for various industries, including travel and fashion. Throughout the next four years, he developed a love for working with journalists and other content creators, and his passion eventually led him to his current position. Today, Colin writes news content and coordinates stories with auto-industry insiders and entrepreneurs throughout the U.S.

Related Articles

Manufacturers In This Article

More Manufacturer News

Latest Articles

From our Publishing Partners