According to the latest report from Cox Automotive’s Kelley Blue Book, new vehicle prices declined in January, with the average transaction price (ATP) falling 2.2% from December to $48,641. However, prices remain 1.3% higher year over year, compared to $48,031 in January 2023.
Erin Keating, Executive Analyst at Cox Automotive, noted that new vehicle sales and prices declined in January after a strong December, which was anticipated.
The price drop was primarily attributed to a sharp decline in luxury vehicle sales, which typically peak in December before slowing in the new year. For example, brands like Audi, BMW, Cadillac, and Lexus posted major sales declines in January, in some cases more than 50%, reducing the overall ATP.
In addition to the drop in luxury vehicle sales, incentive spending also declined from the previous month. It fell from 8.0% of ATP in December to 7.2% in January, averaging $3,486 per vehicle. While it’s lower than December’s figures, this represents a noteworthy increase of 29.2% compared to January 2023, when incentives made up just 5.6% of ATP.
On a broader scale, total new vehicle sales volume rose by 5.1% year over year. However, it’s important to note that there was a more than 25% drop in sales compared to December’s unexpectedly strong performance. Furthermore, inventory levels dipped below 3 million units for the first time since late October, indicating a tightening market.
Jeep, in particular, saw a significant ATP decline, dropping nearly 9% year over year to around $49,000—the lowest in more than three years—as the brand continues to adjust pricing strategies.
Meanwhile, electric vehicle prices remained stable in January, with an ATP of $55,614—up nearly 1% from December but down 1.4% year over year. Incentive spending on EVs dropped 3.1% from the previous month but was up 48.6% year over year. Tesla’s average transaction price rose 4.5% year over year to $55,380, with the Model Y and Model 3 seeing increases of 2.2% and 6.2%, respectively. However, Cybertruck prices dropped 6.5% year over year to just under $98,000.
