On the Dash:
- July new-vehicle prices averaged $48,841, with incentives hitting a 2025 high at 7.3% of ATP.
- EV sales jumped 20% in July as buyers rushed to use incentives before the expiration on Sept. 30.
- Luxury prices rose sharply while Jeep posted a 12% year-over-year drop.
New-vehicle prices in July were virtually unchanged from June as automakers leaned on higher incentives to keep sales flowing, according to Kelley Blue Book estimates. The average transaction price (ATP) for a new vehicle was $48,841, down 0.1% from June but up 1.5% year over year, the largest annual gain so far in 2025. Incentives averaged 7.3% of ATP, or $3,553, marking the highest level of the year and exceeding July 2024’s average.
Electric vehicles saw even greater momentum, with sales surging ahead of the expiration of key government-backed incentives. July EV ATPs fell 2.2% from June to $55,689 and were down 4.2% year over year. Automakers and dealers boosted EV incentives to an average of 17.5% of ATP, a record high in the modern EV market, as they sought to clear inventory. Tesla led the price decline, with its ATP dropping 2.4% month over month and 9.1% from a year earlier, driven by stronger sales of lower-priced Model 3 and Model Y vehicles.
Cox Automotive estimates July EV sales topped 130,000 units, making it the second-best month on record and up 20% from last year. Analysts expect Q3 could be the strongest quarter yet for EV sales as consumers rush to purchase before incentives expire.
In the luxury segment, several brands recorded significant year-over-year ATP gains. Cadillac, Land Rover and Infiniti posted double-digit increases, while Mercedes, Porsche and Lincoln saw growth more than twice the industry average. Audi, BMW and Genesis rose closer to the market norm, while Acura bucked the trend with lower prices. Rising costs for imported models and strategic product shifts were key factors in the luxury price climb.
Among volume brands, Jeep posted the sharpest decline, with ATPs falling nearly 12% to $47,275, the lowest since late 2021, despite higher incentives and a 27% jump in sales from a year earlier.
Manufacturer’s suggested retail prices (MSRPs) fell 0.3% from June but rose 2.4% year over year, indicating manufacturer costs continue to rise faster than retail transaction prices. While still below the long-term average of 3.5% annual growth, the July figure marked the largest MSRP increase of 2025.
