According to an analysis by Kelley Blue Book, a subsidiary of Cox Automotive, the average transaction price (ATP) for new vehicles in the United States decreased by 2.6% in January 2024. This is a 3.5% drop from the average transaction price recorded in January 2023.
As inventory levels normalize, discounts made up 5.7% of the average purchase in January, compared to 2.8% a year ago. However, this trend is not uniform across all market segments, with luxury cars and full-size pickup trucks commanding the highest discounts.
While some brands still have low inventory numbers, most car dealers have an adequate supply of new cars. Consumers are displaying a heightened inclination toward high-end vehicles, with 19.8% of purchases in January coming from luxury brands. The average cost of a luxury brand car declined to $60,978, marking the lowest ATP since the summer of 2021.
In January, car manufacturers increased the average sales incentive for luxury vehicles to 6.2% of ATP, which represents a 123% increase compared to the incentive level set in January 2023, despite the decrease in the cost of these cars.
Cox Automotive and Kelley Blue Book have also reported that the average price of a new EV in January was $55,353, a 10.8% decrease from the previous year. In December 2023, the ATP was $51,950. Then, in January 2024, it increased by 3.2% to reach $53,611, which marked the lowest ATP in a year.
Mark Strand, Cox Automotive’s Senior Director of Economic and Industry Insights, emphasized the consistent narrative of significant EV price drops, especially led by Tesla. He noted the need for continuous pricing model updates due to the frequent launch of new EVs.
Despite stricter federal EV incentives, many EV models have seen a threefold increase in incentives over the past year. This comes as manufacturers choose to independently match the $7,500 tax credit despite reduced qualification options.
