According to Kelley Blue Book data, the average transaction price (ATP) for new vehicles in the U.S. in September reached $48,397, a slight increase from August but a 0.4% drop year-over-year. While prices remain steady, a significant factor holding ATPs in check is the continued rise in incentive spending, which has increased for the third consecutive month. In September, incentives averaged 7.3% of the ATP ($3,522), up from 7.2% in August and significantly higher than the 4.8% recorded in 2023.
Higher inventory levels across U.S. dealerships are putting downward pressure on prices. By the start of September, the new vehicle supply was 2.84 million units, a notable increase from the 2.61 million in January and the 2.07 million a year prior. Cox Automotive reports that the mix of smaller, more affordable vehicles, including models like the Chevrolet Trax, Toyota Corolla, and Hyundai Elantra, has contributed to the steady ATP. These vehicles are transacting well below the national average, which has helped moderate overall prices.
In contrast, full-size pickup truck sales have declined in 2024, with their higher average price of over $65,000 pushing ATPs down as the segment shrinks. Mid-size SUVs have also seen a sales decrease of more than 5% through Q3, further influencing industry-wide ATPs.
Moreover, EV transaction prices followed the broader industry trend of price moderation, with September’s ATP for EVs at $56,351, down 0.9% year-over-year. EVs continue to carry a premium, though the gap is narrowing. In September, EV ATPs were about 16% higher than the overall market average, the smallest difference seen in 2024.
Incentive spending on EVs also remains robust, averaging $6,904 (12.3% of ATP) in September, well above the industry average. However, incentives for EVs dipped slightly compared to August, which had marked the highest level of EV incentives for the year.
Tesla, the dominant player in the EV market, saw its average transaction price rise by 13.6% year-over-year to $58,212 in September. However, Tesla’s core models, the Model 3 and Model Y, experienced price drops from the previous month. Meanwhile, the ATP for the new Cybertruck surged to $116,706 in September, the highest since its launch, with more than 5,000 units sold.
Despite economic uncertainties and fluctuating market conditions, the steady vehicle prices and continued incentives signal a market in transition, with consumers opting for smaller, more affordable vehicles and manufacturers pushing to capture more EV market share.
