New-Vehicle Prices Decline Year Over Year; Incentive Spending Rises

As of September 2024, Kelley Blue Book reported the average transaction price (ATP) for a new vehicle in the U.S. was $48,397, a slight increase from August but down 0.4% year-over-year. Incentive spending rose for the third month in a row, with September’s incentives averaging $3,522, or 7.3% of the ATP, up from 7.2% in August and much higher than the 4.8% from a year earlier.

Stable Prices with Higher Incentives

New-vehicle ATPs have remained relatively steady throughout 2024. In September, the ATP was only $30 higher than in January, largely due to higher vehicle inventories. U.S. dealerships had 2.84 million vehicles in stock at the start of September, up from 2.61 million in January.

Affordable Vehicles Dominate the Market

Smaller, more affordable vehicles like the Mitsubishi Mirage, Chevrolet Trax, and Toyota Corolla have helped keep average prices down. Popular models like the Toyota RAV4 and Honda CR-V continue to transact below $40,000, further pulling the overall ATP down. Subcompact and compact SUVs, which are lower-priced, are performing better than pricier full-size trucks and mid-size SUVs. Sales of mid-size SUVs, with ATPs above $48,000, dropped by over 5% in 2024.

EV Prices Decline

Electric vehicle (EV) prices were 0.9% lower year-over-year in September, with an average price of $56,351. Tesla’s ATP in September was $58,212, up 13.6% from the previous year, while the Cybertruck's ATP soared to $116,706. Incentives for EVs were significantly higher than for gasoline vehicles, averaging $6,904 (12.3% of the ATP), though they decreased slightly compared to August.

For buyers, prices for new vehicles, especially affordable models and EVs, are becoming more manageable, with growing incentives. Those seeking high-end pickups or larger SUVs may still face steep costs, but the market is showing more flexibility, particularly in smaller vehicle segments.