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May 31, 2024 by Adam Malik
Image credit: Depositphotos.com
After a quarter of downward movement, new vehicle prices in the U.S. headed up in April.
In March 2024, new-vehicle transaction prices in pretty much held steady at an average of $47,218, a slight 1% decrease from February, according to Kelley Blue Book. Compared to March 2023, this marks another 1% drop, and a 5.4% decline from the peak in December 2022.
Incentive spending by manufacturers increased significantly, up 11% to an average of $3,121, constituting 6.6% of the average transaction price. This marks the highest level of incentives since May 2021. Luxury vehicle incentives were notably higher, averaging 7.5% of ATP, while non-luxury incentives were at 6.4%. However, affordable vehicle options remain limited, with only eight models priced below $25,000 and just two under $20,000.
“A healthy 15.5 million new car SAAR is welcome as consumers enjoy lower prices thanks to significant supply recovery and a doubling of incentive spend compared to last March,” said Erin Keating, executive analyst for Cox Automotive. “However, it bears repeating that historically high interest rates and associated inflation combined with an ever-widening deficit of available vehicles at lower price points will continue to challenge affordability for most car buyers.”
But April 2024 saw a reversal in the downward price trend, with ATPs rising by 2.2% to $48,510 — the highest since December 2023. Despite this monthly increase, year-over-year prices were down 0.5%. Sales volume decreased month-over-month, but the seasonally adjusted annual rate (SAAR) of sales was 15.7 million, slightly higher than in March and flat compared to the previous year. New-vehicle inventory levels were up 46% year-over-year but mostly unchanged from March.
Keating noted that the price increase in April likely reflects a pullback on incentives compared to the end of Q1.
“Affordability challenges continue to lurk, and as inventory builds, we can expect to see incentives grow through the remainder of 2024 to maintain sales momentum,” Keating said during April’s update.
Luxury vehicles significantly influenced the overall increase in ATPs. Luxury brand sales accounted for 18.4% of new-vehicle sales in April, with prices rising by 2.4% from March. Tesla, the leader in the luxury market, saw a 5.7% increase in ATPs, while Volvo posted above-average increases. Despite these gains, luxury prices were down 2.1% year-over-year.
Non-luxury vehicle prices also saw an increase in April, rising to $44,989 from $44,078 in March, a 2.1% increase. Year-over-year, non-luxury vehicle prices were nearly flat, down by just 0.2%. Pickup trucks significantly influenced the increase in non-luxury vehicle prices, with full-size pickup truck prices up 2.8% year-over-year to $66,631.
New prices move up after trending lower
Image credit: Depositphotos.com
After a quarter of downward movement, new vehicle prices in the U.S. headed up in April.
In March 2024, new-vehicle transaction prices in pretty much held steady at an average of $47,218, a slight 1% decrease from February, according to Kelley Blue Book. Compared to March 2023, this marks another 1% drop, and a 5.4% decline from the peak in December 2022.
Incentive spending by manufacturers increased significantly, up 11% to an average of $3,121, constituting 6.6% of the average transaction price. This marks the highest level of incentives since May 2021. Luxury vehicle incentives were notably higher, averaging 7.5% of ATP, while non-luxury incentives were at 6.4%. However, affordable vehicle options remain limited, with only eight models priced below $25,000 and just two under $20,000.
“A healthy 15.5 million new car SAAR is welcome as consumers enjoy lower prices thanks to significant supply recovery and a doubling of incentive spend compared to last March,” said Erin Keating, executive analyst for Cox Automotive. “However, it bears repeating that historically high interest rates and associated inflation combined with an ever-widening deficit of available vehicles at lower price points will continue to challenge affordability for most car buyers.”
But April 2024 saw a reversal in the downward price trend, with ATPs rising by 2.2% to $48,510 — the highest since December 2023. Despite this monthly increase, year-over-year prices were down 0.5%. Sales volume decreased month-over-month, but the seasonally adjusted annual rate (SAAR) of sales was 15.7 million, slightly higher than in March and flat compared to the previous year. New-vehicle inventory levels were up 46% year-over-year but mostly unchanged from March.
Keating noted that the price increase in April likely reflects a pullback on incentives compared to the end of Q1.
“Affordability challenges continue to lurk, and as inventory builds, we can expect to see incentives grow through the remainder of 2024 to maintain sales momentum,” Keating said during April’s update.
Luxury vehicles significantly influenced the overall increase in ATPs. Luxury brand sales accounted for 18.4% of new-vehicle sales in April, with prices rising by 2.4% from March. Tesla, the leader in the luxury market, saw a 5.7% increase in ATPs, while Volvo posted above-average increases. Despite these gains, luxury prices were down 2.1% year-over-year.
Non-luxury vehicle prices also saw an increase in April, rising to $44,989 from $44,078 in March, a 2.1% increase. Year-over-year, non-luxury vehicle prices were nearly flat, down by just 0.2%. Pickup trucks significantly influenced the increase in non-luxury vehicle prices, with full-size pickup truck prices up 2.8% year-over-year to $66,631.
