New vehicle prices increased for the fourth consecutive month in December, nearly reaching the all-time record set at the end of 2022, Cox Automotive’s Kelley Blue Book reported Jan. 15.
The average purchase price of a new car last month was $49,740, a 1.3% year-over-year increase and a 1.5% gain from November, inching closer to the record-high of $49,958 set in December 2022, according to the report.
Luxury vehicles tend to sell better in December and 2024 was no exception, with increased sales of high-end models boosting the average transaction price for the month, Kelley Blue Book said. Luxury models selling for over $80,000 represented 5.6% of total new car sales in December—a record high.
Consumer sentiment and confidence is also on the rise, Erin Keating, an executive analyst at Cox Automotive, said in a statement. She said consumer optimism benefits sales of luxury vehicles.
Keating said that lower interest rates toward the end of 2024, combined with incentives, also contributed to higher sales volumes and average transaction prices.
Though the average value of incentive packages remained steady from November to December at 8% of a vehicle’s purchase price, they were higher from a year ago, Kelley Blue Book reported. Last month’s average incentive package of $3,958 was 44% higher than in December 2023.
Other vehicle segments, including entry-level luxury cars that tend to experience strong sales in December, had incentive packages as high as 10% of purchase price, Kelley Blue Book said.
Electric vehicles also sold well in December. The average EV transaction price of $55,544 was nearly 1% higher than it was in December 2023. Average EV purchase incentives also remained strong at 14.3% of purchase price, slightly down from November’s rate of 14.7%.
Despite the average transaction price of new cars rising in December, many automakers slashed prices to boost sales. Kelley Blue Book reported that Buick, Volkswagen, Mitsubishi and Stellantis brands Chrysler, Dodge, Jeep and Ram all posted lower average transaction prices last month compared to a year ago.
