Dive Brief:
- The average transaction price of new vehicles has remained relatively unchanged from a year ago despite inflation and rising interest rates, according to a Sept. 12 report from Cox Automotive.
- Overall, the average transaction price of new vehicles is down 2.4% or $1,212 from the start of the year, the largest decrease in the past decade, per the report. That’s mainly due to a 19% year-over-year decrease in electric vehicle prices.
- The average cost for a new non-luxury vehicle in August was $44,827, 0.7% higher than a year ago.
Dive Insight:
Higher dealer inventory levels and bigger incentives have helped keep new vehicle prices in check, Cox Automotive said a press release.
“After a tumultuous last few years in the automotive marketplace, now we are seeing new-vehicle pricing trends hold steady,” Rebecca Rydzewski, research manager at Cox Automotive, said in a statement. “Dealers and automakers are feeling price pressure, and with high auto loan rates and growing inventory levels, new-vehicle prices seem to have hit a ceiling, at least for now.”
EVs are also getting cheaper, with prices falling from $65,688 to $53,376 since last year. Tesla is mainly responsible for the decline in EV prices, as it aggressively cut prices in 2023 to boost sales amid growing competition in the EV segment.
Cox noted that luxury vehicle sales significantly increased 23% YoY in August, helping boost industry sales volume by 16%. Luxury vehicles accounted for 18.8% of the U.S. market last month. But the average price of a luxury vehicle has declined more than 4% since the beginning of the year.
Full-size pickup trucks and mid- and compact-sized SUVs were the best-selling vehicle categories and commanded higher prices. The three segments accounted for 45% of new vehicle sales volume in August. The average cost of a new full-size pickup was $65,567 last month.
According to Cox, the average transaction price of Tesla vehicles fell by 19.5% compared to August 2022. The price of the Model 3 dropped 21% YoY, while the Model Y fell 16%, the Model S 17% and the Model X 13%, respectively.
Incentives reached their highest levels this year, averaging $2,365 per vehicle in August, or roughly 4.9% of MSRP, according to Cox. Incentives for new vehicles remain low historically after averaging 10.8% in August 2020.
Cox also noted that just three vehicle segments — compact cars and subcompact cars and SUVs — had average transaction prices below $30,000 last month. The lowest-priced vehicles in the U.S. market were the Mitsubishi Mirage and Kia Rio.
