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4 min read
Data Point
Tuesday September 10, 2024
Article Highlights
- New-vehicle prices in August were lower year over year for the 11th straight month as price pressure continues to build.
- The average transaction price in August, at $47,870, was lower versus August 2023 by 1.7%, the largest year-over-year drop since January.
- New-vehicle incentives in August averaged 7.2% of transaction price, higher year over year by 49%, and the highest level since May 2021.
ATLANTA, Sept. 10, 2024 – For the 11th straight month, the average transaction price (ATP) for a new vehicle in the U.S. was lower year over year, according to data released today by Kelley Blue Book, as higher inventories continue to add price pressure to the market. At $47,870, the new-vehicle ATP in August was also lower by 0.6% compared to the revised July ATP of $48,166.
NEW-VEHICLE AVERAGE TRANSACTION PRICE
Incentive levels increased month over month and year over year in August, according to data from Kelley Blue Book. The average incentive package in August equaled 7.2% of ATP, up from 7.0% in July to the highest level since the first half of 2021. A year ago, incentive spending was 4.8% of ATP. In the past decade, incentive spending peaked at 10.8% of ATP in December 2019.
INDUSTRY AVERAGE TRANSACTION PRICE VERSUS INDUSTRY AVERAGE INCENTIVE SPEND AS % OF ATP
“In our latest dealer survey, the message about price pressure was very clear,” said Cox Automotive Executive Analyst Erin Keating. “Dealers are telling us the sales environment is humming along at a muted pace and there is growing pressure to lower prices, just as the overall cost index hit a new record high.” (Q3 Cox Automotive Dealer Sentiment Index results are available here.)
Incentives Climb Higher in August
With new-vehicle inventory in early August higher by more than 40% year over year, consumers enjoyed more choices last month and, in many cases, notably higher incentive levels. Incentive packages for vehicles from Chrysler, Ram and Jeep all shifted from below the industry average in July to above the industry average in August, as many Stellantis dealers work through higher inventory levels. (Incentives for Dodge-brand vehicles declined month over month in August, falling from 6.9% of ATP to 5.6%.) Buick, Lincoln, and Mitsubishi posted notably higher discounts in August, while Nissan and Infiniti continue to offer substantial incentives as well.
In August, Porsche, Land Rover, Toyota and Lexus continued to offer the lowest incentives in the market. These brands also consistently carry inventory levels far below the industry average.
”In the face of a sluggish sales pace – 15.1 million in August – more dealers are pulling the only lever they have: higher incentives,” added Keating. “This shift to a buyers’ market is good news for consumers but certainly impacts dealer profitability. Automakers are coming to the table with more incentives, but credit remains tight, putting more pressure on dealers to get creative with additional discounts and financing, affecting the bottom line.”
On average, trucks and SUVs carried higher incentives last month than cars and vans. Compact SUVs, the market’s most popular segment by volume, had average incentives at 9.2% of ATP, with an average transaction price of $36,506 in August. Incentives in the full-size pickup truck segment averaged 8.4% of ATP in August, up from 8.2% in July and 6.1% in August 2023. Full-size pickup ATPs in August increased slightly month over month to $65,531. High-end luxury cars had the highest incentives last month, with incentives at 10% of ATP, while vans, sports cars and small/midsize pickups had some of the lowest incentives.
EV Incentives Track Higher as Prices Hold Steady
EV incentives in August continue to trend well above industry averages. Last month, EV incentives averaged 13.3% of ATP, higher than July and at the highest point of 2024. On average, EV incentives last month were more than 80% higher than traditional ICE product. The average transaction price for an EV in August, at $56,575, was marginally higher than the revised July ATP of $56,435 but lower year over year by more than 1.2%, suggesting the EV price declines are slowing. A year ago, in August 2023, EV ATPs were lower year over year by nearly 13%.
The average transaction price for a new Tesla declined slightly in August compared to July but was higher year over year by 10.7% at $59,138. Model Y, the best-selling EV in America, had an ATP of $52,482 in August, which was lower than August 2023 but higher month over month for the sixth month in a row. Cybertruck ATPs increased month over month in August as well, increasing for the third straight month and reaching a new high of $112,241. With sales estimated at 4,784 last month, Cybertruck continues to hold the crown as the market’s best-selling product priced over $100,000.