The average transaction price (ATP) for new vehicles declined in January, following a strong December, according to the latest report from Cox Automotive’s Kelley Blue Book. The ATP fell 2.2% from December to $48,641, marking a seasonal shift as luxury sales slowed. However, year-over-year prices remained 1.3% higher.
Lower luxury sales were a key driver of the ATP drop, with brands such as Audi, BMW, Cadillac and Lexus experiencing sales declines of more than 50% from December. This seasonal shift contributed to a smaller share of high-priced vehicles in the market.
"After a surprisingly hot December, both new-vehicle sale volume and prices were lower in January as the market took a seasonal breather," said Erin Keating, executive analyst at Cox Automotive.
Despite the month-over-month price decline, sales incentives also fell. Incentives averaged 7.2% of ATP in January, down from 8.0% in December. However, at $3,486, incentive packages were still 29.2% higher year over year.
Meanwhile, the average transaction price for electric vehicles (EVs) remained steady at $55,614, rising nearly 1% from December but down 1.4% year over year. EV incentive spending fell 3.1% compared to December but was up 48.6% from a year ago. Market leader Tesla saw an ATP increase of 4.5% year over year, with the popular Model Y and Model 3 rising 2.2% and 6.2%, respectively.
Jeep’s ATPs stood out, dropping nearly 9% year over year to just under $49,000 -- its lowest level in more than three years. “Jeep continues to manage a perceived price challenge,” Keating noted.
Total new-vehicle sales volume in January increased 5.1% year over year but was down more than 25% from December’s surge. Inventory levels also dipped, falling below 3 million units for the first time since October.
While January’s ATP increase of 1.3% year over year remains below historical norms, it reflects a cooling market. From 2020 to 2024, ATPs increased an average of 4.9% per year, with peaks above 9% in 2021 and 2022. Prior to 2020, year-over-year increases averaged 3.0%.
