Average New Car Transaction Prices Drop To $48k, Incentives On The Rise

The Average Transaction Price for New Vehicles in the U.S.

The average transaction price (ATP) for a new vehicle in the U.S. has seen a significant increase over the past decade, reaching almost $50,000. However, there has been a slight decrease in recent months, providing some relief for consumers.

ATP for New Vehicles in July

In July, the ATP for a new vehicle in the U.S. was $48,401. This is slightly lower than the ATP of $48,424 from June and down $106 from July of the previous year. It has also dropped by 3.1% from the peak of $49,929 recorded in December 2022.

Shorter Loan Repayment Period

Good news for car buyers who finance their purchases: the average earner can now pay off a new car loan in around 37 weeks. This is the shortest time recorded in the past three years. Additionally, typical monthly payments have decreased by 1.5%, now averaging $753.

Reasons for Price Decrease

The fall in prices can be attributed to solid inventory levels. At the start of July, there were 2.91 million new vehicles in inventory across the country, a significant increase of 52% compared to the same month last year.

Segment Breakdown

The subcompact car class remains the most affordable segment for new vehicles, with an ATP of $23,031 in July. This is 3.9% lower than in June and down 7.3% year-over-year. The compact car class also remains affordable, with ATPs of $26,798, although there has been a 1.3% increase from June.

Some other segments have seen minor price rises. For example, the ATP of high-end luxury cars has jumped 2.8% month-over-month to $114,181, while the luxury subcompact SUV/cross class has risen 2.5% to $41,041.

Incentives

Incentives for new vehicle purchases continue to increase, rising to 7% of the ATP in July. This is higher than the 6.4% reported in June. Compared to a year ago, incentives are 59.1% higher, providing even more benefits for buyers.

Conclusion

Overall, the average transaction prices for new vehicles have experienced a slight decrease in recent months, offering some relief for consumers. With solid inventory levels and increasing incentives, now may be a good time to consider purchasing a new car.