Georgia Chron - Kelley Blue Book Report: Average New-Vehicle Prices Fell in January, But Were Higher Year Over Year By 1.3%

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ATLANTA, Feb. 11, 2025 ~ The monthly new-vehicle average transaction price (ATP) report from Cox Automotive's Kelley Blue Book was released today, providing insight into the current state of the automotive market. According to the report, the new-vehicle ATP in January was lower compared to December, falling by 2.2% to $48,641. However, it still showed a year-over-year increase of 1.3%, with the January ATP being $48,031 a year ago.

One of the key takeaways from the report was the decline in sales incentives last month. Incentive packages, which were at an average of 8.0% of ATP in December, fell to 7.2% in January. However, they were still significantly higher compared to last year, with a 29.2% increase in incentive spending at an average of $3,486 per vehicle. In January 2024, the average incentive package was equal to 5.6% of ATP.

The drop in ATPs is not uncommon for January as luxury brand sales tend to peak in December and decrease in January. This trend was evident as many top luxury brands such as Audi, BMW, Cadillac and Lexus saw a significant decrease in sales volume compared to December, with some brands experiencing a decline of more than 50%. With fewer high-priced vehicles being sold, it is expected that ATPs would trend lower.

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However, despite this decline in January's ATPs compared to December's peak sales month, there was still a year-over-year increase of approximately 1.3%. This increase was well below long-term averages as from 2020 to 2024; ATPs have been increasing at an average rate of 4.9% per year with gains of over 9% seen in both 2021 and 2022. In contrast, from 2013 to 2019, new-vehicle ATPs only saw an average increase of 3.0% per year.

In terms of sales volume, January saw a 5.1% increase compared to the same time last year. However, it was significantly lower compared to December's surprisingly strong sales, with a decrease of more than 25%. This decline in sales can also be attributed to the lower inventory levels at the start of January, which were below 3 million units for the first time since late October.

Executive Analyst at Cox Automotive, Erin Keating, commented on the market's performance in January, stating that after a hot December, both new-vehicle sales volume and prices took a seasonal breather. She also noted that Jeep brand ATPs saw a significant decline of almost 9% compared to last year as they continue to manage a perceived price challenge. In fact, Jeep ATPs in January were close to the industry average at around $49,000 and were the lowest they have been in over three years.

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The report also provided data on electric vehicle (EV) prices and incentives. It showed that EV ATPs in January held steady at $55,614, which was an increase of nearly 1% from December's downwardly revised prices. However, they were still lower by 1.4% compared to last year. Incentive spending on EVs also decreased by 3.1% from December but saw a significant increase of 48.6% compared to last year.

Compared to the overall industry, EV ATPs were higher by 14.3%, showing that consumers are willing to pay a premium for electric vehicles. This is slightly lower than last year's price premium of 17.4%. The report also highlighted that market leader Tesla saw an increase in its ATPs by 4.5%, with its popular Cybertruck seeing a decline in prices by 6.5%. However, both the Model Y and Model 3 saw an increase in transaction prices by 2.2% and 6.2%, respectively, compared to last year.

Overall, the January ATP report from Cox Automotive's Kelley Blue Book shows a decline in prices and sales incentives but still sees a year-over-year increase in ATPs. It also highlights the growing popularity of electric vehicles with higher ATPs compared to the overall industry. Data tables for further analysis are available for download.

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