New-vehicle prices in the United States continued their upward trend in December, reaching levels close to the all-time high recorded in December 2022, according to Kelley Blue Book (KBB) Average Transaction Price (ATP) data. This marks the fourth consecutive month of price increases, with the average new car price hitting $49,740.
Kelley Blue Book, a trusted resource for car values and automotive information for nearly a century, reported that these high prices coincided with a strong sales month. December typically sees elevated ATPs due to a higher volume of luxury vehicle sales. However, several factors contributed to the near-record prices in December 2024.
Erin Keating, executive analyst at Cox Automotive, Kelley Blue Book’s parent company, noted the positive consumer sentiment as a key driver. “Consumer sentiment and confidence have been on the rise,” Keating stated. “Vehicles, especially luxury vehicles, are typically an emotional purchase, and when consumers are optimistic, they go shopping.” She also pointed to slightly lower interest rates and increased incentives as contributing to both higher prices and sales volume.
Car Incentives Remain Robust
While new-vehicle prices climbed, incentive levels remained significant in December. Incentives held steady at 8% of the average transaction price, equating to approximately $3,958 per vehicle. This represents a substantial 44% increase in incentive packages compared to December of the previous year, when incentives averaged around 5.5% of ATP.
Incentive levels varied across vehicle segments. Entry-level luxury cars, compact SUVs, and luxury compact SUVs saw the highest incentives, while luxury full-size SUVs, sports cars, and small/mid-size pickup trucks had the lowest. Among volume automakers, Volkswagen, Ram, and Nissan offered the most generous incentives, exceeding 13% of ATP. Conversely, Toyota, Land Rover, and Porsche offered some of the lowest incentives in the industry.
High-End Vehicle Sales Drive Up Average Prices
December’s near-record ATPs were partly fueled by robust sales of high-priced vehicles. As is typical, luxury vehicle sales tend to increase in December, contributing to higher average transaction prices. However, the strength of sales in the over-$80,000 price category was particularly noteworthy.
Kelley Blue Book data indicates that vehicles priced above $80,000 accounted for 5.6% of total sales in December, the highest volume ever recorded. This translates to approximately 84,000 vehicles, significantly exceeding the typical monthly average of 4.4% or 60,000 units. Popular models in this high-price bracket include the Land Rover Range Rover, Cadillac Escalade, BMW X7, GMC Yukon, and Tesla Cybertruck. Strong sales of full-size pickup trucks, with an average price of $64,261 and segment volume reaching a 2024 high of 223,293 units, also contributed to the overall price increase.
Brand-Specific Price Changes Show Varied Trends
While overall average prices increased, some brands experienced year-over-year price decreases in December. Mitsubishi saw the most significant drop, with ATPs falling by more than 12% compared to the previous year. Buick and Volkswagen also experienced declines of 7.0% and 6.0%, respectively. Notably, Stellantis brands, including Chrysler, Dodge, Jeep, and Ram, all posted year-over-year ATP declines as the company aimed to reduce inventory levels.
Conversely, other brands saw substantial year-over-year price increases. Cadillac ATPs rose by nearly 13%, while Tesla prices increased by 10.5%. Infiniti transaction prices also saw a significant increase of 8.1% year-over-year, reaching an average of $65,667.
Electric Vehicle Prices and Incentives
Electric vehicle (EV) sales remained strong in December, and their higher average transaction price of $55,544 contributed to the overall industry ATP increase. EV prices were up 0.8% year-over-year and 1.1% month-over-month, slightly below the industry average increase.
Incentives for EVs, while still elevated, saw a slight decrease month-over-month, falling to 14.3% of ATP from 14.7% in November. However, EV incentives were still 41% higher than the previous year and have remained above 12% of ATP for the past six months. These substantial incentives, averaging over $6,700 per sale in 2024, played a significant role in driving EV sales to a record-breaking 1.3 million units last year.
Kelley Blue Book’s data provides valuable insights into new car pricing trends and the factors influencing vehicle values. As the automotive market continues to evolve, Kelley Blue Book remains a crucial resource for consumers and industry professionals seeking reliable and objective information. For more detailed data, data tables are available for download from Kelley Blue Book.
About Kelley Blue Book
For nearly a century, Kelley Blue Book has been The Trusted Resource® for vehicle valuation and automotive information. Serving both consumers and the automotive industry, Kelley Blue Book offers transparent, objective data and innovative tools. Millions rely on KBB.com each week for market-reflective values, including the famous Blue Book® Trade-In Values and the Kelley Blue Book® Price Advisor tool. Kelley Blue Book is a Cox Automotive brand.
About Cox Automotive
Cox Automotive is the world’s largest automotive services and technology provider, fueled by extensive first-party data. With a portfolio of leading industry brands like Autotrader®, Kelley Blue Book®, and Manheim®, Cox Automotive delivers solutions for car shoppers, manufacturers, dealers, and lenders worldwide. Cox Automotive is a subsidiary of Cox Enterprises Inc.
