The average price paid for a new vehicle in the U.S. saw a slight decline in October, pulling back from the record high set in September. According to a new report from Kelley Blue Book, the average transaction price (ATP) for a new vehicle fell to $49,766 last month.
This 0.4 percent decrease from the previous month was largely anticipated, driven by a sharp drop in electric vehicle (EV) sales following the expiration of the government’s $7,500 tax incentives. While prices softened month-over-month, they remain elevated compared to the previous year, with the October ATP up 2.1 percent from 2024.
“October’s dip in average transaction prices was anticipated and reflects a natural market adjustment after September’s record highs,” said Erin Keating, Executive Analyst, Cox Automotive. “Fortunately for automakers, there is continued strength in consumer demand, especially from well-heeled households. Consumers remain engaged, and while affordability challenges persist, the industry is adapting with incentives and product mix shifts. We’ve been anticipating a slowdown in the market. This is a story of moderation, not retreat.”
EV Sales Drop Impacts the Market
A significant factor contributing to the overall price decline was the shift in the EV market. EV sales fell nearly 49 percent from September to October. What’s interesting though is that while sales of high-end EVs dropped and that primarily ate into the month’s overall ATP, the average transaction price for a new EV actually climbed 1.6 percent month-over-month to $59,125. With the incentive gone all EV sales took a hit, but the mix of EVs that were still sold moved toward more expensive luxury models. The average EV now costs $9,359 more than the industry average.
“We expected this shift in the electric vehicle market,” noted Stephanie Valdez Streaty, senior analyst at Cox Automotive. “Affordability has always been the core challenge with EV sales, and this reset only underscores how critical it is to bring more attainable EV options to market.”
Even market leader Tesla was not immune to the slowdown. Tesla’s average transaction prices fell 1.1 percent to $53,526 while its sales also declined by more than 35 percent from September. However, they were able to weather the storm a bit better than the overall EV segment at large.
Incentives Were Down Even as Some Segments Thrived
Incentive spending also decreased in October. The average incentive package was 6.5 percent of the ATP, down from 7.3 percent in September. As the market starts to enter what many hope will be a strong holiday season, automakers are not yet resorting to heavy discounts to move inventory.
On the segment specific front, the popular full-size pickup truck segment saw its ATP hit a new record high of $66,462. The MSRP was even higher at $70,351. In the luxury space, brands with strong EV strategies or those facing steep import tariffs saw significant year-over-year price increases. Cadillac ATPs jumped more than 22 percent, while Porsche prices were up over 13 percent. In contrast, brands like Acura, Jeep, and Tesla saw their average transaction prices fall compared to a year ago, reflecting the diverse pressures that tariffs are still causing on the market.
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