February’s new-vehicle average transaction price (ATP) was recorded at $48,039, a year-over-year gain of 1.0 percent but lower by 1.3 percent from January.
According to Kelley Blue Book (KBB) officials, sales incentive levels were mostly flat month over month but higher compared to February 2024 by 18.6 percent. The average incentive package last month was equal to 7.1 percent of ATP ($3,392), up from six percent a year ago.
Erin Keating, Cox Automotive executive analyst, noted that February marked the five-year anniversary of the last “clean month” of data prior to the COVID-19 pandemic that shifted the automotive landscape.
“Compared to February 2020, ATP is up 25 percent while incentives are down 13 percent and monthly sales are down nine percent,” said Keating. “Auto loan rates are higher now as well, making new-vehicle affordability a real challenge for most households.”
Mixed Consumer Message
While affordability is a challenge for many households, Keating noted six-figure vehicles continue to sell well and have experienced a four-fold increase in sales volume since early 2020.
“The income divide remains a key issue for new-vehicle sales momentum, as the industry continues to count on high income households with prime and super prime credit scores to drive sales,” she said.
High-end Buying Continues
With affordability increasingly being a key concern of the American consumer, 11 of nearly 40 brands tracked by KBB had ATPs that were lower year-over-year in February. All four of the major Stellantis brands— Chrysler, Dodge, Jeep and Ram— had notably lower ATPs. Jeep prices were lower by more than 11 percent, the most of any brand.
Those concerns did not hold back the volume of six-figure vehicles continuing to boom as more than 52,000 new vehicles transacted at prices above $100,000, up from 46,000 in the first two months of 2024. Five years ago, in January and February of 2020, just over 12,000 six-figure vehicles were sold. Last month, Land Rover’s Range Rover was king of the hundred-grand jungle, with sales in excess of 3,800 units.
In the hyper-competitive Compact SUV segment, the ATP last month increased 0.5 percent to an estimated $36,198. More than 220,000 Compact SUVs sold— which includes Chevrolet Equinox, Ford Escape, Honda CR-V and Toyota RAV4— represented 18 percent of all vehicle sales.
EV Incentives Hit Record High
The February ATP for In new-electric vehicle (EV) prices was $55,273, down 1.2 percent from January but 3.7 percent higher at the same time last year. Compared to the overall industry ATP, EVs were higher by 15.1 percent, an increase from the 14.9 percent gap recorded in January.
The average incentive package for a new EV was 14.8 percent ($8,162), the highest level in more than five years and more than twice the overall market. A year ago, EV incentives were 10.2 percent. EV incentives, as a percentage of ATP, have increased by 44 percent in the past year. Going forward, incentives are expected to decline as President Donald Trump has vowed to roll back federal incentives.
For EV market leader Tesla, ATPs increased 1.8 percent year-over-year in February to $53,248. Model 3, Model Y and Cybertruck posted price declines in February compared to January; Model S and Model X had month-over-month increases. As sales cooled, the Cybertruck ATP in February declined by more than 10 percent from January to an estimated $87,554.
