New-vehicle prices were lower year-over-year for the ninth straight month in June, according to data released by Kelley Blue Book (KBB).
The average transaction price (ATP) for a new vehicle in the U.S. was $48,644—$266 (0.6 percent) higher from the revised May ATP but $307 (0.6 percent) lowered compared to June 2023.
Many top sellers pulled back on incentives in June despite higher inventory levels. KBB reported new-vehicle incentives—measured as a percent of ATP fell to 6.4 percent of ATP ($3,102) last month, down from 6.7 percent in May but higher than one year ago when incentives were 4.2 percent of ATP ($2,036).
Incentives Discipline
Land Rover, Tesla and Toyota were among the brands with the lowest incentives in June. At the higher end, Audi, Infiniti, Nissan and VW were among those on the higher end.
Cox Automotive Executive Analyst Erin Keating noted even brands holding onto more days’ supply, like many Stellantis brands, are keeping incentive spend in check. In June, Jeep increased to 6.3 percent—still below industry average—from 5.3 percent, and Ram dropped to 5.5 percent from 6.3 percent.
“As we head into the back half of the year, we are seeing that automakers are showing real discipline on pricing,” said Keating in a press statement. “There appears to be a real effort to hold the line out there.”
Affordability Concerns
Dealerships have highlighted affordability is increasingly a top concern among consumers amid higher interest rates and having to pay a higher premium for auto loans as the average price is nearly $50,000 for a new vehicle.
Additionally, auto credit availability decreased across all lender categories, as reported by the Dealertrack Credit Availability Index. Consumers faced more restricted credit access both month-over-month and year-over-year, with approval rates dropping and new-vehicle loans becoming particularly harder to obtain.
Keating stressed that that nearly half of the market sells for well below average and the elevated ATP doesn’t mean there are no affordable vehicles for customers.
Under $40K Sales
Currently, 40 percent of vehicles transacted for below $40,000 and 26 percent transacted or between $30-and-$40,000 in June. Among the top ten best-selling vehicles in June, half carried ATPs below $40,000— the Toyota RAV4, Honda CR-V, Toyota Camry, Honda Civic and Chevrolet Trax.
“Anytime you speak in averages, there will be factors that can skew the big picture,” added Keating. “At the same time, it is often the monthly payment that really matters, so we can’t ignore the impact interest rates are having on people’s ability to pay.”
The best-selling vehicle in the U.S. continues to be a full-size pickup from Ford. In June, 65,000 Ford F-Series were sold with an ATP of $67,443, up 30 percent from five years ago.
High-volume, full-size pickup trucks from Chevrolet, GMC and Ram—all among the top ten best-selling products in the U.S.—help drive average prices higher, Keating said, as the KBB data on average transaction price is sales-weighted.
