For the fourth consecutive month, new-vehicle prices climbed higher in December 2024, just falling short of all-time high mark in December 2022.
Kelley Blue Book reported on Jan. 15 that the average transaction prices (ATPs) for new-vehicles were $49,740, an increase of 1.3 percent year over year and higher by 1.5 percent compared to November 2024. Analysts noted sale’s typically peak in December, as high-priced models from luxury makers often sell well in the final month of the year.
“It was a December to remember, in terms of both sales volumes and prices,” said Cox Automotive Executive Analyst Erin Keating.
High-Priced Vehicles Sales Push ATPs Higher
December typically sees an uptick in sales by luxury vehicle makers and, in general, for higher-priced vehicles, which is why industry average transaction prices usually peak in December, according to KBB officials. The all-time high for transaction prices was in December 2022, when new-vehicle inventory was just beginning to recover from historic lows and ATPs hit $49,958. Last month, ATPs were near that record, at $49,740, thanks in part to notably strong sales of vehicles transacting for more than $80,000.
“As we reported just after the election, consumer sentiment and confidence have been on the rise,” said Keating. “Vehicles, especially luxury vehicles, are typically an emotional purchase, and when consumers are optimistic, they go shopping. Rates dipped for a short bit late in 2024, discounts were higher, and the glass was half full. No wonder we saw the lift in both prices and volume.”
Recent data suggest that approximately 4.4 percent of total industry sales in a given month, or roughly 60,000 units, are for deals priced above $80,000. Last month, Kelley Blue Book estimates that approximately 84,000 vehicles – or 5.6 percent of total sales – transacted at prices higher than $80,000, the highest volume ever. Vehicles in this category include the Land Rover Range Rover, Cadillac Escalade, BMX X7, GMC Yukon and Tesla Cybertruck.
Pulling ATPs higher were strong sales of in the full-size pickup trucks that averaged $64,261. Segment volume was 223,293 units, the highest point in 2024.
Incentives Up nearly 50% From a Year Earlier
New-vehicle sales incentives in December held steady from November 2024 at 8.0 percent of ATP or approximately $3,958. The average incentive package on a new vehicle was higher by 44 percent compared to December 2023, when incentives equaled approximately 5.5 percent of ATP.
Incentives in December were highest for entry-level luxury cars (10.0 percent), compact SUVs (9.7 percent) and luxury compact SUVs (9.4 percent). Volkswagen, Ram and Nissan offered the largest incentives among volume automakers, with all of them being above 13 percent of ATP.
Brand Price Changes Year Over Year
In December, many brands posted ATPs well below year-ago levels. Year-over-year, Mitsubishi ATPs were lower by more than 12 percent. Buick and VW vehicles were transacting lower last month than in December 2023, by 7.0 percent and 6.0 percent, respectively.
All of Stellantis’ major brands—Chrysler, Dodge, Jeep and Ram—posted notable ATP drops compared to year-ago levels as the company works to reduce elevated inventory levels. Chrysler and Dodge brand prices were both down 4.3 percent year over year; Jeep prices were lower by 6.3 percent, and Ram prices were lower by 1.6 percent.
Other brands saw notable year-over-year gains at the end of 2024. Cadillac ATPs were higher in December by nearly 13 percent compared to year-earlier levels. Telsa prices were higher by 10.5 percent, and Infiniti transaction prices increased by 8.1 percent year over year to $65,667.
The EV Market
KBB found the ATP of electric vehicles was $55,544 in December 2024, higher year over year by 0.8 percent, slightly below the industry average, and higher month over month by 1.1 percent.
Incentives for EVs remained elevated, although they were lower month over month at 14.3 percent of ATP, down from 14.7 percent in November. EV incentives were higher by 41 percent year over year and have been above 12 percent of ATP for six straight months.
Strong sales incentives, which averaged more than $6,700 per sale in 2024, were one reason EV sales surpassed 1.3 million units last year, a new record for volume and share, noted KBB officials.
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