The average transaction price (ATP) for a new vehicle in the U.S. was dropped for 11th straight month and lower year over year, according to data released by Kelley Blue Book.

The new-vehicle ATP in August was $47,870, lower by 0.6 percent compared to the revised July ATP of $48,166 as higher inventories continue to add price pressure to the market, according to KBB officials.

At the same time, incentive levels increased month-over-month and year-over-year in August as the average incentive package equaled 7.2 percent of ATP, up from 7.0 percent in July to the highest level since the first half of 2021. A year ago, incentive spending was 4.8 percent of ATP. In the past decade, incentive spending peaked at 10.8 percent of ATP in December 2019.

Connecting Dealers Survey

Cox Automotive executive analyst Erin Keating connected the price issue with the result of the most recent 2024 Cox Automotive Dealer Sentiment Index.

“In our latest dealer survey, the message about price pressure was very clear,” said Keating in a press statement. “Dealers are telling us the sales environment is humming along at a muted pace and there is growing pressure to lower prices, just as the overall cost index hit a new record high.”

With new-vehicle inventory in early August higher by more than 40 percent year over year, consumers enjoyed more choices last month and, in many cases, notably higher incentive levels.

Incentives Climb Higher in August

Incentive packages for vehicles from Chrysler, Ram and Jeep all shifted from below the industry average in July to above the industry average in August, as many Stellantis dealers work through higher inventory levels—incentives for Dodge-brand vehicles declined month over month in August, falling from 6.9 percent of ATP to 5.6 percent.

Buick, Lincoln\ and Mitsubishi posted notably higher discounts in August, while Nissan and Infiniti continue to offer substantial incentives as well.

In August, Porsche, Land Rover, Toyota and Lexus continued to offer the lowest incentives in the market. These brands also consistently carry inventory levels far below the industry average.

Use of Incentives

“In the face of a sluggish sales pace—15.1 million in August—more dealers are pulling the only lever they have: higher incentives,” added Keating. “This shift to a buyers’ market is good news for consumers but certainly impacts dealer profitability.”

“Automakers are coming to the table with more incentives, but credit remains tight, putting more pressure on dealers to get creative with additional discounts and financing, affecting the bottom line.”

Trucks and SUVs, by average, carried higher incentives last month. Compact SUVs had average incentives at 9.2 percent of ATP, with an average transaction price of $36,506 in August.

Incentives in the full-size pickup truck segment averaged 8.4 percent last month, up from 8.2 percent in July and 6.1 percent in a year earlier. Full-size pickup ATPs increased slightly from July to $65,531.

EV Sector

Electrical vehicle (EV) incentives continue to trend well above industry averages. For August, EV incentives averaged 13.3 percent of ATP, higher than July and at the highest point of 2024. On average, EV incentives last month were more than 80 percent higher than traditional ICE product.

The average transaction price for an EV in July, at $56,575, was marginally higher than the revised July ATP of $56,435 but lower from August 2023 by more than 1.2 percent.

As for the sectors leader, a new Tesla declined slightly month to month but higher by 10.7 percent at $59,138 from the previous year. Model Y, the best-selling EV in America, had an ATP of $52,482 in August, which was lower than August 2023 but higher for the sixth month in a row.

Cybertruck ATPs increased month over month in August as well, increasing for the third straight month and reaching a new high of $112,241. With sales estimated at 4,784 for August, Cybertruck is the market’s best-selling product priced over $100,000.

Related stories:

• New-Vehicle Prices Lower for 10th Consecutive Month: KBB
• KBB: New-Vehicle Average Transaction Prices Drop to Two Year Low