The new-vehicle average transaction price (ATP) dropped 2.2 percent in January from the month before to $48,641, according to the monthly report from Kelley Blue Book (KBB).
Sales incentives at $3,486 of ATP declined in January as well, dropping to an average of 7.2 percent of ATP in January from 8.0 percent in December 2024. Compared to a year ago, the average incentive package was 5.6 percent of ATP and the average new-vehicle price rose 1.3 percent from $48,031.
The year-over-year ATP increase in the first month of 2025 was well below long-term averages. From 2020 to 2024, ATPs increased an average of 4.9 percent a year, with average gains of 9 percent or more in both 2021 and 2022. In the seven years prior, from 2013 to 2019, new-vehicle ATPs, on average, were higher year over year by approximately 3.0 percent, according to KBB
Let the Jeep Drop
Total new-vehicle sales volume in January was higher year over year by 5.1 percent but lower by more than 25 percent compared to a surprisingly strong December. Erin Keating, executive analyst, Cox Automotive, explained that both new-vehicle sale volume and prices were lower in January as the market took a seasonal breather, except for one brand.
“Jeep brand ATPs in January were lower year over year by almost 9 percent, as the storied make continues to manage a perceived price challenge,” said Keating in a press statement with the report’s release. “In fact, Jeep ATPs in January were close to $49,000, not far from the industry average, and the lowest point in more than three years.”
Historically, the ATP declines due to the impact of luxury brand sales peaks in December and tumbles the following month. This year is no exception as Audi, BMW, Cadillac and Lexus posted significantly fewer sales in January compared to December—some sales volumes lower by more than 50 percent. With fewer high-priced vehicles in the sales mix, ATPs generally trend lower.
EV’s Hold Steady
ATPs for electric vehicles in January were reported at $55,614, higher by nearly 1 percent compared to a downwardly revised December. Incentive spending on EVs in January decreased by 3.1 percent compared to December. EV prices in January were lower year-over-year by 1.4 percent.
Tesla continue to be the market leader, with an ATP of $55,380, a year-over-year increase of 4.5 percent. The two most popular EVs in the U.S., the Model Y and 3, both saw transaction prices increase from last a year earlier at 2.2 percent and 6.2 percent, respectively. Cybertruck prices declined during the same time period as well by 6.5 percent to just under $98,000.
