Election years always come with some uncertainty, but for the automotive industry, they also bring unique opportunities. As I’ve discussed with our Industry Insights team at Cox Automotive, we’re seeing several trends emerge from the latest Kelley Blue Book data that point to a strong finish for 2024.
We’re seeing new-vehicle prices stabilize, incentives climbing sharply, and electric vehicles (EVs) continuing to attract more buyers. These shifts are setting the stage for dealers to finish the year strong and prepare for what’s next.
Key Takeaways from October’s ATP Data
Kelley Blue Book’s October Average Transaction Price (ATP) data reveals some interesting points about the state of the market that we should all pay attention to. These insights are essential for understanding the dynamics driving post-election consumer spending, year-end sales and beyond.
Here’s what we’re seeing:
- October marked a turning point for new vehicle prices. After months of fluctuations, the ATP for new vehicles in October reached $48,623, up 7.0 percent year-over-year and slightly higher than September. This slight rebound signals that the market is moving toward steadier ground as we head into 2025.
- Incentives are climbing. One of the most striking trends is the 60 percent year-over-year increase in incentives, which averaged 7.0 percent of ATP in October. Automakers are using these incentives to attract buyers and move inventory, particularly in high-demand segments like compact SUVs and midsize SUVs. Compact SUVs, in particular, stood out, offering average incentives of 9.4 percent of ATP and an approachable average price of $36,769.
- EVs are gaining momentum. While EV ATPs dipped slightly to $56,902, incentives surged to 7.0 percent of ATP, more than doubling year-over-year. Automakers are actively working to make EVs more accessible to a broader audience, and it’s working. For example, Tesla’s move to price the Cybertruck below $100,000 shows how competitive pricing can spark interest in the EV market.
How Election Season Impacts Automotive Sales
Election years often bring a unique mix of caution and opportunity for big-ticket purchases such as cars. Historically, consumers tend to approach major spending decisions with more scrutiny, carefully weighing their financial stability against broader economic conditions. This makes strategic marketing and pricing for dealerships especially important.
What we’ve seen so far this year is a mix of strategies from automakers to address these shifting dynamics. Stellantis, for example, has leaned heavily on incentives, with brands like Chrysler, Dodge, Jeep, and Ram offering deals above the industry average to capture buyer attention. On the other hand, luxury brands like Porsche and Toyota have taken a different approach, maintaining lower incentives, and counting on their strong brand loyalty to drive sales.
These differing strategies emphasize an important point: the key to success lies in knowing your audience. Whether it’s offering value-driven deals for cost-conscious shoppers or reinforcing the prestige of a luxury purchase, aligning your approach with consumer expectations is what sets you apart.
The Growing Role of Incentives in Automotive Sales
Incentives are playing an increasingly critical role in driving consumer behavior and shaping the automotive market as 2024 comes to a close. Key learnings from our Industry Insights team show that automakers are using targeted incentives to move inventory, respond to shifting demand, and stay competitive in a dynamic environment.
One of the most notable trends this year is the significant rise in incentives across multiple segments, with October showing a 60 percent year-over-year increase, averaging 7.7 percent of ATP. These incentives are not just about lowering prices—they’re strategically designed to capture attention in key areas:
- Boosting accessibility: High-demand segments, such as compact and midsize SUVs, are seeing robust incentives that make them more attainable for budget-conscious buyers.
- Encouraging year-end sales: With the year winding down, incentives are becoming a key tool for automakers to clear inventory and meet sales goals. From volume-driven incentives in mainstream models to more targeted offers in luxury segments, these strategies are helping dealers close deals while staying competitive.
Leveraging Tools Like AT+Marketplaces to Stay Competitive
One of the most exciting shifts we’re seeing is the way technology empowers both buyers and sellers. Tools like Kelley Blue Book Price Advisor, integrated into Cox Automotive’s AT+Marketplaces, give consumers the transparency they crave while providing dealers with actionable insights into pricing and inventory.
During election seasons, when marketplace activity often spikes, these tools become indispensable. Buyers look for the best deals, and sellers need data-driven strategies to compete. Dealers who lean into these technologies can ensure they’re not just meeting consumer expectations—they’re exceeding them.
Looking Ahead
As we close out 2024, the trends are clear: incentives will continue to play a key role in driving sales, adopting new technology and the ability to adapt quickly to consumer needs will be critical for success.
In my conversations with our chief economist Jonathan Smoke and the Cox Automotive Industry Insights team, one message keeps coming up: success in this market is all about preparation and adaptability. Whether that means using the latest tools to manage inventory or finding new ways to delight your customers, the goal is the same—keep the consumer at the center of everything you do.
Looking ahead to 2025, the automotive market is poised for an upswing, but thriving in this dynamic environment lies in staying data-driven, flexible, and focused on what matters most—your customers.
