New-Vehicle Average Transaction Price Decreases Year Over Year and Incentives Increase

Takeaway: The average transaction price (ATP) for new vehicles in 2024 reflected a year of stability and modest shifts, shaped by elevated inventory levels, rising incentives, and evolving consumer preferences. Unlike the steep increases of previous years, 2024 saw moderated ATP growth, with early-year pricing pressure alleviated by competitive incentives and ample stock, providing shoppers improved buying opportunities. However, the strength of luxury and high-priced segments toward year-end pushed ATPs close to historical highs. Notably, robust EV incentives throughout the year highlighted shifting market dynamics, underscoring evolving buyer priorities and ongoing challenges in affordability.

What’s next: As we begin 2025, average transaction prices have retreated from the near all-time high in December. However, tariffs could significantly increase new-vehicle prices, with the most affordable vehicles being the hardest hit. This could lead to a decline in sales and further complicate the already challenging affordability issues in the U.S. auto market.