The upward pandemic-era pressure on new-vehicle prices appears to have finally subsided, as July’s year-over-year average price increase was the smallest in a decade, Kelley Blue Book says.
It found further confirmation of the milestone in the January-through-July transaction price decrease of 2.7%, which it said it the biggest fall of that period in a decade.
July’s average new-vehicle transaction price was $48,334, down 0.7% month-over-month and up $199 from a year earlier, the Cox Automotive company said.
Inventories that have steadily increased this year from pandemic-era lows, along with rising incentives, are affecting the rebalancing. Automaker incentive spending rose in July for the 10th month in a row to its greatest since October 2021 for a $2,148 average, or 4.4% of the ATP. That’s up from 2.4% year-over-year.
“New-vehicle price inflation has all but disappeared in 2023,” said Cox Automotive Research Manager Rebecca Rydzewski. “New-vehicle prices, primarily driven by cuts in luxury and electric vehicles, are decreasing as inventory is steadily improving.”
Average nonluxury new-vehicle prices alone fell nearly $500 month-over-month in July to $44,700, up just 0.5% year-over-year, though they’ve held steady since January. Just one model was selling for less than $20,000, though, unlike before the pandemic: the Mitsubishi Mirage, Kelley Blue Book said.
Meanwhile, average luxury prices fell $192 month-over-month to $63,552, a nearly 3% year-over-year decrease and down by more than 5% since the year started. The decline was helped along by more than 19% cuts in prices at Tesla, which Cox considers the luxury market leader.