New car prices are on the rise once again, with the average transaction price of a new car increasing by 2.2% to ,510 in April. This marks a reversal from months of declining prices, although the figure is still down by 0.5% compared to the previous year.
Buyers may not find much solace in this increase, as Kelley Blue Book reported a decline in new vehicle incentives as well. The average incentive in April was 6.3% of the average transaction price, down from 6.6% in March. However, this reduction in incentives is a significant improvement from the situation in 2022 when tight inventories and high demand led to limited discounts.
Cox Automotive executive analyst Erin Keating commented on the trend, stating that the increase in pricing in April likely reflects a pullback on incentives compared to the end of Q1. With affordability concerns still present, the slow increase in inventory may result in a gradual growth of incentives through the remainder of 2024 to sustain sales momentum.
In April, the average transaction price for a mainstream vehicle was ,989, up from ,078 in March. This increase was driven by higher prices for pickups, with the average transaction price for a full-size truck reaching ,631.
Luxury vehicle sales remained strong despite a 2.4% increase in transaction prices, resulting in an average transaction price of ,076. Brands like Tesla and Volvo saw an even greater increase in transaction prices, with Tesla experiencing a 5.7% climb due to price adjustments in early April.
The average transaction price for electric vehicles also increased slightly to ,252, although this reflects a year-over-year decrease of 8.5%. This decline is attributed to price pressure on EVs caused by slowing sales, healthy inventory levels, and increased competition, despite significant incentives for electric vehicles in the market.
