The average transaction price (ATP) of a new vehicle in the U.S. declined slightly in January 2023 to $49,388, a decrease of 0.6% from December’s record high and up 5.9% from 2021. New-vehicle inventory levels are increasing from historic lows in early 2022, but prices remain elevated, according to data released today by Kelley Blue Book.
“The transaction data from January indicates that overall prices are no longer increasing like they were a year ago,” said Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive. “Both luxury and non-luxury prices were down month over month, but the mix of luxury vehicle sales last month—at a record high, near 20 per cent—helped keep the overall average price elevated.”
According to Kelley Blue Book calculations, new-vehicle ATPs have been above the sticker price for more than a year. In January 2023, the average price paid was $310 more than the average sticker, as prices continue to trend downward relative to sticker price. A year ago, in January 2022, the average ATP was more than $900 above the average MSRP. Sales volumes last month were up year over year by more than 6% but down from December, thanks in part to improved supply and added fleet sales. Elevated retail prices and high loan rates are putting downward pressure on retail sales.
Incentives remain low compared to pre-pandemic years, but they are trending upwards as inventory improves. High loan rates and continued inflationary pressures appear to be hurting the lower part of the market, so automakers are more focused on luxury and higher-end models.