A recent update from Kelley Blue Book found new-vehicle prices in the United States climbed higher in December, for the fourth consecutive month, and were close to the all-time high of December 2022.
KBB said average transaction prices typically peak in December. For 2024, new-vehicle ATPs reached $49,740 during the last month of the year — up 1.3% year-over-year and representing an increase of 1.5% from a month earlier.
“It was a December to remember, in terms of both sales volumes and prices,” said Cox Automotive Executive Analyst Erin Keating in a statement. “As we reported just after the election, consumer sentiment and confidence have been on the rise.”
Keating added that vehicles, particularly luxury, are typically an emotional purchase. She said that when consumers are optimistic, they go shopping.
“Rates dipped for a short bit late in 2024, discounts were higher, and the glass was half full. No wonder we saw the lift in both prices and volume.”
KBB’s report also found that December new-vehicle sales incentives were mostly the same as the prior month, at 8.0% of ATP or approximately $3,958. They said the average incentive package on a new vehicle rose by 44%, when compared to December 2023 when it was around 5.5% of ATP.
When considering large segments incentives were highest for entry-level luxury cars (10.0%), compact SUVs (9.7%), and luxury compact SUVs (9.4%) in December 2024, and lowest for luxury full-size SUVs, sports cars, and small/mid-size pickup trucks.
“Volkswagen, Ram and Nissan offered the largest incentives among volume automakers, with all of them being above 13% of ATP,” said KBB. “Toyota, Land Rover and Porsche incentives were among the lowest in the industry.”
