Vehicle Prices Approach Peak Again
Luxury models sold briskly in December, as is customary for the end of the year. Cadillac was one brand whose ATP rose year-over-year, in its case by 13%.
New-vehicle prices are headed back toward pandemic-era highs, based on the last four months of 2024.
As measured by Cox Automotive’s Kelley Blue Book, the average transaction price in December rose about 2% month-over-month and 1% year-over-year to $49,740.
That came close to the historical peak ATP of $49,958 in December 2022, said Cox, which pointed out that prices tend to spike in December with increased luxury sales.
Still, it marked the fourth straight month of ATP increases, which doesn’t seem to bode well for already cash-crunched consumers.
“It was a December to remember, in terms of both sales volumes and prices,” said Cox Automotive Executive Analyst Erin Keating in a press release on the month’s results. She credited the season and a post-election boost in optimism.
“As we reported just after the election, consumer sentiment and confidence have been on the rise. Vehicles, especially luxury vehicles, are typically an emotional purchase, and 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.”
In fact, models selling for more than $80,000 made up 6% of December sales, the highest volume for that segment on record, Cox said.
Some individual brands’ ATPs rose for the month, Cadillac’s by about 13% year-over-year, Tesla’s by 11% and Infiniti’s by 8%. Others’ ATPs fell at similar rates, Mitsubishi’s by 12%, Buick’s by 7% and Volkswagen’s by 6%.
Part of the overall inflation came from electric vehicle ATPs, which were about 1% above year-earlier levels at $55,544.
Overall incentives were flat from November at 8% of the ATP, but that’s up 44% year-over-year, Cox said. EV incentives followed about the same pattern.