Average new car prices fell 1.4% year over year in October, as good inventories helped buyers
Atlanta, November. 13, 2023 – In October, as the UAW strike began but new car inventories were rising, the average price paid for a new car in the U.S. was $47,936, less than 1% more than the previous month (revised to $47,797), according to Kelley. Blue Book, Cox Motor Company. Compared to last year, when incentives were near historic lows, average new-car transaction prices in October were 1.4% lower, or roughly $670. Year-to-date, new vehicle transaction prices have declined more than 3.5% as downward price pressure continues to favor buyers in the market.
Average transaction price for a new car
“New car prices in October were mostly unchanged from September,” said Rebecca Rydzewski, research director at Cox Automotive. “The only big mover last month was Tesla, which continues to change prices at a surprising pace. In fact, Tesla’s price changes in 2023 show just how dynamic pricing can be with a direct-to-consumer sales model.”
After increasing rapidly during the spring and early summer, the growth of new vehicle incentives has temporarily halted. Average incentive packages have remained mostly unchanged over the past three months at just under 5% ATP. New car sales incentives are much higher than they were one year ago, but remain weak by historical standards. For most of 2023, luxury vehicle incentive packages were higher than non-luxury incentives. However, this trend reversed in October, when non-luxury incentives averaged 4.9% ATP while luxury incentives averaged 4.6%.
Average industry transaction price versus average industry spending incentives as a percentage of ATP
Prices of non-luxury goods remain steady in October
The average price paid for a new non-luxury car in October was $44,331, up less than 1% from a year ago and down $189 from the revised September price. Stimulus spending in the non-luxury sector averaged 4.9% of ATP in October, up from 2.3% one year ago and from 4.7% compared to the previous month.
Transaction prices for some brands affected by the strike rose on a monthly basis in September. Chevrolet, Chrysler, and Dodge all saw incentive levels decrease in October compared to September, and their ATP levels increased. Conversely, the Ford, Jeep and Ram brands all had incentives growing month over month, pushing their October ATP bonuses down. Overall, the UAW attack was small in scope and directly affected only a few vehicles.
Percentage price change by automaker
Only three vehicle segments had average transaction prices below $30,000 in October — compact cars, minivans, and small SUVs/crossovers — and as noted in previous reports, the number of new vehicles transacted on average Under $20,000 are still at two, the Kia Rio and Mitsubishi Mirage. Both cars will be retired in the coming years.
Luxury product prices rise, led by Tesla’s U-turn
Luxury new car prices in October rose $757 compared to September but fell 7.4% year over year to $62,903. The monthly increase in average luxury goods prices was led by Tesla, the luxury market leader by volume. Last month, Tesla’s average transaction prices rose 5.2% compared to September, reflecting 10 consecutive months of lower transaction prices for the electric car maker. Other luxury brands that posted significant gains in transaction prices last month include Cadillac, Genesis, Jaguar, Lincoln and Volvo.
Despite overall higher prices, sales of luxury brands were strong in October, with the share of luxury products in total sales rising to 19.4%, compared to 18.6% in September.
The average price paid for an electric vehicle rises in October but remains much lower than in 2022
The average price paid for a new electric vehicle in October was $51,762, up from a revised $50,326 in September. The month-over-month price increase was driven by transaction price gains with the Tesla Model 3 (up 10%) and Model Y (up 3%). However, even with the gains in October, average EV prices fell by more than $13,000 year over year. Notably, the average price paid for a Tesla Model