Kelley Blue Book Analysis: January Sees New-Vehicle Prices Dip But Rise Compared to Last Year
In a recent report by Kelley Blue Book, various trends in new-vehicle transaction prices for January 2025 were revealed. Notably, the average transaction price (ATP) for new vehicles witnessed a 2.2% decline from December 2024, settling at $48,641. However, when compared to January 2024, this price represented an increase of 1.3%, up from the previous year's $48,031. This phenomenon indicates a slight volatility influenced by market conditions and seasonal changes.
One key observation from the report is that sales incentives provided by manufacturers have decreased as well. In January, they accounted for 7.2% of ATPs compared to 8.0% in December, totaling around $3,486 per vehicle, which reflects a significant increase of 29.2% from the previous year. This shift in incentives may affect consumer buying behavior as the pressures of car pricing fluctuate in a competitive market.
It's common for ATPs to decrease in January due to a dip in luxury brand sales that peaks in December. Brands like Audi, BMW, Cadillac, and Lexus experienced significant declines, some exceeding 50% in sales. With fewer high-end vehicles shifting the overall sales mix, the average transaction price naturally trends lower.
Moreover, the 1.3% year-over-year increase in January's ATP is considerably less than the long-term average increase of 4.9% seen annually from 2020 to 2024, where gains exceeded 9% in 2021 and 2022. Historical perspectives show that from 2013 to 2019, new-vehicle average prices typically rose by around 3.0% each year.
Despite the overall price decrease in January, the total sales volume for new vehicles rose by 5.1% year-over-year. However, it was still over 25% lower than the unexpectedly robust December sales. Noted within the report, the new-vehicle inventory fell below 3 million units as January launched, marking the first significant drop since late October 2024.
Erin Keating, Executive Analyst at Cox Automotive, emphasized that, "After an unexpectedly busy December, both new-vehicle sale volume and transaction prices fell in January as the market could be stabilizing for seasonal adjustment factors." The Jeep brand's ATP in January showcased an almost 9% decrease compared to the previous year, as the brand navigates a perceived pricing challenge, averaging around $49,000, closely aligned with industry averages. This represents the lowest point Jeep has reached in over three years.
Turning to electric vehicles (EVs), prices remained relatively stable in January. The ATP for EVs was recorded at $55,614, reflecting a nearly 1% uptick from the adjusted prices in December. Interestingly, EV prices dropped by 1.4% year over year. Moreover, incentive spending on EVs decreased by 3.1% from December but still remained significantly higher—up by 48.6% year over year.
When comparing the overall market, the ATP for EVs was 14.3% above the general industry average, which had previously shown a higher price premium of 17.4% just a year earlier. For market leader Tesla, an analysis indicated the ATP increased by 4.5% year over year, with the Cybertruck's prices falling 6.5%, nearing $98,000, while Model X prices similarly declined. However, the Model Y and Model 3, both key players in the U.S. EV market, observed year-over-year ATP growth of 2.2% and 6.2% respectively.
Kelley Blue Book, established in 1926, serves as a trusted resource within the automotive industry and among consumers. As the industry benchmark, KBB provides reliable, data-driven information benefiting automotive dealers, manufacturers, and the general public, thus contributing to informed decision-making when purchasing vehicles.
In summary, the Kelley Blue Book report serves as a vital indicator of current trends within the automotive market, denoting the importance of understanding seasonality effects on pricing, sales incentives, and consumer preferences as the year progresses.
One key observation from the report is that sales incentives provided by manufacturers have decreased as well. In January, they accounted for 7.2% of ATPs compared to 8.0% in December, totaling around $3,486 per vehicle, which reflects a significant increase of 29.2% from the previous year. This shift in incentives may affect consumer buying behavior as the pressures of car pricing fluctuate in a competitive market.
It's common for ATPs to decrease in January due to a dip in luxury brand sales that peaks in December. Brands like Audi, BMW, Cadillac, and Lexus experienced significant declines, some exceeding 50% in sales. With fewer high-end vehicles shifting the overall sales mix, the average transaction price naturally trends lower.
Moreover, the 1.3% year-over-year increase in January's ATP is considerably less than the long-term average increase of 4.9% seen annually from 2020 to 2024, where gains exceeded 9% in 2021 and 2022. Historical perspectives show that from 2013 to 2019, new-vehicle average prices typically rose by around 3.0% each year.
Despite the overall price decrease in January, the total sales volume for new vehicles rose by 5.1% year-over-year. However, it was still over 25% lower than the unexpectedly robust December sales. Noted within the report, the new-vehicle inventory fell below 3 million units as January launched, marking the first significant drop since late October 2024.
Erin Keating, Executive Analyst at Cox Automotive, emphasized that, "After an unexpectedly busy December, both new-vehicle sale volume and transaction prices fell in January as the market could be stabilizing for seasonal adjustment factors." The Jeep brand's ATP in January showcased an almost 9% decrease compared to the previous year, as the brand navigates a perceived pricing challenge, averaging around $49,000, closely aligned with industry averages. This represents the lowest point Jeep has reached in over three years.
Turning to electric vehicles (EVs), prices remained relatively stable in January. The ATP for EVs was recorded at $55,614, reflecting a nearly 1% uptick from the adjusted prices in December. Interestingly, EV prices dropped by 1.4% year over year. Moreover, incentive spending on EVs decreased by 3.1% from December but still remained significantly higher—up by 48.6% year over year.
When comparing the overall market, the ATP for EVs was 14.3% above the general industry average, which had previously shown a higher price premium of 17.4% just a year earlier. For market leader Tesla, an analysis indicated the ATP increased by 4.5% year over year, with the Cybertruck's prices falling 6.5%, nearing $98,000, while Model X prices similarly declined. However, the Model Y and Model 3, both key players in the U.S. EV market, observed year-over-year ATP growth of 2.2% and 6.2% respectively.
Kelley Blue Book, established in 1926, serves as a trusted resource within the automotive industry and among consumers. As the industry benchmark, KBB provides reliable, data-driven information benefiting automotive dealers, manufacturers, and the general public, thus contributing to informed decision-making when purchasing vehicles.
In summary, the Kelley Blue Book report serves as a vital indicator of current trends within the automotive market, denoting the importance of understanding seasonality effects on pricing, sales incentives, and consumer preferences as the year progresses.
Topics Auto & Transportation）
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