New data shows average transaction prices hit a record high, driven by strong EV sales and luxury demand, leaving price-conscious buyers sidelined
The average transaction price of a new vehicle crossed a major threshold in September, climbing beyond $50,000 for the first time. Buyers paid an average of $50,080 last month, marking a new high in the cost of getting behind the wheel.
That’s an astonishing figure and Kelly Blue Book (KBB) noted “new-vehicle prices have risen steadily for more than a year, with the pace of the increases accelerating in recent months.” Speaking of which, the average transaction price jumped 2.1% from August and 3.6% from a year ago.
Record Prices Keep Climbing
Transaction prices weren’t the only things that climbed as average MSRPs also hit a new record of $52,183. That’s up 4.2% compared to this time last year.
The tax credit rush for EVs could have juiced the numbers and KBB believes 11.6% of vehicles sold last month were electric. That too would be a record and the average transaction price for an electric vehicle was $58,124.
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However, sales will likely drop following the elimination of the clean vehicle tax credit, although automakers have rolled out hefty incentives of their own.
Sticking with that theme, KBB said automakers spent 7.4% of average transaction prices on incentives and that equates to roughly $3,700. That’s the highest level we’ve seen all year and it’s up slightly from 7.2% in August. However, both are on par with the 7.3% figure of September 2024.
The automaker with the highest transaction prices last month was Jaguar Land Rover-owner Tata at $102,096. They were followed by Mercedes ($75,700) and BMW ($69,924).
On the flip side, the lowest average transaction price was $36,092 from Subaru. They narrowly beat the Renault-Nissan-Mitsubishi Alliance, which clocked in at $36,547.
Cox Automotive’s executive analyst, Erin Keating, said “Prices go up over time, and today’s market is certainly reminding us of that. While there are many affordable options out there, many price-conscious buyers are choosing to stay on the sidelines or cruising in the used-vehicle market.”
As a result, things are “being driven by wealthier households who have access to capital, good loan rates and are propping up the higher end of the market.”
Keating also noted that while tariffs are adding cost pressures, the “pricing story in September was mostly driven by the healthy mix of EVs and higher-end vehicles pushing the new-vehicle ATP into uncharted territory.”
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