The average new car buyer in America paid $49,740 last month, close to an all-time high. But high prices aren’t to blame. The increase came thanks to Americans choosing to buy more expensive models.
December’s figure is just $218 under the all-time record set in December of 2022. But that month’s average came thanks to a shortage of new cars, forcing many Americans to pay more than sticker price for a new vehicle and settle for the feature and color combination dealers could get.
Two years later, that picture is radically different. Last month, the average buyer qualified for $3,958 worth of incentives — an 8% discount off MSRP. Incentives grew by 44% in 2024 alone as some automakers found themselves overstocked and used discounts to compete.
Related: Is Now the Time to Buy, Sell, or Trade-in a Car?
So why the high average transaction price? Because Americans went luxurious with their holiday car shopping. Sales of vehicles priced above $80,000 boomed in December, up 37% over a year ago.
“As we reported just after the election, consumer sentiment and confidence have been on the rise,” explains Cox Automotive Executive Analyst Erin Keating. “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.”
Cox Automotive owns Kelley Blue Book.
Americans Set Luxury Shopping Records
December usually means an uptick in luxury car sales. But 2024 saw a new phenomenon – soaring sales of vehicles priced high even by luxury standards.
In a typical month, 4.4% of the cars Americans buy are priced over $80,000. Last month, that figure was 5.6% — the highest on record.
Full-size truck sales also lifted that average. Most full-size trucks now have a starting price of around $40,000, but automakers also sell more expensive versions equipped like luxury cars. Luxurious pickups sold well in December, with the average transaction price on a full-size truck reaching a Mercedes-like $64,261.
Some Brands Saw Prices Fall
The last time America neared record new car prices, it was difficult to find an affordable car. That’s not true this time.
Several brands saw their average sale price fall in December. Buick sold the average vehicle for 7% less than one year ago. Volkswagen saw its average price fall 6% year-over-year.
All of Stellantis’ major brands – Chrysler, Dodge, Jeep, and Ram – posted notable average transaction price (ATP) drops compared to year-ago levels as the company works to reduce elevated inventory levels. Chrysler and Dodge brand prices were both down 4.3% year over year; Jeep prices were lower by 6.3%, and Ram prices were lower by 1.6%.
With its small lineup, Mitsubishi saw the biggest drop, selling the average vehicle for 12% less than a year before.
Other brands saw notable year-over-year gains at the end of 2024. Cadillac ATPs were higher in December by nearly 13% compared to year-earlier levels. Telsa prices were higher by 10.5%, and Infiniti transaction prices increased by 8.1% year over year to $65,667.
EV Prices Followed the Same Pattern
Transaction prices for electric vehicles (EVs) fell throughout 2024 but surged at the end. The average EV sold for $55,544 in December – 0.8% higher than a year ago and 1.1% higher than in November.
That increase came despite healthy EV incentives. The average EV transaction included a 14.3% discount last month. EV incentives rose a shocking 41% during the year.
Americans bought a record number of electric cars in 2024, driving home more than 1.3 million EVs for the first time.
