America’s new car market is still not back to its pre-pandemic normal, but it grew closer in July as automakers and their dealers provided more discounts on new cars.
The average new car buyer paid $48,401 last month – almost unchanged from June’s figure. That final sale price included discounts worth 7% of the total.
Before the COVID-19 pandemic hit, incentives routinely made up 10% of the average sale. At the height of the pandemic’s impact, cars often sold for more than the manufacturer’s suggested retail price. A year ago, incentives were at 4.4%.
The average buyer in July 2024 paid $106 less than they would have a year before. The average sale price peaked in December 2022 at nearly $50,000.
Many automakers are significantly overstocked this summer. Dealers had 52% more cars on hand in July than a year before. However, high interest rates are keeping many shoppers home, spooked by high monthly payments and tough lending standards.
Trucks Keep Average High, But There Are Cheaper Vehicles
The high prices of hot-selling full-size trucks are keeping the average transaction price higher than it otherwise would be.
The average buyer of the Ford F-Series, America’s best-selling vehicle, paid over $67,000 last month. Its rival, the Chevrolet Silverado, had an average price of over $60,000 as well.
Still, approximately one in four new vehicles last month was a compact SUV (average price, $36,621), or a subcompact SUV ($29,827).
“The thing about the U.S. is its diversity, and that goes for the U.S. auto market as well,” said Erin Keating, executive analyst at Cox Automotive. “There are many expensive, high-profile vehicles out there, but consumers have many good options priced well below industry average. We hear this from the large dealers all the time: No matter the budget, chances are we can make something work. This is particularly true where inventory is higher, and incentives are following.”
Cox Automotive owns Kelley Blue Book.
EV Prices Holding Steady
The average transaction price for an EV in July, at $56,520, was higher than in June but lower year over year by 1.5%
Dealers discounted electric cars more than gas-powered cars last month. Incentives made up 12% of the average EV purchase.
Segment leader Tesla is seeing its average rise – In July, Tesla ATPs were $59,593, up 11% from one year ago and at the highest point since February 2023.
The Cybertruck’s success is pushing its average higher. Last month, it was once again the best-selling vehicle of any kind priced over $100,000. However, prices for Tesla’s Model Y and Model 3 also rose.
