New-Vehicle Price Inflation Disappearing
Pandemic-induced ATPs receding as inventories, incentives ascend.

Automaker incentive spending rose in July for the 10th month in a row to its greatest since October 2021.
IMAGE: Pixabay/Andreas 160578
The upward pandemic-era pressure on new-vehicle prices appears to have finally subsided, as July’s year-over-year average price increase was the smallest in a decade, Kelley Blue Book says.
It found further confirmation of the milestone in the January-through-July transaction price decrease of 2.7%, which it said it the biggest fall of that period in a decade.
July’s average new-vehicle transaction price was $48,334, down 0.7% month-over-month and up $199 from a year earlier, the Cox Automotive company said.
Inventories that have steadily increased this year from pandemic-era lows, along with rising incentives, are affecting the rebalancing. Automaker incentive spending rose in July for the 10th month in a row to its greatest since October 2021 for a $2,148 average, or 4.4% of the ATP. That’s up from 2.4% year-over-year.
“New-vehicle price inflation has all but disappeared in 2023,” said Cox Automotive Research Manager Rebecca Rydzewski. “New-vehicle prices, primarily driven by cuts in luxury and electric vehicles, are decreasing as inventory is steadily improving.”
Average nonluxury new-vehicle prices alone fell nearly $500 month-over-month in July to $44,700, up just 0.5% year-over-year, though they’ve held steady since January. Just one model was selling for less than $20,000, though, unlike before the pandemic: the Mitsubishi Mirage, Kelley Blue Book said.
Meanwhile, average luxury prices fell $192 month-over-month to $63,552, a nearly 3% year-over-year decrease and down by more than 5% since the year started. The decline was helped along by more than 19% cuts in prices at Tesla, which Cox considers the luxury market leader.
Originally posted on Auto Dealer Today
More Industry

Pennsylvania Dealership Under New Retailers
The sale of the Chrysler Dodge Jeep Ram store puts a family auto group on a leaner path as first-time dealers take the helm.
Read More →
Battery Storage Takes Priority Over EVs
U.S. automakers are prioritizing battery energy stationary storage over electric-vehicle production as the consumer demand for EVs lags the rest of the world.
Read More →
Auto Dealers Feel Better But Not Great
A second-quarter Cox Automotive poll of franchised retailers and independents found better views of the current market after a good spring but anticipation of third-quarter storminess.
Read More →
New-Vehicle Sales Picture Relative
A May forecast is complicated by last spring’s trade tariff effects on auto retail. Despite continued hard realities, many consumers took advantage of ways to bite the bullet.
Read More →
Auto Group Acquires Third Nissan Rooftop
Iowa-based Coleman Automotive Group recently acquired its seventh dealership, McGrath Nissan, which it renamed Nissan of Elgin.
Read More →
April Less Affordable
Based on prices, reduced incentives and slower household income growth, consumers found it more challenging to buy new last month, Cox Automotive reported.
Read More →
Building an Extraordinary F&I Agency
Work to determine your specialized talent, because that fact will determine everything about your agency’s future.
Read More →
Recipe for Compliance
The secret to both amazing barbecue and compliance is the same: understanding the basics and committing to a process.
Read More →
EVs Getting More Attractive
A growing percentage of U.S. consumers are open to switching and fewer are adverse to the idea, according to a recently completed survey. That’s despite the end of a tax break.
Read More →
EV Sales Drop in April Following Surge
North American electric-vehicle sales were down 28% year-over-year, a sharp contrast from global EV sales growth of 6%.
Read More →