The average transaction price (ATP) for a new vehicle in the U.S. was $48,397 in September, according to data released today by Kelley Blue Book.

The September ATP increased modestly from August but was lower year over year by 0.4 percent, as downward price pressure continues to hold new-vehicle prices in check. Incentive spending in September increased for the third straight month, rising modestly compared to August.

The average incentive package for a new vehicle was equal to 7.3 percent of the average transaction price ($3,522) in September, up from 7.2 percent in August and well above the 4.8 percent reported one year ago.

Cox Analysis

Cox Automotive Executive Analyst Erin Keating said new-vehicle transaction prices continue to be very steady this year, and higher incentive spending is helping maintain sales volume

“We still believe there is potential for growth in the market for the rest of the year, but with the uncertainty of a national election around the corner and major weather events disrupting business, maybe a slow, steady pace is all we should expect,” said Keating.

Compared to January, when the average transaction price for a new vehicle was $48,369, prices in September were virtually unchanged, higher by less than $30, with higher vehicle inventory levels have been a key driver of the downward price pressure.

New-vehicle supply at the start of September was 2.84 million units across dealerships in the U.S., as measured by Cox Automotive’s vAuto Live Market View, higher than the 2.61 million recorded in January and well above the 2.07 million a year earlier.

Why ATP is Holding

While the Mitsubishi Mirage was the only new vehicle in the U.S. still transacting for under $20,000 in September, the overall mix of small, more affordable vehicles has been elevated for much of 2024, which is helping hold down the new-vehicle ATP, according to Cox officials.

Vehicles such as the Chevrolet Trax (ATP: $25,081), Toyota Corolla ($25,535), and Hyundai Elantra ($25,902) remain best sellers, while the Toyota RAV4 and Honda CR-V–—No. 3 and No. 5 on the best-selling list, respectively—routinely transact for prices below $40,000, roughly 17 percent below the national average.

“One reason transaction prices are lower in 2024 is that many buyers are choosing smaller, less expensive vehicles,” noted Cox Automotive senior economist Charlie Chesbrough. “The subcompact and compact SUV segments are outperforming the market this year, and by no coincidence, they’re also two of the lowest-priced product segments in the market.”

Market Overview

As more affordable vehicles are gaining market share in 2024, other segments are shrinking. The full-size pickup truck share is lower year over year in 2024. And since the average transaction price for a full-size pickup is north of $65,000, the lower share is helping pull industry-wide ATPs lower.

The mid-size SUV segment is smaller this year versus 2023. Through Q3 sales of mid-size SUVs have an average transaction price above $48,000, lower by more than 5 percent. This market shift away from higher-priced vehicles, according to Kelley Blue Book research, is helping drive new-vehicle ATPs that are generally flat or lower year over year.