The average new car buyer in America paid $48,389 in May — about 1% less than a year ago. May marks the eighth straight month prices have been lower year over year, according to estimates by Kelley Blue Book.
Supply Higher Than Demand
New car prices are governed by the simplest economic laws. Dealers started May with 2.84 million new cars for sale, 51% more than a year ago.
Automakers traditionally aim to keep 60 selling days’ worth of cars in stock. Most now have more than 100, with only Toyota, Lexus, and Honda under the traditional target. That gives shoppers many options and leaves dealers and factories marking down cars to win their attention.
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Discounts On the Rise
The average new-vehicle incentive package – discounts and rebates included – last month was 6.7% of the average transaction price. That’s the highest level since May 2021. The average buyer last month claimed incentives worth about $3,200.
A split in Americans’ tastes meant the top 10 best-selling models include some higher-priced and some lower-priced vehicles.
Trucks Priced Like Luxury Cars Pull the Average Up
Four of the 10 best-sellers were full-size trucks, all selling above $60,000 on average. But five of the top 10 sold for under $40,000. The Toyota RAV4, in third place, had an average sale price of $37,608. The Honda CRV – fourth – sold for an average of $37,364, nearly 23% below the national average.
“The U.S. market is very diverse,” explains Cox Automotive Executive Analyst Erin Keating, “with plenty of popular, high-priced vehicles that sell very well and drive the average higher. The popularity of fully loaded, full-size pickup trucks that are more luxurious than many luxury vehicles is unique to the U.S. market.” The Ford F-Series, she notes, outsold the entire BMW brand 2-to-1 in May. The average F-Series sold for $67,937 – not far from the $72,946 price of the average BMW luxury vehicle.
Cox Automotive is the parent company of Kelley Blue Book.
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Still, America’s tastes are slowly shifting toward more affordable cars. Vehicles priced under $40,000 made up 41.2% of sales in May, up from 36.8% a year ago.
EV Prices Climbed On Tesla Price Increases
The average electric vehicle buyer paid $56,648 in May, which is 2.6% higher than in April. EV prices had been in a steady decline for most of 2024, but rose last month on a series of price increases from market leader Tesla.
EV incentives continue to run much higher than the overall market. In May, the average incentive package for an electric vehicle was 12.4% of the final sales price.
