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

First-Half Dealership Deals Up
Buy-sell activity shows that acquirers are looking for value and scale as many retailers seek to leave an increasingly competitive and complex market, Kerrigan Advisors reports.
Read More →
Kia Closes Out Summer With a Bang
Its U.S. subsidiary broke multiple records in August, in part due to a surge of demand for hybrids models.
Read More →
Indiana Dealership Changes Hands
A 30-year-old Ford dealership in Indiana has a new owner and will soon be undergoing renovations to meet manufacturer requirements.
Read More →
Texas Dealership No Longer in the Family
The Ford store, a longtime cornerstone of the Houston market, is now part of one of the fastest-growing U.S. auto groups.
Read More →
Genesis Grows California Presence
The Cardinale Automotive Group opened its third Genesis rooftop in the Golden State, Genesis of San Bruno, a stand-alone dealership serving the San Francisco Bay Area.
Read More →
August Auto Sales a Mixed Bag
An early forecast shows strong business despite consumer hurdles, and hybrids are a big piece of their affordability coping strategy.
Read More →
EV Market Humming Along
July sales show steady growth as the segment stabilizes from last year’s artificial surge following pullback of federal support.
Read More →
Auto Loan Delinquency Rates Stabilize
Auto loans are a main driver of nonmortgage consumer debt, but delinquency rates stabilized in the second quarter across all credit risk tiers.
Read More →
EV Sales Recover in Q2
The EV sales roller coaster continues as numbers show improvement, but industry experts predict a year-over-year third-quarter decline and fourth-quarter jump.
Read More →
The Cheapest Hybrids to Fuel
The powertrain is increasing in popularity, in no small part due to its fuel economy. A new report lists the most efficient hybrids on the market.
Read More →