According to Cox Automotive’s Kelley Blue Book, new car prices skyrocketed in December 2024, reaching an average transaction price (ATP) of $49,740. This is a 1.3% increase from the previous year and a 1.5% increase from November 2024 due to strong sales of expensive cars and luxury models.
“It was a memorable December in terms of both sales and prices,” said Erin Keating, executive analyst at Cox Automotive. “Consumer sentiment and confidence are on the rise, and cars, especially luxury cars, are emotional purchases. It’s no wonder that favorable market conditions have increased both prices and sales volumes.”
Sales of expensive cars are rapidly increasing
December usually sees a surge in luxury car sales, contributing to the rise in ATP. Last month, about 5.6% of all new car sales, or 84,000 units, exceeded $80,000, an industry record. Popular models in this price range include the Land Rover Range Rover, Cadillac Escalade, BMW X7, GMC Yukon, and Tesla Cybertruck.
Additionally, full-size pickup trucks with an average price of $64,261 helped improve ATP, with sales in that segment exceeding 223,000 units.
Brand-specific trends
Some brands showed noticeable changes in ATP. Mitsubishi Motors led the decline with a 12% year-over-year decline, while Buick and Volkswagen saw sales declines of 7% and 6%, respectively. Stellantis brands such as Chrysler, Dodge, Jeep and Ram also reported declines as automakers sought to manage high inventory levels.
Conversely, Cadillac and Tesla saw significant price increases, with ATP rising 13% and 10.5%, respectively. Infinity also reported an 8.1% year-over-year increase, with an average transaction price of $65,667.
Electric vehicles drive growth
The EV market also contributed to the rise in ATP. EV prices averaged $55,544 in December, an increase of 0.8% year-on-year and 1.1% month-over-month. Sales incentives remained strong, averaging 14.3% of ATP. This equates to more than $6,700 per sale. These incentives played a key role in pushing EV sales to over 1.3 million units in 2024, setting a new annual record.
Incentive trends
Incentives across all vehicle categories remained steady at 8.0% of December ATP, representing approximately $3,958 per transaction. Entry-level luxury cars and compact SUVs offered the highest incentives at 10% and 9.7% of ATP, respectively. Volkswagen, Ram, and Nissan led the way in providing incentives, all exceeding 13% of ATP, while Toyota, Land Rover, and Porsche reported the lowest incentives in the industry.
As the industry moves towards 2025, consumer optimism and evolving automotive trends suggest that ATP may continue to rise, especially in the luxury car and EV segments.
