Kelley Blue Book Releases May 2024 New Vehicle Sales Report

While prices remained level, higher incentives helped move vehicles...

A new report from Cox Automotive reveals new-vehicle prices in May remained lower year over year for the eighth consecutive month, as higher inventory levels continued to hold downward pressure on transaction prices.

Last month, according to Kelley Blue Book, the average transaction price (ATP) for a new vehicle in the U.S. was $48,389, statistically unchanged from the downwardly revised price of $48,368 in April. The new-vehicle ATP in May was lower year over year by 0.9%, approximately $442.

Higher incentives helped make new vehicles more affordable in May. The average new-vehicle incentive package – discounts and rebates included – last month was 6.7% of the average transaction price, according to Kelley Blue Book estimates, an increase from April and the highest level since May 2021.

Kelley Blue Book Releases May 2024 New Vehicle Sales Report | THE SHOP

Incentives in May were approximately $3,200, notably higher than one year ago when discounts were measured at 4.0% of ATP.

“In May, we saw some positive news on the sales front,” said Erin Keating, executive analyst for Cox Automotive. “A lot of those sales gains were juiced by higher incentives and lower prices, which is good news for consumers worrying about inflation.”

Today’s new-vehicle market is a textbook example of supply-and-demand dynamics in the economy. At the beginning of May, new-vehicle inventory was estimated at 2.84 million, which was higher year over year by 51% and at the highest point since late 2020, according to vAuto Live Market View. (vAuto is a Cox Automotive brand.) Many brands had more than 100 days’ supply at the start of May, and only Toyota, Lexus and Honda had days’ supply under 60.

Higher new-vehicle inventory continues to keep industry-average prices in check and drive incentives higher, as consumers have more choices and dealers are willing to deal.

While higher inventory levels are holding down overall prices, average industry prices are being pushed higher by expensive, high-volume models.

In May, four of the top 10 best-selling vehicles in the U.S. were full-size pickup trucks – the Ford F-Series, Chevrolet Silverado, Ram Pickup and GMC Sierra. All four trucks posted ATPs above $60,000, with the GMC Sierra – No. 7 in the top 10 list – above $70,000. The best-selling vehicle in the U.S. last month, the popular Ford F-Series pickup, had an average price near $68,000. 

While four popular pickup trucks push prices higher, five of the top 10 most popular vehicles transacted at prices below $40,000 and well below the Kelley Blue Book average transaction price for the industry – $48,389. Examples include the Toyota RAV4 – the third most popular vehicle in America – with transaction prices averaging $37,608. And the Honda CRV – No. 4 in sales – had an ATP in May of $37,364, nearly 23% below the national average.

“The U.S. market is very diverse, with plenty of popular, high-priced vehicles that sell very well and drive the average higher,” added Keating. “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 outsold BMW 2-to-1 in May.”

Last month, the share of vehicles transacting below $40,000 increased compared to May 2023, suggesting a market shifting to more affordable models. Vehicles transacting below $40,000 accounted for 41.2% of new-vehicle sales in May, up from 36.8% one year ago. Kelley Blue Book counted approximately 70 different models available for below $40,000. 

Only one model with meaningful sales volume – the Mitsubishi Mirage – transacted below $20,000.

Tesla prices, which bottomed out in late 2023, are estimated to have increased by 3.1% month over month to $57,369 in May. Prices were higher year over year by 1.5%. Since January, when Tesla ATPs stood at $51,892, the EV maker’s average transaction price has increased by more than 10%, lifted in some part by growing Cybertruck sales – an estimated 3,000 were sold in May. Average transaction price: $108,667.

The average price paid for an electric vehicle in May was $56,648, which is 2.6% higher than in April. Unlike Tesla, though, industry-wide EV prices in May were lower year over year by 4.1%. EV incentives continue to run much higher than the overall market. 

Overall, new EV prices peaked in the summer of 2022, during the last gas price surge, and have since generally been on the decline. This year, EV prices have been volatile on a month-to-month basis and fell to a low in March before increasing again in April and May.

Data tables are available for download.

Pat Curtin

Pat Curtin is the managing editor of THE SHOP magazine.

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