Americans paid near-record prices for brand new cars in December, as a mix of seasonal demand and better sticker prices pushed the common transaction inside shouting distance of $50,000.
Recent automotive prices have climbed for 4 consecutive months, based on Kelley Blue Book (KBB) data. In December, the common price of a recent vehicle was $49,740, the second-highest level ever recorded and just shy of the December 2022 record ($49,958). Vehicle prices increased 1.5% from the previous month alone.
A part of this can be a function of automakers launching recent, higher-priced 2025 model-year cars. As they unveiled recent features and technology, many also increased manufacturer’s suggested retail prices, or MSRPs, on their hottest models. For instance, the brand new 2025 Ford F-150 pickup truck starts at $38,710, up from $36,570 on the 2024 model. (KBB calculates average transaction costs to reflect what buyers really pay, which will be lower than the “sticker” price of a vehicle, based on a spokesperson from KBB parent company Cox Automotive.)
A seasonal demand bump also aspects into the spike in prices. High-end cars, particularly, are inclined to sell well across the winter holidays. Their loftier prices contribute to a rise in the general average. This season particularly, shoppers snapped up luxury cars, based on KBB. “Sales of vehicles priced above $80,000 boomed in December, up 37% over a yr ago,” it noted in a report.
Several brands stood out with large transaction price increases. In line with KBB, Cadillac transaction prices soared 13% prior to now yr, Tesla prices jumped 10.5% and Infiniti prices rose 8.1%.
Average recent automotive prices near $50,000
Higher prices mean higher monthly payments for buyers. Most buyers are actually signing up for payments over $600. In a separate report released this week, Cars.com finds that over 60% of new-car buyers now have monthly payments over $600, while 35% are over the $800 mark.
In 2019, sub-$600 automotive payments were the norm. Since then, nevertheless, automotive prices have surged 29%, and auto loan rates are much higher as a consequence of the Federal Reserve’s rate of interest hikes to combat inflation.
“Financing costs are still a serious barrier for a lot of buyers despite some recent help from the Federal Reserve with a percentage point of rate cuts,” Cars.com said in a report.
Looking to save lots of? The excellent news is, there are still deals on the market. For one thing, discounts are going to be available on most 2024 models straight away — in case you can find one, that’s.
In December, KBB data shows that Volkswagen, Ram and Nissan had the best incentives amongst major automakers. All three manufacturers had incentives amounting to greater than 13% of MSRPs across their lineups, in comparison with a median of 8% across all automakers. (At current prices, 8% is roughly $3,958.)
One other place to search for deals: Most Stellantis models (Chrysler, Dodge, Jeep and Ram) can be found at higher inventory levels than a yr ago. This implies dealers are wanting to unload them. Prices on vehicles from all 4 nameplates have dropped, KBB finds.
