December’s Auto Market: Luxury Leads Price Surge
December 2024 closed with a strong performance for the auto industry. High-end vehicle sales, in particular, played a major role in driving average new-car prices up. According to Cox Automotive’s Kelley Blue Book, the average transaction price (ATP) reached $49,740, a 1.3% increase year-over-year and 1.5% higher than November 2024.
Consumers were feeling good, and they were buying – especially luxury vehicles. This is reflected in both the sales volume and the prices.
Luxury Vehicles Shine
A significant 5.6% of all new-vehicle sales, which amounts to roughly 84,000 units, exceeded $80,000 in December. This marks a new high for the industry, signaling the strong demand for high-end automobiles. Vehicles like the Land Rover Range Rover, Cadillac Escalade, BMW X7, GMC Yukon, and even the Tesla Cybertruck, have been popular choices within this price bracket.
Full-Size Trucks and Brand Movements
Full-size pickup trucks, with an average price of $64,261, also fueled the price increase, with over 223,000 units sold. Meanwhile, some brands reported a downturn. Mitsubishi saw the largest decrease at 12%, followed by Buick and Volkswagen at 7% and 6% respectively. Stellantis brands also experienced declines as they worked to manage high inventory levels.
On the other hand, Cadillac and Tesla had a strong month, with ATPs going up 13% and 10.5%, respectively. Infiniti also did well, achieving an 8.1% rise, with its ATP reaching $65,667.
Electric Vehicles’ Impact
The electric vehicle (EV) market had a hand in the rising prices too. EV prices averaged $55,544 in December, up 0.8% year-over-year and 1.1% from the previous month. Generous sales incentives were a major driver, averaging 14.3% of ATP, which is equivalent to over $6,700 per sale. These incentives played a part in pushing EV sales past 1.3 million units in 2024, setting a new yearly record.
Incentives and the Road Ahead
Overall, incentives across all vehicle categories remained stable at 8.0% of ATP in December, translating to approximately $3,958 per transaction. Entry-level luxury cars and compact SUVs showed the highest incentives, at 10% and 9.7% of ATP, respectively. Volkswagen, Ram, and Nissan led in incentive offerings, all exceeding 13% of ATP, while Toyota, Land Rover and Porsche reported some of the lowest incentives in the industry.
As the auto industry heads into 2025, both consumer sentiment and the changing trends in the market suggest that ATPs could keep rising, specifically in the luxury and EV segments.
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