The average new car buyer paid $48,510 last month — an increase of 2.2% from March and the highest average since last December. The increase came after three straight months of price drops.
Prices are still 0.5% lower than they were a year ago.
Incentives Declined
Incentives — the discounts automakers and dealers advertise to attract customers — declined in April. They comprised 6.3% of the average deal, down from 6.6% the month before.
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That’s significant, as incentives have grown steadily since last October.
However, the change may not signal long-term trouble for car buyers. It might just be a sign of a new quarter.
“The month-over-month increase in pricing in April is likely just a reflection of some pullback on incentives compared to the end of Q1, in March when many automakers were pushing discounts to hit a strong finish to the quarter,” said Erin Keating, an executive analyst at Kelley Blue Book parent company Cox Automotive.
Pickups Pushing Non-Luxury Prices Higher
The average non-luxury buyer paid $44,989, a 2.1% increase from March’s average. Pickup trucks drove the increase. Full-size trucks sold for 2.8% more in April than in March, and midsize trucks sold for 3.3% more.
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A single vehicle may explain that change. The Toyota Tacoma dominates the midsize truck market. An all-new, redesigned Tacoma has just begun arriving on dealer lots. Redesigned vehicles tend to come with a price bump. The Tacoma’s starting price rose by $3,750 from 2023 to 2024. A loaded 2024 Tacoma 4×4 Limited costs $8,520 more than the same trim level in 2023.
Luxury Incentives Down
Americans bought more luxury cars last month than the month before. Luxury marques made up 18.4% of all cars sold – up from 18.2% in March.
However, luxury automakers offered fewer discounts. Incentives on luxury cars fell from 7.4% to 6.0%.
That left the average luxury buyer spending $64,076. Still, luxury prices were down 2.1% from a year ago.
EV Prices Flat
Electric vehicle (EV) transaction prices in April were essentially flat versus March at $55,252, up roughly 0.1%. Flat prices almost look like an increase after a year of steady declines in EV prices. April’s average is 8.5% lower than a year before.
However, Telsa controls more than half the EV market in the U.S., so a Tesla price change has an outsized effect on overall EV prices. After disappointing first-quarter financial results, Tesla increased its average price for a second straight month.
