Kelley Blue Book (KBB), a leading vehicle valuation and information source, released its monthly new-vehicle average transaction price (ATP) report for January 2025, revealing key insights into the automotive market.
Key Findings from the Kelley Blue Book Report
The January report highlights several important trends impacting car buyers and the automotive industry:
New-Vehicle ATP Dips in January
The average transaction price (ATP) for new vehicles in January 2025 decreased by 2.2% compared to December, settling at $48,641. Despite this monthly decline, January’s ATP still marked a 1.3% increase compared to the same period in 2024 ($48,031). This seasonal dip is typical as luxury car sales, which peak in December, tend to decrease in January. Several luxury brands like Audi, BMW, Cadillac, and Lexus saw sales drop significantly, some by over 50%, contributing to the lower overall ATP.
Sales Incentives Rise Year-Over-Year
While ATPs saw a slight year-over-year increase, sales incentives offered by manufacturers were significantly higher. Incentives averaged 7.2% of ATP in January, equivalent to approximately $3,486 per vehicle. This represents a substantial 29.2% jump compared to January 2024, where incentives were only 5.6% of ATP.
Slower Year-Over-Year ATP Growth
The 1.3% year-over-year ATP increase in January is notably lower than the historical average growth rate. From 2020 to 2024, ATPs surged by an average of 4.9% annually, with even more significant gains of 9% or higher in both 2021 and 2022. The period from 2013 to 2019 also saw a more robust average annual growth of around 3%.
Sales Volume Fluctuations
January’s total new-vehicle sales volume experienced a 5.1% increase compared to the previous year. However, it was down more than 25% from December’s surprisingly strong performance. New-vehicle inventory dipped below 3 million units at the start of January for the first time since late October.
Jeep Prices Decline, Electric Vehicle Prices Hold Steady
According to Kelley Blue Book’s Executive Analyst, Erin Keating, Jeep prices notably declined by almost 9% year-over-year, reaching their lowest point in over three years at nearly $49,000. This reflects the brand’s ongoing efforts to address pricing concerns. Meanwhile, electric vehicle (EV) ATPs remained relatively stable in January at $55,614, a slight increase compared to a revised December figure. While EV prices were down 1.4% year-over-year, incentive spending on EVs dropped 3.1% from December but saw a significant 48.6% increase compared to the previous year. Tesla, the leading EV manufacturer, saw its average transaction price increase by 4.5% year over year.
Kelley Blue Book: A Trusted Resource for Automotive Information
The Kelley Blue Book report provides valuable market insights for both consumers and the automotive industry. The data underscores the dynamic nature of the car market, influenced by seasonal trends, inventory levels, and manufacturer incentives. KBB continues to be a trusted source for vehicle valuations, market trends, and expert analysis, empowering consumers and industry professionals alike to make informed decisions.
