The average price for a new vehicle continues to get lower, according to the latest sales figures from car valuation site Kelley Blue Book (KBB).
How Much Does a New Car Cost Right Now?
The average price for a new vehicle was $48,389 in May 2024 — just about the same as the revised price in April ($48,368), but about $442 lower than the year-over-year price.
Here are some factors that have swayed pricing over the past month, according to KBB:
- New car incentive packages, including rebates and discounts, accounted for 6.7% of the purchase price, which is the highest since May 2021.
- New car inventories are estimated at 2.84 million, a 51% increase year over year and the most since late 2020 at the peak of the COVID-19 pandemic.
- 41.2% of new vehicle sales over the past month were transactions below $40,000, which is a 36.8% jump compared to a year ago.
- Buoyed somewhat by Cybertruck sales, Tesla prices crept 3.1% higher to $57,369 compared to the previous month and 1.5% compared to the previous year.
Let’s dive a little deeper still and look at the average prices of some major car categories as of May. We’ll also see how much their prices have changed month to month and since last year.
| Car Manufacturer | May 2024 Transaction Price (Average) | April 2024 Transaction Price (Average) | May 2023 Transaction Price (Average) | Month Over Month Change | Year-Over-Year Change |
|---|---|---|---|---|---|
| Compact Car | $26,295 | $26,537 | $26,949 | -0.9% | -2.4% |
| Compact SUV/Crossover | $36,393 | $36,532 | $36,588 | -0.4% | -0.5% |
| Mid-Size Car | $32,005 | $31,826 | $32,419 | 0.6% | -1.3% |
| Full-Size Car | $44.232 | $45,165 | $46,811 | -2.1% | -5.5% |
| Full-Size Pickup Truck | $65,771 | $66,284 | $65,512 | -0.8% | 0.4% |
| Luxury Car | $54,226 | $55,596 | $54,745 | -2.5% | -0.9% |
| Minivan | $48,090 | $48,956 | $47,525 | -1.8% | 1.2% |
| Sports Car | $46,178 | $46,395 | $46,171 | -0.5% | 0.0% |
| Subcompact Car | $23,756 | $23,932 | $25,232 | -0.7% | -5.9% |
| Industry Average | $48,389 | $48,368 | $48,830 | 0.0% | -0.9% |
Shopping for a New Car? Read This.
“In May, we saw some positive news on the sales front,” Erin Keating, executive analyst for Cox Automotive, says in the KBB news release. “A lot of those sales gains were juiced by higher incentives and lower prices, which is good news for consumers worrying about inflation. While there are a lot of vehicles transacting at very high prices, that doesn’t mean all new vehicles are unaffordable. There are still plenty of excellent, well-priced vehicles out there, particularly in the compact segments.”
Because of the sweet incentive deals, money expert Clark Howard says there may be an opportunity for you to score a new car right now.
“There’s a lot more manufacturer incentives and rebates, special financing offers you’re seeing pop up on the TV ads. And then the dealers discounting below suggested manufacturers retail price, like it used to be,” he says on his podcast.
“Because of specific disruptions in the used vehicle market, you’ll likely find that a brand new version of these brands will be cheaper to buy than a two-year-old version of these brands,” he says.
Here are some ways to save on a new car right now:
1. Shop Around
Don’t take the first deal that comes along … or the second. Make sure you shop around to compare the best prices for similar models.
“It’s ultra-important for you to comparison shop,” Clark says. If the dealer in your local area doesn’t have what you want, you may have to expand your search to find the vehicle for you.
“What you do is, you shop and even be willing to go farther to buy a new vehicle than you would have in the past,” Clark says. Read about Clark’s unusual tip to save money on a new car.
2. Avoid a Long Car Loan
Clark advises against taking out an extended loan on any car, new or used.
“The longest auto loan you should ever take out is 42 months,” Clark says. “If you can’t afford the payment on a 42-month loan, then you should buy a cheaper car.”
Read about Clark’s 42-month rule for auto loans.
Final Thoughts
Clark points out that the production issues that have vexed the car market are starting to ease. Thankfully, this is beginning to translate into stabilization in the car market and cheaper vehicle prices for you.
Want more insight on vehicles? Read Clark’s guide on how to buy a new car.
