A new car is still going to cost you an arm and a leg. But there is some good news in this crazy car market from car valuation site Kelley Blue Book (KBB), which analyzed average transaction prices (ATPs) for August 2023.
“Transaction prices are now down 2.4%, or $1,212, from the start of the year, the largest decrease in the past decade,” says a KBB news release.
This is good news — but when you look at the data year over and year and by car type, it becomes clear that prices are still on a rollercoaster.
How Much Does a New Car Cost Right Now?
The average price for a new vehicle was $48,451 in August — a 0.6% bump from the previous month’s figure and a $42 increase compared to a year ago, according to the latest KBB data.
Breaking down different categories of vehicles, here is the latest price information from KBB:
- For new non-luxury vehicles, the average price was $44,827 — a $169 decrease compared to the previous month and a year-over-year increase of only 0.7%.
- For new luxury vehicles, the average price was $64,107 — a 3.3% decrease year over year.
- For new electric vehicles, the average price was $53,376 — a $257 decrease compared to the previous month. EVs are down more than $11,000 year-over-year, thanks to big declines in Tesla pricing.
Let’s dive a little deeper still and look at the average prices of some major car categories as of August. We’ll also see how much their prices have changed month to month and since last year.
| Car Manufacturer | August 2023 Transaction Price (Average) | July 2023 Transaction Price (Average) | August 2022 Transaction Price (Average) | Month Over Month Change | Year-Over-Year Change |
|---|---|---|---|---|---|
| Compact Car | $26,281 | $26,434 | $26,148 | -0.6% | 0.5% |
| Compact SUV/Crossover | $35,688 | $35,624 | $35,212 | 0.2% | 1.4% |
| Electric Vehicle | $53,376 | $53,633 | $65,688 | -0.5% | -18.7% |
| Mid-Size Car | $31,943 | $32,159 | $32,146 | -0.7% | -0.6% |
| Full-Size Car | $48,061 | $48,023 | $46,674 | 0.1% | 7.6% |
| Full-Size Pickup Truck | $65,567 | $65,362 | $63,648 | 0.3% | 3.0% |
| Minivan | $48,139 | $48,275 | $47,395 | -0.3% | 1.6% |
| Sports Car | $48,035 | $47,606 | $45,312 | 0.9% | 6.0% |
| Subcompact Car | $25,050 | $24.877 | $22,510 | -7.3% | 2.4% |
| Hybrid/Alternative Energy Car | $39,624 | $37,961 | $33,555 | 4.4% | 18.1% |
| Luxury Car | $80,697 | $81,024 | $75,781 | -0.4% | 6.5% |
| Industry Average | $48,451 | $48,165 | $48,409 | 0.6% | 0.1% |
Shopping for a New Car? Read This.
In this crazy car market, money expert Clark Howard doesn’t want you to overpay, so if you can get by with the car that you have, he suggests that you hold on to it until car prices drop further. To keep your current car on the road, read up on this simple maintenance schedule you can follow.
If you absolutely must get a new car, here are some ways to save.
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
If you’re shopping for a new vehicle right now, Clark says he feels your pain.
But he points out that the production issues that have vexed the car market for more than two years will continue to ease. And, thankfully, this should translate into stabilization in the car market and cheaper vehicle prices for you.
Want more insight on vehicles? Read up on when Clark says car prices will drop.
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