New Car Prices Decreased by 2.2% in January | Carscoops

      The full-size car segment experienced a significant price decline of 7.5% in January.

      16 hours ago

      by Brad Anderson

      The typical time required to save for a new vehicle in the United States decreased to 37.7 weeks.

      According to Cox Automotive, incomes nationally increased by 3.6% year-over-year.

      The average transaction price for a new vehicle in the US dropped to $48,641 in January.

      Although purchasing a new vehicle is still unattainable for many, those who can afford one will be pleased to find that the affordability situation is at its best in 41 months. This enhancement is attributed to a reduction in the average price of new cars, along with rising average annual incomes across the United States.

      Recent data indicates that the median time needed to save for the average new vehicle in the US fell to 37.7 weeks in January, down from 38.2 weeks in December. This marks an improvement from a year ago when 39.6 weeks of income was necessary.

      Price Reductions and Income Increases Enhance Affordability

      Cox Automotive reports that the average price of new vehicles in the U.S. dropped by 2.2% in January, reaching $48,641. While this remains higher than the $48,031 average transaction price from the previous year, the trend is encouraging for buyers.

      Concurrently, while prices were falling, incomes rose by an average of 3.6% year-over-year. The average monthly car payment also decreased by 1.3% to $755, reflecting a 1.7% decline compared to the same period last year. This amount is significantly lower than the $795 peak recorded in December 2022.

      “New-vehicle affordability was supported by the lower prices typically seen in January following the surge in luxury brand sales in December,” stated Cox Automotive chief economist Jonathan Smoke. “These reduced prices, along with increased incomes, more than compensated for reduced incentives and a slight rise in interest rates in January.”

      Various market segments played a role in the decline of average transaction prices nationwide. For instance, average transaction prices in the full-size car segment dropped by 7.5% compared to December 2024, while the luxury subcompact SUV/crossover category saw a month-to-month decrease of 6.4%. Declines were also observed in the luxury car, luxury compact SUV/crossover, and high-performance car segments.

      Notable Exceptions to the Decline

      Interestingly, not all segments followed this declining trend. Luxury full-size SUV/crossovers experienced an average price increase of 4.1%, rising from $107,927 in December 2024 to $112,405 in January 2025. Likewise, high-end luxury cars saw a price rise of 2.6%, increasing from $117,652 in December 2024 to $120,765 in January this year.

      While most buyers are benefiting from better deals, some are facing rising prices based on the type of vehicle they seek. This illustrates how factors such as buyer preferences and seasonal trends can impact the market. For those in the market for a new car, monitoring these changes could aid in securing a better deal.

      Average Transaction Prices For New Cars (January 2025)