Photo Credit: Ground Picture/


Average New Vehicle Prices Fall Again In April

Written By: CarPro | May 18, 2023 10:15:07 AM

Great news if you're a new car shopper. After falling in March for the first time in 20 months, new vehicle prices remained below MSRP in April according to the latest data shared from Kelley Blue Book. Researchers say non-luxury prices increased while, notably,  luxury prices decreased for the first time in nearly a year. KBB also reports that automaker incentives in April were at their highest level in a year. 

Average New Car Prices Trending Down

According to Kelley Blue Book, new vehicle MSRPs are trending down with the average price Americans paid for a new vehicle in April remaining below the manufacturer's suggested retail price (MSRP) for the second consecutive month. The average transaction price (ATP) of a new vehicle in the U.S. remained relatively flat in April 2023 at $48,275, a month-over-month decrease of 0.03% ($14) from an upwardly revised March reading of $48,289.

New-vehicle transaction prices in April were up 3.7% ($1,744) compared to year-ago levels. Meanwhile, auto manufacturers' incentive spending rose to the highest level in the last year at 3.6% of the ATP in April, averaging $1,714.

KBB also breaks things down into dollars. In April 2023, the average price consumers paid fell to $378 below sticker price. That's quite a difference from a year ago when the average ATP was $600 above MSRP. Sales volumes were down month over month by 1.5% but up 9.0% year over year in April, which KBB attributes to higher inventory levels and fleet deliveries.

"New-vehicle transaction prices are trending downward in 2023, which should feel like a breath of fresh air to buyers following the last few years of low supply and rapidly rising prices," said Rebecca Rydzewski, research manager of Economic and Industry Insights for Cox Automotive. "Now that inventory levels are starting to climb and manufacturers are increasing incentives, the market will respond accordingly. High auto loan interest rates are still a major issue for many buyers, but inventory and price trends are a positive in the market right now."

Average Prices for Non-Luxury Vehicles In April Increase

The average price paid for a new non-luxury vehicle in April was $44,750, an increase of $461 compared to March 2023. Year-over-year, non-luxury prices increased by 5.2%. Even as the average non-luxury sticker price rose above $45,000 in April, buyers still paid below MSRP by $381.

The brands with the biggest ATP declines: Chrysler, Ford, Honda, Nissan, Toyota and Volkswagen which saw ATP declines between 0.2% to 3.5% month over month in April.

The non-luxury brands with the most price strength: Kia and Honda that  transacted between 3% and 4% over sticker price in April, respectively. KBB says both automakers still have inventory levels well below the industry average.

Average Prices for Luxury Vehicles in April Fall

Notably, April saw a drop in luxury vehicle transaction prices which fell below $65,000 for the first time in nearly a year. 

The average luxury buyer paid $64,144 for a new vehicle in April 2023, down $1,605 from March, and the first time transaction prices for luxury fell below $65,000 in 11 months. Transaction price estimates for Tesla, the luxury brand leader in the U.S., continue to show the results of price cuts across the company's four vehicles.

Across key segments, luxury vehicle ATPs were a mixed bag in April:

  • Entry-level luxury cars, high-end luxury cars, luxury compact SUVs, luxury mid-size SUVs and luxury subcompact SUVs all showing price declines between 0.5% and 1.4%
  • Luxury cars and luxury full-size SUVs saw price increases between 0.8% and 1.6%

Researchers say strong luxury vehicle sales have been a primary reason for overall elevated new-vehicle prices. This trend continued in April, with the luxury vehicle share at 18.2% of total sales. Still, that's down from a high of 19.5% in February.

April New EV Prices Down More Than $10K Year-Over-Year

Falling electric vehicle prices are another big story for April. KBB says EV ATPs fell to nearly $55,000.  KBB says initial estimates for the average price paid for a new electric vehicle (EV) in April fell from March by $4,464 (down 7.5%) to reach $55,089. That's down a significant $10,096 compared to one year ago. The average new EV sold for an upwardly revised $59,553 in March, according to Kelley Blue Book estimates, which still is well above the industry average. New EV pricing peaked in June 2022 and has fallen significantly so far in 2023.

"April's downward movement of EV average transaction prices reflects EV automakers, particularly Ford and Tesla, seeking a balance between pricing and profitability," said Michelle Krebs, executive analyst at Cox Automotive. "With average EV prices trending lower, we are seeing EV sales increase. For example, EV sales estimates in April were up by 26% year over year."

Automaker Incentives Continue Trending Upward 

As inventory increases for many automakers,  incentive spending is increasing as well.  KBB data shows that incentives averaged $1,714 in April,  their highest level in a year.  They increased to 3.6% of the average transaction price compared to 3.2% in March. That amounts to $170 month over month.

Still researchers say incentives remain at a historically low level.  For comparison, Kelley Blue Book estimates incentives averaged:

  • 3.6% of ATP in April 2023
  • 7.8% of ATP in April 2021 
  • 9.0% of ATP in April 2019

The luxury car segment had the highest incentives in April 2023 at 7.7% of ATP. Vans had the lowest incentives at only 0.3% of ATP.

"Incentives are one of the ways automakers can ensure new-vehicle inventory levels are kept in check," said Rydzewski. "Buyers can benefit significantly from manufacturers increasing incentives, including special low APR financing to help keep new auto loan rates attractive. As supply continues to increase, industry average incentives are likely to go up as well."

For a closer look at the KBB data click here.

Get access to our network of certified CarPros and enjoy your next car buying experience! Find a CarPro

Photo Credit: Ground Picture/

Source: Kelley Blue Book Press Release.