New cars prices dropped 2.2% in January

The full -size cars segment experienced a drop in price of 7.5% in January

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Although the purchase of a new vehicle remains out of reach for many, those who can afford one will be happy to know that their affordability is at its most favorable level in 41 months. This improvement comes from a drop in the average price of a new car, associated with the growth of average annual income in the United States.

New data reveal that the median number of weeks necessary to offer the new average vehicle in the United States fell to 37.7 weeks in January, a fall of 38.2 weeks in December. It is also an improvement compared to 12 months ago, when an average of 39.6 weeks of income was necessary.

Price reductions and income growth increases affordability

According to Cox AutomotiveThe average price of new vehicles in the United States decreased by 2.2% in January, falling to $ 48,641. Although this is even higher than the average transaction price of $ 48,031 (ATP) compared to a year ago, the trend evolves at least in a favorable direction for buyers.

Read: a new average car costs $ 48,000, but buyers only want to spend $ 35,000

At the same time, prices have dropped, revenues increased on average by 3.6% from one year to the next. The average monthly payment of the car in January also decreased by 1.3% to $ 755, reflecting a decrease of 1.7% compared to the same period last year. This is significantly lower than the $ 795 peak seen in December 2022.

“The affordability of the new vehicle received a boost of the drop in prices generally observed in January following the wave of luxury brands sales in December,” said the chief economist of Cox Automotive, Jonathan Smoke. “These lower prices, combined with higher income, have more than compensated for lower incentives and a slight increase in interest rates in January.”

Several market segments have contributed to the drop in ATP across the country. For example, the ATPS in the full-size car segment dropped 7.5% compared to December 2024, while prices in the luxury SUV / Cross-compact cross category decreased by 6.4% per month . Declines have also been noted in the luxury car, the luxury compact SUV / crossing and high -performance car segments.

Notable exceptions to the downward trend

Interestingly, not all segments have followed this downward trend. Luxury Full-Size SUV/CROSSOVERS SAW AVERAGE PRICES RISE BY 4.1%, from $ 107.927 in December 2024 to $ 112.405 in January 2025. Similarly, High-End Luxury Cars Experienced A 2.6% Increase, with Prices Climbing from $ 117.652 To $ 120.765 in January of this year.

While most buyers get better offers, some see prices increase, depending on the type of vehicle they follow. This simply shows how things like buyers’ preferences and seasonal models can shake the market. If you are on the market for a new car, keeping an eye on these quarters of work could help you conclude a better deal.

Average transactions price for new cars (January 2025)