The average new car buyer paid $48,039 in February — 1% more than a year ago but 1.3% less than January’s figure.
The overall drop, however, hides another trend: Americans are on pace to buy a record number of six-figure cars this year.
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America is separating into two separate car markets. One serves wealthier, better-credit buyers purchasing more luxury cars than ever. Another serves more typical buyers, who are paying less every month.
The Low-End — Declining Prices and Compact SUVs
Kelley Blue Book tracks prices among nearly 40 car brands. Eleven, including some of the best-selling mainstream brands, saw their average sale price fall last month.
All four major Stellantis brands — Chrysler, Dodge, Jeep, and Ram — had notably lower transaction prices in February compared to one year ago. Jeep is in the midst of a major strategic effort to drive down its own prices. It’s working. Jeep prices were lower by more than 11%, the most of any brand. Ram prices were lower by nearly 7%.
Compact SUVs were the best-selling category, representing 18% of all new cars last month. They sold for an average of $36,198.
The average transaction included discounts worth 7.1% of the sale price. That’s down slightly from late 2024 when many dealers were significantly overstocked. Several brands remain well over the usual industry target for inventory but may be holding onto extra stock rather than selling it as a hedge against tariffs that could drive up prices next month.
The High-End — Six-Figure Sales Booming
At the other end of the market, Americans are buying record numbers of luxury cars. Through the end of February, shoppers have already driven home more than 52,000 vehicles priced at $100,000 or more.
Just five years ago, Americans bought only 71,000 all year. They drove home 337,128 last year, a more than four-fold increase since 2020.
Last month, Land Rover’s Range Rover was king of the hundred-grand jungle, with sales of over 3,800 in February alone.
“The income divide remains a key issue for new-vehicle sales momentum, as the industry continues to count on high-income households with prime and super prime credit scores to drive sales,” explains Cox Automotive Executive Analyst Erin Keating.
Cox Automotive owns Kelley Blue Book.
Automakers reoriented their lineups toward wealthier, better-credit buyers at the height of the COVID-19 pandemic, cutting affordable cars from their portfolios and building more high-priced models.
EVs Getting Twice the Average Discount
The average electric vehicle (EV) buyer paid $55,273 last month, down 1.2% from January’s figure. EV buyers qualified for an average discount of 14.8%.
EV incentives were 10.2% of the final transaction price a year ago. They have increased by 44% in the past year.