Over the past year or so, new vehicle average transaction pricing has largely been on the decline following years of historic increases, though that downward slope hasn’t exactly been an even one. Rather, we’ve seen prices rise and fall on a month to month basis over that time frame, a trend that continued in December 2023. In fact, the Ford brand saw its ATP rise by 2.2 percent to $55,628 last month, while Lincoln’s average transaction pricing increased every so slightly – by 0.8 percent to $67,401. As for Ford Motor Company as a whole, ATP also increased in the last month of the year, too.
In December, Ford Motor Company ATP increased by 2.2 percent to $56,198, though in good news, that figure is also 2.1 percent lower than December 2022, when the company’s average transaction price was $57,432. The overall new vehicle market somewhat followed suit, however, with its ATP increasing by 1.3 percent to $48,759, which was also 2.4 percent lower than December 2022, when that same figure came in at $49,939.
This news isn’t all doom and gloom, however, as Cox Automotive notes that December marked the fourth consecutive month that new-vehicle transaction prices were lower versus last year, which is unique in that the industry typically almost always sees some sort of year-over-year increase. This was driven by an increase in incentive spending – which reached 5.5 percent of ATP for the first time since August 2021 – a big jump from the 2.7 percent incentives accounted for in December 2022.
“When we look at price strength, the pandemic created a seller’s market in which new vehicles were transacting above manufacturers’ suggested retail price in 2022,” said Michelle Krebs, executive analyst for Cox Automotive. “That market is all but gone now, as higher inventory has led to higher incentives and discounts – lower margins for dealers – and vehicles are now typically selling for under MSRP. The shift from a seller’s market to a buyer’s market is well underway.”