New-vehicle prices moderated slightly in May and incentive spending grew, according to data released today by Kelley Blue Book. The average transaction price (ATP) for a new vehicle purchased in May declined from April and rose a mild 1.2% year over year, the smallest annual gain of 2026 and below the long-term average gain of 3.5% for May. Vehicle sales last month were higher year over year and compared to April.*
“Average transaction prices are rising 2 – 4% year-over-year across key vehicle segments, powered by a convergence of product cycles and supply dynamics,” said Erin Keating, Executive Analyst, Cox Automotive, the parent company of KBB.** “Redesigned SUVs from Toyota, Kia, Jeep, and Hyundai are commanding higher prices out of the gate, while Ford’s F-Series production constraints are tightening truck inventory, lifting average transaction prices, with freshened Ram pickup stepping in to capture buyers at the premium end,” said Keating.
After posting a strong 0.7% monthly increase in April, the new-vehicle ATP in May declined 0.5% month over month. Prices typically soften in May, according to Kelley Blue Book data. The average decline in the month is 0.4%. [AutoInformed opines that this is not a large trend reversal of the affordability problem in the auto industry – AutoCrat]
In May, the new-vehicle manufacturer’s suggested retail price (MSRP) – aka “asking price” – was $51,595, mostly unchanged from the revised lower April MSRP of $51,604. Year-over-year MSRP growth moderated to 1.6% in May, below the 2% annual increase recorded in April. The long-term average annual MSRP increase is 3.4%.
Incentives
Incentive spending increased in May to 7.1% of ATP, up from 6.8% in May 2025 and 6.9% in April. Incentive spending remained highest for EVs, many luxury segments, compact cars and full-size pickups. “For the past two years, automakers have remained relatively disciplined with incentive spending. Since January 2024, incentive spending has averaged 6.9% of ATP,” KBB said.
Vehicle Segments
For four of the five best-selling vehicle segments, annual ATP gains in May were well above the industry average of 1.2%. The top five segments by volume held steady in May, with the mid-size SUV segment on top for the fourth consecutive month. The top five segments accounted for 64.2% of total industry sales. Transaction prices in the largest segments were:
- Mid-size SUV: $50,185, up 2.9% year over year
- Compact SUV: $37,757, up 3.4% year over year
- Full-size pickup truck: $66,288, up 2.4% year over year
- Sub-compact SUV: $31,122, up 4.2% year over year
- Compact car: $27,443, up 0.7% year over year
Electric Vehicle Prices Lower Year Over Year for 11th Consecutive Month
- Electric Vehicle ATP: The average transaction price for a new electric vehicle declined month over month in May to $54,532. The average was lower by 4.0% year over year; May was the 11th consecutive month with an annual price decline. Initial estimates suggest EV sales topped 85,000 in May, the best result since the EV tax credits were revoked at the end of Q3 2025.
- EV Incentives: Electric-vehicle incentives remain elevated at nearly twice the industry average. In May, incentive spending was mostly unchanged month over month at 14% of ATP, equal to roughly $7,600.
- Tesla ATPs: The average price paid for a Tesla in May was lower by 1% compared to April and down 3.4% year over year. In May, 96% of Tesla’s total sales were its two core, most-affordable models, the Model 3 ($49,082) and Model Y ($51,537). As Tesla accounts for approximately 50% of the EV market, lower Tesla prices result in a lower industry-wide EV ATP.
*AutoInformed on
**Kelley Blue Book
Founded in 1926, Kelley Blue Book, The Trusted Resource®, says it is the vehicle valuation and information source trusted and relied upon by both consumers and the automotive industry for nearly a century. Kelley Blue Book provides transparent, objective information and data-driven, innovative tools for consumers, automotive dealers and manufacturers. Kelley Blue Book publishes millions of market-reflective values weekly on its top-rated website KBB.com. These include Blue Book® Trade-In Values to the Kelley Blue Book® Price Advisor tool, which offers a range for what consumers reasonably can expect to pay for a vehicle in their area. KBB.com editors rate and review hundreds of new vehicles each year to help consumers understand the Best Cars and Best SUVs to meet their needs. Kelley Blue BookSM Instant Cash Offer provides a redeemable trade-in offer to transaction-ready consumers and conveniently connects them to local participating dealers. Kelley Blue Book’s Service Advisor provides guidance on how much to pay for service and repairs, allowing consumers to schedule service with local dealers on KBB.com. Kelley Blue Book also provides vehicle values to finance and insurance companies as well as governmental agencies. Kelley Blue Book is a Cox Automotive brand.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
Vehicle Affordability – Price Increases Small as Incentives Grow
New-vehicle prices moderated slightly in May and incentive spending grew, according to data released today by Kelley Blue Book. The average transaction price (ATP) for a new vehicle purchased in May declined from April and rose a mild 1.2% year over year, the smallest annual gain of 2026 and below the long-term average gain of 3.5% for May. Vehicle sales last month were higher year over year and compared to April.*
“Average transaction prices are rising 2 – 4% year-over-year across key vehicle segments, powered by a convergence of product cycles and supply dynamics,” said Erin Keating, Executive Analyst, Cox Automotive, the parent company of KBB.** “Redesigned SUVs from Toyota, Kia, Jeep, and Hyundai are commanding higher prices out of the gate, while Ford’s F-Series production constraints are tightening truck inventory, lifting average transaction prices, with freshened Ram pickup stepping in to capture buyers at the premium end,” said Keating.
After posting a strong 0.7% monthly increase in April, the new-vehicle ATP in May declined 0.5% month over month. Prices typically soften in May, according to Kelley Blue Book data. The average decline in the month is 0.4%. [AutoInformed opines that this is not a large trend reversal of the affordability problem in the auto industry – AutoCrat]
In May, the new-vehicle manufacturer’s suggested retail price (MSRP) – aka “asking price” – was $51,595, mostly unchanged from the revised lower April MSRP of $51,604. Year-over-year MSRP growth moderated to 1.6% in May, below the 2% annual increase recorded in April. The long-term average annual MSRP increase is 3.4%.
Incentives
Incentive spending increased in May to 7.1% of ATP, up from 6.8% in May 2025 and 6.9% in April. Incentive spending remained highest for EVs, many luxury segments, compact cars and full-size pickups. “For the past two years, automakers have remained relatively disciplined with incentive spending. Since January 2024, incentive spending has averaged 6.9% of ATP,” KBB said.
Vehicle Segments
For four of the five best-selling vehicle segments, annual ATP gains in May were well above the industry average of 1.2%. The top five segments by volume held steady in May, with the mid-size SUV segment on top for the fourth consecutive month. The top five segments accounted for 64.2% of total industry sales. Transaction prices in the largest segments were:
Electric Vehicle Prices Lower Year Over Year for 11th Consecutive Month
*AutoInformed on
**Kelley Blue Book
Founded in 1926, Kelley Blue Book, The Trusted Resource®, says it is the vehicle valuation and information source trusted and relied upon by both consumers and the automotive industry for nearly a century. Kelley Blue Book provides transparent, objective information and data-driven, innovative tools for consumers, automotive dealers and manufacturers. Kelley Blue Book publishes millions of market-reflective values weekly on its top-rated website KBB.com. These include Blue Book® Trade-In Values to the Kelley Blue Book® Price Advisor tool, which offers a range for what consumers reasonably can expect to pay for a vehicle in their area. KBB.com editors rate and review hundreds of new vehicles each year to help consumers understand the Best Cars and Best SUVs to meet their needs. Kelley Blue BookSM Instant Cash Offer provides a redeemable trade-in offer to transaction-ready consumers and conveniently connects them to local participating dealers. Kelley Blue Book’s Service Advisor provides guidance on how much to pay for service and repairs, allowing consumers to schedule service with local dealers on KBB.com. Kelley Blue Book also provides vehicle values to finance and insurance companies as well as governmental agencies. Kelley Blue Book is a Cox Automotive brand.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.