New-vehicle transaction price drops increased in January, the average falling 2.6% to $47,401. But it wasn't enough to stop a sales slowdown.

The new average price was down 3.5% year-over-year, Cox Automotive said.

Part of the reason was a third straight month of increased incentives, which averaged 5.7% of the average transaction price. That was up nearly 100% year-over-year and from 5.5% in December.

Despite less pocketbook pressure, the sales pace for the month fell from 16.1 million in December and 15.1 million a year earlier to 15 million.

Lower January prices are typical after the brisker holiday sales season that’s particularly hot for luxury models, but last month’s decline was deeper than normal, Executive Analyst Erin Keating said in a press release.

“Prices have been trending downward for roughly six months now as automakers are sweetening deals to keep the sales flowing.”

Luxury model price drops led the way in January’s trend, Cox said. The average fell from $62,834 in December to $60,978, its lowest since the summer of 2021, Cox said.

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