The automotive world is a fascinating mix of trends, numbers, and human behaviour, and few resources capture it as vividly as the Kelley Blue Book Report. Released monthly by Cox Automotive, this data-packed snapshot offers a window into how much we’re paying for new vehicles, what’s driving those prices, and where the industry might be headed. The February 2025 edition, dropped on March 11, paints a picture of a market that’s equal parts resilient and strained—where luxury thrives, affordability wanes, and electric vehicles (EVs) carve out their own curious niche. Let’s dive into what this report tells us about the state of new-car buying today, without the fluff or sales pitch—just the facts, woven into a story worth reading.
A Market in Flux: Average Prices and Incentives
The Kelley Blue Book Report pegs February’s new vehicle average transaction price (ATP) at $48,039. That’s a modest 1% bump from February 2024, but a 1.3% dip from January 2025. It’s a subtle shift, yet it hints at a market cooling off after years of relentless climbs. Five years ago, before a global pandemic rewrote the rules, that number sat at roughly $38,400—meaning today’s ATP is up a hefty 25% since February 2020. Erin Keating, an executive analyst at Cox Automotive, calls that pre-COVID month the last “clean” data point, a benchmark for how far the landscape has shifted.
What’s keeping prices afloat? Incentives play a role, though they’re not the giveaway bonanza of yesteryear. February’s average incentive package hit $3,392, or 7.1% of ATP—up 18.6% from a year ago when it was 6%. That’s a notable jump, but compared to 2020, incentives are down 13%. Meanwhile, monthly sales have slipped 9% over the same five-year stretch, and higher auto loan rates are squeezing buyers further. For many households, affordability feels like a distant dream—a theme that echoes across the Kelley Blue Book Report.
The Affordable Mirage Fades Away
If you’re hunting for a new ride under $20,000, the options just got slimmer. The Mitsubishi Mirage, long the lone holdout in that price bracket, saw sales drop to 2,323 in February—a 15% slide from January. With an ATP of around $19,000 and a stingy 2% incentive rate (well below the 7.1% industry average), it’s no surprise the Mirage struggled to move. Word is, Mitsubishi’s discontinued it, leaving the sub-$20,000 category empty. The brand itself still boasts the lowest ATP at $30,410, trailed by Nissan at $32,262. For budget-conscious buyers, these numbers signal a shrinking pool of attainable options—a stark contrast to the market’s high-end boom.
Six-Figure Splurge: Luxury’s Unstoppable Rise
Flip the script, and you’ll find six-figure vehicles thriving. The Kelley Blue Book Report notes over 52,000 new cars sold above $100,000 through February 2025, up from 46,000 the year before. Rewind to 2020, and that figure was just 12,000—a four-fold surge in five years. Land Rover’s Range Rover led the pack last month, with over 3,800 units sold at prices that make most wallets tremble. Keating ties this to an “income divide,” where high earners with top-tier credit keep the luxury segment humming. It’s a tale of two markets: one scrambling for scraps, the other splashing cash like it’s going out of style.
Compact SUVs: The People’s Choice
Somewhere in the middle lies the compact SUV segment—think Chevrolet Equinox, Ford Escape, Honda CR-V, and Toyota RAV4. February’s ATP here was $36,198, up 0.5% from last year. With over 220,000 units sold, these vehicles accounted for 18% of all new-car sales, proving their status as the industry’s workhorses. They’re not cheap, but they’re not Range Rover territory either—a sweet spot for buyers who want utility without breaking the bank. The Kelley Blue Book Report highlights their staying power in a crowded, competitive field.
Brand Winners and Losers
Not every brand is riding the same wave. The Kelley Blue Book Report tracked nearly 40 brands, and 11 saw ATPs drop year over year. Stellantis took the biggest hit: Jeep’s prices fell over 11%, Ram’s nearly 7%, and Chrysler and Dodge followed suit. It’s a rare bright spot for buyers, though it might reflect softer demand or heavier discounting. On the flip side, Mitsubishi and Nissan hold the affordability crown, while luxury marques like Land Rover bask in six-figure glory. The report lays bare a market of haves and have-nots, shaped by strategy, consumer taste, and economic currents.
Electric Vehicles: Pricey, but Discounted
Electric vehicles deserve their own spotlight. February’s EV ATP clocked in at $55,273—down 1.2% from January but up 3.7% from last year. That’s 15.1% higher than the industry’s $48,039 average, a gap that widened slightly from January. Incentives, though, are where EVs stand out: at 14.8% of ATP (about $8,162), they’re more than double the market average and the highest in over five years. A year ago, EV incentives were 10.2%—a 44% leap since then. The Kelley Blue Book Report suggests manufacturers are leaning hard into discounts to move inventory, especially as growth cools.
Tesla, the EV kingpin, saw its ATP rise 1.8% year over year to $53,248, though it fell 3.7% from January. Model 3 and Model Y prices dipped, as did the Cybertruck’s (down over 10% to $87,554), while Model S and X ticked up. It’s a mixed bag for Tesla, reflecting a market where demand isn’t as white-hot as it once was. Across the board, the Kelley Blue Book Report shows EVs as a premium play—costlier than gas-powered rides, but softened by hefty rebates.
The Bigger Picture: Affordability vs. Aspiration
What ties this all together? The Kelley Blue Book Report reveals a market at a crossroads. On one hand, rising ATPs, shrinking incentives, and climbing loan rates are walling off new cars from the average buyer. Keating’s point about February 2020 as a pre-COVID baseline drives it home: the industry’s up 25% in price, but down in accessibility. On the other hand, luxury sales are soaring, EVs are pushing boundaries (and budgets), and compact SUVs keep the middle ground alive. It’s a split-screen reality—affordability eroding for most, while aspiration fuels a select few.
The data isn’t just numbers; it’s a mirror to our priorities and pressures. The Mirage’s exit marks the end of an era for cheap wheels, while Range Rovers and Teslas signal where the money’s flowing. The Kelley Blue Book Report doesn’t predict the future, but it frames the present with unflinching clarity: a car market that’s thriving for some, tough for others, and always evolving.