New vehicles might still be out of reach for many customers who land in the subprime credit tier. But the latest data from Kelley Blue Book showed that perhaps the prospects for putting a subprime consumer into a new model might be improving.

KBB reported on Wednesday that the average transaction price (ATP) of a new vehicle in July was $48,334, a month-over-month decrease of 0.7% ($337) from June’s ATP of $48,671, and up only $199 from one year ago.

Compared to the start of the year, analysts said transaction prices are down 2.7%, or $1,335. KBB computed the movement to be the largest January to July tumble in the past decade.

“New-vehicle price inflation has all but disappeared in 2023,” Cox Automotive research manager Rebecca Rydzewski said in a news release. “New-vehicle prices, primarily driven by cuts in luxury and electric vehicles, are decreasing as inventory is steadily improving.

“With higher inventories and higher incentives helping to keep downward pressure on prices, there certainly are good reasons for shoppers to be heading back into the market,” Rydzewski continued.

KBB also reported that OEM incentive spend increased for the 10th consecutive month in July to the highest level since October 2021, averaging $2,148, or 4.4% of the average transaction price.

One year ago, average incentive spending was 2.4% of ATP, according to KBB tracking.

Analysts also mentioned the average price paid for a new, non-luxury vehicle in July was $44,700, down $471 compared to June.

Year-over-year, KBB indicated non-luxury prices increased by only 0.5%.

“However, non-luxury vehicle prices have held remarkably steady since January, fluctuating up and down by only a few hundred dollars,” analysts said.

KBB pointed out the bigger story is that unlike five years ago, only one model transacted below $20,000 in July.

The Mitsubishi Mirage’s average transaction price in July was $19,205, according to KBB.

Analysts recollected that in July 2018, there were a dozen vehicles with ATPs below the $20,000 barrier.

“In comparison, many of today’s smallest vehicles, including the Hyundai Venue, Kia Rio, Nissan Versa and Toyota Corolla, are all transacting well over $20,000,” KBB said. “Mainstream brands with particularly tight inventory — Honda, Kia and Toyota — raised their incentive spending in July but were still below the industry average.”