The average earner can now pay off a new car loan in around 37 weeks.

The average transaction price (ATP) for a new vehicle in the U.S. has soared over the last decade from around $32,000 to almost $50,000 but, fortunately, there has been a little bit of reprieve for consumers in recent months.

Data from Kelley Blue Book reveals that the ATP for a new vehicle in the U.S. was $48,401 in July. This is slightly lower than the ATP of $48,424 from June and down $106 from July last year. They have also dropped by 3.1% from the peak of $49,929 recorded in December 2022.

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There's promising news for car buyers who finance their purchases. Cox Automotive's analysis shows that, before the COVID-19 pandemic, it took the average earner between 33 and 36 weeks to pay off a car loan. Although this period has generally increased in recent years, it dropped to 37 weeks in July -- the shortest time recorded in the past three years. Additionally, typical monthly payments have decreased by 1.5%, now averaging $753.

Solid inventory levels have contributed to the fall in prices. At the start of July, there were 2.91 million new vehicles in inventory across the country, a huge 52% jump from the same month last year.

The country's most affordable segment for new vehicles remains the subcompact car class with an ATP of $23,031 in July, 3.9% lower than in June and down 7.3% year-over-year. The compact car class also remains affordable with ATPs of $26,798, although that is a 1.3% increase from the $26,450 of June.

Several other segments have seen minor price rises. For example, the ATP of high-end luxury cars has jumped 2.8% month-over-month to $114,181, while the luxury subcompact SUV/cross class has risen 2.5% to $41,041.

Incentives continue to increase and rose to 7% of the ATP in July, higher than the 6.4% reported in June. Compared to a year ago, incentives are 59.1% higher, and almost every major brand except Ram had higher incentive levels year-over-year in July. That's great news for buyers.