Some welcome news for potential car buyers: dealerships are taking their foot off the gas on new vehicle prices.

According to Kelley Blue Book, the average transaction price for a new car in July was $48,334, a slight dip from June and only a 0.4% year-over-year increase.

That could present an opportunity for those who have been waiting for prices to cool before purchasing their next ride, even as interest rates remain high.

"Be aware of what are the offers out there, do your homework, because manufacturers are certainly going to be more willing to negotiate on price today than they were a year ago," said Charlie Chesbrough, senior economist and senior director of industry insights at Cox Automotive, which owns Kelley Blue Book.

Chesbrough noted that the downward trend could indicate that prices could drop even further, suggesting that some buyers may want to wait even longer.

A 'deflationary environment'

"Patience may be rewarded," he said. "So if I wait to buy tomorrow, I may actually get a better price than if I buy today, and that's sort of the definition of a deflationary environment, and that seems to be where we're headed here in the new vehicle market."

The average price of a new car surged earlier in the pandemic, as manufacturers struggled to keep up production amid supply chain woes and shifted their focus to building pricier, more profitable models.

The average new-vehicle transaction price hit a record high of $49,918 in December, according to Kelley Blue Book. (The company noted that December typically sees higher prices due to luxury vehicle sales.)

Though prices are still close to what they were last year, they are falling. Industry watchers say a number of factors contribute to that — higher vehicle inventories, more incentives being offered at dealerships and a price war in the electric car market.

Although vehicle sales have improved over the last year, that's mostly been due to commercial fleet purchases, Chesbrough said. Lower prices on the lot may be a sign that car makers are now looking to accelerate retail sales.

"Certainly these high vehicle prices have been weighing down on the market," he said. "So the fact that we're seeing incentives rise does suggest that the manufacturers feel that they have to put a little bit more money on the hood in order to move these vehicles in the market that we have today."