The year 2000 was 25 years ago. If that sounds surprising because you keep referencing 2000 as “a few years back,” stop holding your phone at arm’s length and just buy some reading glasses already. Also, you’re going to want to sit down. Not because your back probably hurts, but because this news will hurt more: Kelley Blue Book says the average new-car price is $50,080, the first time it’s ever exceeded $50,000.
In 2000, the average new-car price was an estimated $20,356, according to a February 2001 study by the U.S. Bureau of Economic Analysis. And before you think inflation accounts for the cost difference, adjusting that 2000 amount into today’s dollars gets us $38,395. Where’s the extra 12 grand going? The 2025 cars don’t come with suitcases of cash in the trunk.
One detail that may have pushed current average prices higher is that the $7,500 EV tax credit disappeared on September 30. Of course, electric vehicle sales exploded right beforehand. The average sale price of an EV in September was over $58,000, and they comprised 11.6% of vehicle sales. So like that kid in your class who always got “A++” on tests, they pulled up the average.
The EV boost is just a single factor, though, and recent. From 2000 to 2025, vehicles have gotten larger, people are buying larger vehicles, and cars have tons more features. While a Consumer Reports study says safety and efficiency regulations didn’t drive up car purchase prices between 2003 and 2021, it also wrote that large SUVs “showed a statistically significant increase in price,” and midsized cars “showed a statistically significant decrease in price.” Well, isn’t it just lovely that sedans are going extinct, then.
Not to get technical about economics, but average car prices go up when cheap cars disappear. Also, manufacturers like making money. This is why many narrow-profit-margin inexpensive sedans have disappeared. For example, Sergio Marchionne, CEO of Fiat Chrysler in the mid-2010s, axed the Chrysler 200 and Dodge Dart. They weren’t profitable enough. In 2022, Audi CEO Markus Duesmann told the German publication Handelsblatt, per AutoEvolution: “We have realigned Audi as a premium brand. We’ll also limit our model range at the bottom and expand it at the top.” Well, Audi sales are in the toilet, so that went great.
The blame for this shift lies with consumers and manufacturers who have both fed into the feedback loop of “bigger, newer, and more feature-rich is better.” And so, the inevitable happened: Crossovers and SUVS have outsold sedans since 2017.  SUVs, crossovers, and trucks have higher profit margins than cars, even when using the same platforms.  Who knew that using more materials would result in vehicles that cost more?
Americans love trucks and SUVs for their high seating, visibility, and perceived safety of bulk. Yes, perceived, not necessarily actual. Consumers demand vehicles be as safe as possible, and what’s safer than being surrounded by multiple tons of vehicle? Well, a 2025 Mazda 3 ($24,550 suggested starting price) is an Insurance Instute for Highway Safety (IIHS) Top Safety Pick+, while a 2025 Chevrolet Silverado 1500 pickup ($36,900) is not. The IIHS even rates the Silverado’s structure and safety cage as “Poor” — not something you’d expect with a pickup weighing north of 5,000 pounds. By the way, the Silverado is the second-bestselling vehicle in America (behind the Ford F-150) and the Mazda 3 isn’t even the top seller in its segment.
When Doug DeMuro reviewed the Mercedes-AMG G65 in 2017, he scoffed that it came with a manual rather than electronic emergency brake. He said of the G65 and its handbrake lever, “Remember, this thing is $230,000, and it just looks so unsightly.” Sure, an electronic brake is more consistent, but it’s also more expensive to manufacture and repair. Tiny benefit for significant added cost. Luxury is no longer defined by material and build quality, but gadgetry, which causes car prices to rise. Still, car buyers are demanding all the gadgets they can stand (and then some).
And we can’t forget about the tariffs! Back in September, Kelley Blue Book told car buyers to expect tariffs to increase sub-$40,000 cars to get price hikes by as much as $6,000. Volkswagen and Audi announced higher car prices following the news that the 15% tariff on European goods was here to stay. The good news is that tariff impacts on car prices weren’t as bad as feared (still not great). Part of the reason is that now there are near-zero financial penalties for missing fuel economy standards, which lessened the tariffs’ impact. Hooray?
All this being said, do consumers get more from their cars in 2025 than in 2000? Setting aside concerns over tariffs, ever-increasing amounts of hard-to-fix, pricey electronics, and plastic-filled engine bays threating long-term durability, cars today are much faster, safer, cleaner, and more fuel-miserly than they were 25 years ago. (They may also be less engaging and fun, too, though that’s subjective.) But $20,000 vehicles sitting on the endangered species list may be the most frustrating part of an economic landscape where layoffs are rampant and AI seems to be threatening more jobs every day. 

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