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The average transaction price (ATP) for a new vehicle in the United States exceeded $50,000 for the first time in September, marking a milestone in the ongoing rise of vehicle costs, according to new data from Kelley Blue Book.
The average new-car buyer paid $50,080 last month, up 2.1% from August and 3.6% higher year over year — the largest annual gain since spring 2023.
Incentive spending rose modestly to 7.4% of ATP, or about $3,700 per vehicle, the highest level so far in 2025. The average manufacturer’s suggested retail price (MSRP) — or “sticker price” — climbed to a record $52,183, up 4.2% year over year.
Kelley Blue Book analysts say the continued strength of the luxury and electric vehicle markets helped push prices into record territory. More than 60 models carried ATPs above $75,000, representing 7.4% of total industry sales. The Cadillac Escalade remained a standout, with 4,320 units sold in September.
Erin Keating, executive analyst at Cox Automotive, said the pricing trends reflect an increasingly bifurcated market.
“It is important to remember that the new-vehicle market is inflationary,” Keating said. “Today’s auto market is being driven by wealthier households who have access to capital, good loan rates and are propping up the higher end of the market.”
Keating noted that tariffs have added cost pressure but attributed most of September’s price growth to the mix of high-end and electric models. She added that the milestone was “only a matter of time,” pointing out that America’s best-selling vehicle — the Ford F-Series pickup — often sells for more than $65,000.
Electric vehicle (EV) sales hit a new record in the third quarter of 2025, with 437,487 units sold and a market share of 10.5%. Buyers rushed to close deals before federal EV incentives expired at the end of September, pushing sales nearly 30% higher than a year earlier.
The average EV transaction price reached $58,124, up 3.5% from August but essentially flat year over year. Incentive spending for EVs fell slightly to 15.3% of ATP, or about $8,900 per vehicle.
Tesla’s ATP declined to $54,138 in September, down 6.8% year over year, as the company prepared to introduce lower-priced versions of its Model 3 and Model Y — a shift that could bring down overall EV prices in the months ahead.
With record transaction prices, expanding EV adoption, and rising luxury demand, analysts suggest the auto industry may be approaching a tipping point. While the top end of the market remains robust, price-sensitive consumers are increasingly turning to used vehicles or delaying purchases altogether.
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Mark Huffman has been a consumer news reporter for ConsumerAffairs since 2004. He covers real estate, gas prices and the economy and has reported extensively on negative-option sales. He was previously an Associated Press reporter and editor in Washington, D.C., a correspondent for Westwoood One Radio Networks and Marketwatch.
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