Cars have always been expensive, both to own and to maintain. Recently, however, those costs have hit a new high for a number of reasons.
According to a recent report from Kelley Blue Book, the average price for a new vehicle surged above $50,000 for the first time ever.
While the cost of new vehicles has steadily increased for more than a year, price increases have accelerated in recent months, according to the report.
The average transaction price in September was $50,080, up from $48,317 the year prior. This 3.6% jump, according to Kelley Blue Book, was one of the largest increases since early 2023.
“The $20,000 vehicle is now mostly extinct, and many price-conscious buyers are sidelined or cruising in the used-vehicle market,” said Erin Keating, executive analyst for Cox Automotive, which owns Kelley Blue Book.
"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 continued.
While tariffs are a factor, a mix of high-end luxury vehicles and expensive EV models are likely what led to the record high, according to the report from Kelley Blue Book.
As electric vehicles make up a larger share of the new car market – an estimated 11.6%, according to the report – the average price for one increased to $58,124.
“Tariffs have introduced new cost pressure to the business, but the pricing story in September was mostly driven by the healthy mix of EVs and higher-end vehicles pushing the new-vehicle ATP into uncharted territory,” said Keating.
While the sticker shock might turn some potential buyers away from a new car, the Kelley Blue Book report said that vehicle sales are maintaining a normal pace.
“We’ve been expecting to break through the $50,000 barrier,” Keating explained. “It was only a matter of time, especially when you consider the best-selling vehicle in America is a pickup truck from Ford that routinely costs north of $65,000.”
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