Average New Car Prices Just Hit a Record High

If you recently went looking for a new car, you may have been shocked by the sticker prices. The range of affordable models continues to dwindle, while price tags balloon on already expensive SUVs and trucks, leading people to pay more than ever for a new vehicle.

The average transaction price of a new car has surpassed $50,000 for the first time.   

According to a Cox Automotive report, consumers paid an average of $50,080 for a new car in September. That’s up 2.1 percent from August and 3.6 percent year-over-year. That coincides with an increase in the average MSRP, which jumped 2.1 percent for the month and 4.3 percent for the year.  

Cars are expensive and are getting more so. Increased production cuts, regulatory uncertainty, and tariffs are driving up costs for automakers, making it challenging to produce cheaper models for a healthy profit.

Most of the cars under $30,000 on sale today in America are imported and subject to tariffs. Automakers were sending fewer of those vehicles to dealers earlier this year, although they were building more lower-trim options of other models.   

Cox Automotive attributed the higher transaction price to the increased demand for electric vehicles ahead of the expiring federal tax credit. Ford and General Motors reported strong EV sales last quarter, likely pushing the average transaction price up.   

That doesn’t mean consumers don’t want affordable options. Cheap car sales exploded last year as people sought value. The Nissan Versa, which the automaker will discontinue after 2025, saw sales jump 71.7 percent in 2024. Sentra sales jumped 39.8 percent, and Nissan will continue to sell it for another generation.   

It doesn’t appear that new car prices will decrease anytime soon. Prices spiked during the COVID-19 pandemic, with the average transaction increasing from just under $39,000 in 2019 to over $47,000 by the end of 2021, and they have been in the high $40,000 range ever since.   

Now, new car pricing has entered a new bracket that seems wildly expensive for the average consumer. People want cheap cars, but automakers don’t have to serve that market when so many are willing to pay so much.