Healthy Food Delivery : Average New Car Cost Surpasses $50K for the First Time

Wednesday, October 29, 2025

Average New Car Cost Surpasses $50K for the First Time

Buying a car is a major financial decision. Buying used can save you a solid chunk of change, but can also get you in trouble if you end up with a car in rougher condition than was advertised. Buying a new car gives you some peace of mind in that department, at least in theory. But it also comes with a hefty price tag — now more than ever.

New estimates released by Kelley Blue Book reveal that the average transaction price (ATP) of a new vehicle was $50,080 in September. That marks the first time the ATP has ever exceeded $50,000, representing a 3.6 percent year-over-year increase. The manufacturer’s suggested retail price (MSRP) reached $52,183, which was also a record high.

“It is important to remember that the new-vehicle market is inflationary,” said automotive industry expert Erin Keating. “Prices go up over time, and today’s market is certainly reminding us of that.”

What Are People Buying?

So why is now the time that auto prices finally broke that $50,000 barrier? Inflation is a large part of it. According to KBB, the 3.6 percent annual increase in ATP was the largest since 2023, but also in line with typical inflation rates.

Another major factor is the types of vehicles people are buying. In economically tight times, car buyers on a budget typically choose to buy used vehicles rather than brand-new mid-tier vehicles. That drives down sales of more affordable new cars and skews price averages higher.

“While there are many affordable options out there, many price-conscious buyers are choosing to stay on the sidelines or cruising in the used-vehicle market,” said Keating. “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.”

KBB estimates that electric vehicle sales made up over ten percent of the U.S. car market in September. Despite not necessarily fitting in the luxury vehicle class, electric vehicles do come with a hefty average price tag— in September, EVs had an ATP of $58,124.

Are Tariffs Driving Up Prices?

Tariffs have been a driving force of economic uncertainty all year. But even though they will likely continue to impact consumers for the foreseeable future, tariffs are not to blame for these recent record-breaking new car prices.

“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. “We’ve been expecting to break through the $50,000 barrier. 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.”