Key Takeaways
- New car prices reached above $50,000 for the first time, according to a new Kelley Blue Book estimate.
- Analysts at Cox Automotive say it was “only a matter of time” before the barrier was broken.
- Despite the rising prices, retail sales are “healthy,” according to the report.
New car prices have hit a monster milestone — but many prospective car buyers aren’t celebrating.
The average transaction price (ATP) for a new vehicle rose above $50,000 for the first time in September, hitting a record high of $50,080, according to estimates released this week by Kelley Blue Book (KBB).
“We’ve been expecting to break through the $50,000 barrier,” said Erin Keating, executive analyst at Cox Automotive, in a statement. “It was only a matter of time. That’s today’s market, and it is ripe for disruption.”
Related: America’s Best-Selling Vehicle Will See Production Delays After a Major Factory Fire
The average new-vehicle manufacturer’s suggested retail price (MSRP) also hit a record in September of $52,183, which is a 4.2% year-over-year increase. Many of the new 2026 vehicles arrived at dealer lots last month.
According to the report, more than 60 models had ATPs above $75,000 in September.
America’s best-selling vehicle, the Ford F-150, starts around $39,330, but Keating notes in the report that the pickup truck “routinely costs north of $65,000.”
Despite prices rising for more than a year, retail sales have remained steady and are at a “healthy pace,” driven by the luxury and EV markets, the report 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 said. “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.”
Why are new car prices so high?
Michael Douglas, head of dealer operations and credit at Chase Auto, told The Penny Hoarder that various factors, from regulatory changes and increased materials costs to a shift to more expensive EVs, have “led to production delays, reduced inventory, and higher manufacturing costs.”
Meanwhile, Keating said that while tariffs have “introduced new cost pressure to the business,” the reason prices have been rising includes the cost of parts, supply chain bottlenecks, and America’s preference for larger vehicles.
“It is important to remember that the new-vehicle market is inflationary,” Keating added. “Prices go up over time, and today’s market is certainly reminding us of that. The $20,000-vehicle is now mostly extinct, and many price-conscious buyers are sidelined or cruising in the used-vehicle market.”
And used car prices aren’t much better. According to Nerdwallet, in August, the ATP of a 2022 vehicle was $31,156, which is an increase of 5.5% compared to the same period in 2024.
Related: I Tried Buying a Car on Amazon. Here Are the Pros and Cons.
Key Takeaways
- New car prices reached above $50,000 for the first time, according to a new Kelley Blue Book estimate.
- Analysts at Cox Automotive say it was “only a matter of time” before the barrier was broken.
- Despite the rising prices, retail sales are “healthy,” according to the report.
New car prices have hit a monster milestone — but many prospective car buyers aren’t celebrating.
The average transaction price (ATP) for a new vehicle rose above $50,000 for the first time in September, hitting a record high of $50,080, according to estimates released this week by Kelley Blue Book (KBB).
“We’ve been expecting to break through the $50,000 barrier,” said Erin Keating, executive analyst at Cox Automotive, in a statement. “It was only a matter of time. That’s today’s market, and it is ripe for disruption.”
The rest of this article is locked.
Join Entrepreneur+ today for access.
