Average New Car Price Surpasses $50,000, Breaks Record: Kelley Blue Book

The average transaction price (ATP) of a new vehicle crossed $50,000 in September for the first time ever, according to an Oct. 13 statement by vehicle valuation company Kelley Blue Book (KBB).

It was a record high of $50,080, up by 2.1 percent from August. It was 3.6 percent higher year over year, the largest annual gain since spring 2023.

Amid rising prices, incentive spending by sellers rose in September to hit 7.4 percent of ATP—roughly $3,700. This is the highest incentive level for the year, according to KBB.

“We’ve been expecting to break through the $50,000 barrier,” Erin Keating, executive analyst at auto services company Cox Automotive, which owns KBB, said in the statement.

“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. That’s today’s market, and it is ripe for disruption.

“The $20,000-vehicle is now mostly extinct, and many price-conscious buyers are sidelined or cruising in the used-vehicle market. 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.”

While tariffs have added cost pressure to the sector, the higher ATPs in September were mostly driven by electric vehicles (EVs) and higher-end vehicles, Keating said.

According to a tracker monitoring the Trump administration’s tariffs, the 25 percent tariffs on auto imports implemented in April and the 25 percent tariffs on auto part imports imposed in May are both in effect. The rates have been adjusted for certain nations based on negotiations with Washington.

KBB said a “record” 437,487 EVs were sold in the third quarter of the year, with the EV share of the auto market hitting 10.5 percent. The company attributed this to buyers who rushed to finalize their EV purchases before the expiry of an incentive in September.

On July 4, President Donald Trump signed the One Big Beautiful Bill Act, which set Sept. 30 as the final date to receive $7,500 in EV purchasing credits.

These incentives were instituted as part of the Inflation Reduction Act signed in 2022 by then-President Joe Biden. The end of the credits is widely expected to negatively affect EV sales.

According to KBB, overall, new vehicle prices have been rising steadily for more than a year, with the pace picking up over the past months.

“Despite higher prices, retail sales continue to maintain a healthy pace,” KBB said.

A Sept. 3 report by Cox Automotive found that despite economic uncertainties, auto dealers in the United States retained a steady outlook in the third quarter.

Dealer profitability “declined slightly” in the third quarter amid elevated costs, the report states. On the plus side, concerns about the economy and interest rates eased slightly in the third quarter.

“With sales momentum mostly holding, dealers are not throwing in the towel on sentiment,” Jonathan Smoke, chief economist at Cox, said.

“New-vehicle sales have come down from the surge in the spring but have remained relatively strong and better than the past few years.

“While the labor market has softened, unemployment remains historically low, and, for the most part, tariffs have only been a glancing blow to consumer wallets so far. While 2025 has been a roller coaster for many, the market is still generally on track.”

On the customer side, prospective car buyers are facing the pressure of high costs to buy their dream vehicles.

The average amount financed for new vehicle purchases jumped to $42,647 in the third quarter, up from $40,713 in the same quarter last year, car shopping guide company Edmunds said in an Oct. 1 statement.

The annual percentage rate for such purchases was 7 percent. It was the third straight quarter that the rate remained above this level, according to the Edmunds statement.

The share of buyers who took auto loans with monthly payments of $1,000 or more made up 19.1 percent of all new financed transactions.

“In Q3, affordability in the new-car market remained stretched, with buyers putting less money down, financing more and relying on longer terms to keep monthly costs in check,” Jessica Caldwell, head of insights at Edmunds, said in the statement.