For the first time ever, and certainly not the last, the average transaction price for a new vehicle crossed the $50,000 threshold last month, according to new data from Cox Automotive via Kelley Blue Book.
September’s average transaction price of $50,080 represented a 2.1% increase over August, and a 3.6% rise compared to a year earlier. The latter is the largest year-over-year jump since the spring of 2023. Cox reported that average dealer incentive spending has risen too, likely to offset some of that pressure, to 7.4% of the average transaction price, or approximately $3,700. In August, it was 7.2%.
“The $20,000-vehicle is now mostly extinct, and many price-conscious buyers are sidelined or cruising in the used-vehicle market,” Executive Analyst Erin Keating said in a Cox release. Keating added that while tariffs have introduced “new cost pressure,” a mix of EVs and high-end vehicles are really what pushed those sale prices higher. Speaking of, Cox estimates the EV share of the auto market at 11.6% at the moment, another record, buoyed by a rush to purchase EVs before the expiration of the federal tax credit at the start of October.
It was only a matter of time until we got here, and looking back, it was a slow climb—up until the beginning of 2021. If you go back to January 2016, the average new car cost $33,618, according to Edmunds via Automotive News. By March of 2021, a little more than five years later, that number hit $39,950—an increase of $6,332. But it took only another nine months for the market to jump by another $7,000, to $46,626 in December 2021. The trend has been steadier beyond the first two post-pandemic years—more like it was before COVID—but it’s still been volatile, rising and falling by as much as $2,000 every quarter or so, leading up to this point.
So what’s next? Outside of perhaps one or two blips downward over the next few months, the market isn’t turning around. It will be interesting to see how EVs in particular come out of this—both because their tax rebates are gone, which didn’t factor into ATP anyway, and because automakers and dealers may increase incentive spending to soften that impact on affected models.
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Backed by a decade of covering cars and consumer tech, Adam Ismail is a Senior Editor at The Drive, focused on curating and producing the site’s slate of daily stories.