Average new car price tops $50,000 for first time; why prices are soaring and when is the best time to buy

For the first time ever, the average price of a new car in the US has topped $50,000, according to Kelley Blue Book. The pricing guide company reported that buyers paid an average of $50,080 for new vehicles in September 2025, marking a notable jump from $48,317 the previous year.

While prices have been steadily increasing for more than a year, the report noted that recent months have seen accelerated growth in new-vehicle costs. Kelley Blue Book attributes the surge to rising auto tariffs, a higher proportion of luxury vehicles, and increasing costs for electric vehicles (EVs).

Why new car prices soaring

“The $20,000 vehicle is now mostly extinct, and many price-conscious buyers are sidelined or cruising in the used-vehicle market,” said Erin Keating, executive analyst for Cox Automotive, which owns Kelley Blue Book, in a media release published on October 13.

Keating added, “Today’s auto market is being driven by wealthier households who have access to capital and good loan rates and are propping up the higher end of the market.” While tariffs have added some cost pressure, Kelley Blue Book noted that the mix of high-end luxury vehicles and pricey EV models is the main factor behind the record-high average transaction price.

As the high-cost vehicle sells so well, it naturally pulls the overall average price higher.

Electric vehicles push average prices higher

As electric vehicles claim a larger share of the new-car market, estimated at 11.6 per cent, the average price for an EV has risen to $58,124.

“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,” Keating said.

Retail sales remain strong despite rising prices

Despite these record-high prices, retail sales of new vehicles continue to maintain a healthy pace, as per the report.

Fix your old car or buy a new one?

Earlier, when the average price was, $48,317 Sean Tucker, lead editor for Kelley Blue Book, has suggested that consumers should fix their old cars instead of buying a new one. “Lean toward fixing your old one,” USA Today quoted.

“You’re going to pay $9,000 a year in car payments right now. … That is an awful lot of new shocks and belts,” Tucker said.

Best time to buy new car

According to Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, December is an ideal time to purchase a new vehicle. Speaking to USA Today in September, Fiorani explained, “December is a great time to buy a vehicle.

We see sales in December a bit higher than the seasonal average.” However, he advises shoppers to avoid visiting dealerships on holidays, as many buyers tend to head to showrooms at the same time, potentially reducing the advantage of year-end deals.