Vehicle affordability remains a top concern for consumers and dealers, as the average new-vehicle transaction price topped $50,000 for the first time ever in September, according to an Oct. 13 report from Kelly Blue Book.
The average new-vehicle transaction price was $50,080 in September, an increase of 3.6% from a year ago, according Cox Automotive.
Kelly Blue Book is a Cox Automotive company.
For perspective, the average new-vehicle transaction price in September 2019 was $37,590. That’s before the COVID-19 pandemic began in early 2020.
Long-term factors leading to higher vehicle prices
Since then, vehicle prices are up for both the long- and short-term, according to Cox Automotive. But more affluent buyers can afford to spend more on new vehicles, which is contributing to sales of higher-priced models.
“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,” said Cox Automotive analyst Erin Keating in the release.
Meanwhile, many price conscious consumers — including well-qualified ones with good credit — are turning to used vehicles instead. This is also “propping up the higher end of the market,” Keating said.
Another long-term trend driving average vehicle prices higher is the switch from smaller and cheaper passenger cars to bigger and more expensive pickups, SUVs and crossovers. The trend reflects changing consumer tastes, but it also shows that domestic OEMs are essentially dropping unprofitable passenger cars in favor of more profitable trucks and SUVs.
Still, interest rates also remain at a high level, even though the Federal Reserve recently cut rates and indicated it’s considering additional reductions. The average new-vehicle interest rate was 9.43% in September, and 14.12% for used vehicles, according to Cox Automotive.
Short-term factors driving up prices
One of the short-term factors that drove average transaction prices higher in the third quarter is sales of more expensive and sought-after electric vehicles, Keating said in the report.
EV market share reached 10.5% in September, as consumers rushed to beat a Sept. 30 deadline to take advantage of the expiring $7,500 federal EV tax credit. KBB says a record-high 437,487 EVs were sold in the third quarter of 2025.
Another short-term factor impacting average new vehicle prices are new 2026 models accounting for a growing share of dealer inventory. These new vehicles often come with new model-year price increases.
Analysts also expect that tariffs will drive transaction prices higher, but not until 2026, as OEMs have absorbed more of the costs than expected, instead of passing it along to consumers, according to S&P Global.
