\u201cAnd that\u2019s not good for the industry, it\u2019s not good for consumers, it\u2019s not good for dealers, it\u2019s not good for the automakers. We need a broad range of consumers to be in the new car market and if only wealthy folks are buying those cars, that\u2019s a concern.\u201d<\/p>\n
The average price has been on a steady rise for years and analysts with Cox Automotive, which owns Kelley Blue Book, attribute the most recent increase to a combination of factors.<\/p>\n
That includes tariffs imposed by the Trump administration, but they said prices in September were mostly driven by \u201ca healthy mix\u201d of electric vehicles that tend to be more expensive than gasoline-powered cars and trucks plus higher-end vehicles that pushed the average price to new heights.<\/p>\n
\u201cWe\u2019ve been expecting to break through the $50,000 barrier,\u201d Cox Automotive executive analyst Erin Keating said in a news release<\/a>. \u201cIt 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\u2019s today\u2019s market, and it is ripe for disruption.\u201d<\/p>\n The average transaction price came to $50,080 in September, up 2.1% from August and 3.6% higher year-over-year.<\/p>\n According to the Kelley Blue chart, the average price in the U.S. hit $40,000 in March 2020.<\/p>\n Cox Automotive reported that last month there were more than 60 models with average transaction prices above $75,000 \u2014 and they accounted for 7.4% of total industry sales, up from 6% at the same time last year.<\/p>\n The two versions of Cadillac Escalade, priced at six figures, recorded September sales of 4,320 units in the U.S.<\/p>\n The Cox report said the average price for an EV in September came to $58,124, some 3.5% higher than in August.<\/p>\n \u201cWhile there are many affordable options out there, many price-conscious buyers are choosing to stay on the sidelines or cruising in the used-vehicle market,\u201d Keating said. \u201cToday\u2019s 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.\u201d<\/p>\n Another factor accelerating sticker prices is the amount of high-tech features in new cars, such as infotainment systems with large touchscreens, automatic emergency braking, in-car Wi-Fi, battery systems in hybrids and semi-autonomous driving in electric and high-end vehicles.<\/p>\n \u201cIt\u2019s not the vehicle you and I may have grown up driving in the 1970s, 80s or 90s,\u201d Maas said.<\/p>\n The popularity of SUVs, which typically cost more than sedans, has also contributed to the average price going up.<\/p>\n \u201cFiguring out how you make a profitable entry-level car \u2026 that\u2019s the trick,\u201d Maas said. \u201cAnd I think the smart manufacturers are looking around and trying to figure out how can we do that? Because there\u2019s a giant market to be tapped there. If you can figure out how to make a $25,000, $30,000 entry-level vehicle, you\u2019re gonna kill it in this market, I think.\u201d<\/p>\n Breaking the $50,000 barrier comes as third-quarter figures saw a leap in registrations of EVs and plug-in hybrids. A record number of customers jumped on the zero-emissions bandwagon before the expiration of federal tax credits.<\/p>\n Tesla\u2019s Model Y remained the top-selling vehicle in California, with 35,336 deliveries in the third quarter alone and 79,448 from the start of this year through Sept. 30, according to data from Experian Automotive, posted by the California New Car Dealers Association<\/a>.<\/p>\n Toyota\u2019s RAV4 came in a distant second place, with 49,584 registrations so far this year.<\/p>\n The market share for purchases of new cars and light trucks that qualify as zero-emission vehicles by California policymakers \u2014 EVs, plug-in hybrids and hydrogen fuel cell vehicles \u2014 accounted for 24.7% of the market share in Q3, up from 18.2% the previous quarter.<\/p>\n But the federal tax credit of up to $7,500 on the purchase or lease of a new EV, and as much as $4,000 on a used one, came to an end on Sept. 30. The expiration was part of the\u00a0940-page<\/a>\u00a0federal budget legislation dubbed the \u201cOne Big Beautiful Bill\u201d backed by Republicans on Capitol Hill and signed into law in July by President Donald Trump.<\/p>\n \u201cThere was definitely a pull-ahead effect\u201d by consumers to buy EVs before the Sept. 30 deadline,\u00a0Ivan Drury, senior manager of auto insights at Edmunds.com<\/a>, told the Union-Tribune earlier this month. \u201cSo you would expect to see that October sales should be down a bit.\u201d<\/p>\n The question will be how much the loss of the incentives will affect sales of EVs and plug-in hybrids.<\/p>\n Nationally, electric vehicles make up about 8% to 12% of auto purchases.<\/p>\n Speaking at a conference Sept. 30,\u00a0Ford CEO Jim Farley said<\/a>, \u201cI wouldn\u2019t be surprised if EV sales in the U.S. go down to 5%,\u201d adding that while the zero-emission sector will remain a \u201cvibrant industry\u201d going forward, it\u2019s also \u201cgoing to be smaller, way smaller than we thought.\u201d<\/p>\n The chairman of Nissan\u2019s Americas region\u00a0told the Wall Street Journal<\/a>\u00a0that October should be the worst market in years for EVs.\u00a0\u201cManufacturers are going to have to push cars away because demand is not going to be there,\u201d\u00a0Christian Meunier<\/a>\u00a0said.<\/p>\n But California political leaders and regulators say they\u2019re confident the state will reach its aggressive zero-emission vehicle goals.<\/p>\n Gov. Gavin Newsom\u00a0issued an executive order<\/a>\u00a0five years ago mandating the elimination of sales of all new gasoline-powered passenger vehicles throughout California by 2035.<\/p>\n In June, President Trump signed three Congressional Review Act resolutions<\/a>\u00a0rescinding California\u2019s electric vehicle mandates \u2014 as well as rules related to diesel engines. But California and 10 other states have\u00a0filed a lawsuit<\/a>, arguing that Trump\u2019s actions are unconstitutional and beyond the authority of Congress.<\/p>\n![\"The](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2025\/10\/SUT-L-KELLEYBLUEBOOK-AVGCARPRICE-1025-01.jpg\")
The average price for a new vehicle in the U.S has been climbing steadily. (Cox Automotive\/Kelley Blue Book)<\/p>\n