The U.S. average transaction price of a new vehicle established an all-time high in September, crossing $50,000 for the first time, according to Kelley Blue Book. It achieved the mark after more than a year of steady price increases. The average transaction price moved 2.1% higher than in August and 3.6% higher than a year earlier, the largest year-over-year increase since spring 2023.
MSRP also reaches new peak
As 2026 model-year vehicles entered dealerships, the average asking price, or manufacturer’s suggested retail price (MSRP), also set an all-time high of $52,183, up 4.2% from last year. These higher prices both reflect market demand and rising production costs.
Luxury and high-end vehicles driving prices
More than 60 models of vehicles had average selling prices of over $75,000, with nearly 94,000 of the vehicles sold in September. That represented 7.4% of new vehicle sales, up from 6% in the previous year.
Among the six-figure vehicles, the best-selling was the Cadillac Escalade with 4,320 units sold across both models. The high demand for electric premium and luxury vehicles is pushing the overall average transaction price upward, analysts say.
Incentives increasing slightly
Even as they accelerate, automaker incentive spending rose slightly in September to 7.4% of the average transaction price, or roughly $3,700 per vehicle. Incentives such as dealer discounts and special offers are included, though insiders report they are happening less on lower-priced vehicles.
“Prices increase over time, and today’s marketplace is certainly reminding us of that,” according to Erin Keating, an executive analyst at Cox Automotive. She went on to add that the days of seeing a $20,000 new car are mostly behind us, with many price-sensitive customers in the used-car market.
Causes of increased prices
Brian Moody, executive editor at Autotrader, explained the marketplace has been moving in this direction for months due to a variety of reasons:
- The rising cost of electric vehicles
- Tariffs and government-imposed equipment
- Growing hybrid, truck, and full-size electric truck demand
These trends and constricted demand by higher-income households with access to low loan fees and capital are driving up greater prices of gasoline and electric vehicles.
Electric vehicles leading the way
Electric vehicles (EVs) are leading the market specifically. The average transaction price of new EVs in September was $58,124, up 3.5% from August. Per Moody, customers rushed to purchase EVs before the federal tax credit expired, contributing to prices and demand.
What it means for buyers
For future car buyers, the highs translate to:
- Low-priced vehicles are fewer and farther in between, and consumers are paying more for base models
- Electric and luxury vehicles are pushing averages higher, so some families will struggle with affordability
- Incentives can help, but discounts are harder to come by on high-demand or best-selling models
As the market evolves, experts advise that consumers think strategically about timing, loan rates, and vehicle type. Those who can only afford lower-priced models may need to look for used cars or other models while the new-vehicle market continues to climb.
