New Car Prices Have Exceeded A Figure We Never Expected To Reach | Carscoops

      Recent data reveals that average transaction prices have reached an unprecedented level, largely due to robust sales of electric vehicles (EVs) and increased demand for luxury models, leaving more budget-conscious buyers out of the market.

      Last month, the average transaction price reached a record $50,080, reflecting a 3.6% increase compared to the previous year and crossing the $50,000 mark for the first time. This surge in prices is attributed to strong sales of EVs and luxury cars.

      Kelly Blue Book (KBB) highlights that "new-vehicle prices have been steadily increasing for over a year, with the acceleration in recent months." The average transaction price increased by 2.1% from August and 3.6% from the same month last year.

      Additionally, average manufacturer suggested retail prices (MSRPs) also set a new record at $52,183, marking a 4.2% rise compared to the previous year.

      The surge in numbers may be partly due to a rush on tax credits for EVs, with KBB estimating that 11.6% of last month’s sales were electric vehicles, also a record. The average transaction price for an EV was $58,124.

      It's anticipated that sales may decline following the removal of the clean vehicle tax credit, although automakers have started offering substantial incentives themselves.

      KBB pointed out that automakers allocated 7.4% of average transaction prices toward incentives, approximately $3,700. This figure represents the highest percentage seen this year and has slightly increased from 7.2% in August, maintaining parity with the 7.3% rate from September 2024.

      Tata, the owner of Jaguar Land Rover, reported the highest average transaction price at $102,096 last month, followed by Mercedes at $75,700 and BMW at $69,924. In contrast, Subaru had the lowest average transaction price at $36,092, just ahead of the Renault-Nissan-Mitsubishi Alliance, which recorded $36,547.

      Erin Keating, executive analyst at Cox Automotive, remarked, “Prices tend to rise over time, and today’s market is a clear indication of that. While many affordable options exist, numerous price-sensitive buyers are opting to either stay inactive or explore the used-vehicle market.”

      Consequently, the market is being largely supported by wealthier households with access to capital and favorable loan rates, thereby sustaining the higher end of the market. Keating also mentioned that while tariffs are contributing to rising costs, the primary driver of September’s pricing trends was the favorable mix of EVs and luxury vehicles pushing the new-vehicle average transaction price to new heights.