The typical price of a new car has surpassed $50,000.

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      For the first time ever, and undoubtedly not the last, the average transaction price for a new vehicle surpassed $50,000 last month, based on new data from Cox Automotive through Kelley Blue Book.

      The average transaction price in September reached $50,080, reflecting a 2.1% increase from August and a 3.6% rise compared to the same time last year. This marks the largest year-over-year increase since the spring of 2023. Cox noted that average dealer incentive spending has also gone up, likely to alleviate some of the pressure, now at 7.4% of the average transaction price, or roughly $3,700. In August, it was at 7.2%.

      “The $20,000 vehicle is now mostly a thing of the past, leaving many price-sensitive buyers either on the sidelines or navigating the used vehicle market,” said Executive Analyst Erin Keating in a Cox release. Keating also pointed out that while tariffs have created “new cost pressure,” the mix of EVs and high-end vehicles has significantly contributed to the rise in sale prices. Moreover, Cox estimates that the EV market share currently stands at 11.6%, another record, fueled by a rush to purchase EVs before the federal tax credit expired at the beginning of October.

      It was only a matter of time before we reached this point, and when we look back, it was a gradual increase—up until early 2021. For context, in January 2016, the average cost of a new car was $33,618, according to Edmunds via Automotive News. By March 2021, just over five years later, this number had risen to $39,950, an increase of $6,332. However, it took just nine more months for the market to surge another $7,000, reaching $46,626 in December 2021. Beyond the first two years after the pandemic, the trend has stabilized somewhat—similar to pre-COVID patterns—yet it remains volatile, fluctuating by as much as $2,000 each quarter leading up to this moment.

      What does the future hold? Apart from perhaps one or two minor decreases in the coming months, the market is unlikely to reverse. It will be interesting to see how EVs specifically adapt—particularly since their tax rebates have ended, which did not factor into the Average Transaction Price anyway, and automakers and dealers might increase incentive spending to cushion the impact on affected models.

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