US average new car price tops $50k for the first time – here’s why

Average US New Car Price Crosses $50,000 Mark

The average US new car price has crossed the $50,000 mark for the first time in September, according to Kelley Blue Book (KBB). Despite steadily climbing prices over the past year, Americans continue to buy new cars.

Record Average Transaction Price Driven by Luxury Models and EVs

KBB reports that September’s record average transaction price (ATP) was partly driven by luxury models and electric vehicles (EVs), which pushed the market into record territory. EVs made up an estimated 11.6% of all new vehicles sold last month, a record high. The average EV sold for $58,124, up 3.5% from August’s adjusted figure.

EV Sales Hit Milestone in Q3

In Q3, EV sales reached another milestone: 437,487 EVs were sold in the US, giving them a 10.5% market share. This represents a nearly 30% jump from the same period last year. Many buyers hurried to lock in their purchases before government-backed EV incentives expired at the end of September.

Average EV Transaction Price Remains Flat

Year-over-year, the average EV transaction price is basically flat, down just 0.4%. Incentives averaged 15.3% of ATP in September, or about $8,900 per vehicle, slightly lower than August but higher than a year ago.

Tesla Continues to Dominate EV Market

Tesla, which continues to dominate the EV market, saw an average ATP of $54,138 in September. This represents a slight dip from August and a 6.8% decrease from a year earlier. With Tesla recently introducing new Standard versions of the Model 3 and Model Y, KBB expects average prices across the segment to fall in the coming months.

Market “Ripe for Disruption”

“The new-vehicle market is inflationary. Prices go up over time, and today’s market is certainly reminding us of that,” said Erin Keating, executive analyst at Cox Automotive. “The $20,000 vehicle is now mostly extinct, and many price-conscious buyers are sidelined or cruising in the used-vehicle market.”