Average New Car Tops $50k Now

[canyonwalker]

It's in the news this week that the average new car price in the US has topped $50,000 for the first time. That's according to a study released by Kelley Blue Book.

That eye-popping price presents quite a bit of sticker shock to those of us older than, say, 30, who remember cars being a lot cheaper in the past— including the not-too-distant past. But car prices are inflationary, and over time the compounding effect of a few percent a year packs a wallop— particularly after the past few years, when inflation has run higher than just a few percent a year.

Even so, have car prices increased faster than the rate of inflation? One way of looking at it argues yes. For example, I bought my own first car, new, in 1991. It cost $9,100. Per inflation calculators easy to find online (I did a quick search and tried the top five results, all hosted by reputable sites) that $9,100 in 1991 dollars is $21,500 today. Trying finding a new car for just $21,500 nowadays! "The $20,000 market for cars is extinct," Cox Automotive analyst Erin Keating said, as noted in this Yahoo! Finance article (14 Oct 2025).

"Extinct" is a bit of hyperbole, of course. But if you tweak that term to nearly extinct, it's spot-on. A quick check over at Edmunds.com shows that it's hard to get into a new car, even a subcompact, for my $21,500 effective price in 2025. Here's what I found:

• A popular car that was comparable in size to what I bought at the time is the Honda Civic. The cheapest Civic model today starts at 24,500. (That's Edmunds' suggested negotiated price, not "sticker".)


• Another popular moden that was similar to mine 24 years ago is the Toyota Corolla. The cheapest new 2025 Corolla, in base trim, is $22,200.


• Rounding out the Japanese Big 3, Nissan's base-model Sentra S retails for an average of $21,250.

Many of the articles covering KBB's announcement point out that a simple, inflation based comparison is misleading. That's because, they argue, cars today are better than cars from years ago. Indeed, reliability is up across the auto industry. Statistics show that cars are able to operate more miles and more years now than decades ago.

Feature content in new cars is improved, too. That $21,250 Nissan Sentra S is derided for offering sparse accommodations. Indeed it comes with steel wheels with plastic hub caps and cloth upholstery. But my 1991 new car also had steel wheels with plastic hubcaps and cloth upholstery... and it did not have power windows. Or air conditioning. 😰 These are things we all take for granted in cars today! And the 2025 Sentra S also has remote keyless entry, push-button start, and Apple CarPlay and Android Auto with a 7" touchscreen. My 1991 car didn't even have a side-view mirror on the right side. I bought one a year later for $95 from the dealership's parts department and installed it myself!

So, yeah, the $21,500 end of the new car market really doesn't suck today. Sure, you're getting a base-model car for that money, but even the base model today is a way nicer car than the base models of years ago.

And what about that $50k figure? Most of the news coverage about it notes that the average price has been driven up by most of the activity in the new-car market being at the higher end. Lower end shoppers are finding more satisfaction in buying a good, lightly used car for $21,500. That's where I'd be shopping today with $21,500. Meanwhile the best-selling new vehicle in the US is the Ford F-150 pickup, the most popular trim levels of which start over $40,000. The plusher trims run from $50,000 to over $70,000.

Comments

Thoughts

[ysabetwordsmith]

>> That's because, they argue, cars today are better than cars from years ago. <<

It doesn't matter if people can't afford them, and people nowadays are broker because they have more expenses (e.g. internet) and wages haven't kept pace at all. Considering that America is mostly designed to require cars to survive, it's really painting itself into a corner by making them too expensive to afford.

Re: Thoughts

[canyonwalker]

I showed a data-rich example of how cars in one market segment have increased not much faster than the overall rate of inflation over the past 34 years. The problem of the $50k++ car is people are buying more than they need-- or think they're entitled to more than they can afford.

That $9,100 car I purchased in 1991, new, was an economical subcompact. I was 19 and bought it with my own money. A fullsize SUV with all the bells and whistles would've been completely out of my price range back then, just as a $50k, $60k, or more vehicle is unaffordable to many buyers today.

Re: Thoughts

[ysabetwordsmith]

We've managed to find affordable cars, but I've seen increasing problems with people who can't, especially in cities. It's harder on people who have a family that won't fit in a tiny car, let alone special needs.

[some_other_dave]

There's debate in automotive enthusiast circles about new cars versus old cars. Many believe that new cars are less reliable than old ones, like your 1991 model in particular, because there are many more systems. More features and more systems means more things that can fail.

Meanwhile, the 1991 car is still quite usable. It can keep up with modern highway traffic with no real difficulty. Speeds aren't up very much since the 90s, after all, even if power numbers are. In part that's because weights are also up significantly, as are sizes, and those extra pounds and square inches (of frontal area!) require more power to push around.

A 90s car will also be simple enough to work on without extensive specialized tooling. Which matters to enthusiasts who work on their own cars, but is much less important to the general public who view cars as appliances. But I was able to do a lot of the work on my 1990 Honda CRXes myself with simple hand tools.

Still, there's no denying that in terms of features, power, performance, and convenience, just about all modern cars are better than almost anything you could get in the 90s.

... I remember seeing an ad in 90 or 91 for a Civic for only $9,995. That was in the Bay Area, so prices may have been a bit higher than where you were shopping. (I wasn't really shopping at that point, but I was browsing the papers for interesting cars.)

[ckd]

I'm curious whether there's much difference between the mean new car price and the median new car price; is the average being pulled up by six-figure supercars and high-five-figures luxury urban assault vehicles "S""U"Vs while most new cars are still sold at the low end, or not?

[canyonwalker]

Sometimes the mean and median figures tell very different stories, such as when discussing mean vs. median wealthy (link to a blog I wrote years ago). A quick glance around the road any day of the week tells me that's not the case here, though. I don't see the road full of 9/10 $30k Toyota Camrys with every 10th car being a Rolls Royce. Instead I see plenty of people driving $60-80k trucks and luxury SUVs. I figure the average new car purchased is more expensive in California, and doubly more expensive in affluent Silicon Valley, than the national average.