Sticker Shock: $50,000 Car Becomes The New Normal In America As EVs, Luxury Rides Lead The Charge

The average price of a new car in the U.S. surpassed $50,000 for the first time in September, lifted by record electric vehicle (EV) sales and strong demand for luxury models, even as global EV growth slowed a month earlier.

U.S. buyers shelled out an average of $50,080 in September, up 3.6% from a year earlier, Bloomberg reported, citing data released by Kelley Blue Book on Monday.

Erin Keating, an executive analyst at KBB-parent Cox Automotive, said a rush to purchase EVs before the expiration of a $7,500 federal tax credit sent prices higher. Electric cars averaged $58,124 and accounted for a record 12% of new vehicle sales, while luxury models priced above $75,000 made up 7.4% of the market, up from 6% a year earlier.

“The $20,000 vehicle is now mostly extinct, and many price-conscious buyers are sidelined or cruising in the used-vehicle market,” Keating said, adding that September’s pricing surge was “mostly driven by a healthy mix of EVs and higher-end vehicles.”

The jump in U.S. EV prices followed a broader global slowdown in EV momentum during August. Worldwide sales of fully electric and plug-in hybrid vehicles rose 15% from a year earlier, marking the slowest growth since January, as tougher comparisons weighed on demand, Reuters reported, citing Rho Motion data. 

China, which accounts for more than half of global EV sales, grew just 6% after averaging 36% a month in the first half of the year. Analysts expect activity to rebound in the fourth quarter as new subsidy funds are released and seasonal demand typically strengthens.

Global sales of electric vehicles hit 1.7 million in August, with China leading the charge at 1.1 million units. Europe followed with about 283,000 sales, North America with 201,000, and more than 144,000 came from the rest of the world.

In the U.S., buying a new car has become noticeably harder. Prices have jumped more than 25% in the past five years as more people choose bigger trucks and SUVs over budget models. The average car on the road is now more than 12 years old, S&P Global said. To afford new ones, buyers are taking out longer loans, often seven years or more, and monthly payments have climbed to a record $754, according to Edmunds.com. One in five buyers is shelling out more than $1,000 a month.

Keating added that while tariffs imposed under President Donald Trump have introduced new cost pressures, automakers have so far absorbed most of the impact.

On Stocktwits, retail sentiment was mixed, with the SPDR S&P 500 ETF Trust showing a ‘neutral’ tone, the Invesco QQQ Trust reflecting a ‘bearish’ mood, and the SPDR Dow Jones Industrial Average ETF Trust registering ‘extremely bearish’ sentiment. Message volume ranged from ‘normal’ to ‘high’ across the three indices.

So far this year, SPY is up 14%, QQQ has gained 18%, and DIA has advanced 10%.

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