New Car Prices Will Soon Cross $50,000 For the First Time

A major milestone is fast approaching in the auto market: the average new car selling price is about to surpass $50,000 for the first time. After years of rising MSRPs, stubbornly high interest rates, and climbing insurance costs, drivers are feeling the pressure from every angle. However, there are still ways to find value if you know where to look. Here’s why industry experts are confident that new car prices will reach this unfortunate milestone in 2025, and what car buyers can do to still come out on top.

New Car Price Trends Point In the Wrong Direction

According to the latest data from Cox Automotive, the average new car transaction price currently sits at $48,699, just shy of the December 2022 peak of $49,929. Car price inflation has been unstoppable since the COVID-19 pandemic. While prices cooled slightly at times in 2023 and 2024, two key developments are pushing them back up again:

1. 2026 model year pricing is arriving, and most prices are marching higher.

2. Tariffs on imported vehicles are beginning to trickle into pricing. Even American-made cars are being hit as global supply chains prove tough to adapt to the new trade landscape. In response, automakers like Subaru and Ford have already announced mid-year price hikes. We could see more sneaky price increases from other brands this summer.

It’s important to remember: the $50,000 figure is just an average. There are still dozens of new cars for sale under $30,000 in 2025, though the number is shrinking. The last new car under $20,000, the Nissan Versa, is being discontinued after this year. If you’re shopping with a tighter budget, check out our list of new cars under $25,000 in 2025.

Not all cars are getting more expensive in 2025. In fact, a few are seeing price cuts. Let’s take a look at where there’s wiggle room, and where prices continue to rise.

Which Cars Are Getting More Expensive in 2025?

Prices aren’t rising evenly across the market. In fact, some of the biggest increases are hitting the most budget-conscious buyers.

Prices are rising fastest for these cars:

• Cars under $35,000 are seeing noticeable hikes for the 2026 model year.

• Popular hybrids, especially from Toyota and Honda, are in high demand and are commanding a premium.

• Subaru just hiked prices anywhere from $1,000 to over $2,000 across its lineup.

• In general, affordable models are becoming… less affordable.

These cars are holding steady (for now):

• EVs, which remain slow to sell despite deep incentives, have seen more price cuts and fewer hikes. Models like the Hyundai Kona EV, Chevrolet Equinox EV, and Tesla Model 3 are available as extremely cheap leases this month.
  
• Vans and some pickup trucks are also holding the line for the most part, as automakers focus on keeping these models competitive. After all, trucks are high-margin profit makers for OEMs like GM, Ford, and Stellantis.

How to Save in a $50,000 Car Market

If you’re buying a car this summer, all hope is not lost. With inventory rising for certain brands and models, some cars and trucks are more negotiable than others. Our data tools make it easy to spot where the deals are. Check out CarEdge Insights to see how you can find the most negotiable new and used cars in your area. Ready for pros to take the wheel? Let us negotiate on your behalf to help you save thousands.

“This isn’t the time to walk into a dealership unprepared,” says Ray Shefska, Co-Founder of CarEdge. “Car prices are high, interest rates are brutal, and insurance isn’t letting up. But there are deals to be had if you know where to look — and how to negotiate. That’s what we help people do every day.”

It’s also important to remember that price is just one part of the equation. New car loan rates remain near 30-year highs, averaging around 9% APR, while used car loans hover around 14% APR. On top of that, auto insurance rates jumped 15% in 2024 and are still climbing. That’s why it’s essential to factor in the total cost of ownership, not just the sticker price. Use our free CarEdge cost of ownership tools to get the full picture before you buy.

We’ll be watching the market closely this summer and will keep you posted as prices continue to evolve. Hopefully we’re wrong, but all signs point to the $50,000 average becoming the new normal sometime in 2025.

We track new car prices monthly here →