For the first time ever, the average price of a new car in the US has soared past $50,000 – a staggering milestone that’s leaving many buyers scratching their heads. But here’s where it gets controversial: Is this the new normal, or a bubble waiting to burst? According to Kelley Blue Book (KBB), September marked this historic high, driven largely by the surge in luxury models and electric vehicles (EVs). Despite the eye-watering prices, Americans haven’t hit the brakes on buying. In fact, EVs alone accounted for a record 11.6% of all new vehicle sales last month, with the average EV price hitting $58,124 – a 3.5% jump from August.
And this is the part most people miss: In the third quarter, EV sales hit an all-time high of 437,487 units, grabbing a 10.5% market share. That’s a nearly 30% leap from the same period last year. Why the rush? Government incentives for EVs expired at the end of September, prompting buyers to act fast. But here’s the twist: While EV prices are up year-over-year, they’ve actually dipped slightly by 0.4% compared to last year. Incentives played a big role, averaging $8,900 per vehicle in September – down from August but higher than a year ago.
Tesla, the EV giant, saw its average transaction price drop to $54,138 in September, a 6.8% decline from last year. With Tesla’s recent launch of more affordable Standard versions of the Model 3 and Model Y, KBB predicts EV prices could cool down soon. Erin Keating, executive analyst at Cox Automotive, warns the market is “ripe for disruption.” She adds, “The new-vehicle market is inherently inflationary – prices rise over time, and today’s figures are a stark reminder of that. The $20,000 car is nearly extinct, pushing budget-conscious buyers to the used market. While tariffs have added costs, September’s record prices were fueled by a surge in EVs and luxury vehicles.”
But here’s the burning question: Can the average American keep up with these skyrocketing prices? Or is the auto market pricing itself out of reach for the middle class? Let us know your thoughts in the comments.
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