The Average Price of a New Vehicle Tops $50,000 in the United States

Since the COVID-19 pandemic, the prices of both new and used vehicles have risen dramatically. At the turn of 2025, we began to see some stability, but the arrival of a new tenant in the White House changed the situation, as the trade war he declared on the world drove up the cost of consumer goods, including new vehicles.

• The average selling price of a new vehicle has reached $50,000 for the first time in the United States.

• In Canada, the average price is around $66,500.

• Tariffs imposed by the United States are one of the causes behind the price hike

So much so that the average price of a new model has, for the first time, crossed a sad barrier in the United States: $50,000.

According to Cox Automotive, the average price for a new vehicle in September was $50,080 (in U.S. currency). The Automotive News website, which publishes the average price daily, put it at US$50,003 as of October 14.

It’s a 2.1% increase over August and a 3.6% jump over September 2024.

We don’t have September’s numbers for Canada, but last June, the average price was around CA$66,500.

Let’s face it, it’s anything but affordable. In fact, the number of “inexpensive” vehicles is melting away like snow in the summer as we approach a winter that is unlikely to give us any pause on this front.

The causes

So what’s behind the constant and rapid rise in the cost of new vehicles? The answer to this question is not straightforward. The causes are numerous, and market conditions influence them.

Nevertheless, we can identify a few with certainty. These include production costs themselves (which are constantly rising), inflation, tariffs imposed by the United States, and employee wages (which were significantly negotiated upward by American automakers’ unions last year).

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Add to that the costs associated with manufacturers’ electrification plans, which are forcing them to make significant investments, resulting in the withdrawal from the market of more affordable vehicles that are less profitable for them.

There are also periodic reasons. For example, due to the withdrawal of the US$7,500 federal rebate for the purchase of an electric vehicle in the United States at the end of September, many buyers took advantage of the opportunity to go ahead now. However, since these vehicles are slightly more expensive on average, this had the effect of driving up prices, according to Cox Automotive.

In 2019, just before the pandemic, the average price of a new vehicle in the United States was $ 39,000.

The increase has been dramatic.

Sales remain strong

What’s fascinating is that new vehicle sales remain strong. It’s important to understand that when a new vehicle sells for more, its residual value also increases. As a result, monthly payments are not as affected as one might think.

And monthly payments are what people shop for most. Nevertheless, they are increasing steadily. In Canada, the average monthly payment is around CA$900, while approximately 30% of buyers pay more than CA$1,000 per month, according to a study conducted by The Globe and Mail last year. In the United States, the average monthly cost is around US$725, while 20% of individuals pay more than US$1,000 per month for their new ride.

Additionally, interest rates have been high for the past year, resulting in increased monthly payments.

Finally, it is worth noting that all of this has an impact on the prices of used vehicles, which are in higher demand as more and more consumers cannot afford to buy a new one. It’s the sometimes perverse effect of supply and demand.

Ultimately, what is unfortunate is that consumers are not getting any break.