How Much Does a New Car Cost?

According to the latest report from Kelley Blue Book, the average transaction price for a new car in the U.S. as of July 2024 is $48,401, slightly down from the previous month’s $48,424 average. This decline continues the downward trend from the December 2022 peak of $49,929. Several factors — such as easing supply chain issues, increased production and changing consumer demand — have contributed to this reduction.

Compact and subcompact SUVs remain the most popular vehicle segments, with full-size pickups like the Ford F-Series and Chevrolet Silverado leading sales. Manufacturers have also increased incentives to their highest levels in over three years, offering buyers more opportunities to save on new vehicles.

New car prices consistently increased between 2018 and 2022. The largest increase occurred in 2021, when the average price rose by 14%, from $41,152 to $47,077. Supply chain disruptions and heightened demand during the pandemic likely drove this spike. Prices peaked at $49,507 in December 2022. However, prices decreased by 1.5% in 2023 to $48,759 and continued a modest drop to $48,401 in 2024.

New luxury full-size SUVs are among the most expensive vehicles on the market in 2024, with average transaction prices exceeding $100,000. Conversely, new subcompact cars are the most affordable, with average prices around $25,000.

These price variations can be attributed to various factors, including the vehicle's size, features, technology and brand. For instance, high-performance cars tend to be more expensive due to advanced engineering and superior performance capabilities. In contrast, compact cars remain more budget-friendly due to their smaller size, simpler design and lower production costs.

The average price of a new sedan in 2024 varies significantly depending on the type. Subcompact sedans are the most affordable, with an average cost of around $23,000. Compact sedans are priced higher at $26,800, while mid-size and full-size sedans are even more expensive, averaging around $33,600 and $46,500, respectively.

Since 2018, sedan prices have generally trended upward, except for subcompact sedans, which have decreased since 2022. The average cost of subcompact sedans slightly reduced to around $23,700 in 2023 and declined to about $23,000 in 2024. Some popular examples of sedans include the Toyota Camry, Honda Accord and Chevrolet Malibu.

Among the four types of SUVs and crossovers, subcompact SUVs are the most affordable, with an average price of around $30,000, while full-size SUVs are the most expensive, averaging $76,500. Compact and mid-size SUVs fall in the middle, at $36,600 and $48,300, respectively. The average price for most SUV sizes has shown an upward trend since 2018, but subcompact SUV prices have slightly decreased since 2022, dropping from $30,600 in 2022 to $29,800 in 2024.

SUVs — known for their larger size and off-road capabilities — differ from crossovers, which are typically built on a car platform and offer a more car-like driving experience. SUVs have become increasingly popular, with models like the Ford Explorer, Toyota Highlander and Jeep Grand Cherokee being some of the most sought-after examples.

SUVs and crossovers also have luxury counterparts that have been gaining popularity. The BMW X series, Range Rover and Acura MDX are prime examples. Like their regular counterparts, the prices of luxury models vary depending on the type.

Full-size luxury SUVs average $90,445, making them among the most expensive in this category, although this represents a decline from a previous high of nearly $111,000. Mid-size luxury SUVs follow closely, with an average price of around $73,600. Compact luxury SUVs average $52,100, while subcompact luxury SUVs tend to be more affordable at $41,000.

Pickup trucks come in two basic sizes: mid-size and full-size. In 2024, the average price for a mid-size pickup truck was $42,690, while full-size pickup trucks averaged $65,713. Pickup trucks have seen a steady increase in price over the years, with notable jumps in 2020 and 2021. During that period, the average cost for full-size models increased by around $8,000 a year, while mid-size trucks saw a $4,000 jump.

A van is a medium-sized vehicle typically featuring one row of seats in the front, with the rest of its space dedicated to either cargo or additional seating. Vans had the most significant increase in average cost over the last six years, rising by 50%. In 2018, the average price of a new van was $34,205; it climbed to $59,031 in 2024. Minivans — which are smaller and more family-oriented with three rows of seating — are more affordable, averaging $46,772 in 2024. Popular examples of vans include the Ford Transit and Mercedes-Benz Sprinter, while the Honda Odyssey and Toyota Sienna are well-known minivans.

The average price of sports cars is $47,263, an increase of about 3% from $45,793 in 2023. Sports cars are sought for their speed, handling and overall driving experience.

High-performance cars, which differ from sports cars in terms of advanced engineering and superior performance capabilities, are significantly higher in price, averaging $137,828 in 2024. This represents a substantial increase from $124,250 in 2023.

The Ford Mustang, Toyota Supra, Honda Civic Type R and Chevrolet Camaro are some examples of high-performance or sports cars. These vehicles are known for their visually appealing designs and powerful engines.

The average price of new cars can vary significantly depending on the brand's origin — American, Asian or European. Typically, European brands command the highest prices due to their emphasis on luxury, performance and advanced technology.

The average cost of a new car from American brands in 2024 is nearly $56,000. While this is not as high as European brands, it's about 23% more expensive than vehicles from Asian manufacturers.

Cadillac and Lincoln, both luxury brands, are the most expensive, each with an average price exceeding $65,000. GMC and Ram trucks average above $60,000, and Tesla, known for its electric vehicles, is in a similar price range.

Ford — Lincoln's parent brand — is more affordable because it doesn't focus on luxury vehicles. Buick has the lowest average price among American brands, with models priced under $40,000.

Asian-made vehicles are more affordable than American and European brands, with an average price of $43,480. Genesis and Lexus are the most expensive brands, each averaging over $60,000, followed by Infiniti at just under $57,000.

Toyota, Lexus's non-luxury counterpart, averages around $42,000 and offers a wide range of models, including hybrids, full-size SUVs and trucks. Honda follows closely at around $37,000.

Mazda, Nissan and Mitsubishi have the lowest average prices in 2024, with all models priced under $35,000.

While the average price of new cars from American and Asian brands is under $60,000, the average cost of new vehicles from European brands exceeds $67,000.

Many consumers associate European brands with luxury vehicles. For example, Volkswagen, which produces more mainstream cars, has an average price of almost $37,000. However, the Volkswagen Group also owns several luxury brands, including Porsche, with the highest average price of around $122,000.

Other well-known European brands include Mercedes-Benz and BMW, both renowned for luxury. A new Mercedes averages $73,000, while a BMW averages $71,000.

Knowing the average price of a new car is helpful when exploring options, but several other factors can significantly affect the final transaction price. These include the sticker price (the manufacturer's suggested retail price, or MSRP), whether you're trading in a used vehicle, availability, add-ons, dealer fees and sales tax.

Another important factor to consider is auto insurance, as the cost of insuring your new vehicle will depend on the make, model and coverage level. Be sure to shop around for the best auto insurance to ensure you're getting the best rate and coverage.

The MSRP, or sticker price, is the manufacturer's recommended sale price for a vehicle. Dealers must display the MSRP on a window sticker, including details like the model year, trim level, destination fee and any additional charges. Although the MSRP serves as a baseline, dealers can set their prices higher or lower depending on demand and sales strategies. Knowing a vehicle's MSRP helps you gauge its value and assess if you're getting a good deal.

Dealer fees are additional charges the dealer imposes to cover various services, such as processing documents or registering your vehicle. These fees can amount to up to 10% of the car's price, but some are negotiable. Common dealer fees include:

The principles of supply and demand heavily influence new car prices. Recent supply chain disruptions, such as microchip shortages during the pandemic, reduced the supply of new vehicles, driving up prices. However, dealers may lower prices to move inventory when supply exceeds demand.

New car prices vary by location due to regional demand, local taxes and dealership competition. Prices may be higher in high-demand areas, whereas lower demand in other regions could result in better deals.

Trading in your old vehicle can reduce the price of a new car, especially if the dealer needs that particular model. They're more likely to offer a favorable deal on cars they can resell quickly.

Additional features like advanced audio systems, anti-theft devices or enhanced safety packages can increase the final sale price. Dealers may be willing to include these options, but they will add to the overall cost.

Financial incentives and rebates include cash rebates, low-interest financing and lease deals that make purchasing a new car more affordable. As of July 2024, average incentives are 7% of the transaction price, amounting to $3,383, marking the most generous level over three years.

Most states also require you to pay sales tax when purchasing a new car. These taxes can vary greatly depending on your location. For instance, Texas has a 6.5% sales tax, whereas California's can range from 7.25% to over 10%. However, states like Alaska, Delaware, Montana, New Hampshire and Oregon do not impose a sales tax, which could influence where you decide to buy your vehicle.

Here are some resources that can provide additional information and tools related to purchasing a new car:

• American Automobile Association (AAA): Offers resources on car buying, financing and extended warranties, along with discounted car prices through its partnerships.
• Cars.com: Offers car reviews, comparisons and tools for finding new car deals and incentives, as well as a marketplace for purchasing new vehicles.
• Edmunds: Provides in-depth car reviews, pricing guides and comparison tools to aid car-buying decisions.
• Insurance Information Institute (III): Provides insights into auto insurance, helping you understand coverage options and how to save on insurance for your new car.
• National Highway Traffic Safety Administration (NHTSA): Offers vehicle safety ratings and recall information.