When Will New Car Prices Drop?

Quick Facts About New Car Prices

• September’s new vehicle average transaction price was $50,562 — just $52 below December 2025’s all-time high of $50,614.
• Automakers continue to restrain incentive spending and inventory levels remain relatively balanced, though affordable vehicles are in shorter supply.
• Prices continue to rise moderately year over year, but have stayed fairly flat throughout 2026. Waiting for a significant price drop may not pay off. If you need a new car, shop around and consider a wider range to fit your budget.

At $50,562, September’s average transaction price (ATP) for a new vehicle has moved closer to December 2025’s record high. Prices rose a modest 0.9% from August and 0.7% year over year. Model-year 2027 vehicles continue to hit lots, but the pace lags behind that of 2025. In September, 2027 models accounted for 22.4% of available inventory.

More buyers are choosing the most affordable models, which keeps the overall industry average transaction price relatively stable despite rising prices. However, demand for lower-priced vehicles keeps supplies relatively tight. If you find a vehicle that fits your needs and budget, waiting for a better deal may not pay off. However, careful shoppers can still find good deals. Manufacturer incentive spending in September averaged 6.6% of ATP, up only 0.1% from August. As model-year 2027 vehicles arrive in greater numbers and dealers make room for them, shoppers may find discounts on remaining 2026 models.

Read on for expert insights into what’s driving these trends and what you need to know if you’re planning to start your search or buy a car now. 

• Where New Car Prices Stand
• The State of Electric
• New Car Inventory Update
• The Implications for Car Shoppers
• What Drives New Car Prices
• Shop Around for the Best Offer on Your Trade-in

New Car Prices Rose Again in September, Closing in on Last Year’s Peak

The new-vehicle ATP in September was up 0.9% from August, and 0.7% year over year. The ATP reached a record $50,614 in December 2025, a month when prices commonly spike due to a higher proportion of luxury-vehicle sales. September’s ATP came within $52 of that record. Prices rose year over year in four of the five highest-volume segments. Compact SUVs were the exception, with ATP declining 0.4%.

Because ATP is only an average, looking at individual segments can give shoppers a better sense of what to expect:

• Compact SUV: ATP of $37,614, down 0.4% year over year.
• Midsize SUV: ATP of $50,630, up 2% year over year.
• Full-size pickup truck: ATP of $67,573, up 1.5% year over year.
• Subcompact SUV: ATP of $31,213, up 1.5% year over year.
• Compact Car: ATP of $27,977, up 3.2% year over year.

In September, these five segments accounted for about 855,000 sales, or nearly two-thirds of the total. Price increases in four of the five segments exceeded the industry average, suggesting that a shift toward lower-priced models helped moderate the overall ATP increase.

“Consumers don’t buy the industry average. They buy a vehicle, and prices for many of the vehicles they’re shopping are continuing to move higher,” said Cox Automotive Executive Analyst Erin Keating. “What’s keeping the overall average transaction price increase relatively modest is mix. Affordability pressures are pushing more buyers toward lower-priced vehicles and segments, which tempers the industrywide number even as prices for individual vehicles rise.” Cox Automotive is Kelley Blue Book’s parent company.

New-vehicle sales slowed in September, down 3.4% from August, but rose 4.0% year over year. This year-over-year increasepartly reflects a calendar difference — Labor Day sales were included in September’s reporting this year, but in August’s reporting in 2025. On a seasonally adjusted basis, sales were relatively flat.

With ongoing conflict in the Middle East, fuel prices remaining high, and increasing economic pressure on households, the industry is keeping a close watch on consumer sentiment. Despite these challenges, new-vehicle demand has remained resilient, and pricing has remained comparatively stable. Sales slowed in September, allowing dealer inventory to recover. Model year 2027 vehicles are arriving in greater numbers, although the transition continues to lag behind last year’s pace.

Many buyers simply need a vehicle and cannot wait for international conflicts to end or economic conditions to improve. Explore Kelley Blue Book’s Car Affordability Information Center for curated articles designed to help you make smart, budget-friendly decisions.

MORE: Can I Afford a Car in 2026?

EV Sales Declined, but Market Share Increased

New electric vehicle (EV) sales declined 0.8% from August and 40.7% year over year. Sales totaled an estimated 86,632 vehicles, accounting for 6.5% of total new vehicle sales, up from August’s 6.3%. Tesla continued to dominate, with 48,367 units sold, a 1.7% increase from August. Rivian, Cadillac, and Kia also posted gains, while Toyota’s EV sales declined.

The average ATP for a new EV increased to $55,842 in September, up 2.3% from August but down 3.1% year over year. Incentives averaged $6,117, or 11% of ATP, the lowest level in 2026. Sales of Tesla’s highest-volume models, the Model 3 and Model Y, largely drove the increase in ATP. A greater proportion of higher-priced models, including the BMW iX3, Cadillac LYRIQ, Kia EV9, and Lucid Gravity, also contributed.

Inventory levels for new EVs tightened in September. Overall days’ supply fell to 68, down 7.4% from August. That was 10 days less than the supply of gasoline-powered vehicles and hybrids (ICE+). Inventory levels continue to vary widely by brand. Tesla, Mercedes-Benz, Ford, and Audi saw supply rise. Subaru had the leanest inventory, with just 15 days’ supply in September. Cadillac, Honda, Nissan, Volkswagen, and GMC also saw significant inventory declines.

“The EV market continues to adjust following last year’s federal tax credit expiration, with new and used EV markets showing increasingly different dynamics,” said Cox Automotive Director of Industry Insights Stephanie Valdez Streaty. “New EV sales remain well below last year’s elevated levels, but September’s higher share and tighter inventory point to continued market rebalancing.”

New Car Inventory Update

Dealerships track the number of new vehicles they have on hand using a metric called “days’ supply,” or how long it would take them to sell out at the current sales pace if they stopped adding new vehicles to inventory. According to Cox Automotive’s vAuto Live Market View, new car inventory data for September showed an 82-day supply, up from 75 days in August. This time last year, the figure was 87. September’s increase followed three consecutive months of inventory declines. Overall, dealers have enough inventory to meet demand, although supply remains lower year over year.

Total available inventory increased to 2.80 million units in September, up 4.5% from August. The average listing price was $49,726, up 0.7% from August and 1.4% year over year.

Inventory levels vary considerably by brand. Toyota ended the month with the tightest inventory at 35 days’ supply, followed by Lexus at 41 days and Honda at 48 days. The Toyota Camry had just 22 days’ supply, while the RAV4 had 24. At the other end of the spectrum, Stellantis brands carried some of the industry’s largest inventories. Jeep had 169 days’ supply, more than twice the industry average, while Ram and Dodge had 152 and 149 days’ supply, respectively.

What Drives New Car Prices

New car prices are not established by any single factor. They reflect a complex interplay among the following:

When any one of these factors shifts, the others may adjust it in response.

What Does This Mean for Car Shoppers?

The 2026 market has demonstrated stability, and the industry does have more supply heading into Q4. However, while inventory levels look balanced overall, the distribution is certainly not even across all brands. Brands like Toyota, Lexus, and Honda are operating with very lean, competitive inventory, and supply of the most affordable vehicles remains constrained. Prices are still rising in all but one of the highest-volume segments.

This creates more pressure for consumers, and deals are not plentiful. Even brands with high days’ supply continue to show restraint in incentive spending. That said, as 2027 vehicles continue to hit lots through the end of the year, dealers will look to make room for them. If you’re willing to shop around and consider a wider range of makes and models from prior model years, you may find a deal.

Shop Around for the Best Offer on Your Trade-in

Trade-in value is another factor driving car prices. A lack of used-vehicle stock has kept prices higher, giving credence to the idea that buying a new vehicle can sometimes be cheaper than purchasing a used model that’s only a few years old. As a result, it’s still potentially a good time to trade in your car. 

Dealers value your trade-in partly based on what they need in stock, so if you have a popular model, you may be in luck. On the other hand, they may offer less or a model already plentiful on their lots. In other words, a buyer trading in a 2018 Honda Civic for something else may be much happier with the trade-in appraisal than a shopper trading in a 2021 Jeep Grand Cherokee. 

Car buyers should prepare to shop around for the best trade-in offer. It requires another step, but selling your old vehicle to one dealership and buying your new car from another may make sense if the final numbers work in your favor. Use the Kelley Blue Book Instant Cash Offer tool to shop your trade-in vehicle at nearby dealerships. Comparing multiple bids makes it easier to choose the best offer. Remember, you can always negotiate the offer, and using one offer to counter another is not unheard of when shopping for a vehicle. 

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What to Do if You Need a Car Now

Incentives are a buyer’s best friend in the current market. If you can adjust your expectations about the type of car or brand you are willing to buy, you may find good deals. Beyond that, prices remain on a steady, modest upward trend. Before buying: 

• Research your options and expand your search if needed.
• Look for deals and incentives, especially on vehicles that dealers may be trying to sell to make room for newer models.
• Shop ahead for a car loan if you’re not paying cash.

Editor’s Note: We have updated this article since its initial publication.