Quick Answer
Buying new: Yes, if you find the right deal. New car prices crossed $50,000 in August, but they are still rising more slowly than usual. Loan approval conditions are also the strongest they have been since 2015.
Buying used: Be careful. Used car prices rose to their highest level since late 2022, and affordable older vehicles remain hard to find.
Selling or trading in: Still a good time. Dealers continue to need used cars, so many sellers and trade-in shoppers can still get solid offers.
What’s Happening Now
New and used car prices both rose in August, and both reached notable milestones.
The average new vehicle sold for $50,089 in August 2026, crossing the $50,000 mark for the first time this year. That sounds alarming, but the market is more stable than the headline suggests. New car prices were 1.9% higher than a year ago, below the roughly 3% year-over-year growth often seen in a typical market.
The average can also be misleading. Luxury vehicles, expensive truck trims, and heavily optioned models push it higher. Shoppers who choose lower trims, compare brands, and avoid unnecessary add-ons can spend much less.
Used car prices are under more pressure. The average used car sold for $27,239 in August, the highest average since December 2022. Inventory is tighter than it was earlier this summer, and lower-priced used cars remain scarce.
If You’re Buying New
This can be a reasonable time to buy, especially if you are flexible.
Automakers and dealers offered incentives worth about 6.5% of the average transaction price in August, down from 7.2% a year earlier. That means discounts have not been as generous recently, but some brands still have more vehicles on dealer lots than others. More supply can mean more room to negotiate.
Financing conditions are also improving. In July, lenders approved almost three-quarters of auto loan applications, and the average down payment fell to 13%. Still, shoppers should be cautious about longer loans, especially 84-month terms. A lower monthly payment may look appealing, but a longer loan can keep you underwater longer and make your next trade-in harder.
The best strategy: shop multiple dealers, compare financing before you go, and focus on the total transaction price — not just the monthly payment.
If You’re Buying Used
Used car shoppers should move carefully.
Dealers now have about a 44-day supply of used vehicles, down from midsummer highs. That tighter supply could keep pressure on used car prices into early fall.
Shoppers with budgets under $15,000 will have fewer choices. Older, less expensive vehicles remain in short supply because Americans are holding onto cars longer, and fewer affordable vehicles have been built in recent years.
Before buying used, compare the price against new-car deals. In some cases, a newer used car may cost nearly as much as a new one once incentives and financing are included.
If You’re Selling or Trading In
The used car shortage has eased from its worst point, but it has not disappeared. With used prices near recent highs, trade-in and resale values remain relatively strong.
Selling privately will usually bring the most money, while selling or trading to a dealership is faster and easier. Either way, get multiple offers before accepting one.
If you still owe money on your car, check your equity first. Nearly six in 10 new-car buyers are rolling negative equity from an old loan into a new one. That can make the next vehicle more expensive over time.
Bottom Line
If you need a car now, buying new may still be the better opportunity, especially if you find incentives, avoid expensive trims, and qualify for favorable financing.
Used car buyers should be more selective, especially at the lower end of the market.
If you are selling or trading in, it is still worth acting now — but shop your vehicle around before making a deal.
Visit our Car Affordability Information Center for curated articles to help you make smart, budget-friendly decisions.
Editor’s Note: We have updated this article since its initial publication. Chris Hardesty and Chris Teague contributed to the report.
