- The average American new-car buyer paid $49,353 in February.
- That’s 3.4% higher than a year ago – significantly more than most year-over-year increases.
The average American new-car buyer paid $49,353 in February – 3.4% higher than a year ago. That’s a more significant increase than we’re used to seeing. Over the past three years, the average month has seen prices 0.9% higher than the previous year.
The increase came even though dealers and automakers increased the average discount they offered. Purchases included a 6.9% average discount last month, up from 6.5% in January.
Related: Is Now the Time to Buy, Sell, or Trade in a Car?
If discounts increased, how did prices rise? The sticker price of the average new car rose by 3.5%, hitting $51,440. A combination of high tariffs, manufacturers canceling inexpensive models, and Americans choosing more luxurious cars drove sticker prices so high that even hefty discounts still led to a significant year-over-year increase.
Buyer Choice Is a Big Part of Price Increases
- Midsize SUVs, with their higher prices, outsold compact SUVs last month.
- Expensive full-size trucks pulled the average higher.
Midsize SUVs were the best-selling vehicles in America in February. They sold at an average price of $50,148. The second-place slot went to cheaper compact SUVs, which sold for an average of $36,807.
Full-size trucks, however, had an outsized impact on the final tally. The average full-size truck sold for $66,157.
“Remove expensive full-size pickups, and the average is closer to $39,000, which tells a very different affordability story,” explains Erin Keating, executive analyst for Kelley Blue Book parent company Cox Automotive.
She notes, however, that a 3.4% year-over-year increase might be rare in recent history, but it’s not unusual in the long run. “Outside of the ‘everything was broken’ phase, when prices were rising at a 13% clip, the industry’s long‑run average is closer to 3%. What we’re seeing now looks more like normalization than a new pricing problem.”
EV Prices Dropped
- Electric car prices dropped by 1.4% year-over-year, slightly closing the gap to gas-powered car prices.
The average electric vehicle (EV) sold for $55,300, 1.4% lower than a year ago despite the end of a $7,500 federal EV subsidy last fall.
EVs now make up more than a quarter of car sales worldwide, but only about 8% in the U.S. America is now the world’s second-largest car market after China.
Automakers significantly increased the discounts they offer on electric cars. Many are saddled with inventory they planned when the federal government offered buyers help with an EV purchase. They are marking down prices as they attempt to match supply to demand.
The average EV buyer received a 14.2% discount from the sticker price.
