When it comes to vehicle prices, the Kelley Blue Book is an essential, credible resource. So when it reported that the average price of a new vehicle crossed $50,000 in September, it’s worth exploring that news.
The most notable thing is that the price increase has been remarkably swift. Michelle Singletary, a financial columnist for The Washington Post, included charts that cited quarterly data from the Edmunds car-shopping website. According to this report, the average price of a new vehicle was $38,300 in the first quarter of 2020. Then the covid-19 pandemic took hold, and within two years, the 2022 first quarter, the average had risen all the way to $45,400.
By Edmunds’ measurements, the average price in the recently completed third quarter of 2025 was $48,400. For September alone, Edmunds reported an average of $49,200. Its numbers may not be the $50,000 reported by Kelley, but they are uncomfortably close to it.
How come? The pandemic played a role by interrupting the supply chain, which meant fewer vehicles were available for sale. That explains the rapid increase from 2020 to 2022.
But there are other factors, Singletary wrote: “More than 60 models had average prices of more than $75,000, according to the KBB report, which found that luxury vehicles and expensive electric vehicles helped push the prices to record territory.”
The current average price is ridiculously high. There’s no other way to describe that $50,000 figure, although it must be conceded that automakers wouldn’t be producing $75,000 vehicles unless there were people willing to buy them.
However, it’s worth remembering that we’re talking about a $50,000 average, which means there are still a lot of new vehicles available at lower prices. Hopefully there are still a few in the more affordable range of $25,000 to $30,000.
Another concerning trend involves people who trade in a used car for a new one. Here, Singletary wrote, a rising number of buyers owe more on their existing vehicle than they will be paid for trading it in — a situation known in financial terms as being “upside down” on a loan.
In the third quarter of 2025, 28% of trade-ins applied toward the purchase of a new vehicle were upside down. The average upside-down owner owed $6,900 more on the existing car than it was worth. One quarter of upside-down owners owed more than $10,000 on their car, and 8% owed more than $15,000.
Singletary lists many concerns about these trends. She worries rising prices will not stop buyers from taking on debt they can’t manage. The number of used-car buyers paying $1,000 or more per month on their loan is rising. Perhaps worst of all, loans of seven years or longer are becoming more frequent, to the point where one Edmunds official said the idea of always having a car payment is normal to some.
Singletary, as befits a financial columnist, has some common-sense ideas to avoid all this motorized sticker shock.
“Keep your vehicle until it is paid off, following the recommended maintenance schedules,” she wrote. “Then take the payments you were making and save that money. If you keep your car for years, you will have enough to buy the next one with cash.”
Also, try to resist the urge to trade up to a luxury vehicle. And make a larger down payment to reduce what you borrow. None of this is rocket science, but as vehicle prices climb, financial reality is important. If you’re upside down, that’s the signal to keep the car you already have.
