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New and Used Vehicle Prices Increase in the United States

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The Shifting Landscape of Vehicle Affordability in the U.S.

A combination of rising prices, shifting market strategies, and broader economic factors has altered the landscape of vehicle affordability in the United States. The average price for a new vehicle has increased significantly over the past six years, while the availability of lower-priced options has decreased. These trends have led to higher monthly payments, longer loan terms, and changes in consumer purchasing behavior.

Current Pricing and Market Data

The average price for a new vehicle in the United States is nearly $50,000, representing a 30% increase over six years. According to the U.S. Labor Department, new car prices were up 12.6% in March 2025 compared to the previous year, far outpacing the overall consumer price increase of 3.3% in the same period.

  • The share of new vehicles listed for less than $30,000 is approximately 13%, down from 40% five years ago.
  • Based on a 10% down payment and a six-year loan, the average monthly payment for a new vehicle recently reached $775.
  • In the used vehicle market, the average sale price was about $25,000 in February 2025, with average monthly payments of $560.
  • The share of used vehicles priced under $30,000 fell from 78% in 2021 to 69% in February 2025.

Industry Trends and Consumer Behavior

Automakers have reduced production of lower-priced models and smaller sedans, focusing instead on larger SUVs and pickup trucks, which generally yield higher profit margins. Data indicates that the average selling prices for vehicles from Ford Motor Co., General Motors, and Stellantis have generally trended higher than those from Honda, Hyundai, Mazda, and Subaru.

To manage higher costs, consumers are increasingly opting for longer loan terms. The share of buyers choosing seven-year loans now constitutes over 12% of all sales, up from nearly 8% a year ago.

The average age of vehicles on U.S. roads is now nearly 13 years, which is 18 months longer than a decade ago. A decrease in vehicle leasing has contributed to a reduced supply of two- and three-year-old cars entering the used vehicle market.

Contributing Factors to Higher Costs

Multiple factors are cited as contributing to increased vehicle ownership costs:

  • Regulations and Features: Federal rules require certain safety features, such as rear-view cameras. The integration of advanced technologies like lane-keep assist and automatic emergency braking also adds to vehicle costs.
  • Supply Chain and Tariffs: Production declines during the COVID-19 pandemic initially affected markets. Subsequent supply chain disruptions and tariffs have continued to impact vehicle pricing.
  • Insurance and Repair: Government data shows car insurance prices have increased 55% compared to six years ago. The average cost of car repairs is 48% higher.

Demographic Shifts and Consumer Perspectives

Data from Cox Automotive shows the share of new car buyers with annual incomes below $100,000 fell to 37% last year, down from 50% in 2020.

Charlie Chesbrough, a senior economist at Cox Automotive, stated, "The ability to buy transportation is still out there. The question is just, what do you get for your money?" Chesbrough noted that a consumer seeking a mid-sized SUV with specific features for $25,000 would find that option unavailable.

David Undercoffler, head of consumer insights at CarGurus, said automakers often place desired options in more expensive vehicle trim levels, which can influence final purchase decisions.

Automaker Responses and Consumer Examples

Some automakers have publicly addressed affordability concerns. Ford stated in February 2025 that it plans to offer several vehicles priced under $40,000 by the end of the decade. General Motors has pointed to vehicles from its Buick and Chevrolet brands, including the Chevrolet Trax, as lower-cost options.

Examples from consumers include Dana Eble and Tyler Marcus, a married couple searching for a second car with a budget between $20,000 and $30,000. They are considering a Chevrolet Trax, a Mazda, or an electric vehicle. Separately, Sam Dykhuis, 27, recently purchased a used 2021 Mazda CX-5 for slightly over $20,000, using savings to buy it outright and avoid a monthly payment.