We believe everyone should be able to make financial decisions with
confidence. And while our site doesn't feature every company or
financial product available on the market, we're proud that the
guidance we offer, the information we provide and the tools we create are
objective, independent, straightforward — and free.
So how do we make money? Our partners compensate us. This may influence
which products we review and write about (and where those products appear on
the site), but it in no way affects our recommendations or advice, which are
grounded in thousands of hours of research. Our partners cannot pay us to
guarantee favorable reviews of their products or services. Here is a list of our partners.
Are Car Prices Going Up or Down?
The average new car price remains around $50,000. Here’s what to know about today's car market and buying a car.
Many, or all, of the products featured on this page are from our advertising
partners who compensate us when you take certain actions on our website or
click to take an action on their website. However, this does not influence our
evaluations. Our opinions are our own. Here is a list of our partners and
here's how we make money.
Updated · 4 min read
How is this page expert verified?
NerdWallet's content is fact-checked for accuracy, timeliness and
relevance. It undergoes a thorough review process involving writers and
editors to ensure the information is as clear and complete as possible.
Shannon Bradley is a NerdWallet authority on autos and home services. Before joining NerdWallet in 2021, Shannon spent 30-plus years as a writer, content manager and marketer in the financial services industry. In these roles, she developed financial expertise and created educational content covering a wide range of personal and business topics. Shannon is based in Newburgh, Indiana.
Julie Myhre-Nunes leads the Auto Loans, Student Loans and Home Services teams at NerdWallet. Julie has over a decade of experience in personal finance. Before joining NerdWallet, she led editorial teams at Red Ventures and several startups. Her personal finance insights have been featured in Forbes, The Boston Globe and CNBC, while her writing has appeared in USA Today, Business Insider, Wired Insights and more.
Published in
Managing Editor
SOME CARD INFO MAY BE OUTDATED
This page includes information about these cards, currently unavailable on
NerdWallet. The information has been collected by NerdWallet and has not
been provided or reviewed by the card issuer.
In November, the average transaction price paid for a new vehicle was $49,814, an increase of 1.3% over the previous year. The average new car price reached a record high in September, when it surpassed $50,000, according to Cox Automotive's Kelley Blue Book
A major factor driving the average new vehicle price is car buyer vehicle choice. Higher-income buyers have continued to favor trucks, large SUVs and luxury models that cost more than other car types. At the same time, many consumers who are unable to qualify for a high-balance new car loan, or make high monthly payments, have turned to used car purchases.
How have tariffs affected car prices?
After tariffs were implemented in April, vehicle prices remained relatively steady for most of 2025. Automakers appeared to be absorbing tariff costs instead of passing them to consumers, with numerous carmakers attributing financial losses directly to tariffs. But as 2026-model-year vehicles rolled out, sticker prices began to tick up, at least in part due to tariffs.
Tariffs affecting car manufacturers, and now consumers, include those on imported vehicles, foreign-made parts and production materials, such as steel, aluminum and copper. Recently, President Trump extended a tariff offset through 2030, giving car manufacturers more time to shift supply chains to the U.S. During this time, auto makers will be reimbursed 3.75% of the Manufacturer’s Suggested Retail Price for imported parts of U.S.-made vehicles
Used car prices reached record levels during the pandemic and have remained elevated. In November, the average transaction price for a used vehicle was $26,035, according to Edmunds
Higher used car prices have been driven less by tariffs and more by tight inventory, fueled by factors like fewer lease returns and drivers holding on to cars longer. As new car prices have climbed, more buyers have opted for used cars — further tightening supply. The good news is that used car inventory has improved in recent months, and lease returns are expected to rebound in 2026.
Why are cars so expensive to begin with?
Regardless of tariffs, new and used car prices are high for several reasons.
At the height of the Covid-19 pandemic, supply chain disruptions and semiconductor chip shortages were responsible for slowing, and even halting, vehicle production. As car inventory decreased, new and used car prices skyrocketed and remain elevated.
Ongoing inflation has increased manufacturing and labor costs, which car manufacturers and dealers have in some instances passed on to car buyers.
Many new cars come with advanced technology, larger infotainment screens, driver-assistance systems, and hybrid/EV powertrains — all adding to the cost.
NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account factors like maximum rates, variety of loan options, visibility of borrower requirements, accessibility, speed of funding, fees and more.
Best for borrowers with good or excellent credit who want fast approval and funding to buy a new car.
NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account factors like maximum rates, variety of loan options, visibility of borrower requirements, accessibility, speed of funding, fees and more.
4.5
Est. APR:
Annual percentage rate (APR) represents the true cost of
borrowing money. It is your interest rate plus any loan fees,
and is expressed as a percentage.
Annual percentage rate (APR) represents the true cost of
borrowing money. It is your interest rate plus any loan fees,
and is expressed as a percentage.
6.74 - 15.24%
Term: 24 - 84 months
You will be redirected to the partner's website.
The terms presented here are estimated and provided solely to assist you
in finding a great lender. The terms may vary based on the partner's terms
and conditions.
You will be redirected to the partner's website
The terms presented here are estimated and provided solely to assist you in finding a great lender. The monthly payment amount, Annual Percentage Rate (APR), and any other terms are based on standard Consumers Credit Union rates and terms for your NerdWallet provided credit score, zip code, and the other self-provided information. These terms may vary based on your credit history, your individual income, or other terms of the lender.
NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account factors like maximum rates, variety of loan options, visibility of borrower requirements, accessibility, speed of funding, fees and more.
Best for applicants who want to compare multiple new car purchase loan offers.
NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account factors like maximum rates, variety of loan options, visibility of borrower requirements, accessibility, speed of funding, fees and more.
4.0
Est. APR:
Annual percentage rate (APR) represents the true cost of
borrowing money. It is your interest rate plus any loan fees,
and is expressed as a percentage.
Annual percentage rate (APR) represents the true cost of
borrowing money. It is your interest rate plus any loan fees,
and is expressed as a percentage.
6.24 - 29.90%
Term: 24 - 84 months
You will be redirected to the partner's website.
The terms presented here are estimated and provided solely to assist you
in finding a great lender. The terms may vary based on the partner's terms
and conditions.
You will be redirected to the partner's website
The terms presented here are estimated and provided solely to assist you in finding a great lender. The monthly payment amount, Annual Percentage Rate (APR), and any other terms are based on standard Consumers Credit Union rates and terms for your NerdWallet provided credit score, zip code, and the other self-provided information. These terms may vary based on your credit history, your individual income, or other terms of the lender.
Auto Credit Express
New car purchase loan
Not yet rated
Best for new-car buyers who can’t qualify for a lower-rate loan through a traditional lender and need help finding a dealer with subprime lending.
Min score: 525
Amount: $5,000 - $50,000
Min. Amount$5,000
Max. Amount$50,000
Not yet rated
Est. APR:
Annual percentage rate (APR) represents the true cost of
borrowing money. It is your interest rate plus any loan fees,
and is expressed as a percentage.
Annual percentage rate (APR) represents the true cost of
borrowing money. It is your interest rate plus any loan fees,
and is expressed as a percentage.
N/A - N/A
Term: 24 - 84 months
You will be redirected to the partner's website.
The terms presented here are estimated and provided solely to assist you
in finding a great lender. The terms may vary based on the partner's terms
and conditions.
You will be redirected to the partner's website
The terms presented here are estimated and provided solely to assist you in finding a great lender. The monthly payment amount, Annual Percentage Rate (APR), and any other terms are based on standard Consumers Credit Union rates and terms for your NerdWallet provided credit score, zip code, and the other self-provided information. These terms may vary based on your credit history, your individual income, or other terms of the lender.
According to the consumer price index (CPI), which is a Bureau of Labor Statistics measurement of inflation and prices paid by consumers, new vehicle prices have increased 22% since 2019
CPI reports have shown the new vehicle index ticking up and down slightly throughout 2025 — and a 0.8% increase for the 12 month period ending in September. The used car and truck index increased 5.1% over the same time period
Today’s average new car price is hovering near the previous all-time high, which was $49,958 in 2022, according to Kelley Blue Book. That’s approximately $11,000 higher than new car prices before Covid-19.
What about auto financing rates and payments?
On top of paying high car prices, car buyers who finance face elevated interest rates and payments. Average auto loan interest rates increased to their highest level in years during the pandemic and have only recently begun to come down.
When the Federal Reserve changes the federal funds rate, auto loan interest rates tend to march in the same direction, even though the two aren’t directly linked. Below is a chart showing recent moves in the federal funds rate. It held steady through most of the year, with the first cuts of 2025 occurring in September, October and November.
The average car payment in the third quarter of 2025 was $754 for a new car and $565 for a used one according to Edmunds. The company also reported that nearly 20% of new-car buyers committed to a monthly payment of $1,000 or more in the third quarter of this year
The "one big, beautiful bill," which was signed into law in July, includes an auto loan interest tax deduction, which is intended to help with vehicle affordability. Auto loan borrowers can deduct up to $10,000 a year for car loan interest for tax years 2025-2028. The deduction is available only for new cars with final assembly in the U.S., and the vehicle must be for personal use.
The deduction is “above-the-line,” meaning it can be taken by people who claim the standard deduction and those who itemize. It will begin to phase out for individuals with modified adjusted gross incomes over $100,000 ($200,000 for joint filers)
The upfront price of cars hasn’t been the only financial pain point for consumers, as shown by the NerdWallet Vehicle Ownership Costs Index, which is a measurement of inflation and spending figures from the BLS.
Car ownership costs grew at a double-digit annual rate every month from April 2021 to November 2022, according to NerdWallet's ownership index. That growth has slowed dramatically — the most recent data shows ownership inflation rose 2% in August. Since August 2019, the costs — including gas, repairs and maintenance, parking, insurance and licensing costs — have risen 43%.
While it isn’t necessarily a good time to buy a new or used car due to high prices, decreasing interest rates are starting to offer some payment relief. Moving into 2026, car prices are expected to remain stable without significant decreases, so putting off a purchase may not provide much cost benefit.
If you're someone who simply can't fit a high car payment into your budget, and you can delay buying a car, that could be your best option. Focus on paying down other debt and saving toward a larger car loan down payment, if possible.
If you do move forward with financing a car and interest rates continue to fall, look into refinancing your car to a lower rate later.
How to find the best deal on a car
To increase your chances of finding a car that meets your needs at the best price, here are some tips to follow.
Shop around and be flexible about make and model. Some models and trim levels are being affected by tariffs more than others. Also, previous-year models may be a better deal than new models coming out.
Look at auto manufacturer websites for any special pricing promotions.
Check online pricing guides, such as Kelley Blue Book, Edmunds or NADA guides, to know what price you should pay.
If financing, know the ins and outs of getting a car loan, so you can get more favorable terms.
Use an auto loan calculator to determine the best scenario — loan amount, interest rate, term and down payment — for a monthly payment that fits your budget.
Article sources Article sources
NerdWallet writers are subject matter authorities who use primary,
trustworthy sources to inform their work, including peer-reviewed
studies, government websites, academic research and interviews with
industry experts. All content is fact-checked for accuracy, timeliness
and relevance. You can learn more about NerdWallet's high
standards for journalism by reading our
editorial guidelines.
