Average new vehicle price now exceeds $50,000; Mitchell discusses uptick in total losses

In September, the average transaction price (ATP) of a new vehicle in the U.S. was $50,080 for the first time, according to estimates by Kelley Blue Book (KBB).

KBB says new vehicle prices have risen steadily for more than a year, with the pace of the increases accelerating in recent months; however, despite higher prices, retail sales continue to maintain a healthy pace.

The September ATP last month was also up 2.1% from August and was higher year-over-year (YoY) by 3.6%. The annual gain of 3.6% in September was the largest gain since the spring of 2023, but aligned with the long-term average of ATP inflation, KBB said.

Incentive spending increased in September to 7.4% of ATP, or $3,700. KBB found that incentive levels were highest this year in September, up from 7.2% of ATP in August. In September 2024, incentive levels were equal to 7.3% of ATP.

“As 2026 model year products arrive on dealer lots, the average new-vehicle manufacturer’s suggested retail price (MSRP) — commonly called ‘the asking price’ — also reached a new record-high in September of $52,183,” a press release from KBB says. “The MSRP last month was higher by 4.2% year over year, an increase above the long-term average.

“A rich mix of luxury vehicles and expensive EV models likely helped push the ATP into record territory last month. Kelley Blue Book is initially estimating the electric vehicle share of the U.S. market in September at 11.6%, a record high. The electric vehicle ATP last month was $58,124, up 3.5% from the revised lower EV ATP in August.”

By KBB’s count, there were more than 60 models with ATPs above $75,000 with total sales near 94,000 units in September — 7.4% of total industry sales, up from 6% in September 2024.

“It is important to remember that the new vehicle market is inflationary,” said Erin Keating , Cox Automotive executive analyst, in the release. “Prices go up over time, and today’s market is certainly reminding us of that. The $20,000 vehicle is now mostly extinct, and many price-conscious buyers are sidelined or cruising in the used vehicle market.

“Today’s auto market is being driven by wealthier households who have access to capital, good loan rates, and are propping up the higher end of the market. Tariffs have introduced new cost pressure to the business, but the pricing story in September was mostly driven by the healthy mix of EVs and higher-end vehicles pushing the new vehicle ATP into uncharted territory. We’ve been expecting to break through the $50,000 barrier. It was only a matter of time, especially when you consider the best-selling vehicle in America is a pickup truck from Ford that routinely costs north of $65,000. That’s today’s market, and it is ripe for disruption.”

A record 437,487 EVs were sold in Q3 2025, with EV share reaching 10.5% of the market. Buyers rushed to finalize deals as government-supported EV incentives set to expire at the end of September, which pushed total volume higher YoY by nearly 30%, according to KBB.

The initial estimate of the EV average transaction price in September was $58,124, up 3.5% from the revised lower ATP in August. YoY, EV prices remained mostly unchanged, lower by 0.4%.

At 15.3% of ATP (nearly $8,900), EV incentives in September were lower compared to August. A year ago, EV incentives averaged 13% of ATP.

The ATP for a new Tesla last month was $54,138, down slightly from August and lower YoY by 6.8%. KBB predicts that the recent announcement of new, lower-priced versions of the best-selling Model 3 and Model Y will likely cause Tesla and segment-wide ATPs to decline in the coming months.

Mitchell on claims volumes

In a September episode of Mitchell Collision Podcast, Mitchell International Strategy and Market Intelligence Vice President Ryan Mandell spoke with Olga Yuskevych, manager of automotive and mobility for Boston Consulting Group, and Josh Meyer, vice president of strategy and innovation for LKQ Corp., about market trends affecting claims. The discussion covers claims volumes to total losses and how repairable claims could be increased.

“The problem, or the headwind in our industry, is claims,” Meyer said. “Of course, cars have gotten safer with ADAS, and ADAS do have a modest impact on the number of incidents on the road. But, at the same time, miles driven and VIO have grown every year coming out of COVID. And the headwind we face is largely due to the economics of insurance. Insurance has gotten more expensive. Deductibles have gone up, and coverage has been reduced. Thus, consumers are less likely to make an insurance claim.

“Total loss is a big factor out there, and it has grown a little bit every year. That is also eating into the repairable claims count. This is also due to increased cost of repair due to general inflation and due to vehicle and technology complexity.”

He noted that as fewer insurance claims are filed, more vehicles go unrepaired, and the efficacy of ADAS decreases over time.

“An easy example to give is a vehicle that’s not been repaired, probably doesn’t have an ADAS that’s functioning as intended,” Meyer said. “Unless maintained, ADAS efficacy erodes over time, and thus its functionality as a new vehicle is going to be very different than its functionality with a 10-year-old vehicle. And there is today no law that I’m aware of that requires ADAS to be maintained.”

Yuskevych added that total losses have been increasing since at least 2024, as used vehicle prices dropped.

“[T]hat has outpaced the drop in repair costs, but as new and used vehicle pricing is now increasing and normalizing, we’re probably going to see the total loss rates slightly decline, if not just stay stable for the next year or so,” she said.

“We’re definitely looking at the cost of repairs and the cost of parts and the impact of tariffs, although I don’t have specific numbers for you. I do think as the cost of vehicles is continuously increasing due to the electronics content, the ADAS content in the vehicles, it would make sense to lower the total loss threshold, but we have not done that specific analysis.”

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Featured image credit: SimonSkafar/iStock

Data table provided by Cox Automotive and Kelley Blue Book