Car prices hit an average of $50,000—how much you’d pay per month
New car prices have never been this high.
The average sales price reached $50,080 in September, topping $50,000 for the first time. According to the Kelley Blue Book.
The milestone comes as customers flock to buy electric vehicles before the $7,500 federal tax credit expires Sept. 30, according to KBB; According to KBB, electric vehicles sold for an average of $58,124, helping to raise overall prices.
KBB says that although new car prices typically rise in the early fall, September’s annual increase was the largest since spring 2023, driven by EV purchases, higher luxury sales and, to a lesser extent, tariffs.
“Now this [the EV] Once the incentive ends, it’s possible that electric vehicle sales will decline slightly and the average transaction price will drop below $50,000 later in the year,” Brian Moody, managing editor of Kelley Blue Book, told CNBC Make It.
Either way, car prices have risen steadily since February. Monthly costs can exceed $1,000 when expenses such as insurance, maintenance and fuel are taken into account.
How much does a $50,000 car really cost per month?
To illustrate what today’s prices mean to buyers, consider a $50,080 vehicle financed for 60 months with a 20% down payment and a 7.12% interest rate; The current national average for a five-year new car loan is According to Bankrate.
This works out to a monthly payment of approximately $796. But when you add gas and insurance, the actual monthly cost goes even higher.
Americans spend an average of $177 a month on fuel Analysis by Empowerand the national average cost of auto insurance, which includes liability, collision and comprehensive protection, is $242, According to Experian. This brings the total monthly cost of a new car owner to roughly $1,215 per month.
There are also annual and ongoing costs to consider, including:
- Maintenance and repair: The average cost for all vehicle types in the US is around $900 per year, According to Consumer Affairs
- Registration fees: The average cost for registration is approximately $75 per year, although it varies significantly by state. According to Insurify
Consider used or rental cars to offset costs
It’s worth remembering that new cars can lose around 20% of their value in the first year, and 60% after five years. According to the Kelley Blue Book.
For cost-conscious buyers, it can be helpful to explore the used and rental options that often come with it. lower monthly payments.
“As everything gets more expensive, we are seeing more and more people turning to renting as a way to keep ownership costs low,” says Zander Cook, co-founder of lease purchasing platform Lease End.
Leasing essentially means renting a new car for a certain period of time rather than buying it outright. While monthly payments tend to be lower, leases have mileage limits – usually 10,000 to 15,000 miles per year — and may include excess wear or mileage charges. Leases also do not result in ownership when the term ends.
“Renting doesn’t work for everyone. If you drive tons of miles a year or live somewhere really rural, it’s probably not the most suitable option,” says Cook. “But for most people, especially those who live in cities or suburbs and drive 10,000 to 12,000 miles a year, renting makes a lot of sense.”
Another option is to buy a used car. The trade-off here is that it can lead to higher maintenance and repair costs as the vehicle ages and warranty coverage expires.
However, cars that are around three years old usually hit the sweet spot between price and reliability. According to J.D. Power. By then, most models have met their maximum depreciation but are still under warranty.
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