It's in the news this week that the average new car price in the US has topped $50,000 for the first time. That's according to a study released by Kelley Blue Book.
That eye-popping price presents quite a bit of sticker shock to those of us older than, say, 30, who remember cars being a lot cheaper in the past— including the
not-too-distant past. But car prices are inflationary, and over time the compounding effect of a few percent a year packs a wallop— particularly after the past few years, when inflation has run higher than just a few percent a year.
Even so, have car prices increased
faster than the rate of inflation? One way of looking at it argues
yes. For example, I bought my own first car, new, in 1991. It cost $9,100. Per inflation calculators easy to find online (I did a quick search and tried the top five results, all hosted by reputable sites) that $9,100 in 1991 dollars is $21,500 today. Trying finding a new car for just $21,500 nowadays! "The $20,000 market for cars is extinct," Cox Automotive analyst Erin Keating said, as noted in
this Yahoo! Finance article (14 Oct 2025).
"Extinct" is a bit of hyperbole, of course. But if you tweak that term to
nearly extinct, it's spot-on. A quick check over at
Edmunds.com shows that it's hard to get into a new car, even a subcompact, for my $21,500 effective price in 2025. Here's what I found:
- A popular car that was comparable in size to what I bought at the time is the Honda Civic. The cheapest Civic model today starts at 24,500. (That's Edmunds' suggested negotiated price, not "sticker".)
- Another popular moden that was similar to mine 24 years ago is the Toyota Corolla. The cheapest new 2025 Corolla, in base trim, is $22,200.
- Rounding out the Japanese Big 3, Nissan's base-model Sentra S retails for an average of $21,250.
Many of the articles covering KBB's announcement point out that a simple, inflation based comparison is misleading. That's because, they argue, cars today are
better than cars from years ago. Indeed, reliability is up across the auto industry. Statistics show that cars are able to operate more miles and more years now than decades ago.
Feature content in new cars is improved, too. That $21,250 Nissan Sentra S is derided for offering sparse accommodations. Indeed it comes with steel wheels with plastic hub caps and cloth upholstery. But my 1991 new car also had steel wheels with plastic hubcaps and cloth upholstery... and it
did not have power windows. Or air conditioning. ๐ฐ These are things we all take for granted in cars today! And the 2025 Sentra S also has remote keyless entry, push-button start, and Apple CarPlay and Android Auto with a 7" touchscreen. My 1991 car didn't even have a side-view mirror on the right side. I bought one a year later for $95 from the dealership's parts department and installed it myself!
So, yeah, the $21,500 end of the new car market really doesn't suck today. Sure, you're getting a base-model car for that money, but even the base model today is a way nicer car than the base models of years ago.
And what about that $50k figure? Most of the news coverage about it notes that the average price has been driven up by most of the activity in the new-car market being at the higher end. Lower end shoppers are finding more satisfaction in buying a good, lightly used car for $21,500. That's where I'd be shopping today with $21,500. Meanwhile the best-selling new vehicle in the US is the Ford F-150 pickup, the most popular trim levels of which start over $40,000. The plusher trims run from $50,000 to over $70,000.