How much does a car cost?

General car price statistics and trends

The average cost of a new vehicle was $48,759 in December 2023, representing a 5% increase from the previous year. The average price of a used vehicle by the end of last year was $26,446, a decrease of 3% from 2022.

A 2024 ConsumerAffairs survey found that the highest price people are willing to pay for a vehicle was $22,090 for a new car and $18,464 for a used car. And yet, only two out of five respondents looking for a new vehicle could identify potential options in their price range.

As the market begins to turn and favor buyers and the demand for less expensive vehicles increases, auto dealers will also be pushing into the used car market.

Cheaper vehicles are also being purchased quickly, making it difficult for car dealers to maintain inventory. Auto dealers in the U.S. report that vehicles under $10,000 only tend to stay on the lot for an average of 35 days. In contrast, cars over $35,000 are left on dealer lots for nearly two months.

Average car price trends 2015-2023

There has been a steady increase in the price of both new (37%) and used (45%) vehicles since 2015. The COVID-19 pandemic caused global supply chain shortages of chips and other crucial car parts, which caused the most dramatic i price increases within the past decade.

The average cost of a new car by the end of 2019 was nearly $37,000; by the end of 2022, the prices had increased by almost $10,000. The automakers experiencing supply shortages made up for potential profit loss by using the materials they did have to build vehicles with higher price points, like SUVs.

Now that this low-supply, high-demand market is normalizing, higher inventories are projected to reduce prices in the future, and consumers in the market for new cars can look forward to purchasing incentives such as discounts and rebates that can lower the price of a vehicle.

Average price by vehicle type

Midsize sedans have the lowest average cost of the vehicle types below, at an average of just under $33,000. In contrast, the average full-size SUV can reach prices of over $70,000.

Tesla’s late-year price cuts pushed the sale of electric vehicles (EVs) through the end of 2023. This move was significant in the electric car industry, especially since Tesla is the leading producer of EVs in the U.S., and had a substantial impact on the market; 2023 saw a record number of EV buyers, at nearly 1.2 million in the U.S.

Other EV brands are becoming increasingly competitive with more buyer-friendly prices; currently, the 2023 Chevy Bolt has an MSRP of $26,500, and the 2024 Nissan Leaf has a $28,140 MSRP.

Average retail car price by state

While the manufacturer sets the MSRP of a vehicle, registration and documentation fees vary widely by state; some states administer flat fees, and others charge by vehicle type, weight, miles per gallon and other factors. Title fees are usually a one-time expense and are more consistent across states.

Florida, Virginia, Colorado and North Carolina have the highest average documentation fees, while Wisconsin, Illinois and Oregon have the highest title fees for new vehicle purchases. Nevada, Kansas, Illinois and California have the highest sales tax rates on their vehicles.

» LEARN MORE: How to buy a new car

Conversely, New Mexico, Arizona, North Dakota and Hawaii have the least expensive title fees, and  Oregon, Montana, Alaska, New Hampshire and Delaware have no sales tax. California, Minnesota and Arkansas have the least expensive documentation fees.

Average used car price by state

The average used car price by state was just over $33,500 at the end of 2022. Eight of the 10 cheapest states for used vehicle purchase are in the northeast, with Vermont boasting the least expensive used cars at $31,445.

The most expensive used cars are found in the midwestern region of the U.S.; buyers in Wyoming will spend the most money on used cars, at an average of $41,405.

Other car ownership costs, like insurance and car maintenance, vary by state, so consumers should research insurance costs and warranties before making their purchase.

» LEARN MORE: How to buy a used car

Average trade-in value trends

Many factors affect a car’s average trade-in value, which is the value a dealer will apply to your new vehicle purchase in exchange for your old car.

One of the most significant determinants of trade-in value is depreciation. A new vehicle begins to lose value the moment it leaves the lot and is further influenced by regular wear and tear; this loss of value is called depreciation. Vehicles lose about 20% of their value within the first year of ownership and around 60% after five years.

Other determining factors of trade-in value include:

• Age: The older the vehicle, the less credit you are likely to receive for your trade-in, save for certain models
• Condition: The wear and tear to the body and internals of a vehicle affect its trade-in value.
• Mileage: High-mileage vehicles are worth less than low-mileage vehicles, but depreciation slows after about 100,000 miles.
• Customizations: Aftermarket modifications can cause depreciation because they may deter potential buyers.

A brand's reputation is another important factor; if a particular automaker’s vehicles are known to be reliable, they will have more value at trade-in. As of 2023, Toyota had the best five-year resale value. Full-size pickups and compact cars have the best resale value of all of the vehicle types, while electric vehicles are currently the worst of those listed.

Vehicle price trend projections

As the market effects from the pandemic quell, car production around the world is expected to exceed sales by over 6%, creating a surplus of new vehicles. Sellers will likely need to offer discounts to get the new cars off their lots. As seller inventories inflate, it is expected that dealers to offer incentives, rebates and other discounts to get customers to purchase new vehicles.

Car production around the world is expected to exceed sales by over 6%, creating a surplus of millions of vehicles, the price of which will most likely need to be discounted to get the vehicles off of the lot. Additionally, experts predict that automakers will begin to manufacture more small, low-end car models that are more affordable for consumers.

There is much uncertainty about the future of oil, which impacts car prices, particularly what type of cars consumers demand. Per Reuters, oil prices are also projected to rise in 2024, as the Organization of Petroleum Exporting Countries (OPEC) agreed to cut 2.2 million barrels of crude oil output per day throughout the beginning of this year. This could decrease consumer demand for large “gas-guzzlers” and increase demand for vehicles with higher fuel economy.