How Much Does a Car Cost?

Car cost breakdown

New and used car prices are generally up 1% to 2% year over year, and new EV prices continue to edge down. While EV pricing has cooled, it still runs higher than comparable gas models.

New car prices

The average cost of a new car was $49,855 in July 2026, representing a 1.9% increase from July 2025, according to Kelley Blue Book.

Used car prices

According to Kelley Blue Book, the average cost of a used car was $27,028 in July 2026, up 6% from one year ago.

Electric vehicle prices

The average cost for a new EV was $56,126 as of July 2026, according to Kelley Blue Book. New EV sales were down 41.5% in July compared to the same period one year ago, and EV sales only made up 5.6% of new car sales in July, according to Cox Automotive.

» MORE: Do you really need a new car?

Car purchase fees by state

While the manufacturer sets the manufacturer’s suggested retail price (MSRP) for 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, ranging from $699 to $999, while Wisconsin, Illinois and Oregon have the highest title fees, ranging from $106 to $155. California has the highest sales tax rate at 7.25%.

In comparison, New Mexico, Arizona, North Dakota and Hawaii have the least expensive title fees, ranging from $3 to $5, and Alaska, Delaware, Montana, New Hampshire and Oregon have no sales tax. California, Minnesota and Arkansas have the least expensive average documentation fees, ranging from $85 to $129.

The table below shows each state’s sales tax rate, average documentation fee and title fee.

Note that these tax rates are only at the basic state level, so county- and city-level rates may be added on top of them. And although some states don’t have an official sales tax, the 0% rate can hide certain added car costs.

Delaware, for example, imposes a 5.25% document fee on car title transfers. In other states, automotive purchases have their own special sales tax rate. To be precise, calculate and factor in all local fees imposed for your area when estimating the total price of buying a car.

Factors that influence car prices for trade-in

Trade-in value is the amount that a dealer will deduct from your new car purchase based on the value of your used car. The resale value estimates a car’s market value, or how much it will sell for.

Some factors that influence trade-in value include:

Depreciation

Depreciation refers to the loss of value over time, primarily due to wear and tear. A new vehicle begins to lose value the moment it leaves the lot. Vehicles lose about 20% of their value within the first year of ownership and around 60% after five years, according to Kelley Blue Book.

Age and mileage

The older the vehicle, the less credit you’re likely to receive for a trade-in, except for certain models. High-mileage vehicles are also worth less than low-mileage vehicles, but depreciation slows after about 100,000 miles, according to Kelley Blue Book.

Condition and modifications

A vehicle’s condition, including wear and tear, will affect its trade-in value. Also, aftermarket modifications can cause depreciation by deterring potential buyers.

Brand reputation

If a particular automaker’s vehicles are known to be reliable, they will have more value at trade-in. For example, in Kelley Blue Book’s 2026 Best Resale Value Awards, Toyota won top honors for the 10th time. Five of its models also made Kelley Blue Book’s top 10 list for vehicles with the best resale value.

Car price trends and projections

Over the last decade, both new and used vehicle prices have steadily increased. In 2019, the average cost of a new car was over $36,000, and by 2022, the average price increased by nearly $10,000. Part of this increase was due to the COVID-19 pandemic, which caused global shortages of chips and other crucial car parts.

Average new vehicle price, 2019 to 2025

The table below shows the average retail selling price for new vehicles from 2019 to 2025.

» MORE: New car statistics 2026

Average used vehicle price, 2019 to 2025

The table below shows the average retail selling price for used vehicles from 2019 to 2025.

» MORE: Used car statistics 2026

Current trends and projections

While pandemic‑era supply chain issues have eased, tariffs and input costs continue to put upward pressure on prices, according to the National Automobile Dealers Association (NADA). This policy led to a decline in new vehicle inventory in the first half of 2025, partly due to tariffs on imported vehicles and auto parts.

Despite the tariff policy and inventory changes, NADA also reported that dealership revenues remained strong from 2024 to 2025, with new vehicles accounting for 54.2% of total dealership sales and used vehicles 32.6%.

Automotive industry analysts at Cox Automotive project new and used car sale prices to remain generally stable through the end of 2026. Significant price decreases remain unlikely due to steady demand and controlled manufacturer inventory levels.

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