Back to GuidesEven though the brunt of the global pandemic has passed, there are still lingering effects in every industry. In the automotive industry, in particular, automakers are still struggling with chip shortages, trade-in values are higher than ever as dealerships seek to keep inventory up, and average transaction prices are at record highs.
According to Kelley Blue Book, the average transaction price of a new car in December of last year reached $49,507, a 1.9% increase over the month before and an astonishing 4.9% year-over-year increase. In fact, Kelley Blue has also calculated that car buyers have paid over MSRP for new vehicles since July of 2021.
This will most likely not come as a surprise to anybody, but what may be surprising is that the average trend in high vehicle prices is not indicative of each segment in the car market. Some new vehicles have actually come down in price, and car shoppers looking to save money can still find deals if they know where to look.
New Vehicle Prices
Vehicle prices are not as simple as paying the dollar amount you see on a window sticker. Dealership markups, total vehicle cost after interest rates are added to a car loan, destination fees, and other miscellaneous fees all factor into a vehicle’s price.
MSRP, or the manufacturer’s suggested retail price, is a good place to start. It is the price at which an automaker suggests that a dealership sells a new vehicle. Used vehicles do not have an MSRP since they do not come straight from the factory, but used car prices are affected by overall car market trends just like new cars are. MSRP can also be referred to as the sticker price of a vehicle since it is mandated to be placed on the window sticker of any new vehicle.
Sale price is the second pricing buzzword to know. It is the final total price that you are going to be paying for any given vehicle. This would include things like the destination fee, transfer fees, added cost from interest rates, and added maintenance or warranty items. Incentives like cash back are then subtracted to reach the total sale price of a vehicle.
What is Causing Prices to Rise?
There are three main reasons we have continued to see record-high vehicle prices post-pandemic. The most obvious is supply and demand. Supply chain hiccups and a global microchip shortage have held up manufacturers from being able to produce new vehicles at a rate comparable to pre-pandemic times. Buyers’ demands have easily outpaced production capability.
The second reason is high inflation. Record-high inflation rates also have people struggling to save money. In order to do so, many car buyers are opting for higher monthly payments as interest rates also rise. Unfortunately, many auto loans only temporarily prevent buyers from paying full price for a car. Buyers may end up spending well over a vehicle’s MSRP over the course of their car loan term, even if they received a great initial deal.
The last factor in rising vehicle prices is the increase in high-profit vehicles. Rebecca Rydzewski from Cox automotive explains that because automakers cannot make as many new vehicles as they used to, they are manufacturing higher-profit models and moving away from value-oriented ones to make up the difference.
Fortunately, not every vehicle is selling over sticker price. KBB has found that Audi, BMW, Infiniti, Lincoln, and Volvo vehicles have been selling at least 1% below MSRP, if not lower. Buick has been selling at least 2% under MSRP in the last year. Honda, Kia, Land Rover, and Porsche have gone the opposite direction, selling at up to 8% more than MSRP, according to KBB’s data.
Average Cost by Vehicle:
Kelley Blue Book’s data shows some interesting trends by vehicle. They found that the average non-luxury vehicle price reached $45,578 at the end of last year. This sets a record for non-luxury vehicle pricing and represents a $2,506 year-over-year increase.
Meanwhile, they also found that the average cost of a luxury vehicle fell to $66,660, a $1,796 year-over-year decrease. Electric vehicles took an even bigger dive, with the average electric vehicle costing $61,448. That represents a smaller year-over-year decrease, but a huge $3,594 step down from November of 2022.
To further understand the average cost of a new vehicle, we will dissect each vehicle segment by averaging the MSRP and destination fee of each vehicle within its respective segment. We will not be able to cover every single vehicle available on the market, but we can take a look at some of the most popular ones to give you a better picture of the current average cost of a new vehicle.
Subcompact Cars
The subcompact car segment is a small, shrinking segment, but it contains the least expensive models on the market. It consists of the Kia Rio, Nissan Versa, Mini Cooper, Mitsubishi Mirage, and Mini Cooper Clubman. The Nissan Versa has the dubious honor of being the least expensive car on sale right now with a base MSRP of $16,825.
The average starting price for the class is $22,289. Taking the highest trim level of each model and averaging them brings the average segment MSRP to $25,766. Removing the Mini Cooper Clubman from the equation brings both averages down dramatically: $19,100 on the low end and $22,933 on the high end.
Compact Cars
Compact cars are larger, more popular, and pricier than subcompact cars, and the segment is full of recognizable nameplates like the Honda Civic, Toyota Corolla, Mazda Mazda3, and Subaru Impreza. Both the Subaru Impreza and Kia Forte tie for the honor of being the least expensive models in the class with a starting MSRP of $20,815.
Averaging the MSRP of each base model within the segment brings the average price to $22,124. Averaging the most expensive trim levels brings the segment's high end to $28,698.
Compact Luxury Cars
There are many compact luxury cars available on the current market, but none truly fit into the subcompact segment. Models include the Genesis G70, BMW 2-Series, BMW 3-Series, Acura Integra, Audi A4, Volvo S60, Lexus IS, Cadillac CT4, and Mercedes-Benz CLA-Class.
With an average base sticker price of $41,616, the small luxury car segment has the compact non-luxury segment thoroughly beat. Taking the top-tier trim levels into consideration, the average cost rises to $54,035. Even though that is higher than the current average cost of a new vehicle, it is well below the average current cost of a new luxury vehicle.
Midsize Cars
The Toyota Camry, Honda Accord, Kia K5, Hyundai Sonata, Nissan Altima, Chevrolet Malibu, and Subaru Legacy make up the shrinking midsize car segment. On the low end of the spectrum is the $25,415 Subaru Legacy. The Honda Accord, on the other hand, has a starting price of $28,390.
The average starting MSRP of a midsize car comes to $26,669. Taking the most expensive trim levels of each car into consideration, the average MSRP for the segment rises to $35,589. The top-tier Subaru Legacy Touring XT holds the honor of having the highest MSRP in the segment, edging out the Honda Accord Touring Hybrid by only a few hundred dollars.
Midsize Luxury Cars
Recognizable models like the BMW 5-Series, Audi A6, Lexus ES, Acura TLX, Volvo S90, Mercedes-Benz E-Class, and Genesis G80 make up the midsize luxury car segment. The $57,995 Audi A6 just edges out the Mercedes-Benz E350 Sedan for the highest base price in the class while the Cadillac CT5 wins the award for the lowest starting price: $39,590.
The average base MSRP for the class is $50,390. Averaging the top trim levels of each midsize luxury car produces an MSRP similar to the average cost of a luxury vehicle in the last month of 2022: $66,546.
Full-Size Cars
The non-luxury full-size car segment has been slowly disappearing over the past several years, with several more members slated to go away or change dramatically in the coming year. The Dodge Challenger, Chrysler 300, and Nissan Maxima are the only remaining members of the segment.
These three models have an average starting price of $36,205. Removing the Charger Hellcat models from the equation, range-topping models average out to $52,758.
There are more full-size luxury cars in the class than full-size non-luxury cars. The BMW 7-Series, Audi A8, Mercedes-Benz S-Class, Porsche Panamera, Genesis G90, Audi A7, and Mercedes-Benz CLS-Class make up the members club. Of course, opulence is the name of the game, and the Mercedes-Benz S-Class leads the pack with a starting price of $115,550.
The average starting cost for the full-size car segment comes in at $90,562. Factoring in the priciest trim levels produces an average of $103,682. This is due to the Porsche Panamera GTS’ $136,650 MSRP, the Mercedes-Benz S580’s $125,050 MSRP, and the BMW 760i xDrive’s $117,395 MSRP. None of these prices include optional extras and dealership fees.
Subcompact SUVs
The non-luxury subcompact SUV segment is a crowded one and one that is entirely made up of car-based crossovers. It contains the cheapest SUV currently available, the $20,835 Hyundai Venue, but the segment’s range is much broader than the subcompact car segment. Models include the Kia Soul, Chevrolet Trailblazer, Hyundai Kona, Mazda CX-30, Nissan Kicks, and Toyota Corolla Cross.
The segment’s average base MSRP is $24,863. Taking the top trim level of each model into consideration, the average sticker price rises to $30,580. The Subaru Crosstrek Hybrid, in particular, helps bring that average up as its sticker price soars to over $38,000.
Subcompact Luxury SUVs
The subcompact luxury SUV class is much more defined than the smallest luxury car class. Like the non-luxury subcompact SUV segment, crossovers make up the entire luxury segment. The Volvo XC40, Mercedes-Benz GLA-Class, BMW X1, BMW X2, Cadillac XT4, Audi Q3, Lexus, UX, Land Rover Range Rover Evoque, and Jaguar E-Pace make up the field.
This class’s low-end average starting price comes to $40,112 while the high-end average is only around $5,000 more at $45,048.
Compact SUVs
The compact SUV segment is among the hottest in the current car market. Models like the Toyota RAV4, Honda CR-V, Mazda CX-5, Hyundai Tucson, Nissan Rogue, Kia Sportage, and Subaru Forest represent crossovers well. Meanwhile, the Jeep Wrangler and Ford Bronco are truck-based SUVs that flex their off-road muscles.
The average starting price of the 12 crossovers in the class is just below $30,000 at $29,648. The cheapest base model is the Kia Sportage LX, starting at $27,615. Top trim levels in this segment average out to $41,725, in large part, because several models feature hybrid and plug-in hybrid options, pushing top-tier pricing well above the $40,000 mark.
The Jeep Wrangler and Ford Bronco are different enough within the class to warrant their own averages. Base Wrangler models have a starting price of $32,990. Base model Broncos are not far behind at $35,890. Both models have a host of configurations, trim levels, and options, but range-topping Wrangler models will set buyers back $64,415. The highest trim level for the Bronco has an MSRP of $68,690 after the destination fee is added.
High-performance Wrangler Rubicon 392 models and Bronco Raptor models have a sticker price of at least $84,290 and $78,375 respectively.
Compact Luxury SUVs
Compact luxury SUVs make up another crowded segment of the market full of crossovers. Perhaps unsurprisingly, the cheapest model of the bunch is the Buick Envision with a starting price of just under $35,000. It has some pretty stiff competition in the BMW X3, Genesis GV70, Volvo XC60, Acura RDX, Lincoln Corsair, Mercedes-Benz GLC-Class, Audi Q5, and even the Porsche Macan.
The average base price for a compact luxury SUV is $46,875, about $5,000 more than the average price of a top trim level non-luxury crossover. Similar to their non-luxury counterparts, there are several hybrid plug-in hybrid models within this segment, driving the average highest trim level price to $60,658 before options and extras from the dealership.
Midsize SUVs
Midsize SUVs are numerous on the market and beloved in car buyers’ hearts as they provide a great balance of space, utility, and style. Three-row crossovers like the Honda Pilot, Toyota Highlander, Nissan Pathfinder, Jeep Grand Cherokee L, Mazda CX-9, Chevrolet Traverse, and Subaru Ascent make up the majority of the players in the field.
There is some diversity within this segment, though, too. Two-row crossovers like the Hyundai Santa Fe, Ford Edge, Honda Passport, and Chevy Blazer trade the third row for some extra cargo space. Even truck-based, body-on-frame SUVs are represented in the Toyota 4Runner.
With an average base price of $38,109, the midsize SUV segment falls well under the average transaction price of a new vehicle at current. Even averaging the top trim levels of each model brings us to a $53,673 price, only about $4,000 more than the current average price of a new vehicle.
Midsize Luxury SUVs
Like their non-luxury counterparts, a host of luxury SUVs slot into the midsize segment. There are several hybrid options within the segment as well as three-row and two-row models for your choosing. The largest difference between the luxury and non-luxury SUV segments is the price range.
Pricing can vary dramatically within the class as evidenced by the Cadillac XT5 and Maserati Levante. The cheapest XT5 starts at $45,540 while the least expensive Levante model starts at $92,195. Models like the BMW X5, Audi Q8, Cadillac XT6, Lexus GX, Volvo XC90, Land Rover Range Rover Sport, Lincoln Aviator, and Genesis GV80 fall somewhere in the middle.
The average base MSRP of a midsize luxury SUV is $60,510. Taking the average MSRP of each model’s top trim level will produce a $86,459 result. Several of the priciest models in the class can exceed six figures, even before options are added.
Full-Size SUVs
There is not too much to the full-size SUV segment. Models are big, brawny, and spacious, and their pricing ranges are not as extreme as some other segments. The Ford Expedition, Chevrolet Tahoe, Chevrolet Suburban, Toyota Sequoia, GMC Yukon, Nissan Armada, and Jeep Wagoneer make up the class. Each is a true SUV, featuring body-on-frame construction.
The average base MSRP for the class is $57,774. If you want to get into some of the top trim levels that each model has to offer, you will pay an average of $79,890. Most of what you pay for is sheer size, but there are some impressive features to be had as well.
Full-Size Luxury SUVs
The full-size luxury SUV segment is the most impressive and prestigious in the industry. Models like the BMW X7, Cadillac Escalade, Lincoln Navigator Mercedes-Benz GLS-Class, and Land Rover Range Rover can intimidate with their eye-watering price tags, but they also deliver what you pay for with extreme levels of luxury.
With only the Infiniti QX80 and BMW X7 starting below $80,000, the average base MSRP for the segment stands at $91,842. The Infiniti QX80, again, stands out for being the only model in the class with a top trim level that does not exceed the $100,000 mark. Thanks to models like the Land Rover Range Rover, BMW X7, and Cadillac Escalade, the average top-tier price for the class is $131,204.
Compact and Midsize Pickup Trucks
With several new models introduced in the last three years, the midsize and compact pickup truck markets are hot. Longstanding models like the Toyota Tacoma, Honda Ridgeline, Nissan Frontier, GMC Canyon, and Chevrolet Colorado are accompanied by newcomers like the Jeep Gladiator, Hyundai Santa Cruz, and Ford Maverick.
The average base sticker price for a small pickup truck is $32,111. The $23,690 starting price of the Ford Maverick balances out the $40,570 starting price of the Jeep Gladiator. Move to the highest trim levels of each model and the average price for the class climes to $45,721.
Full-Size Pickup Trucks
Even with only six models from which to choose, the full-size pickup truck segment contains three of the best-selling vehicles on the car market. The Ford F-150, Chevrolet Silverado, RAM 1500, GMC Sierra, Toyota Tundra, and Nissan Titan make up the entirety of the segment.
The average base cost of a full-size pickup truck is $38,372. The cheapest Ford F-150, Chevy Silverado, RAM 1500, and GMC Sierra models are quite reasonably priced, but they are work trucks. Most regular buyers will likely pay more for a non-work truck base model. Top trim levels for the entire class average out to $73,035.
Minivans
Minivans are often tossed aside in favor of three-row crossovers, even though they do many things better. Because of car buyers’ preferences, there are only four minivans on the market: The Honda Odyssey, Toyota Sienna, Kia Carnival, and Chrysler Pacifica.
The highest and lowest base minivan prices are within about $4,000 of each other, averaging $37,346 across the segment. Taking the average price of each model’s top trim level is similar until you factor in the Chrysler Pacifica Hybrid. Its top trim level soars to $61,590, bringing the high-end class average to $53,263.
Sports and Performance Cars
Sports cars and performance cars come in a variety of body styles and performance levels. Sports cars are not even clearly defined. There is also no distinctive line between when a sports car becomes a performance car or even when a performance car crosses the line to become a supercar.
That being said, we will consider the following models as sports cars: The Nissan Z, Ford Mustang, Chevrolet Camaro, Mazda Miata, Subaru BRZ, Toyota GR86, Porsche 718 Boxster, Porsche 718 Cayman, Honda Civic Type R, Subaru WRX, Toyota Supra, Dodge Challenger, BMW Z4, Volkswagen Golf GTI, and Volkswagen Golf R.
Averaging the base model price of each car listed above will produce a reasonable $40,168 starting price. Even the highest trim level average of $58,495 is not bad considering the diversity that these cars have.
Performance cars like the Chevrolet Corvette, BMW M3, BMW M4, Audi RS3, Aston Martin Vantage, Lexus LC, Lexus RC F, and several others make up an even more diverse segment that can reach as high as the middle six-figure mark. Most buyers looking for these models will be less concerned with price than the average car buyer.
Electric Cars
Electric cars span nearly every segment we have covered so far, but they can be hard to classify alongside other subcompact, compact, midsize, or full-size cars for several reasons. Value-oriented cars like the Chevrolet Bolt, Nissan Leaf, and Mini electric make up a small portion of the market while many electric cars, strictly by their level of technology and price, can and are considered luxury vehicles.
The Bolt, Leaf, and Mini electric average a starting price of $29,126 and a high-end average price of $35,193. Other electric cars include the BMW i4, Tesla Model S, Porsche Taycan, Audi e-tron GT, Polestar 2, Tesla Model 3, Mercedes-Benz EQS, and BMW i7. Their average pricing is much higher.
Because of the huge pricing differences, even within the luxury electric car segment, the average starting price comes to $83,722. Averaging the top trim levels, the MSRP rises to $127,894.
Electric Trucks/SUVs
There are only three attainable electric pickup trucks on the market right now: the Rivian RIT, the Ford F-150 Lightning, and the GMC Hummer EV. On the low end, average prices are around $73,000 while, on the high end, buyers can expect to pay nearly $98,000 before options.
Electric SUVs are more diverse, and they can be more easily broken up into luxury and non-luxury categories. Models like the Kia Niro EV, Hyundai Kona EV, Subaru Solterra, Kia EV6, Hyundai Ioniq 5, Mustang Mach-E, Nissan Ariya, and Volkswagen ID.4 make up the non-luxury vehicle field.
Average base pricing for the field starts a $43,377. The most expensive trim levels in each model’s lineup average out to a surprisingly close $55,366.
Electric luxury SUVs include the BMW iX, Audi e-tron, Tesla Model Y, Tesla Model X, Mercedes-Benz EQB, Genesis GV60, Cadillac Lyriq, Volvo XC40 Recharge, Volvo C40 Recharge, and Jaguar I-Pace. Like the non-luxury segment, the luxury segment has a tight high and low average price range, but this is mostly due to the wide variety of pricing within the segment itself.
Average base pricing for the segment comes in at $71,367. The top trim level of each model in the segment averages out to $82,787, with the Audi e-tron GT bringing that average up with its $145,395 RS trim level.
