New-vehicle prices in the U.S. climbed to an average transaction price of $49,855 in July, reaching the highest monthly level recorded in 2026, according to Kelley Blue Book data. The figure was up 1.9% from July 2025, while sales volume fell 1.5% year over year as higher vehicle costs continued to pressure car shoppers.

New-Vehicle Prices Approach $50,000

Overall transaction prices moved closer to the $50,000 mark, but consumers continued shifting toward lower-priced vehicle segments, limiting broader price growth. Compact cars and subcompact SUVs posted year-over-year sales gains, while sales of full-size trucks and luxury vehicles slowed.

At the same time, shoppers have fewer truly inexpensive vehicles to choose from on dealer lots, leaving limited options at the lower end of the market.

July Transaction Prices Rise Despite Seasonal Trend

July’s average transaction price increased 0.2% from June’s $49,758 average. The gain ran counter to the historical long-term July trend of a 0.1% decline.

The monthly increase was driven primarily by reduced manufacturer discounts. Incentive spending fell to 6.4% of ATP, the lowest level recorded since January.

The average manufacturer suggested retail price also increased, reaching $51,621 and representing a 1.9% annual gain.

Vehicle Segments Continue to See Price Growth

Several major market segments recorded year-over-year price increases in July.

• Full-size pickup trucks: $66,980, up 2.8%
• Midsize SUVs: $50,144, up 2.4%
• Compact SUVs: $37,745, up 2.7%
• Subcompact SUVs: $31,052
• Compact cars: $27,904

With prices remaining elevated, an increasing share of buyers opted for base trims as they looked to keep monthly payments manageable.

EV Prices Reverse Six-Month Decline

Electric vehicle prices also moved higher in July, ending a six-month streak of annual declines. EVs posted an average transaction price of $56,126, up 1.6% from a year earlier and 1.2% from June.

EV incentives declined 9.1% month over month to $6,626, equivalent to 11.8% of ATP. Tesla followed the broader trend, with its average transaction price rising 1.5% from June to $53,891 as its incentive spending fell significantly.

New Model-Year Inventory Adds Price Pressure

The July increase in transaction prices came as automakers pulled back on discounting while 2027 model-year inventory began arriving. Cox Automotive Executive Analyst Erin Keating said newer inventory brings updated features and higher baseline MSRPs into the market.

The continued arrival of fresh inventory is adding upward pressure to transaction prices even as consumers increasingly favor lower-priced vehicle segments.

Affordability Remains a Challenge

For buyers, the market continues to present an affordability challenge. Consumers are seeking less expensive vehicles to control costs, but reduced incentives and higher baseline MSRPs are keeping final transaction prices elevated.

With used cars also remaining expensive, shoppers face high transaction costs across both new and pre-owned markets heading into late 2026.