Sticker shock: Car prices top $50K for first time in US, Kelley Blue Book says

[kevinbgoode1]

8. It isn't just the sticker shock, the cost really hits when the loan terms are considered. . .

"Seven-year loans made up 19.8% of all new vehicle financing by dealers in the first quarter of 2025, Edmunds reports, an all-time high.

The average new-car customer borrowed $41,473 in the first three months of 2025, at an annual interest rate of 7.1%, for an average monthly payment of $741. Those financing terms added $9,231 in interest to the cost of the average car."

https://www.usatoday.com/story/money/2025/04/26/car-loans-interest-rates-depreciation/83256984007/


I purchased a new car a few months ago, with the base MSRP at just over 17k. With a couple of added features (armrest, mats) and destination charges, the price went up to over $19k. Being elderly, I added extended warranty and maintenance plans - that took the price up to $22k. They were going to add more to the cost if I paid cash (which I had planned to do) so I let them put me on a loan with a no prepayment penalty. That loan, over the term, would have added another $8500 to the cost. I waited until it was processed/posted online and paid it all off before the first installment payment was due.

Frankly, I don't know how anyone can afford a new vehicle these days. I've always driven economy cars with as few extra features as possible (as well as a manual transmission) and am still shell-shocked at the cost today.