Buyers are shopping for cheaper cars. New-car prices are still near a record.

There's a strain playing out on American car dealership lots: Shoppers desire cheap cars, but prices keep going up and up.

That's what Cox Automotive established in its September numbers. Last month, the average new car transaction cost was $50,562, a nearly 1% increase from the duration before, and fair $52 below a document high, the data resolute found. The average cost is up 0.7% from a twelvemonth ago.

At the identical time, buyers are gravitating distant from full-size segments toward additional affordable options.

"Customers continue to display us that they're consenting to modify by either going to smaller vehicles, akin sedans, or smaller-sized SUVs," Erin Keating, Cox Auto's administrator analyst, told Business Insider. She stated shoppers are additionally consenting to toggle brands to create their finances work.

That elasticity has helped restrain the industrywide average price, Keating stated — but now, smaller vehicles are expanding the numbers on their opening stickers.

The average cost of a compact car rosy 3.2% twelvemonth complete twelvemonth in September, to $27,977, during subcompact SUVs rosy 1.5%, to $31,213. Four of the five highest-volume new-vehicle segments posted cost gains complete the industry average.

Only compact SUVs saw a small dip compared to September 2025. Their prices were downward 0.4% to $37,614.

It's crucial to keep those prices in environment alongside the greater economy, Keating added. On Wednesday, the Bureau of Labor Statistics established that overall cost increase accelerated by 3.7% in September.

"The charge of cost increase on a conveyance is so far below the norm charge of cost increase in the country," she said. "Going up by 1% or 2% really is motionless way below historic norms."

September's numbers motionless display that the industry is struggling to let go of 2026.

Next-model-year vehicles accounted for 22.4% of accessible inventory at the end of September. That's up from 12.4% in August, according to a Cox Automotive analysis, but it's motionless far below final year's changeover. By the end of September 2025, 38.6% of all new vehicles waiting on many were 2026 example years.

Keating stated this year's slower rollout method small updated (and frequently repriced) models have reached new-vehicle dealerships. She predicts that average new transaction prices volition apt continue to increase through the next three months.

Shoppers could see a argent lining on the horizon: incentives.

Keating stated dealers could commencement offering several pricing carrots to customers to get slow-selling vehicles — particularly larger, small fuel-efficient ones — off their dealership lots. Jeep-maker Stellantis, Ford, and GM are most apt to see those discounts, she said.

"When you have new metal element coming in, you're gonna desire to get the old metal element moving," Keating said.