If you’re about to shop for a new car, you’ll see a scary number this week. The average new vehicle sold for $51,109 in October, a record, according to Kelley Blue Book.
Don’t let it set your budget. That average is mostly a story about pickup trucks.
What’s actually driving the record
Kelley Blue Book says the October average rose 1.3% from September and 2.1% from a year ago. That yearly gain is actually below the usual October increase of 3.6%. Prices aren’t racing. The mix is.
Strong sales of midsize SUVs, full-size SUVs and full-size pickups dragged the average up. The typical full-size pickup went for $67,912. Three of the five best-selling segments went for a lot less: compact SUVs at $37,895, subcompact SUVs at $31,333, compact cars at $28,030.
Erin Keating, an executive analyst at Cox Automotive, said it plainly: “The average is telling us as much about product mix as it is about affordability.” Keating added that vehicles priced from roughly $28,000 to $38,000 grew 9.6% in sales volume over the year.
Translation: plenty of buyers are already ignoring the headline. You should too.
The payment math
Here’s what those prices cost on a loan. We used 10.17%, the average mid-tier new-car loan rate on Cox Automotive’s Dealertrack platform for September, the latest month posted. We assumed 72 months and nothing down, before tax and fees.
The $51,109 average works out to about $951 a month. The $67,912 pickup is about $1,264. A $37,895 compact SUV is about $705. The $28,030 compact car is about $522.
That’s a $742 monthly gap between the pickup and the compact car. Over six years, the pickup costs about $23,100 in interest alone. The compact car costs about $9,500.
If you need a truck to haul a trailer for work, buy the truck. If you want one because the average says $51,000 is normal now, that’s $742 a month for the feeling.
What to do before you shop
Set your budget by payment first, then pick the segment. Run your own numbers in our loan calculator with the rate a bank or credit union actually quotes you, not the one the dealer offers at the desk.
Get that outside quote before you walk in. Our post on the 10% new-car loan rate shows why your credit tier moves the payment more than the Fed does.
Ask about incentives, but don’t expect miracles. Kelley Blue Book pegs the average at $3,490, or 6.8% of the price, and says it’s still below long-term norms. Dealers aren’t desperate. If a deal offers 0% financing or cash back, our 0% APR vs. rebate math shows which one wins.
Compare more of the field on the loans hub and our best loans page.
The detail
Kelley Blue Book’s transaction price is an estimate of what buyers paid before incentives, taxes and fees. Average sticker price hit $52,933, up 2.4% from a year ago. EVs averaged $56,220. Our payments are standard amortization figures, rounded, and your actual rate depends on your credit, the lender and the term.
How Candid Yak makes money. Some of the products we write about pay us if you apply or sign up through our links. That never changes our verdict, our rankings, or the numbers in this article. We call a bad deal a bad deal whether it pays us or not. Some brands shown in our comparison tools are placeholder examples while we finalize partner agreements, and we label them as such.