In 1989, a poorly paid newspaper reporter and his bride were able to buy a 1924 Craftsman bungalow in Greenville, S.C., for $50,000.
On Wednesday, Cox Automotive told him he’d have to pay that much now to buy a new car.
Cox Automotive Chief Economist Jonathan Smoke said the average transaction price for a new car in September hit a record high of $50,080 “even though incentive spending was at its highest level this year.” The high prices sunk its Cox Automotive/Moody’s Analytics Vehicle Affordability Index to its lowest level since December 2024.
“Higher incentives and income growth weren’t enough to offset September’s new-vehicle price increase,” Smoke said.
The estimated average auto loan rate remained stable, decreasing by 1 basis point to 9.63%, which was 89 basis points lower than a year earlier.
Prices rose 3.6% over the 12 months ending in September, rising slightly faster the 3.4% gain in personal income.
The typical payment for a new vehicle increased 1.9% from August to $766 in September, marking the highest monthly payment in 15 months, and was up 1.2% from a year earlier. The number of median weeks of income needed to purchase the average new vehicle increased to 37.4 weeks from 36.8 weeks a year earlier. The average monthly payment peaked at $795 in December 2022.
Meanwhile, Edmunds reported Wednesday that more buyers are showing up at dealers buying new cars with trade-ins carrying outstanding balances greater than what the old car is worth.
Underwater trade-ins reached a four-year high of 28.1% in the third quarter, up from 26.6% in the second quarter.
The percentage of new vehicles bought with a trade-in remained fairly constant at 43% to 46% for the years Edmunds published: 2019 to 2025.
However, the share of trade-ins with negative equity varied from a high of 34% in 2019 to a low of 15% in 2022. It’s been rising about 4 points a year since then, reaching the 28% mark in the third quarter.
Average age of the trade-ins has increased in years when the underwater share rose. The average age of trade-ins was 3.6 years in 2019, a low of 2.9 years in 2022 and a high of 3.7 years in 2025.
Edmunds found Americans with upside-down car loans owe more than ever. The average amount owed on upside-down loans hit a record $6,905 in the third quarter, edging past the previous high of $6,880 set in the first quarter.
Ivan Drury, Edmunds’ director of insights, said nearly one in three upside-down car owners owe between $5,000 and $10,000 — and a growing share owe far more than that.
A record share of underwater car loans is carrying five-figure debt. Nearly one in four (24.7%) trade-ins with negative equity carried more than $10,000 in debt in the third quarter, surpassing the previous high of 24.6% set in last year’s fourth quarter. Another 8.3% of trade-ins with negative equity carried more than $15,000 in debt, up from 7.7% in the second quarter.
“The sheer amount of debt consumers are carrying in their trade-ins should be a wake-up call,” Drury said.
“Much of this stems from shoppers trading out of vehicles too quickly, or carrying loans taken out during the pandemic car market frenzy, when prices were at record highs,” he said. “Those choices are now catching up, making it far harder to buy again without piling on even more debt.”
Higher monthly payments are one result of buying a new car with an underwater trade-in.
Edmunds found the average monthly payment for buyers who rolled negative equity into a new loan was $907 in the third quarter — $140 more than the overall industry average monthly payment of $767. Those buyers also financed $11,164 more than the typical new-vehicle buyer.
Contact Jim DuPlessis at JDuPlessis@cutimes.com.
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