New car prices hit record high

Cheyenne residents looking to buy a new vehicle will pay more than anyone in history. The average transaction cost for a new car reached $51,109 in the latest report from Kelley Blue Book, a division of Cox Automotive. That figure is $500 higher than the previous record established in December 2025.

The price increase is slowing down, however. The new record represents a 2.1% rise over the past year. Erin Keating, an executive analyst at Cox Automotive who co-authored the report, noted that this rate of increase is below the current inflation rate. Between 2012 and 2021, new cars averaged a 3.4% annual price increase. The Kelley Blue Book transaction cost reflects the final amount paid, including add-ons and subtracting dealer incentives, but it excludes auto loan interest.

Borrowing costs have added to the burden for buyers. Auto loan rates currently stand at over 7% for new vehicles and about 11% for used vehicles, according to Edmunds. Keating said this shift means a larger portion of monthly payments goes toward interest rather than principal. She described this as a true shift in how buyers manage their finances, especially since many do not purchase cars frequently enough to track these changes closely.

Used vehicles are also expensive, though they remain cheaper than new models. The average used car now costs close to $27,000, a 6% increase from last year. Ivan Drury, director of industry insights at Edmunds, said vehicles below that price point represent a small sliver of the market. This scarcity stems from supply chain issues during the pandemic, which limited production of lower-margin models and reduced the flow of used cars into local lots.

Higher manufacturing costs and consumer preferences drive the high price tag. Tariffs on steel, aluminum, and imports from Canada have raised costs for automakers. Additionally, buyers increasingly prefer larger vehicles like SUVs and trucks. The average sticker price for a full-size pickup truck is nearly $72,000. Drury noted that consumers now expect features like heated seats and 360-degree cameras, pushing them toward mid-to-upper trim levels rather than entry-level models.

The pool of new car buyers has also shrunk. Approximately 16 million people buy new cars annually, a decrease of about 1 million since the pandemic. Keating observed that people in their late 30s and early 40s are holding onto their current vehicles longer due to household financial pressures. Meanwhile, drivers aged 65 and older are purchasing vehicles at higher rates, extending the time they stay on the road.

Automakers face a competitive market as they vie for a shrinking group of buyers. Keating said companies are stealing market share from rivals rather than relying on new consumers entering the market. In the past quarter, buyers financed an average of $44,664, with more than a quarter choosing loan terms of 84 months or longer. These longer terms often come with small down payments, sometimes as low as $500 or $1,000, which increases the total cost over the life of the loan.