Former Waymo CEO John Krafcik discusses the evolution of self-driving technology and the company’s safety improvements in “The Claman Countdown.”
Americans are increasingly being priced out of the new car market as prices remain high.
The average transaction price for a new car in April 2025 was $48,422, slightly higher than the average for the previous twelve months, according to Edmunds data published in June 2025. However, there is a significant price difference compared to used cars.
According to Edmunds sales data, the average transaction price for new cars was more than 29% higher in April 2025 and 35% higher compared to 3-year-old used cars than in April 2020.
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However, dealers appeared to be offering some discounts to try to get new cars off the lots.
The Manufacturer’s Suggested Retail Price, commonly referred to in the industry as MSRP, averaged approximately $50,408 in April 2025. The difference between the average transaction price and the suggested retail price proves that some discounting occurred, said Ivan Drury, Edmunds Director of Insights.
The average transaction price for new cars in April 2025 was more than 29% higher and 35% higher compared to 3-year-old used cars than in April 2020. (iStock)
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This shift is also reflected in who still buys new cars. According to iSeeCars, nearly 19.2% of new car buyers now choose luxury brands – a sharp increase from about 11% to 12% before the pandemic, based on data from Cox Automotive.
According to iSeeCars, almost 19.2% of new car buyers now choose luxury brands. (Andrej Ivanov/Bloomberg via Getty Images)
One of the reasons new cars are becoming more expensive is due to government compliance, fuel economy, safety equipment and smart technologies, all of which add to the complexity and cost of building a new car, Moody said. According to Moody, the tariffs also increase prices for some models that source parts from abroad or build their cars entirely abroad.
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However, Moody believes there is a technology plateau in new cars, which could reduce the incentive to buy a new rather than a lightly used car.
“Once you get self-driving like Super Cruise and Blue Cruise, and every car has Apple CarPlay and backup cameras, forward collision detection and lane departure prevention, what then? A four-year-old minivan probably has the same technology as a brand new car,” he said.
Used vehicles for sale from a dealer in Colma, California. (David Paul Morris/Bloomberg via Getty Images)
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As a result, many automakers may have to find another way to lower prices because the car won’t have anything spectacular to offer in the coming years if the technology is about the same, said Moody, who noted that many executives have already recognized that they need to find a way to lower the price of their cars.
