Buying a new car in 2026 may seem daunting with record-high average prices, influenced by tariffs, geopolitical tensions, and fuel costs. However, Kelley Blue Book (KBB) experts suggest it can still be a good time to buy if you shop strategically.
The average new car price exceeded $49,000 in February 2026, a 3.4% year-over-year increase. KBB notes this reflects significant inflation, largely driven by consumer preference for expensive vehicles like full-size trucks, which averaged over $66,000. Excluding these trucks, the average purchase price drops to around $39,000, indicating a more affordable market for many buyers.
Affordable options exist, such as compact SUVs. The average price for this segment was $36,807 in February 2026, with models like the Honda CR-V ($32,370), Mazda CX-50 ($31,395), and Toyota RAV4 ($33,350) offering reliability and modern technology without luxury premiums.
Tariffs remain a factor, despite being ruled illegal by the Supreme Court in February 2026. They have cost automakers billions and created uncertainty, leading brands like BMW, Hyundai, and Volkswagen to raise prices or increase destination fees.
Meanwhile, the used car market saw a slight price decrease, with the average listing at $25,287 in February. However, inventory for vehicles under $15,000 is very low, and demand may rise as new car prices climb, potentially pushing used prices higher later in the year.