For most of the 2010s, new car prices barely budged — automakers competed on incentives and financing while sticker inflation stayed near zero. Then the pandemic upended everything: a semiconductor shortage choked production just as demand surged, and new-vehicle prices jumped about 20% in a couple of years. This guide charts new car prices since 1995, breaks down the post-2020 jump, and compares it with the even wilder ride in used cars.
How much have new car prices risen?
The chart tracks the Consumer Price Index for new vehicles, indexed so you can see the cumulative change. For years it was strikingly flat — new cars got better-equipped but not much more expensive on paper, as fierce competition and discounting held sticker inflation down. That long plateau makes the sharp climb after 2020 stand out all the more.
The post-2020 jump
Starting in 2021, new-vehicle prices broke sharply higher. A global semiconductor shortage idled factories — modern cars need dozens of chips — so automakers built fewer vehicles right as buyers, flush with savings, wanted more. With inventories thin, dealers dropped discounts and some charged above sticker price. The year-over-year chart shows new-car inflation spiking to its highest in decades before easing as production recovered.
Why new cars got so expensive
The chip shortage was the trigger, but several forces kept prices high afterward. Automakers had learned they could earn more by building fewer, pricier, better-equipped vehicles, and many leaned into trucks and SUVs over cheaper sedans. Higher costs for materials, labor, and technology added more. The result is a new-car market where the typical transaction price climbed to record highs and stayed there even after the immediate shortage eased.
New cars vs. used cars
New and used prices are linked but behaved very differently. Used prices, with no factory to ramp up, spiked far more violently — over 40% in a year — then partly fell back. New prices rose less dramatically but have proven stickier, settling at a permanently higher plateau rather than reversing. Together, the two were among the largest drivers of the 2021–22 inflation surge, which is why economists watched vehicle prices so closely.
Frequently asked questions
How much have new car prices risen?
After a flat 2010s, new-vehicle prices jumped about 20% following 2020. The cumulative change since 1995 is shown above.
Why did new car prices jump after 2020?
A semiconductor shortage cut production just as demand surged, so dealers thinned discounts and some charged above sticker — pushing new-car inflation to decades-highs.
Have new car prices come back down?
Not really. Unlike used prices, which partly reversed, new-car prices proved sticky and settled at a higher plateau even after the chip shortage eased.
Why are new cars so expensive now?
Beyond the chip shortage, automakers shifted to building fewer, pricier, better-equipped trucks and SUVs, while material, labor, and technology costs rose.
Did new or used car prices rise more?
Used prices spiked far more — over 40% in a year — but partly fell back; new prices rose less but have stayed elevated. Both fueled the 2021–22 inflation surge.