If you’re a car buyer looking for a brand-new vehicle in 2026, you’ve likely noticed that prices are still holding steady at historic highs. And for most buyers, they aren’t meaningfully dropping yet. While we’ve moved past the extreme supply shocks of a few years ago, the market has settled into a new, more expensive “normal.” In fact, according to Kelley Blue Book (KBB), the average new-car price reached an all-time high of $50,326 in December 2025.

With prices this elevated, many buyers are choosing to wait. But if you need a new vehicle sooner rather than later, understanding why prices remain high and where price relief is actually happening can help you buy smarter without blowing your budget.

Why Are Car Prices So High?

While the pandemic-era semiconductor shortages are largely in the rearview mirror, new factors are keeping sticker prices elevated in 2026:

Shift Toward Luxury and Larger Vehicles

A major driver of the $50,000+ average isn’t just that every car is more expensive—it’s that Americans are choosing more expensive cars. In late 2025 and early 2026, midsize SUVs and full-size pickup trucks became the dominant force in the market. Luxury vehicle sales also reached a peak, accounting for nearly 20% of all new car shoppers. When more people buy high-trim Subarus and Ford F-150s, the overall market average naturally climbs.

Rising Manufacturer Costs and Tariffs

Automakers are facing higher production costs due to labor, logistics, and raw materials. Additionally, new trade policies and potential 25% tariffs on certain imports have led many manufacturers to pass these costs directly to the consumer. This has kept MSRPs (the “asking price”) at record levels, even as dealership lots begin to fill back up.

Inventory Imbalance

Inventory has “normalized” to about a 76-day supply across the industry, but it’s an uneven split. While brands like Toyota and Lexus have very few cars on the lot (leading to higher prices), other brands are overstocked. This disparity keeps the overall average high, even if individual deals can be found elsewhere.

When Will Car Prices Drop?

Experts predict that 2026 will be a year of stability rather than a major price crash. While we aren’t seeing the 10-15% annual jumps of the early 2020s, prices are expected to remain “sticky” due to high demand for SUVs and trucks.

The good news? Affordability is expected to improve slightly by late 2026 as interest rates continue to ease and new tax benefits for U.S.-assembled vehicles kick in. If you’re looking for a “drop,” your best bet is in the electric vehicle (EV) segment, where high inventory and record incentives (averaging 18% of the transaction price) are creating significant downward pressure on prices.

When Is the Best Time to Buy a Car?

If you need to start the car-buying process sooner rather than later and can’t wait for the high prices of now to drop, there are still ways you can save money when buying a new vehicle during the year with various deals and incentives.

Look for High-Inventory Brands

In early 2026, inventory levels vary wildly by brand. While you’ll pay a premium for a Toyota or Honda, brands like Chrysler, Jeep, and Volkswagen currently have over a four-month supply of vehicles. Dealers with overflowing lots are far more likely to offer aggressive discounts and incentives to move units.

Near the End of the Month

Generally, car prices at the end of a month tend to go down due to sales goals. Car dealerships and individual salespersons have goals that they aim to meet regarding car sales, which are typically set monthly. Therefore, sellers are incentivized to offer a discount at the end of the month if they are attempting to reach a goal. Be aware, however, that this isn’t always a sure thing depending on the dealership and salesperson.

Around Memorial Day

Memorial Day is one of the most famous times of the year for dealership savings. During this period, you can potentially expect lower prices on the manufacturer’s suggested retail price (MSRP) and lower interest on financing. Simply waiting to purchase a new vehicle until this time of year might be worth it.

The Month of October

At first glance, October may seem like an odd month to find a good deal on a vehicle, but it makes more sense when you consider the typical lifecycle of vehicles. Fall is often when automakers begin introducing the following year’s models. When this happens, prices on the current model year vehicle are driven down. Therefore, using the current year as an example, you can get a new 2026 model-year vehicle at a lower price in October because the 2027 models will start rolling off production lines and onto dealership lots.

Black Friday and New Years

It is no surprise that both Black Friday and the New Year are on this list for the best times to purchase a new vehicle. Black Friday is simply infamous across the United States for savings, and New Year’s takes the October discount concept to new heights as dealerships strive to reach sales goals and get all prior-year units off the lot before the new year.

Avoid Expensive Car Repair Bills with Endurance

With the various issues impacting the new and used car market, it may be some time before you find yourself behind another vehicle. But whether it’s your current car or a new one, without an active factory warranty, any repairs or breakdowns you face will be your responsibility to pay for. And with the price of a new vehicle higher than ever, you’ll want to save as much as possible, and Endurance can help.

Endurance vehicle service contracts are designed to protect you and your vehicle from unexpected breakdowns and repairs. Unlike a manufacturer’s warranty or even an extended warranty from your automaker, with Endurance, you can enjoy breakdown protection while also receiving some great perks and savings. For example, with Endurance, you can take your vehicle to any certified repair shop or mechanic for repairs, meaning if you’re away from home on a road trip, you can still get the help you need. 

And if you find yourself stuck on the side of the road, don’t worry, as you’ll have roadside assistance and towing available 24/7, including being right at your fingertips with the Endurance Customer Portal. But that’s not all, as you’ll also automatically receive trip interruption coverage and rental car reimbursements to help you get back on the road fast. You can also enjoy some Elite Benefits, including complete tire coverage, windshield repair, key fob replacement, and more, available for activation with any contract.*

To learn more about how Endurance can help protect you and your vehicle, call us at (800) 253-8203. You can also request your FREE quote to start protecting your vehicle today.

If you’re looking for even more helpful articles on a variety of other automotive topics, including DIY maintenance tips, vehicle buying guides, and more, be sure to visit the Endurance blog.