When you hear someone start a sentence with, “Back in my day,” they’ll usually be talking about the price of something. The average transaction price (ATP) of a new vehicle is the highest it’s ever been. But guess what? Twenty-five years ago, it was the highest that it had ever been, too.
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The average price of a new vehicle was $21,474 in 2001, per the U.S. Department of Energy. Ten years later, it grew by 16.64%, to $25,048. However, according to Kelley Blue Book (KBB), the average manufacturer’s suggested retail price (MSRP) for February 2026 was $51,440, which is a whopping 139.55% increase from 2001.
Using the Bureau of Labor Statistics Inflation Calculator, $21,474 in February 2001 had the same buying power as $39,917 in February 2026. So, why is it much more expensive than that to buy a new car today?
2001: How 9/11 Changed the Auto Industry
Fearing an economic collapse after the Sept. 11, 2001, terrorist attacks in the U.S., President George W. Bush famously urged everyone to, in not in so many words, “Go shopping.” Although purchases dropped immediately after 9/11, car sales were saved by auto manufacturers offering 0% financing across their model lines.
As Jalopnik wrote, the incentive game was changed forever in the last quarter of 2001. But 0% financing strengthened captive lending companies (subsidiaries who provide financing for their parent company, e.g., Ford Motor Credit Company, GM Financial), often negated better incentives and provided little help for lower-income families and those trying to rebuild their credit.
In 2001, a new Toyota Corolla (ninth generation) cost $16,199, a Plymouth Voyager (third generation and the last year of production with Plymouth) was $17,672 and a Jeep Wrangler (second generation) went for $22,092, according to GOBankingRates.
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2026: It’s Not Still All About the COVID-19 Pandemic
It’s easy to blame today’s high vehicle prices on the COVID-19 pandemic. The supply chain disruptions, microchip shortages and inventory inconsistencies helped shape what we are seeing now. And while today’s tariffs and higher parts and production costs also tell part of the story, auto companies have caused today’s inflated MSRPs.
Compact car and all SUVs sell well, and you can still find relatively affordable vehicles to buy (the 2026 base Corolla costs a little over $24,000, which is about $8,000 more than in 2001). However, with word that the Nissan Versa will be discontinued, there exists no sub-$20,000 economical cars available to U.S. buyers.
According to KBB, the ATP for the compact car segment was $27,341 in February, while the ATPs for new midsize, compact and subcompact SUVs were $50,148, $36,807 and $30,836, respectively. Although it’s not uncommon for a full-size pickup to run six figures with trim options, the third biggest selling vehicle segment had an ATP of $66,157 in February.
Americans are buying more luxury brand cars than ever because automakers are stocking their showrooms with more high-end, high-profit models. Unfortunately, with average sticker prices over $50,000 for 11 consecutive months, used cars costing as much as new models did only a few years ago and the ongoing U.S. and Israel-Iran war causing gas and oil prices to skyrocket, there seems to be little relief in sight for the average driver.
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This article originally appeared on GOBankingRates.com: What a New Car Cost in 2001 vs. the Price of One Today
