It’s not exactly a lie, but when you see a headline crying about how the average transaction price of new cars in America is around $50,000, it’s important to remember that this number includes every loaded Grand Highlander, Denali-grade GMC truck, and Ineos Quartermaster. In some ways, that’s not the best number. I think the most helpful number is $35,377, and while that’s high compared to the past, I think it’s also a way more digestible figure.
I’ll start today’s Morning Dump with a bit of a repudiation of our fixation on ATP and explain why $35,377 is your better target price if you’re just buying a car. Maybe don’t pay that much for a Honda Prologue, though, as the Prologue is officially dead. Also, make sure your pay for your food if you work at Ford plant or you might get fired (and you might get fired if you do pay).
That’s all heavy, so let me end Friday in the usual way with some cool cars. In this case, a collection of some truly great Benzes.
$35,377 Is ‘The Keating Line’ Price For Cars
Here’s the chart everyone likes to refer to, via Cox Automotive:
As you can see, incentives and average transaction price have leveled off near $50k post-pandemic. Some of this is certainly costs rising, and to that you should blame both inflation and tariffs (which also likely contributed to inflation). And while it’s a big deal that this number briefly got above $50k, I think the $50k ATP price is a little misleading.
Why? That $50,000 number was somewhat specifically tied to a period in time when carmakers shoved a ton of electric vehicles out of their doors in order to claim the IRA tax credit, as you can clearly see in the graph. I do think the market will get back to a $50k ATP at some point, and that will largely be a reflection of the sort of K-shaped car market that includes people buying a lot of more expensive, three-row SUVs.
If you’re a normal person, looking for the normal car, that number gives the false impression that you should expect to pay $50,000 or more to get a new car. If someone is offering you a 911 for $50,000, take that deal, but as an average buyer looking for a vehicle in the most common segments, I would ignore it.
What’s a better number? I love naming things (when I coined the term trimflation to describe the prioritization of production of higher trim levels I never expected it would take off like it has) and I think the price you should consider paying for an average car will, from now on, be referred to as The Keating Line, for Cox Automotive analyst Erin Keating, who wrote this:
The largest concentration of available vehicles […] remains in the $30,000-to-$40,000 price range, where dealers had more than 688,000 units at month-end, roughly 24% of available inventory. The average listing price within that segment was $35,377, and days’ supply measured 70 days, well below industry average. In June, 28% of vehicles sold were priced in this $30,000-to-$40,000 range.
That makes a lot of sense to me. You take the largest price segment in terms of available inventory (in this case, $30-40k vehicles, making up 24% of the market) and you take the average listing price of that segment, which typically accounts for incentives (but not financing) and you’re currently left with $35,377.
This has the effect, I think, of getting us something closer to a median price than an average by kicking out the higher and lower ends of the market. Though, again, this isn’t a transaction price, this is a listing price. What you end up paying will have a lot more to do with very specific circumstances around financing, trade-ins, et cetera, and this number nicely sidesteps all of that. If you’re just looking for a nice new car, the Keating Line is a decent indicator of where you should set your expectations.
There are a lot of cars that most people seem to buy in that price bracket. That’s the price of a decent FWD RAV4 if you want a crossover, a nicely equipped Honda Accord hybrid if you want a sedan, or a Ford Maverick if you’re more into trucks. Obviously, if you want nicer trims or different drivetrains you might have to downsize your vehicle choice, but it gives you a place to start.
One of the shortcomings of this is that maybe you always end up with a number that’s somewhere in the middle. Would that have been true in the past? A few years ago, the most populous segment was $20k-$30k cars, and my guess is that the average price there was probably closer to $30k as the upper $20s got you the thick part of the market where there were a lot of Ford Escapes, mid-trim RAVs, et cetera.
I’m going to reach out to Cox Automotive and ask them why we don’t have a median transaction price and what The Keating line might have looked like in past years to see if it always tends towards the middle.
The Keating Line! You heard it here first.
Wait, The Prologue Wasn’t Already Dead?
To me, the GM-based Honda Prologue is the poster child for everything that went wrong with the EV head fake the industry experienced over the last few years. This is a decent-looking vehicle from an established brand that sold decently well when there were tax credits to be had. That it failed, ultimately, is both a reflection of larger trends not specific to this vehicle (a new administration running away from EVs, the reality that there aren’t as many buyers for EVs), and some specific issues this vehicle had (too expensive for less performance than a Tesla, with early-Tesla bugginess).
When Honda announced it was killing all its new EVs in the United States, I presumed that included the Honda Prologue. I guess it technically didn’t mean that, but Honda told Car And Driver that is, indeed, what is happening:
A Honda spokesperson confirmed the news to Car and Driver. “Honda will conclude sales of Prologue later this year following completion of the 2026 model year,” its statement read. “Prologue customers will continue to receive full support through our dealer network, including service, parts, and warranty coverage.”
It’s kinda strange that Honda won’t have a single EV for sale here next year.
Ford Looking Into Snack Kiosks That Keep Leading To The Company Firing Employees
As Ian Flemming wrote in Goldfinger: “Once is happenstance. Twice is coincidence. Three times is enemy action.”
I saw an article earlier this month about how a UAW worker at a Ford plant in Kentucky was fired for stealing a $1.95 cookie. It turns out he didn’t actually steal the cookie, and that his life was sent into a tailspin over an accident . This seemed like a fluke to me and I didn’t write it up, because as bad as it was, weird things happen all the time and Ford eventually offered the employee his job back.
According to this Detroit Free Press article, this isn’t just a one-off, but a trend:
Three union members with knowledge of the events interviewed by the Detroit Free Press say they believe there is a glitch in the vendor’s self-service machines resulting in the wrongful terminations of employees. The Free Press is not revealing the names of the members because they were told by their supervisors to not speak to the news media. The UAW administration did not respond to repeated requests for a comment on this situation.
Also, one of the union members and a Ford official both confirmed to the Detroit Free Press that at least three people who were recently fired from the Michigan Assembly Plant for alleged theft in the food store have been brought back to work after an investigation cleared them. The Detroit Free Press is not naming the Ford official because they said they are not authorized to share that information with the media.
That’s not great. A lot of this seems to revolve around the system either glitching out or beeping affirmatively even when a transaction failed (alternatively, some members claim in the article that the opposite happens and they’re charged erroneously for items they didn’t buy). This seems like a UX problem from Aramark, the kiosk-providing company, that’s turned into something way bigger. Given how hard it is to find great employees, this “fire first, figure it out later” approach also seems very flawed.
Self-serve kiosks should be a solved problem, but Ford also thought that using AI to do quality checks was a solved problem before having to reverse course and hire back its veteran quality control staff. Sometimes, the best person for a job is a person.
Check Out These Sweet Mercedes-Benz Cars From The Company’s Best Era
Are you ready for the “Patina Collection” from Broad Arrow?
“These are not your traditional Mercedes-Benz collector cars or even your typical AMG collectibles,” says William Cooper, Car Specialist for Broad Arrow Auctions. “Our offering from The Patina Collective represents an era of wild design and true excess coupled with incredible performance. The group speaks to an emerging market for a new generation of car collectors who are after the most unique and eclectic cars from the 1980s and 1990s, a group of cars that have earned a longstanding cult following and that are now coming into their own as true collectibles. The Patina Collective has an incredible reputation for assembling rare, high-quality finds and Broad Arrow’s online auction offers the chance to acquire these cars with confidence in their provenance, with importation complete, and entirely without reserve.”
There is some truly killer stuff in here that would make you King or Queen of any Radwood event. Low-key the MTS 190 E with a manual conversion and Rial mesh wheels is an inspired choice.
What I’m Listening To While Writing TMD
If you buy one of those sweet ’80s Benzes you need to pump “She Blinded Me With Science” by Thomas Dolby.
The Big Question
What’s the best-priced new car under The Keating Line?
Top photo: Honda
Keating line, or almost $50K MSRP… either way, the current lack of truly affordable cars is depressing. Sure, the Versa and Mirage weren’t great cars, but at least they were cars that a lot of folks could pay for and were likely to run for a good while. Also RIP to the Fit and Yaris, which it kills me Honda and Toyota don’t sell in America anymore. Both of them still sell in the UK and elsewhere, and seem like good cars to own and drive, but at least in the UK they seem expensive, so I guess their manufacturers figured they wouldn’t sell in the US anymore.
Peak small/good/affordable auto was the 2020 Toyota Yaris hatchback, which was really a Mazda 2 with a(n uglier) Toyota nose. About $20K or so MSRP. Not beautiful, but good to drive and well put together. AFAIAC, for decent/cheap, we’re half a decade past ‘peak auto.’
I’m not sure how that Keating line makes any sense at all. Sure 24% of the available inventory is in that $30-40K range but that means the vast majority of available inventory is priced higher. Sure there are some priced under $30k, but even if that came close to the next tier that would still mean that the majority is over $40k. Plus I’m not sure that available inventory is a good metric in the first place.
So, what comes after the Prologue?
Chapter 1
“Given how hard it is to find great employees, this “fire first, figure it out later” approach also seems very flawed.”
Not if what makes that employee great is being able to accuse them of theft, kick them to the curb without a supoena from their lawyer and later quietly and unapologetically onboard them back to the bottom of their old, dead end job with THEM accepting the fault of being in the wrong place at the wrong time.
Abusable employees is what makes capitalism great!
I once again lament the death of the Fit in the USA. Although by now it would likely be a Fit XLSport AWD CUV
“Self-serve kiosks should be a solved problem, but Ford also thought that using AI to do quality checks was a solved problem before having to reverse course and hire back its veteran quality control staff. Sometimes, the best person for a job is a person.”
Did they fire the managers involved with making the decision to replace quality control staff with AI?
They probably didn’t… but probably should…
“What’s the best-priced new car under The Keating Line?”
It’s a tie between the Chevy Bolt and the Toyota Prius.
The Bolt for those who can plug in at home and are fine with the range.
Prius hybrid for those who can’t plug in at home.
Prius plug-in hybrid for those who can take advantage of plugging in at home but also want long driving range (900+ km).
I like the idea of The Keating Line, but I think using rounded-up segments ($30k-$40k) seems arbitrary, and biases the results a bit.
Perhaps the $10k range should be more of a “sliding window”, where you maximize the percentage inventory for all $10k windows (in $1k increments), and once you find that segment, you then compute the average price.
So, for example, if the $27k-$37k segment holds 30% of the inventory (in contrast to 24% of the inventory for the 30k-40k segment), then you use that range to get your average cost (and your Keating Line number).
I am a numbers nerd, and when my OCD kicks in, I get annoyingly picky. But I see folks affect statistical data at work all the time, using arbitrary biases to tell a story. This is not one of those cases, but I figured it can be improved a bit. It would be interesting if the data can be sliced this way.
Oh, I forgot the TBQ: Honda Civic Hybrid Hatchback. The SI a close second.
That makes a lot more sense than an arbitrary multiple of 10k increment, maybe even set the high end as a function of the low end too, so the 20k to 30k window has the top at 1.5x the bottom, so the window starting at 30k goes up to 45k
Considering the image you used for this sub-head looks like a Miami Vice set, I’d go with In the Air Tonight or Smuggler’s Blues.
Agreed. Nearly every car up for auction is some hot rod version of some cars I like in their natural state. I want an auction of Mercedes that were only driven by little old ladies to Hollywood Presbyterian on Sundays.
There are some bang for your buck cars out there if you look and are willing to modify your expectations some. A buddy was just telling me he was shopping Toyota SUVs to replace their high mileage family car (a 2012 Mazda 6 they bought in 2014) and realized if he was willing to give up on an SUV for a similar $35K he could get into a new Camry Hybrid AWD which will be more fun (relatively speaking) to drive than nearly any of the used crossovers he was looking at, and while it’s “mild” awd it still should help having that rear axle boost to get rolling in slippery conditions while getting killer mpg (rated at 46mpg). He had been thinking a 3 row SUV for the extra kid space but the economics of a fundamentally better car for the money as well as the long term pay off from a more economical car as gas prices show no real sign of returning to pre-Iran-idiocy prices has him taking a harder look at a sedan again.
Is the Camry AWD, eAWD or mechanical AWD?
It is eAWD, small electric motor on the back axle in this case
SUVs: vehicles for people who like compromises.
Everything is a compromise.
We all need to realize this.
Yes, I drive a CRV.
SUVs are intently flawed vehicles that have been highly, and professionally, propagandized to the public for two main reasons:
1. Maximize corporate profit.
A. Skirt CAFE.
Their modern domination of sales was not because they are superior, and not because the public utilized independent thought to embrace them, it was a planned migration.
Pickup trucks were also part of this campaign.
Everything is not a compromise.
A Miata is a pure roadster.
A Kenworth T680 is a pure hauling machine.
SUVs are the old cliche “jack of all trades and master of none”. Owners of them would be better served in a vehicle designed for their needed use case.
Which for almost all would be a sedan or minivan.
Okay
Smart buddy (and hopefully a friend, too). He’s wise
The 2026 Toyota RAV4 AWD starts at $33,300 while the Camry AWD starts at $31,125 so there isn’t that much difference between the MSRP.
Camry is rated at 50 mpg and the RAV4 at 41 mpg. At national averages that will save $250 a year or a bit less than $5 a week on gas.
I’ve had both as week long rental (+ a current gen Prius) and I’d take the RAV4. Both the Camry and Prius still drone under acceleration like my old Prius while Toyota seems to have mostly fixed that on the 2026 RAV4. It drives a lot better than my parents’ 2024 RAV4 hybrid.
Personally if I was looking for a midsize car it would be the Civic Hybrid. Same interior room as the Camry but smaller outside dimensions. Drives better too because the Honda 2 motor hybrid goes with large electric motors with direct drive instead of small ones with a planetary drive.
That $2k price differential is the key, and while Joey Q Public thinks it’s not much in the long term life of the vehicle it’s critical profit to Toyota.
Which is why the automakers want everyone in an SUV.
That and they don’t have to make the RAV 4 get 50mpg.
Yes, the RAV4 Hybrid AWD is $2K more. It is also a much larger and more capable car. The RAV4 has 37.5 cu ft of cargo area behind the rear seats vs 15 cu ft for the Camry. You can also fold down the seats have have 70 cu ft. This is why buyers choose SUVs over sedans – you get more car in the same footprint.
It also isn’t much more when talking about the life of a vehicle. Say you keep a car for 10 years. It cost less than $4 more a week to buy the RAV4. Add in the fuel and you are at $9.
(Or in other measurements – one pint of beer a week.)
I didn’t believe this until I double checked the EPA web site. I still remember when the tiny Civic was first introduced. In 2026 the Camry has an interior passenger volume of 100 cubic feet, the Civic 99 cubic feet.
Yes, the Camry is only 1 cu ft larger in passenger volume and has the same trunk size as the Civic.
It is crazy how much Honda has inflated their cars over time. The 2026 Civic is larger than a 1996 Accord (which was a compact car back then). Today the Accord is a large car.
On the other had Toyota has keep things steady. The 1996 Corolla had 89 cu ft of passenger volume and a 13 cu ft trunk. The 2026 has the same measurements.
GT-line turbo K4 hatch
Yeah, but how outraged are people going to be when the Keating line moves to the 40-50k bracket. I can see the headlines now: “New Car Prices Jump $10000 In One Year! You Won’t Believe The Reason Why!”
I suspect the Keating line (and honestly any average transaction price for a $10k segment that isn’t at either extreme end of the market – I bet the average for 40-50k is also around 45k) will always be around halfway through the range. Unless one end of the range falls off the bell curve of prices it’s always going to average out to somewhere pretty close to the middle.
I’m also curious how that 28% number compares to other price ranges. Basing the Keating line on the most vehicles listed at a given price is less interesting than looking at which segment sold the most. For example, if hypothetically 33% of sales came from the $40 to $50k range then I would argue the Keating line should be 45-ish because that’s actually the largest segment. Just because something is offered doesn’t mean people are buying it.
It would also be interesting to see a comparison of the percentage of vehicles listed in a given price segment versus the percentage of vehicles sold in that segment. I wouldn’t be surprised if it turns out that the very low and very high end of the market sell disproportionately well compared to the number of vehicles offered, but that’s pure speculation.
Counterpoint: Unexpected item in the bagging area.
Admittedly, that particular one doesn’t happen much anymore because I think most (not all) places shut off the weight sensors, but now they have AI cameras watching you and if you happen to do something like move back toward the bag without an item in your hand to rearrange things, it will get pissy because it sees the motion without a scanned item.
I’m sure the stores have done the math and found that any mistakes made by the self-checkout are more than offset by not having to pay $15/hr to a flesh-and-blood cashier, but they’re definitely not perfect and definitely should not be trusted to terminate an employee.
I had forgotten about the Prologue so much that, before I scrolled down, I was picturing a vaguely sedan-like vehicle.
My company installed one of those self-serve kiosks years ago, along with a small swarm of cameras. I couldn’t get the card reader to work reliably, so I ended up putting their stupid app on my phone; I still have a couple of dollars tied up in that thing. There was one time when I was trying to buy a bag of chips that the kiosk’s reader and the app showed a completed transaction, but no money was deducted. Not know what to do, and really wanting the chips, I went to the manager in charge of the thing and explained my situation. He told me to enjoy the chips. 🙂
Did you get that in writing??
Well if you’re going to do things properly according to statistics. If you cut the top expensive 10% percentage you need to cut the 10% most cheap, and your average needs to include at least 50% of the market. It’s like they say with statistics you can show anything.
For instance 28% of accidents are caused by drunk drivers. That means 72% are caused by sober drivers so everyone should drive drunk. Of course that’s wrong but it is technically correct.
That is why the proper average for this is the median not the mean.
The Camry LE is a lot of car for sub-Keating Line money.
The bolt and the leaf offer decent value. The Toyota and Subaru bev are normally priced $32k to $35k but their sticker can be $5k more. You can now sneak a ionic 5 or charger in there.
Trax and envista are always sitting around $22k to $24k. Kona is in there normally around $26k to $27k. The ’27 steltos is about $27k and looks very interesting.
I think the best value currently for bev is probably bolt followed by ionic 5. For ice envista followed by Kona. Hybrid is tough probably Elantra and niro but $27k for a Corolla hybrid that you might depreciate much over for quite some time might be the better bet.
“The Big QuestionWhat’s the best-priced new car under The Keating Line?”
The Chevrolet Trax and the Buick Envista.
Nicely optioned for around $25K and fully loaded with adaptive cruise control and even Car Play and Android whatever-it’s-called for people who want that kind of stuff for under $30K.
The Buick is a product of the CCP, so no thanks.
The Trax is made in SK, so that’s a plus. It’s not bad looking. It’s a SUV, so…
Of course Camry and Corrola are US made, so money spent ends up putting food on locals tables.
Not that a single person gives a rats patootie about that.
“The Buick is a product of the CCP, so no thanks.”
The Buick Envista is manufactured by GM Korea at the GM Bupyeong assembly plant located in Bupyeong-gu, Incheon, South Korea. This specific factory builds all North American versions of the Envista, which are built on the same VSS-F platform as the Trax.
Plus, the Trax is more of a subcompact wagon than a true SUV. It’s only 3 inches taller than our 2015 Cruze.
I think you were thinking of the Buick Envision which is on the E2 platform and, indeed, is manufactured in China. Plus, GM wants over $40K for that one with the tariffs.
Yeah, I got them mixed up and I stand corrected. Thanks.