On a recent afternoon in Northeast D.C., Mark and Sakeena Young walked the length of a dealership lot, pausing at a modest SUV with a window sticker brushing $49,000.
They did the math. Even before insurance, before gas, before parking, the price alone would rival a year’s rent in some neighborhoods.
The recently married couple decided to leave the dealership without engaging a salesperson. Across the nation and in the District, buying a car is no longer just a major purchase.
For many residents like the Youngs, it has become a financial stretch that reshapes household budgets for years.
The average price of a new vehicle in the United States topped $50,000 for the first time last year and stood at $50,326 in December, according to Kelley Blue Book data cited by Bloomberg. By early 2025, Cox Automotive data showed average transaction prices near $49,000, up sharply from 2016 levels. In the D.C. region, those numbers are headscratchers.
“We have a different vehicle buyer today than we had just a few years ago,” said Charlie Chesbrough, senior economist Cox Automotive, during a recent auto analyst event. “The key takeaway here is that we’re seeing the average buyer here is much more affluent.”
In the District, where roughly one-third of households do not own a car, according to U.S. Census data, that reality is felt differently than in many other parts of the country. Some residents can rely on Metro and buses. Others, especially those commuting across the region or working late hours, still depend on a vehicle. For them, the cost of ownership now begins at a far higher starting point.
The District also layers on additional expenses. D.C. imposes an excise tax on new vehicle titles based on weight and fuel efficiency, generally ranging from 6% to 8% of a vehicle’s fair market value, according to the D.C. Department of Motor Vehicles. That is separate from registration, inspection fees, insurance and, for many residents, parking costs that can add hundreds of dollars a month.
Just across the river, Virginia’s title and registration fees are often lower and more uniform. Delaware has no sales tax. For area buyers willing to travel, those differences can amount to thousands of dollars.
Meanwhile, the affordability gap is reshaping who buys new vehicles at all. The share of new-car buyers earning less than $100,000 a year has dropped from 50% in 2020 to 37%, while buyers earning more than $200,000 now account for 29% of purchases, according to Cox Automotive data.
“We’re now relying on the extremely wealthy to generate the sales,” Mark Barrott, a partner at consulting firm Plante Moran, said during the same analyst event. “That’s a structural problem from an affordability perspective.”
Automakers have trimmed entry-level models in recent years, favoring higher-margin SUVs and trucks. Industry data reportedly show a growing share of buyers choosing luxury brands compared with pre-pandemic levels. At the same time, added safety features, fuel economy requirements and compliance costs have pushed prices higher.
For many Black drivers, the financial strain tied to car ownership runs even deeper. A University of Connecticut study found that 76% of Black households that own cars spend more than 15% of their income on vehicle-related expenses, a level researchers classify as cost-burdened.
“When there’s an ‘equity’ piece of a transportation plan, they tend to talk about ‘captive [transit] riders,’ and the need to provide service for people who don’t necessarily have other options,” Dr. Quinn Molloy, the study’s lead author, said in an interview with Streetsblog USA. “But there’s a much larger cohort of people who struggle with the cost of car ownership. … The consistency of how much [Black drivers] are spending in general, I think, is pretty mind-blowing.”
Even as some analysts point to rising inventory and modest price stabilization in early 2025, the starting line remains high. The average transaction price for a new car in April 2025 was $48,422, according to Edmunds data cited by Fox Business.
“In this city, it’s growing increasingly difficult to maintain anything of value with how prices are,” Mark Young stated. His wife cut in to add, “The question is no longer whether cars are expensive. It is who, exactly, they are still built for and who exactly is willing to give up something they really need like health insurance to buy a car?”