Buyers are shopping for cheaper cars. New-car prices are still near a record.

• Shoppers are turning to smaller cars as gas and vehicle prices keep climbing.
• They're even willing to try out new car brands, Cox Automotive found.
• Still, car prices keep climbing and are nearing an all-time record.

There's a tension playing out on American car dealership lots: Shoppers want cheap cars, but prices keep going up and up.

That's what Cox Automotive found in its September numbers. Last month, the average new car transaction price was $50,562, a nearly 1% rise from the month before, and just $52 below a record high, the data firm found. The average price is up 0.7% from a year ago.

At the same time, buyers are gravitating away from full-size segments toward more affordable options.

"Customers continue to show us that they're willing to adapt by either going to smaller vehicles, like sedans, or smaller-sized SUVs," Erin Keating, Cox Auto's executive analyst, told Business Insider. She said shoppers are also willing to switch brands to make their finances work.

That flexibility has helped restrain the industrywide average price, Keating said — but now, smaller vehicles are increasing the numbers on their window stickers.

The average price of a compact car rose 3.2% year over year in September, to $27,977, while subcompact SUVs rose 1.5%, to $31,213. Four of the five highest-volume new-vehicle segments posted price gains above the industry average.

Only compact SUVs saw a small dip compared to September 2025. Their prices were down 0.4% to $37,614.

It's important to keep those prices in context with the greater economy, Keating added. On Wednesday, the Bureau of Labor Statistics found that overall inflation accelerated by 3.7% in September.

"The rate of inflation on a vehicle is so far below the standard rate of inflation in the country," she said. "Going up by 1% or 2% really is still way below historical norms."

September's numbers still show that the industry is struggling to let go of 2026.

Next-model-year vehicles accounted for 22.4% of available inventory at the end of September. That's up from 12.4% in August, according to a Cox Automotive analysis, but it's still far below last year's changeover. By the end of September 2025, 38.6% of all new vehicles waiting on lots were 2026 model years.

Keating said this year's slower rollout means fewer updated (and often repriced) models have reached new-vehicle dealerships. She predicts that average new transaction prices will likely continue to rise through the next three months.

Shoppers could see a silver lining on the horizon: incentives.

Keating said dealers could start offering some pricing carrots to customers to get slow-selling vehicles — particularly larger, less fuel-efficient ones — off their dealership lots. Jeep-maker Stellantis, Ford, and GM are most likely to see those discounts, she said.

"When you have new metal coming in, you're gonna want to get the old metal moving," Keating said.