In a striking development that underscores the growing economic divide in the United States, the cost of a new car has surpassed the $50,000 mark. This significant milestone, reported by Kelley Blue Book through Cox Automotive, reveals that in September, the average price paid for a new vehicle hit $50,080 for the first time.

The increase represents a 3.6% rise compared to the same period last year, primarily driven by luxury car buyers. These consumers are significantly influencing the market, as they typically have better access to capital and favorable loan rates, according to Erin Keating, an executive analyst at Cox Automotive. “Today’s auto market is being propelled by wealthier households who are sustaining the higher end of the market,” Keating explained.

A combination of factors, including substantial tariffs and a rush to purchase new electric vehicles before tax credits expire, has further fueled the price surge. Specifically, the average transaction price for electric vehicles reached $58,124 last month, as reported by Kelley Blue Book.

This trend in new car pricing mirrors a larger pattern within the economy, where high-income earners are increasingly dominating consumer spending. A recent economic report indicates that individuals in the top 10% income bracket now account for 49.2% of total consumer expenditures, highlighting the growing influence of wealthier consumers on the market.

Hefty tariffs and a surge of new electric vehicle buyers rushing to claim expiring tax credits also contributed to the rise. Last month, the average EV sold for $58,124, Kelley Blue Book said.

The new car data reflects a broader trend across the economy, with high earners making up a growing share of consumer spending. A recent report found that consumers in the top 10% of the income distribution are now behind 49.2% of total spending.

Meanwhile, many everyday Americans are struggling to find new cars they can afford.

“The $20,000-vehicle is now mostly extinct, and many price-conscious buyers are sidelined or cruising in the used vehicle market,” Keating said.

Rising car prices aren’t new, but mounting evidence shows consumers are starting to feel the strain of auto debt.

Last quarter, 28% of trade-ins toward new car purchases were underwater, meaning the vehicles were worth less than what was owed on them, according to Edmunds. Borrowers with upside-down loans owed more than ever — an average of $6,905.

New-car shoppers are also taking on bigger loans — financing an average of $42,647 last quarter, while average down payments have plunged to the lowest level in nearly four years, Edmunds data shows.

More borrowers are also falling behind on their payments.

This year, the share of subprime auto loans that are 60 days or more overdue on their payments hit a record of more than 6%, according to Fitch Ratings.

Keating noted that the best-selling vehicle in the U.S. is a pickup truck from Ford that routinely costs north of $65,000 and said “it was only a matter of time” before the $50,000 barrier was broken.