In a telling sign of the growing economic divide in the United States, the average cost of a new car has now surpassed the $50,000 mark. This milestone underscores the increasing burden on consumers and highlights the shifting dynamics of the automotive market.

Cox Automotive’s Kelley Blue Book reported that in September, the average price paid for a new vehicle reached $50,080. This is the first instance where this figure has exceeded $50,000, reflecting a 3.6% increase from the previous year. A significant portion of this rise is attributed to the spending habits of luxury car buyers.

“The current auto market is largely being sustained by more affluent households,” remarked Erin Keating, an executive analyst at Cox Automotive. “These groups have better access to financial resources, favorable loan rates, and are supporting the higher end of the market.”

Additional factors contributing to the price surge include hefty tariffs and a wave of electric vehicle purchasers eager to take advantage of tax credits before they expire. According to Kelley Blue Book, the average price for an electric vehicle last month was $58,124.

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.