50,000 euros for a new car: have we gone crazy?

Yes, that’s quite a high amount. Let’s go back in time for a moment. According to the Mobility in Figures report prepared by BOVAG and RAI Association, in 2020 the average new car price was still at 38,373 euros. If you go further back in time, to 2005, a new car cost an average of 24,608 euros. With that, if you take inflation (56 percent) into account, you would now come out at about 38,388 euros.

So today’s average new car price is well above that. In an even broader historical perspective: in 1975, with a modal annual income of 10,437 euros, you could buy two new cars. Now the modal annual income has risen to 46,500 euros, but that is lower than the average new car price anno 2025.

Why do modern cars have such a high new-car price?

The sharp increase in prices does not come out of the blue. New cars today are significantly more luxuriously equipped and feature much more technology. Think standard features such as automatic air conditioning and a comprehensive infotainment system. Not only in terms of comfort is the standard higher today than it used to be. Modern cars are also equipped with more safety systems. Think multiple airbags and driver assistance systems, such as automatic emergency braking assistance and adaptive cruise control.

The weight of the modern car has also increased. Back in the 1970s, a compact car used to weigh about 700 to 800 pounds. Now it averages 1,400 to 1,500 pounds. Simply put, they have become more complex products. But, products that are meant to last longer. Another important factor is drive technology. Fully electric cars and plug-in hybrids in particular are significantly more expensive than gasoline cars.

The RAI Association calculates the average new car price for consumers as follows. The new price for a gasoline car comes out at an average of 34,884 euros. That is still below the previously mentioned figure of 50,026 euros. A new fully electric car costs an average of 50,019 euros and a plug-in hybrid (PHEV) 71,599 euros. By weighing the sales volume per powertrain, the average new price of all cars sold comes to 50,026 euros.

Taxes also have a significant share in new price

The above arguments have their share in the increased new car price, but there is something else. You guessed it, taxes also drive up the new car price considerably. According to RAI Association president Frits van Bruggen, the share of taxes is hefty: “A consumer pays an average of 34 percent in bpm and VAT when buying a gasoline car, for a hybrid it is 28 percent.”

For your imaging, 34 percent of 50,026 euros is an amount of just over 17,000 euros, while 28 percent constitutes an amount just above 14,000 euros. This is a significant increase in the list price, so it is not surprising that the industry association is calling for a different tax structure. It argues to move, for example, to a system where you pay per kilometer, rather than ownership.

New car too expensive, so Dutch choose used cars

As new car prices continue to rise, it is not surprising that more and more Dutch people are opting for a used car. Especially when you consider that a sample from occasion website AutoTrack showed that 81 percent of consumers are willing or able to spend a maximum of 15,000 euros on a car.

New cars are thus beyond the reach of the ordinary Dutchman. Used cars come closer. You pay a lower purchase price than with a new car and the structural costs, such as fuel, insurance and maintenance, do not have to be much higher than with new cars. So used cars can provide years of driving pleasure at low cost.

Affordable automobility is a steady process

Another development is the growth of the used electric car market. According to the ANWB , used electric cars will become cheaper in 2025. So for many people who do want to drive electric, but cannot or do not want to cough up the purchase price of a new EV, a used car is an attractive alternative.

The increase in the new price of new (electric) cars does not necessarily contribute to a greener used car fleet. Because to get electric used cars available, those cars must first be sold new. The average price of a new electric car is now 50,019 euros, which is a big chunk of money. That’s why the flow to used cars is slow in coming, but there is movement. For example, ANWB writes that supply is now increasing as large numbers of electric cars from leasing companies become available on the used market.

There are also constructions that put new cars a little more within financial reach. Consumers are increasingly opting for private leasing. With this, you don’t pay a large sum of money immediately, but spread out over time. And then there is the young used car, which has been sold off. Both options make mobility still somewhat accessible. For the rest, it’s a matter of taking a long view until the market and fiscal policy better match the wishes and financial possibilities of the average Dutchman.