by The US New Car Market is Becoming a Privilege for the Wealthy
If you are wondering why the auto industry continues to sell expensive cars when everyone around is complaining about unaffordability, the answer is quite simple. The market is being sustained by wealthy buyers. While many Americans struggle with rising costs, high-income individuals continue to sign contracts at dealerships and support sales.
Economists note that the current automobile market closely resembles the overall economic picture: one segment of the population feels good, while the other feels pressure. High-income households provide positive dynamics in consumer spending, while lower-income buyers suffer from inflation and slower wage growth.
High-income households are driving much of the positive consumer spending data, while lower-income buyers are feeling the brunt of inflation and lower wage growth.
In some cases, low-income households cannot even find a job. The pace of new job creation in the US has slowed sharply, and young people are increasingly finding that entry-level positions they traditionally aimed for are now occupied by artificial intelligence or soon will be.
Buyer Demographics Have Changed Dramatically
This difference is clearly evident in who is buying cars. In 2020, about half of new vehicle buyers earned less than $100,000 per year. By 2025, this share had fallen to just 37%, while the share of those earning over $250,000 per year nearly doubled, reaching 21%.
Prices Have Exceeded Affordability
This change is easier to understand by looking at how much more expensive cars have become. The average price of a new car recently exceeded the $50,000 mark for the first time, and monthly payments are not much more pleasant.
For many people, it’s unattainable. It’s almost like a second mortgage.
Data shows that the typical monthly payment for a new car reached approximately $774 by the end of 2025.
Loans Are Getting Longer and Costs Are Getting Higher
To cope with the situation, more and more buyers are stretching out their loans. Over 20% of new car loans are now for 84 months or longer. This means seven years of payments and a high likelihood that the buyer will be forced to roll over the remaining unpaid loan balance into their next car purchase.
The cost of car ownership has increased in other aspects as well. Insurance prices have risen by more than 50% since 2019, and repair costs have increased by about 46%. When factoring in fuel, insurance, and maintenance, the total cost of car ownership has risen by almost 50% in recent years.
The Market Is Not Falling, But It Is Changing
Despite this, the industry is not declining. Dealers and analysts expect about 16 million cars to be sold in the US this year. But the key nuance lies in who is buying them. Forecasts indicate that the new car market is increasingly separating from middle-class reality, becoming a sphere dominated by high-income buyers who can afford both high initial prices and long-term commitments. This creates a new normal where access to a new car becomes one of the brightest indicators of socio-economic inequality.
