Buying a new car in America is starting to look like a luxury fewer and fewer can afford. While showrooms still have foot traffic, the type of buyer walking through the door has changed, and it’s no longer the middle-income shopper making up the bulk of demand. Unless you’re earning well into six figures, your odds of driving off in a brand-new vehicle are slipping.
New data shows a significant decline in new-car buyers making under $100,000, even as the share of high earners in the market continues to climb since the onset of the Covid-19 pandemic. The median US household income sat at $83,730 in 2024, placing today’s typical new-car buyer well above the national midpoint. This shift mirrors a sharp rise in the cost of new cars.
Average transaction prices hovered near $51,000 in 2025, and those aren’t the only numbers climbing. Buyers are facing steep increases in insurance premiums and the broader impact of inflation. At the same time, the proportion of new-car buyers earning more than $200,000 has increased from 18 percent to 29 percent over the past five years, forming what economists refer to as a ‘K-shaped’ economy, CNBC reports.
In a K-shaped recovery, economic trends split in two directions, with those at the top continuing to see income and wealth grow, while those at the bottom face stagnation or even decline. Annual new-car sales in the US peaked in the years leading up to COVID-19. 5 million, and stayed above 17 million through 2019.
9 million in 2022. 3 million by 2025, but they’re still not back to the levels seen a decade ago. And while demand is back, affordability is not.
Industry analysts point out that pricing, not interest, is the main barrier now. The squeeze is only worsened by the disappearance of affordable entry-level models. Carmakers have steadily trimmed small sedans and compact cars from their offerings, leaving fewer options for buyers on tighter budgets.
A study from consulting firm Plante Moran found that one-third of Americans simply can’t afford a new car at all. ” For buyers making up to $105,000, that number more than doubles, with over 250 models considered within reach. At the same time, financing pressure is mounting.
A record number of buyers are now signing up for monthly car payments exceeding $1,000. The shift in buyer demographics has significant implications for the automotive industry. As the median income continues to rise, it’s clear that the average new-car buyer is becoming increasingly affluent.
This trend signals a fundamental change in the way Americans purchase and consume vehicles. It's not just about having access to cars; it's about being able to afford them. The consequences of this shift are far-reaching, affecting not only individual buyers but also the broader economy.
As carmakers continue to navigate this new landscape, they must consider how their products and pricing strategies will evolve to meet the changing needs of their customers. With the average transaction price nearing $51,000, it's clear that affordability is becoming an increasingly pressing concern. The industry must find a way to make cars more accessible to a wider range of buyers, lest they risk alienating those who are already struggling to keep up with the rising costs.
As one expert noted, relying too heavily on high-margin vehicles could lead to a smaller market and long-term demand that simply doesn’t keep pace. With the stakes higher than ever, it's time for carmakers to reevaluate their priorities and focus on creating more affordable options for buyers across the board.
The shift in buyer demographics is a clear indication of the growing wealth gap in America. As incomes continue to rise, it's becoming increasingly difficult for those at the lower end of the spectrum to afford new cars. Carmakers must take note and adapt their strategies to ensure that their products remain accessible to a wider range of buyers.
