A General Motors Co. Chevrolet Blazer electric vehicle at a dealership in Colma, California, January 23, 2026.
David Paul Morris | Bloomberg | Getty Images
DETROIT — American consumers find themselves at a crossroads when it comes to the U.S. auto industry. Affluent buyers are buying new vehicles at increasingly higher prices, while lower-income buyers continue to drive used models.
The trend is increasingly worrying auto industry executives and fueling concerns that U.S. consumers face a K-shaped economy, in which the wealthy continue to make gains while those with lower incomes struggle.
“We have a different vehicle buyer today than we did a few years ago,” Cox Automotive senior economist Charlie Chesbrough said Thursday at an event for auto analysts. “The takeaway here is we’re seeing the average buyer here is much wealthier.”
Cox reports that the share of new car buyers with incomes less than $100,000 fell from 50% in 2020 to 37% last year, representing millions in lost sales. At the other end of the spectrum, the share of buyers with incomes above $200,000 increased from 18% to 29% during this period.
This change occurred as the MSRP, or manufacturer’s suggested retail price, reached an average of $51,000 in 2025, according to Cox, and as buyers also face higher insurance costs and inflation. Meanwhile, consumer confidence is reaching recession levels.
New car sales reached record levels of more than 17 million before 2020, but have seen mixed results since, ending 2025 with 16.3 million sales. Brand-new vehicles were never intended for the majority of U.S. consumers, but automakers have increasingly backed away from charging millions of Americans, including by eliminating entry-level vehicle lines such as small cars.
“We are now relying on the wealthiest to generate sales,” Mark Barrott, a partner at consultancy Plante Moran, said at Thursday’s event. “It’s a structural problem from an affordability perspective.”
Barrott said U.S. sales weren’t at record highs, but were still pretty good compared to historical levels. Auto industry executives may start paying more attention if market conditions deteriorate due to lower prices from buyers, he added.
“It’s not unrealistic to think that in the next two or three years we could reach that kind of level, and then it really starts to hurt the economy. [automakers]” he said.
A modeling study by Plante Moran found that a third of the U.S. population cannot afford new vehicles, and choices are very limited for those who are hesitant. There are about 110 “affordable” models, in relative terms, for households with incomes of $65,000 or less, compared to more than 250 “affordable” models for those with incomes up to $105,000, according to the study.
The median household income in the United States was $83,730 in 2024, according to the US Census Bureau. This amount has increased by 24% since 2020, when it was $67,521.
In the United States, average transaction prices for new vehicles hovered around $50,000 toward the end of last year, up 30% from less than $38,747 at the start of 2020, according to Cox Automotive.
CarMax Edmunds reported this month that new car buyers are spending more and more each month on a new vehicle purchase, with a record 20% committing to average monthly payments of more than $1,000 during the fourth quarter of last year.
Ford CEO Jim Farley warned earlier this month that the U.S. auto industry needs to be aware of affordability issues that are leading to consumer withdrawal. Although producing larger, more expensive vehicles may be more profitable for automakers, it can shrink the market and lower sales.
“Everyone who works in the auto industry…we should all pay close attention to consumer demand,” Farley said Jan. 13 at an event at the Detroit Auto Show. “It’s really important.”