A General Motors Chevrolet Blazer electric vehicle at a dealership in Colma, California, on January 23, 2026.
David Paul Morris | Bloomberg | Getty Images
DETROIT — American consumers are at a crossroads when it comes to the U.S. auto industry. Wealthy buyers are buying new cars at increasingly higher prices, while lower-income people continue to drive used cars.
The trend has raised concerns among auto executives, who fear that American consumers are facing a “K-shaped” economy in which the wealthy continue to profit while lower-income families struggle.
“We have a different car buyer now than we did a few years ago,” Charlie Chesbrough, senior economist at Cox Automotive, said Thursday at an auto analyst event. “The important thing here is that we know that the average buyer here is much more affluent.”
Cox reported that the percentage of new car buyers with incomes under $100,000 fell from 50% in 2020 to 37% last year, representing millions of dollars in lost sales. Meanwhile, the percentage of buyers with incomes above $200,000 increased from 18% to 29% during this period.
Cox said the change comes as MSRP (manufacturer’s suggested retail price) will reach an average of $51,000 in 2025 and buyers are also dealing with rising insurance premiums and inflation. Meanwhile, consumer sentiment is at recession level.
New car sales were at a record level of more than 17 million units before 2020, but have since had mixed results, ending with sales of 16.3 million units in 2025. Brand new cars have never been a favorite for most American consumers, but automakers are increasingly pricing out millions of Americans, cutting back on entry-level vehicle lines such as small cars.
“We currently rely on the ultra-high net worth to generate sales,” Mark Barot, a partner at consulting firm Plante Moran, said at an event Thursday. “This is a structural problem from an affordability perspective.”
Mr. Barot said that while U.S. sales were not setting records, they were still quite good compared to historical levels. He added that auto industry executives may start paying more attention if buyers are priced out and market conditions tighten.
“It’s not unrealistic to think that we could reach such a level within the next two or three years, but then this would really start to have a negative impact on the world.” [automakers]” he said.
A modeling study by Plante Moran found that one-third of the U.S. population can’t afford a new car, and for those on the fence, options are extremely limited. According to the study, households with household incomes up to $105,000 have more than 250 “affordable” models, compared to about 110 “affordable” models for households with household incomes below $65,000.
According to the U.S. Census Bureau, the median household income in the U.S. in 2024 was $83,730. That’s up 24% from 2020’s $67,521.
Meanwhile, the average transaction price of a new car in the U.S. hovered around $50,000 toward the end of last year, up 30% from less than $38,747 at the beginning of 2020, according to Cox Automotive.
carmax’s Edmunds reported this month that new car buyers are spending more each month on new cars, with 20% committing to an average monthly payment of $1,000 or more in the fourth quarter of last year.
ford Chief Executive Officer Jim Farley warned the U.S. auto industry earlier this month that it needed to be mindful of affordability concerns that could drive consumers away. For automakers, producing larger, more expensive vehicles can be more profitable, but it can also shrink the market and reduce sales.
“Everyone in the auto industry should pay close attention to consumer demand,” Farley said during a Detroit Auto Show event on January 13. “That’s really important.”
