Wealth gap reshapes U.S. car market as prices soar beyond reach
The gap between high and low-income car buyers in the U.S. has widened sharply since 2019. Households earning $150,000 or more have boosted new-car purchases by 45%, while those making $75,000 or less have cut back by 30%. Rising vehicle prices and economic pressures are reshaping the stock market today, as industry forecasts point to slower growth ahead.
New-car prices have climbed steeply over the past 15 years. In 2010, the average vehicle cost under $30,000, but by December 2025, that figure had jumped to nearly $50,000. Larger models and added features have driven much of the increase, pushing many middle-income buyers out of the stock market. Carmax sales trends reflect this divide. Wealthier households have increased purchases significantly, while lower earners struggle with affordability. Industry analysts note broad consumer unease over living costs, particularly among those earning below $150,000 a year. Looking ahead, U.S. auto sales are expected to slow in late 2025. The annualised rate may drop to 15.6 million vehicles in the fourth quarter, down over 5% from the previous quarter. Forecasts for 2026 vary slightly, with Edmunds predicting 16 million sales, AutoForecast Solutions estimating 16.3 million, and Cox Automotive projecting 15.8 million—the first decline since 2022. To sustain demand, automakers might increase incentives if sales lag. Lower interest rates could ease pressure on buyers, while a surge in off-lease used cars will expand second-hand options. Meanwhile, Germany’s VDA anticipates a 5% rise in electric vehicle production in 2026, reaching 1.76 million units, with battery-electric vehicles growing by 11%.
The U.S. auto market faces a mixed outlook for 2026. Prices are likely to stay high, keeping pressure on lower-income buyers, while incentives and used-car availability may offer some relief. Germany’s push for more electric vehicles could also influence global supply as manufacturers adjust to shifting demand.
