New cars are increasingly becoming a luxury amid K-shaped economy concerns
The U.S. automotive market is experiencing a significant shift, with affluent buyers increasingly dominating new car purchases, while lower-income consumers are left to opt for used vehicles. This trend reflects broader economic concerns, as the share of new car buyers earning less than $100,000 has dropped from 50% in 2020 to just 37% in 2025. Meanwhile, the average price of new vehicles has surged to around $51,000, making them unaffordable for many. As automakers focus on higher-end models, experts warn that this could lead to a structural problem in the industry, potentially shrinking the market and impacting future sales. With consumer sentiment at recessionary levels, the industry must navigate these challenges carefully to maintain demand.
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