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October 14, 2025
Nicholas Morine
With the most recent news that the average price for a new vehicle topped $50,000 in the U.S. last month, according to Cox Automotive figures cited by CNBC’s Michael Wayland, a number of questions and concerns appear to be arising.
“The average price paid for a new vehicle last month topped $50,000 for the first time ever, Cox Automotive’s Kelley Blue Book reported Monday. Meanwhile, auto loan delinquency rates remain near all-time highs for those with low credit ratings,” Wayland wrote, pivoting to cite Cox Automotive executive analyst Erin Keating.
“While there are many affordable options out there, many price-conscious buyers are choosing to stay on the sidelines or cruising in the used-vehicle market. Today’s auto market is being driven by wealthier households who have access to capital, good loan rates and are propping up the higher end of the market,” Keating said.
And as Yahoo! Finance reporter Pras Subramanian detailed, this may come as little surprise to those who follow the automotive sector stateside. Also quoting Keating, Subramanian noted that the most popular vehicle purchased new in the United States was a Ford pickup costing more than $65,000, bucking the popular wisdom that rising car prices were stopping buyers in their tracks.
Keating went on to note that while wealthier Americans were faring relatively well, leveraging low rates and growing capital to splash out on expensive vehicles, the $20,000 market for cars was “nearly extinct” — lower-income Americans either opting for used cars or trucks or sitting on the sidelines entirely.
With pricy EVs and higher-end rides dominating the new vehicle sales market — EV sales trended upward to reach a 10.5% market share in Q3, largely thanks to Tesla, per Electrek — there could be more to the story than the headline itself represents.
A confluence of factors are emerging contributing to a muddled portrait of the auto segment, as well as the broader U.S. economy.
Overall, though, Keating noted that new car pricing was always inflationary in nature — and that top price barriers are always, eventually, subject to breaking, though not without one final caveat.
“We’ve been expecting to break through the $50,000 barrier,” Keating said. “That’s today’s market, and it is ripe for disruption.”
With average new car sale prices continuously climbing despite economic pressures on the middle- and lower-income consumer bases, can we expect new models (or entrants) to focus on bottom-line affordability? Does such an opportunity actually exist?
Will the effect of many U.S. car buyers being priced out of the market lead to demand for value-oriented new car models, or will used cars continue to take on this demand?
Do you see the K-shaped U.S. economy righting itself in the near future? Why or why not?
Will the effect of many U.S. car buyers being priced out of the market lead to demand for value-oriented new car models, or will used cars continue to take on this demand?
View Results
The response depends on the consumer segment. Middle- and higher-income consumers will continue to have the capability to spend but will likely become more cautious about their spending. We already see a lot of signals in our data that many in the middle part of this group are trading down. Lower-income consumers will be more constrained in their habits, and it is unreasonable to expect any meaningful real growth here.
In the near-term, used cars – due to availability – will absorb this economic shock. What remains to be seen is what happens to used-car prices and if they will inflate, as we saw during 2020/2021.
However, I do expect to see more value-priced options in the future, whether as replacements to previous models (ex: Ford Ranger) or as a response to Chinese vehicles (ex: a lower-priced Tesla Model Y).
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