Economists have been warning for months that soaring vehicle prices are pushing lower- and middle-income Americans out of the new-car market. The data backs that up. But at the very top end, the story looks completely different.
Luxury dealerships across the U.S. are still seeing strong demand, even as average new-car prices cross historic thresholds. For affluent buyers, higher prices have not cooled enthusiasm. In some cases, they appear to have done the opposite.
A Record Year for High-End Dealers
In Brentwood, Tennessee, luxury dealer Nelson Andrews says his business is on pace for its strongest year yet. Andrews, who also serves as the city’s mayor, runs Andrews Transportation Group, which operates four dealerships across Middle Tennessee.
“We’re going to have our best year ever this year,” Andrews said.
His dealerships specialize in premium brands, including Cadillac, Jaguar, and Range Rover, vehicles that have climbed sharply in price alongside the broader market. According to Kelley Blue Book, the average new vehicle in the U.S. sold for $50,080 in September, the first time that figure has crossed the $50,000 mark.
“We don’t call the tune, we just dance the dance,” Andrews said, describing how dealers have little control over rising prices.
Why the Top End Isn’t Slowing
Industry analysts say demand for high-priced vehicles shows no clear signs of easing. Cox Automotive notes that buyers are actively choosing more expensive vehicles, keeping transaction prices elevated.
Andrews says his priciest inventory often sells first. Many of his customers, he explained, are not shopping out of necessity but out of passion.
“These are enthusiastic purchases,” he said. “Vehicles are more expensive because that’s what people want to buy.”
That strength stands in sharp contrast to the broader market, where affordability pressures are reshaping buyer behavior.
Middle-Market Buyers Feel the Squeeze
A year-end report from the Boyd Center for Business and Economic Research found households pulled back sharply on durable goods earlier this year, especially cars. High interest rates and lingering economic uncertainty made consumers more cautious after the pandemic-era price surge.
“Consumers had already been reluctant to re-enter the auto market,” the report noted, adding that early 2025 brought an extra layer of hesitation.
That slowdown is visible on dealer lots. Andrews says demand in the middle of the market has softened more than at the high end, reinforcing the growing divide between buyers who can absorb higher costs and those who cannot.
Longer Loans, Shorter Ownership
Financing trends are also shifting. Andrews has seen more lenders willing to extend loan terms to 84 months or longer, a move designed to make monthly payments more manageable.
He’s not a fan.
“If you’ve got somebody with a 94-month commitment and a 48-month attention span, they’re going to be upside down,” he said.
Among luxury buyers, long-term ownership is rare anyway. Most trade in their vehicles after three or four years.
“People love the latest and greatest,” Andrews said.
As prices remain high and affordability tightens, the U.S. car market is increasingly split, with luxury buyers powering ahead while the middle struggles to keep up.
