Buying a brand-new vehicle in the United States is becoming increasingly difficult for middle-class buyers. Prices have climbed sharply in recent years, leaving many consumers with little choice but to turn to the used-car market.
Industry data shows the average transaction price of a new vehicle has surged to roughly $47,000, a dramatic increase compared with just a few years ago. While politics has framed the issue around regulations and tariffs, the real shift appears to be happening inside showroom floors: automakers are producing fewer affordable models and focusing heavily on larger, more expensive vehicles.
The result is a market increasingly tailored to higher-income buyers.
Fewer Budget Cars, More Premium Models
Over the past decade, automakers have steadily reshaped their lineups. Small sedans and entry-level cars have quietly disappeared, replaced by SUVs, crossovers, and pickup trucks loaded with premium features.
In 2010, buyers could choose from 25 models priced around $20,000 or less. Today, the equivalent number of budget-friendly vehicles has dropped to around 20 models, even as the broader vehicle market expanded.
Meanwhile, high-priced vehicles have multiplied. Models priced above $40,000 have grown from fewer than 100 offerings in 2010 to more than 150 vehicles today.
Industry analysts say consumer preferences play a role. Many buyers are opting for larger vehicles and premium features such as advanced safety technology, digital displays and luxury interiors. But those upgrades inevitably push prices higher.
“We’re buying more expensive vehicles,” said Tyson Jominy, senior vice president at automotive research firm J.D. Power. “Trucks, SUVs and well-equipped models dominate sales today.”
A Market Tilting Toward Wealthier Buyers
This shift is reshaping who can afford a new car. Data from vehicle registration firm S&P Global Mobility suggests the share of new-vehicle purchases by households earning $100,000 or less has fallen sharply.
For years, these buyers accounted for roughly half of new-vehicle sales. Recently that share dropped to about 36 percent, indicating a growing divide between wealthier buyers and everyone else.
The trend mirrors the broader U.S. economy, where spending is increasingly driven by higher-income households.
For consumers like Delaware resident Sarah Merriman, finding an affordable replacement vehicle is becoming stressful. She currently pays about $700 per month for her electric SUV and says the limited selection of lower-priced options makes her next purchase uncertain.
Profits Rise as Entry-Level Models Fade
From an automaker’s perspective, the shift toward bigger vehicles has been profitable.
Large SUVs and pickup trucks often carry significantly higher margins than compact cars. Some industry veterans estimate margins on these vehicles can exceed 20 percent, making them far more attractive to manufacturers than smaller models.
Detroit’s major automakers — General Motors, Ford and Stellantis — have gradually phased out many small cars over the past decade in favor of trucks and SUVs.
The strategy has paid off financially. For example, General Motors reported operating profits of about $4,200 per vehicle in North America in 2024, up from roughly $3,000 in 2018.
Still, automakers insist affordability remains a priority. Ford has said it plans to introduce several vehicles priced below $40,000 by the end of the decade, including a more affordable electric model.
A Strategic Risk for the Industry
Some analysts warn that ignoring budget buyers could backfire. If lower-cost foreign brands eventually enter the U.S. market with cheaper models, they could quickly capture customers who feel priced out of new vehicles.
For now, however, the showroom trend remains clear: fewer entry-level cars, more expensive SUVs — and a growing affordability gap for American drivers.
