America’s Affordability Cliff Is Already Reshaping New-Car Buying

This isn’t the first time you’re hearing this, but a new car is pricier than ever, with average sales closing at more than $50,000, and that’s had a domino effect on every aspect of the buying process and car ownership. One in five buyers are taking out an 84-month loan on a new car, and the average loan rate currently sits at 6.9%, roughly two and a half points higher than in 2022 (but lower than the 8.4% we were paying in 2024).

These costs have taken a big bite out of the market, and had an effect on which segments are growing, and which are cooling. According to the Wall Street Journal, the outrageous cost of buying a new car has pushed a million potential buyers off the market, and into the arms of used car sellers (and no doubt a few bicycle shops and ridesharing companies, too). Here’s how this is affecting the makeup of our streets and highways.

We’re Spending Too Much Money On Our Cars These Days

A Market Watch survey from 2024 found that the average American was spending around 20% of their annual income on their car. That includes insurance and gas, not just the cost of purchase, but even so, that’s pretty high. One respondent in 10 admitted to spending 30% of their income or more on their cars.

Earlier this year, Cox Automotive reported that only 37% of new car buyers in 2025 earned an annual income below $100,000, suggesting that not that many of us can afford a new car. The US Bureau of Labor Statistics has the average full-time salary at around $64,220, meaning that you could put every dollar you earn into your car, and still not be able to afford a fully loaded Toyota Tacoma with a year’s income.

While car prices are on the way up, the US Census Bureau reports stagnating income. In 2024, the median household income was $83,730. In 2023, that number was at $82,690, pointing to a trajectory which the Bureau calls “not significantly different”.

According to a report from WalletHub, auto loan delinquency is especially bad in North Dakota, which saw a growth in delinquency of 10.8% from Q3 to Q4 alone in 2025.

Affordable Cars Are The Big Winners When Times Get Tough

Credit: Toyota

A basic understanding of economics will tell you that, when money’s tight and inflation is out of control, the company offering a fair deal is the one that’s going to reap the benefits. To get an idea of how this plays out in the automotive market, we can take a look at the top-selling vehicles of 2025, and compare their year-end sales numbers to those of 2024.

Averaging these numbers out by segment, here’s what we’re seeing in the top 15.

Inside the top 15, the Toyota Tacoma single-handedly carries the mid-size pickup segment to a lead of 42.4%. At the other end, the Tesla Model Y carries the mid-size electric SUV segment to a 24.3% drop in sales. The real story is found in the middle, where mid-size cars see a modest bump of 2%, compact cars see a more substantial 5.1% improvement, and compact SUVs are up 25.9% in the top 15.

Meanwhile, the Ford F-Series had a good year, as usual, but the rest of the full-size segment sees a general downturn, owing mostly to the Chevy Silverado taking a 14.7-point nosedive in its final sales year before the introduction of the fifth-gen relaunch for 2027.

This Was The Easiest Market Forecast Ever

Credit: Toyota

By and large, these numbers would be easy for anyone with basic financial literacy to understand: Small, affordable vehicles are flying off the lots, and big, pricy cars are taking longer to sell.

The Toyota Tacoma’s record-breaking sales year can be attributed in part to drivers leaning away from larger pickups, no doubt, but also to production for the fourth-gen model finally stabilizing. Drivers who were looking at shortages in 2024 were finally able to grab their new Tacos in 2025.

Remember, we’re only crunching the numbers for 2025’s top-15 sellers here, so this is an admittedly narrow view of the overall industry, but it gives us a concentrated look of what people are buying at the top of the market.

Sources: NewsWeek, NewsWeek, USA Today, US Bureau of Labor Statistics, WalletHub, Xtreme Terrain, Consumer Reports.

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This article originally appeared on CarBuzz and is republished here with permission.