According to economist Jonathan Smoke, a significant 10-20% of car shoppers are hindered by affordability issues, highlighting a troubling trend in the automotive market.
Smoke emphasized that the automotive market is experiencing a bifurcated economy, where wealthy consumers are purchasing luxury vehicles, while many middle-class buyers face financing challenges.
Despite an overall high average transaction price of $48,401 for new cars, there's a notable shift towards more affordable segments, revealing a mismatch in market supply and consumer demand.
The data indicates a strong demand for small and midsize SUVs, which make up 25% of sales, yet the industry is performing below its true potential due to affordability constraints.
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