ANALYSIS | Prices for new U.S. cars have soared. Here's 1 big reason why | CBC News

"The trend toward fancier vehicles on the new-car lot is a stark example of the so-called K-shaped U.S. economy: More affluent consumers are driving a larger share of spending, while middle- and lower-income people struggle. The result: the American car-buying public has shifted decidedly more affluent, while a swath of lower- and middle-class consumers have been relegated to the used-car lot."

"The affordability issue presents a tremendous vulnerability for traditional carmakers if Chinese brands were to someday enter the U.S. market. It's a risk that they underserve less affluent consumers, and new entrants come in and steal that business."

"A Reuters review of industry sales data found a more market-based reason: Automakers are offering relatively few budget models, while they've filled showrooms with bigger, more upscale models, raising the selling price of the average U.S. vehicle to around $47,000 US."

The U.S. automotive industry faces a critical affordability crisis as average new vehicle prices reach approximately $47,000, driven by automakers' strategic shift toward larger, more upscale models with higher profit margins. This trend reflects the K-shaped economy, where affluent consumers drive spending while middle- and lower-income Americans struggle to afford new vehicles. Consequently, lower- and middle-class buyers have been pushed toward used-car markets. While politicians debate causes—Republicans citing regulations and Democrats blaming tariffs—industry data reveals the core issue: manufacturers deliberately offer few budget-friendly options. This strategy creates significant vulnerability for traditional automakers, as Chinese brands entering the U.S. market could capture underserved lower-income segments. Consumers like Sarah Merriman face frustration finding affordable replacements for leased vehicles, with monthly payments exceeding $700.

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