Buying a New Car Used to Be a Given. Now It's a Luxury.

"If there's one term that can define the economy in 2025, it's "K-shaped." Wealthy Americans are having a great year as their home values and the stock market spike, while those in lower income brackets are struggling under the weight of rising prices and stagnating income. It's no different in the car market. While automakers are estimated to sell over 16 million new vehicles this year, that growth gives a false sense of security."

"One of the most shocking automotive headlines of the year came in September when the average transaction price for a new vehicle passed $50,000 for the first time, according to data from Kelley Blue Book. That figure alone may have convinced people that new cars had reached luxury territory. But the reality is more complex: a variety of factors, including a surge in EV sales as federal tax credits expired at the end of September, helped push this number to new heights."

The economy in 2025 is K-shaped, with wealthy Americans benefiting from rising home values and stock gains while lower-income households face rising prices and stagnant income. The car market mirrors this divide: automakers may sell over 16 million new vehicles, but headline sales growth masks affordability challenges. Average transaction prices for new vehicles surpassed $50,000, driven in part by factors like a surge in EV sales and the expiration of federal tax credits. New-vehicle prices continue to outpace inflation, and rising total cost of ownership — including financing, insurance, maintenance, fuel and registration — is squeezing many buyers.

Read at InsideHook