Walk into a dealership today and the sticker shock feels almost baked in. The average new vehicle transaction price is around $47,000, and Reuters reports that figure is roughly 40% higher than it was in late 2018.
Delaware driver Sarah Merriman, nearing the end of her lease, said she is “stressing out” because she is already in a $700 monthly payment.
It is tempting to pin the jump on politics, tariffs, or fuel rules alone. But Reuters found a more market-based reason: automakers have been stocking the lot with bigger, higher-trim vehicles while letting true budget models fade away.
Affordability is now the headline
J.D. Power forecast that the average new vehicle retail transaction price in December 2025 would reach $47,104, up 1.5% from a year earlier. Monthly finance payments were expected to hit a record $776, which is why that window-shopping feeling is spreading even among buyers with decent credit.
To keep payments from climbing even higher, more buyers have been stretching loans to 84 months, which J.D. Power expected to make up 10.1% of financed sales for the month. The same forecast put the average used vehicle price near $29,571, so the used lot starts to look like the “budget aisle” by comparison.
A showroom stocked with upsells
Inside the industry, the affordability conversation often circles back to what people are actually buying. As J.D. Power executive Tyson Jominy put it, “We’re buying more expensive vehicles. We’re buying more trucks and SUVs. We’re buying more loaded vehicles.”
The model mix shows how hard it has become to find a true entry point. Edmunds data cited by Reuters show that in 2010 there were 25 models priced around $20,000 or less, but by last year there were only 20 models at the equivalent level today, roughly $30,000.
Over the same span, models at or above an inflation-adjusted $40,000 threshold grew from 96 to 156.
The new car buyer is getting richer
This is not just a story about taste; it is a story about who is left standing at the counter. S&P Global Mobility registration data cited by Reuters show households earning $100,000 or less accounted for 36% of new vehicle sales last year, down from a 50% to 60% range for years before the early 2020s.
Dealers see the shift every day on the showroom floor. “It’s truly a K economy for us,” said St. Louis-area dealer Brad Sowers, pointing to a market where higher earners keep buying new while everyone else hunts for deals, delays upgrades, or both.
Profits made the ladder look irresistible
Automakers did not wander into this problem—the profit map points uphill. Reuters reports that GM, Ford, and Stellantis phased out many smaller entry-level models in favor of trucks and SUVs, where former auto executives say core margins can exceed 20%.
GM illustrates the payoff. Reuters reported it earned about $4,200 in operating profit per vehicle sold in North America in 2024, up from about $3,000 in 2018. Jeep shows the same climb, with starting prices that once ran about $17,000 to $30,000 now closer to $30,000 to $65,000, with the Grand Wagoneer capable of topping $100,000.
Politics points one way, the lot points another
Affordability has become a campaign issue ahead of the midterm elections, and the blame splits neatly along party lines. Reuters notes President Donald Trump and other Republicans have blamed environmental and safety regulations, while Democrats have pointed to Trump tariffs.
In December, Trump administration officials cited the need to lower vehicle prices as a rationale for weakening fuel economy standards, according to Reuters. Even if policy shifts reduce some costs at the margin, the bigger driver of the average price is still what gets built and shipped to dealers.
The opening for low-price challengers
The affordability gap is more than a consumer frustration; it is a strategic risk, especially as Chinese brands expand globally with lower-priced offerings.
John Casesa of Guggenheim Partners told Reuters the trend creates a “tremendous vulnerability” if Chinese brands ever enter the U.S. market, because “new entrants come in and steal that business” when traditional automakers underserve less affluent buyers.
The big three say they are trying to close the gap without giving up profits. GM points to entry-level small SUVs like the Chevrolet Trax and Buick Envista, Ford has said it aims to have five models under $40,000 by the end of the decade including at least one electric model around $30,000, and Stellantis says Jeep pricing changes can add up to $4,000 in value on certain models.
What happens next will come down to whether affordable inventory shows up in real volume, not just in press lines. If it does not, the used car aisle stays crowded, and the opening for cheaper global rivals stays wide.
The official forecast report was published on J.D. Power.
