U.S. New Car Market Splits: Luxury Booms, Mid- and Low-End Models Stall

The U.S. new-car market is accelerating its polarization. In December 2025, the average transaction price for new vehicles reached $50,326, up 0.8% year-over-year. Sales of luxury vehicles priced above $75,000 have surpassed those of models under $30,000, which accounted for only 7% of new-vehicle transactions in November. Dealerships for premium brands such as Cadillac, Jaguar, and Land Rover reported record-high sales in 2025, primarily driven by "enthusiast-driven purchases." Meanwhile, middle- and lower-income consumers are delaying vehicle purchases due to high interest rates, elevated car prices, and lengthy loan terms—some extending up to 84 months—with roughly one in five buyers now paying over $1,000 per month. New cars are increasingly shifting from mass-market consumer goods to luxury choices, further constraining affordability for average households.