U.S. New Car Market Splits: Low-Income Buyers Drop to 37%

The U.S. new-car market is showing clear signs of polarization. According to data from Cox Automotive, the share of new-vehicle buyers with annual household incomes below $100,000 dropped from 50% in 2020 to 37% in 2026, while the proportion of buyers earning over $200,000 annually rose from 18% to 29%. The average transaction price for a new vehicle in the U.S. reached $51,000 in 2025. Combined with rising insurance premiums and inflationary pressures, this has made car ownership increasingly unaffordable for middle- and lower-income households. The number of affordable entry-level models has dwindled, leaving households earning under $65,000 able to afford only about 110 vehicle models. Meanwhile, a record number of consumers are now paying monthly loan payments exceeding $1,000. Analysts warn that the current market relies heavily on high-income buyers, and if affordability continues to deteriorate, automakers could face declining demand within the next two to three years.