It’s not just you: Prices are killing car buyers’ dreams

We all have different approaches to buying a new car. Some of us are grappling with issues like tariffs, tax credits, geopolitics and environmental impacts and wondering if a better purchasing deal awaits us in the future. When it is determined that this is the time to buy, your descent through the sales funnel can be painless or truly excruciating.

Determining how much money you have to get the shiny box is perhaps the most important step. Yes, the average transaction price for a new car in America has been hovering around $50,000 for three years, affordable options are dwindling, and lower-income consumers are giving up the dream of buying a new car and are likely exploring their used options.

Doesn’t get cheaper

We know this based on the in-depth analysis of fourth-quarter auto data provided this week by Cox Automotive, an Atlanta company whose brands include Autotrader, Manheim, Kelley Blue Book and Dealer.com. Cox has a team of astute analysts who keep a close eye on the automakers, the dealers, the banks and the consumers who make it all possible.

Cox has the data that confirms what we probably already know: that cars are not getting cheaper.

36.3 weeks of income to buy a new car

Cox maintains a “vehicle affordability index,” which shows that in 2012 it took 35.7 weeks of an average household’s income to buy a new car in the US. This fell in subsequent years, so that at the end of 2019 it only cost 32 weeks of the family income.

But then came COVID, and in December 2022 it took the average household 42.2 weeks of income to buy something new.

The positive point here is that this number has fallen steadily since then and currently stands at an average household income of 36.3 weeks.

Pick up ATPs for $66K

And if you’re wondering how higher prices have affected consumer preferences, take a look at the Cox chart, which shows that the top five vehicle segments were about the same in 2015 (14 percent). Today, compact and midsize cars account for 7 percent and 5 percent of new car purchases in the U.S., respectively.

Meanwhile, demand for compact and midsize crossovers has increased to 18 percent and 16 percent respectively, with each of these bringing significantly higher average transaction prices from 2025: $36,329 for compact crossovers and $49,272 for midsize crossovers. Over the past decade, demand for full-size pickups has remained steady, but that ATP is an eye-opening $66,192, according to Cox.

The bottom line, according to the Cox analysts, is that even the affordable cars available at the lower end of the market aren’t attracting enough buyers, perhaps signaling that many struggling American households are exiting the new-car market entirely.

But that Taycan may be within reach

And if you’re curious about how sales were affected by tariffs (announced in the spring) and the loss of federal tax credits for electric vehicles (on September 30), check out the chart above. That’s a big sales hit in the fourth quarter.

Cox research also confirms that a flood of used electric cars will hit the market by 2027, meaning the Porsche Taycan you dream of could be within your reach. This glut of used electric vehicles should also put downward pressure on new electric vehicle prices, Cox reports.

Source: Cox Automotive