(NewsNation) — 2025 was a surprisingly solid year for new car sales but not because vehicles became more affordable for everyday buyers.
Instead, growth was driven by higher-income consumers who continued to spend, a clear example of the so-called K-shaped economy at work.
Households earning more than $150,000 a year now buy 43% of the new cars sold in the U.S., up from 30% in 2019, according to Cox Automotive. Meanwhile, households earning less than $75,000 make up just 26% of sales, down from 37%.
That shift helped push the average new vehicle sales price above $50,000 for the first time ever in September, as higher-income buyers gravitated toward larger, more expensive vehicles.
“We have inventory under $40,000 — it’s just not moving the way it used to because the buyers who would’ve purchased it can’t afford new vehicles anymore,” Cox Automotive executive analyst Erin Keating said on a December call.
New-vehicle sales are expected to total 16.3 million in 2025, marking the best sales year since 2019, according to estimates from Kelley Blue Book.
That outcome was far from assured last spring, when President Donald Trump announced tariffs that threatened to disrupt the auto supply chain. Rather than cooling demand, the move pulled some purchases forward, as buyers tried to get ahead of potential price increases.
A similar pull-forward effect happened in the EV market, where sales accelerated in early July following the passage of Trump’s tax and spending bill, as buyers rushed to secure vehicles before a $7,500 federal tax credit expired at the end of September, Cox noted.
But without those tailwinds, sales momentum is expected to slow in 2026. Cox expects new vehicle sales to decline by 2.4% in 2026 to roughly 15.8 million — a slowdown that began in the fourth quarter of last year.
Looking ahead, the divide between higher-income buyers and lower-income consumers may become a lasting feature of the auto market, effectively turning new cars into luxury goods, Keating noted.
“Even with affordable vehicles out there, fewer buyers are buying,” Keating said. “The missing customers aren’t sidelined, they’re essentially excluded.”