Vehicle Affordability Is More Than the Sticker Price
With the share of affordable new models for the median household dropping by nearly half since 2019, vehicle affordability has escalated from a consumer pain point to a critical industry challenge.
CAR’s new research, Vehicle Affordability: Defining, Diagnosing, and Understanding New Vehicle Affordability in the United States, takes a deeper look at what is driving the challenge, including vehicle prices, household income, financing, product content, production costs, insurance, and the broader cost of vehicle ownership.
Key Findings:
Inflation-adjusted consumer expenditure per new vehicle has increased only about 8% since 2002, despite a much larger increase in nominal prices.
The highest-income 20% of households accounted for 55% of new vehicle spending in 2024, up from 42% in 2019.
The share of new models within CAR’s estimated affordability range for the median household declined from 55% in 2019 to 29% in 2024.
Rising insurance, financing, repair, and other ownership costs are placing additional pressure on consumers.
At the same time, today’s vehicles deliver significant improvements in safety, efficiency, performance, durability, and technology compared with vehicles from two decades ago.
The research points to a central conclusion:
Vehicle affordability is a multidimensional challenge, and no single factor or solution can address it alone.
For automakers, suppliers, policymakers, and other industry stakeholders, understanding these dynamics will be increasingly important as the market evolves.
Read the full Report:
Download the Report
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Read the Paper Here |
