A Washington Post/ABC News/Ipsos poll conducted in February 2026, covering 2,589 American adults, asked people which everyday expenses they considered affordable. Gasoline was affordable to 71 percent. Groceries were unaffordable to 45 percent. Healthcare was unaffordable to 56 percent. A new car was unaffordable to 74 percent, making it the single least affordable item in the entire survey, above a week's holiday, above healthcare, above going out for dinner.
That result did not emerge from a single bad year. It is the outcome of a decade of deliberate choices by an industry that decided bigger margins on fewer, more expensive cars was better business than volume on affordable ones. The poll simply measured where that strategy has left the people it used to serve.
How $38,000 Became $50,000
In early 2020, the average transaction price for a new vehicle in the United States was just under $38,750. By late 2025 it had crossed $50,000 for the first time in history. That is a 30 percent increase in five years, against median household income growth of 24 percent over the same period. The gap between what cars cost and what households earn has widened consistently, and there is no mechanism currently in place to close it.
The pandemic supply crunch gave manufacturers a reason to cut production of low-margin vehicles and focus on trucks, SUVs and premium models where profits per unit were significantly higher. Many of those entry-level models never came back. In 2024, American buyers could choose from three cars priced under $20,000. By 2026, there are none. The least expensive new vehicle currently on sale is the 2026 Hyundai Venue at $20,550. The Nissan Versa, which had served as a genuine entry point for first-time buyers for nearly twenty years, was discontinued in December 2025.
A $500 monthly car payment, which before the pandemic would have secured a Toyota Highlander, now buys a compact Toyota Corolla, according to J.D. Power senior vice president Tyson Jominy. That calculation has not been lost on buyers. A record 20 percent of new car buyers committed to monthly payments above $1,000 in the fourth quarter of 2025, according to Edmunds. For everyone else, the arithmetic no longer works.
Who Is Still Buying
The answer to that question is becoming increasingly narrow, and the data behind it is striking.
According to Cox Automotive analysis of S&P Global Mobility data, the share of new car buyers earning less than $100,000 annually dropped from 50 percent in 2020 to 37 percent by 2026. The share earning more than $200,000 grew from 18 percent to 29 percent over the same period. People earning more than $150,000 now account for more than 40 percent of all new car sales, compared to 29 percent in 2019. Households earning under $75,000 made up 37 percent of new car sales in 2019. By 2025, that figure had dropped to 26 percent.
Economists describe this pattern as a K-shaped market. The top of the K continues upward: wealthy buyers purchasing larger, more expensive vehicles in growing numbers. The bottom branch runs the other direction: middle and lower income households priced out entirely, holding onto existing cars longer, moving to used vehicles, or doing without.
Consulting firm Plante Moran modelled the structural consequences of this shift and found that a third of the American population cannot afford a new car at all. For households earning $65,000 or less, roughly 110 vehicle models fall within what the firm classifies as affordable. For households earning up to $105,000, that number rises to around 250. The median US household income in 2024 was $83,730.
Mark Barrott of Plante Moran put the problem plainly at an industry event in January: "We're now relying on the extremely wealthy to generate the sales. That's a structural problem from an affordability perspective." He added that the industry could be two to three years from a point where this structure begins to actively damage sales volumes. Ford CEO Jim Farley made a similar observation at the Detroit Auto Show in January 2026, warning that while premium vehicles generate better short-term margins, over-reliance on affluent buyers shrinks the market and makes the industry brittle.
Even among people earning more than $100,000 per year, 64 percent told the Washington Post/ABC/Ipsos poll that a new car was unaffordable. The affordability crisis is not a problem affecting only low-income Americans. It has climbed far enough up the income distribution that majorities across most demographic groups now describe a new car as beyond their reach.
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Tariffs Are Making It Worse
The affordability problem predates the Trump tariff era but is being accelerated by it. The administration's 25 percent tariffs on imported vehicles and auto parts, introduced in 2025, added costs that manufacturers have largely absorbed rather than immediately passed to consumers, primarily because of concern that buyers would walk away entirely. But those costs are real and will land somewhere. The models most likely to be cut from lineups as a result are the ones with the thinnest margins, which are, by definition, the most affordable ones that remain. The Versa's discontinuation was explicitly cited by industry analysts as an outcome of this dynamic.
Imports made up a significant portion of the sub-$25,000 segment. Those cars were largely built in Mexico, South Korea and Japan, where production costs are lower. Tariffs have made that price positioning untenable for manufacturers trying to maintain any margin. The result, as CNN's reporting noted, is that the disappearance of cheap new cars is not accidental. It is a rational corporate response to a cost structure that makes building them unprofitable at the prices buyers can pay.
What It Means for the Industry
The warning signs are visible beyond the poll numbers. Dealer lots in February 2026 were carrying $39 billion in unsold new car inventory, according to CarEdge data, with some models sitting for more than 400 days. The Volkswagen ID.4 had 480 days of market supply. The Jeep Grand Wagoneer had 463 days. The Dodge Charger had 406 days. These are not obscure niche vehicles. They are products that major manufacturers built in significant volumes and cannot move at current prices.
Total new car sales in the United States reached 16.3 million in 2025, down from 17.5 million in 2016 and still below pre-pandemic levels. The market is not collapsing, but it is not recovering to where it was either. The buyers who drove volume in previous decades have not returned. Many of them cannot afford to.
For buyers priced out of the new car market, the used car sector has absorbed some of the demand. But used car prices rose alongside new car prices during the pandemic and have not fully corrected. The practical consequence for millions of households is that car ownership, which in most of the United States is not a luxury but a prerequisite for employment, school runs, healthcare access, and daily life, has moved structurally further out of reach and shows no clear signs of moving back.
The industry's own executives are aware of what they have built. The question is whether awareness translates into product decisions that actually reverse it, or whether, as Barrott of Plante Moran suggested, the feedback from the market needs to arrive in the form of genuinely painful sales declines before anyone changes course.
Three quarters of the country have already voted with their wallets. The industry is still deciding whether to listen.
Sources: Washington Post/ABC News/Ipsos poll, February 2026, CNBC, CNN, Carscoops, Jalopnik, CarEdge Q4 2025 Car Buying Index, Plante Moran modelling study via CNBC, Cox Automotive via S&P Global Mobility. All poll methodology: 2,589 US adults surveyed February 12 to 17, 2026, margin of error plus or minus 2 percentage points. All analysis and editorial commentary is original.
