In a dramatic shift for the auto industry, U.S. consumers are increasingly balking at high car prices and pushing back on what they are willing to pay. According to The Wall Street Journal, “For years it has seemed no sticker price was too high for American car buyers… Even as average new-car prices approached $50,000 this year.”
Dealerships and analysts report a slowdown in showroom traffic, growing price negotiations, and a rise in consumers choosing smaller vehicles, used cars, or simply delaying purchases altogether. One dealer, Robert Peltier of East Texas, said plainly, “People are asking, ‘How can I afford this?’”
The backdrop to this shift includes tight labor markets loosening, inflation continuing to bite, and new-car inventory finally returning to more normal levels — enabling buyers to shop rather than accept whatever price is offered. The Journal reports that even as inventory constraints eased, buyers stayed willing to pay steep prices; now that the margin of tolerance appears to be eroding.
The consequences are being felt across the value chain. Dealers are increasingly offering discounts and incentives to move inventory. Meanwhile, analysts expect only “muted or no growth” in U.S. auto sales for 2025 and possibly 2026.
Significantly, this isn’t affecting all consumers equally. Luxury buyers and top-income households continue to purchase high-margin trucks and SUVs, but the base of the market is under pressure. As noted by analyst Erin Keating, “we really are relying on the top 20% of households” to sustain the market.
For automakers and dealerships, the message is clear: the era of unbridled price increases may be over. As buyers push back, margins are being squeezed, and financing burdens are increasing for many. One New Rochelle, NY dealer noted both website traffic and showroom visits were down — and that customers were increasingly unwilling to “pull the trigger.”
In sum, the U.S. auto market may be entering a new phase: one driven by affordability and value rather than sheer willingness to pay. The era of “any price will do” appears to be ending — and the industry is adjusting accordingly.
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