We all take different approaches to buying a new car. Some of us hand-wring over things like tariffs, tax credits, geopolitics and environmental impacts and wonder if a better purchase deal waits down the road. When it’s determined that now’s the time to buy, your descent through the sales funnel can be painless, or truly awful.
Determining how much money one has to procure the shiny box is perhaps the most important step. Yes, the average transaction price for a new car in America has hovered around $50,000 for three years, affordable options are dwindling, and lower-income shoppers are giving up on the dream of buying a new car and likely exploring their preowned options.
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Not Getting Any Cheaper
We know this based on the fourth-quarter automotive data deep dive delivered this week by Cox Automotive, an Atlanta company whose holdings include Autotrader, Manheim, Kelley Blue Book and Dealer.com. Cox has a team of astute analysts who track closely the automakers, the dealers, the banks and the consumers who make it all go.
Cox has the data to confirm what we probably already know — that cars aren’t getting any cheaper.
36.3 Weeks Of Income To Buy New Car
Cox maintains a “vehicle affordability index,” which revealed that in 2012, it took 35.7 weeks of an average household’s income to buy a new car in the U.S. That dipped over the next several years, so it only took 32 weeks of household income in late 2019.
But then came COVID, and in December 2022 it cost the average household 42.2 weeks of income to buy new.
The silver lining here is that this number has been steadily falling since then, settling for now at 36.3 weeks of average household income.
Pickup Truck ATPs At $66K
And if you’re wondering how higher prices have impacted consumer preferences, check out the Cox chart showing the five main vehicle segments being roughly equal (14 percent) in 2015. Today, compact and midsize cars account for 7 percent and 5 percent, respectively, of U.S. new car purchases.
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Meanwhile, demand for compact and midsize crossovers has climbed to 18 percent and 16 percent, respectively, and each of those bring considerably higher average transaction prices as of 2025: $36,329 for compact crossovers and $49,272 for midsize crossovers. Over the past decade, full-size pickup truck demand has remained stable, but that ATP is an eye-opening $66,192, according to Cox.
The bottom line is, according to the Cox analysts, even the affordable vehicles that are on the market at the low end are not luring in enough shoppers, perhaps signaling that many American households struggling to make ends meet are leaving the new car market entirely.
But That Taycan Might Be In Reach
And in case you’re curious to see how sales were impacted by tariffs (announced in spring) and the loss of federal tax credits for EVs (on Sept. 30), check out the chart above. That’s a big sales hit in the fourth quarter.
Cox research also confirms that by 2027 there will be a flood of used EVs hitting the market, which means that Porsche Taycan you dream about might be in reach. This glut of used EVs should also put downward pressure on new EV prices, Cox reports.
Source: Cox Automotive