Why it's becoming so expensive to buy a car in America

[hatrack]

7. I think this is attritutable to the "Because We Can" theory of auto pricing.

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https://wapo.st/46WFUil

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Automakers have managed to pay less attention to the entry-level market because luxury vehicles, with higher profit margins, continue to sell. The U.S. economy has seen a widening divide between the fortunes of its top earners and everyone else, creating the so-called K-shaped economy. And cars are no exception.

At the end of last year, vehicles priced over $70,000 were staying about the same amount of time on dealer lots as cars under $70,000. And buyers with household incomes above $150,000 accounted for 29 percent of all car purchases, up from 18 percent in 2020. “Wealthier customers are driving this,” Manzi said. New car buyers are also getting older, another sign of rising costs.

Nearly half of all new car registrations last year came from people 55 and older, according to S&P Global data. A buyer’s average age was 51, according to J.D. Power. It was 50 before the pandemic. Twenty-five years ago, the average buyer was a little over 43 years old.

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U.S. automakers also need to tackle affordability if they hope to keep out ultra-low-cost Chinese car manufacturers, said Keating, of Cox Automotive. Auto analysts didn’t think the United States would welcome these foreign carmakers anytime soon. But Canada recently relaxed its tariff rules for Chinese electric vehicles. U.S. automakers are slowly starting to pay attention to pricing. Chevrolet has been touting its Trax crossover, which starts at $21,700. Car and Driver recently named the 2026 Trax its Best Crossover SUV. “It shows that it can be done,” Jominy said.

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https://www.washingtonpost.com/business/2026/02/17/new-cars-high-prices/