Prices are at record highs. More loans are going bad. It’s not an easy time to afford a new car in America.
By Todd C. FrankelIt can be a shock shopping for a new car these days.

The pandemic shortages are over. Dealer lots are stocked. Customers can find the colors and options they want.

But prices have never been higher — and the auto loans bigger and longer than ever to make it pencil out.

The average sticker price for a new car or truck now sits above $50,000 — about 30 percent more than in 2019. Even with incentives and specials, the out-the-door price reached above $50,000 for the first time in September and stood at $49,191 in January — a record for the typically sluggish sales month, according to *** Automotive.

That’s helped push the average monthly payment to buy a new vehicle to an all-time high of a little over $800, according to J.D. Power.

Some customers go further. About 1 in 5 new auto loans have monthly payments of at least $1,000, S&P Global said, projecting that share could double by year’s end.

“We are approaching a threshold that a lot people don’t want to go over,” said Patrick Manzi, chief economist at the National Automobile Dealers Association.

The auto industry is increasingly worried how much more consumers can take. Signs of stress are growing. Severely delinquent auto loan rates have soared to levels last seen during the pandemic shutdown. “Affordability” was a buzzword at the 2026 North American Dealers Association conference in Las Vegas earlier this month. And there is growing talk about the need for automakers to offer more budget-friendly vehicles, especially when little relief is to be found in the used car market, with average prices of about $25,000.

“There is no doubt that affordability is front of mind,” said Mike Manley, chief executive of AutoNation, one of the nation’s largest auto retailers, speaking to analysts on an earnings call earlier this month.

The question that the industry is asking, said Tyson Jominy, senior vice president at J.D. Power for automaker data and insights: “Is there a breaking point where you just push prices past what the average consumer can afford?”

Sales remain strong, for now. Automakers are coming off their best year since the pandemic, selling 16.2 million vehicles in the United States.

But sales are projected to slump to 16 million this year, according to NADA.

One big change is that carmakers have largely abandoned entry-level vehicles in recent years.

The last car with an asking price under $20,000 — the subcompact Nissan Versa, at $17,390 — ended production in December. Other affordable subcompacts have disappeared in the last couple of years, such as the Mitsubishi Mirage, Kia Rio, Hyundai Accent and Chevrolet Spark.

“Americans just don’t want them,” said Jessica Caldwell, head of insights at Edmunds, the car-buying research company.

They want SUVs and crossovers.

A decade ago, the American market was about evenly split between cars and light trucks. Today, the light truck category — which includes SUVs — makes up about 8 in 10 of sales. Crossover SUVs, such as the Honda CR-V, account for nearly half of vehicles sold.

Under $30,000 “is the new threshold for affordability,” said Manzi of NADA.

That reality surprises many consumers, who might buy a new car every six to eight years.

“It’s not something you shop for every day and so you come back a few years later and get real sticker shock,” said Erin Keating, executive analyst at *** Automotive.

It’s a common complaint, said Caldwell.

“That’s what we hear from so many consumers,” she said. “People don’t like it. They’re not happy with how much cars costs.”

Affordability was cited as the biggest obstacle for people who planned to buy a car in the near future, according to a survey recently released from credit reporting agency TransUnion.

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 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.

Meanwhile, the other end of the car-buying market appears to be struggling.

The average auto loan now runs for 68.8 months — more than five years.

A growing share of auto loans now go for 84 months or longer. These seven-year loans made up 11.7 percent of the market last year, nearly double the share in 2019, according to J.D. Power.

“We’ve already pushed things pretty far,” Jominy said. “How much further can they go?”

Bad auto loans are becoming more common. The share of borrowers with auto loans that were 90-days past due, known as severely delinquent, reached 8.6 percent early last year — levels last seen briefly in 2020 and then after the 2008-2009 financial meltdown, according to Federal Reserve Bank of Philadelphia data. The growth in bad loans is from borrowers with low credit scores.

“That’s that K-shaped economy. That’s kind of the reality,” Manzi said. “Wages haven’t kept up.”

Vehicle prices have surged even though carmakers have been absorbing most of the cost of President Donald Trump’s tariffs, auto analysts said. It’s unclear how much longer they can do that.

“At some point we’ll have to see tariff price increases,” Caldwell said.

U.S. automakers also need to tackle affordability if they hope to keep out ultra-low-cost Chinese car manufacturers, said Keating of *** 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.

The Ford Maverick pickup — which looks like a baby version of the Ford Ranger — starts at $28,145. And Ford announced earlier this month that it planned to offer several more vehicles under $40,000 by 2030.

Honda also is evaluating its lineup.

“With average new car prices hitting record highs across the industry, cost is a growing concern, and we want the Honda and Acura brands to continue to be recognized for delivering incredible value to our customers,” said Lance Woelfer, sales vice president for American Honda.

No one expects a return of the $20,000 car. Instead, carmakers appear to be pinning their hopes on small SUVs.

“That’s the new front door to the industry,” Tominy said.