This isn’t the first time you’re hearing this, but a new car is pricier than ever, with average sales closing at more than $50,000, and that’s had a domino effect on every aspect of the buying process and car ownership. One in five buyers are taking out an 84-month loan on a new car, and the average loan rate currently sits at 6.9%, roughly two and a half points higher than in 2022 (but lower than the 8.4% we were paying in 2024).
These costs have taken a big bite out of the market, and had an effect on which segments are growing, and which are cooling. According to the Wall Street Journal, the outrageous cost of buying a new car has pushed a million potential buyers off the market, and into the arms of used car sellers (and no doubt a few bicycle shops and ridesharing companies, too). Here’s how this is affecting the makeup of our streets and highways.
We’re Spending Too Much Money On Our Cars These Days
2026 Ford F-150 STX 3/4 frontFord Motor Company
A Market Watch survey from 2024 found that the average American was spending around 20% of their annual income on their car. That includes insurance and gas, not just the cost of purchase, but even so, that’s pretty high. One respondent in 10 admitted to spending 30% of their income or more on their cars.
Earlier this year, Cox Automotive reported that only 37% of new car buyers in 2025 earned an annual income below $100,000, suggesting that not that many of us can afford a new car. The US Bureau of Labor Statistics has the average full-time salary at around $64,220, meaning that you could put every dollar you earn into your car, and still not be able to afford a fully loaded Toyota Tacoma with a year’s income.
While car prices are on the way up, the US Census Bureau reports stagnating income. In 2024, the median household income was $83,730. In 2023, that number was at $82,690, pointing to a trajectory which the Bureau calls “not significantly different”.
According to a report from WalletHub, auto loan delinquency is especially bad in North Dakota, which saw a growth in delinquency of 10.8% from Q3 to Q4 alone in 2025.
Affordable Cars Are The Big Winners When Times Get Tough
2026 Toyota Camry XSE. Motion. On-road. FrontToyota
A basic understanding of economics will tell you that, when money’s tight and inflation is out of control, the company offering a fair deal is the one that’s going to reap the benefits. To get an idea of how this plays out in the automotive market, we can take a look at the top-selling vehicles of 2025, and compare their year-end sales numbers to those of 2024.
2025 Rank
Model
Segment
2024 Sales
2025 Sales
YoY % Change
1
Ford F-Series
Full-Size Pickup
765,649
801,525
+4.7%
2
Chevrolet Silverado
Full-Size Pickup
549,945
469,093
-14.7%
3
Toyota RAV4
Compact SUV
475,193
479,288
+0.9%
4
Honda CR-V
Compact SUV
402,791
403,769
+0.2%
5
Ram Pickup
Full-Size Pickup
373,120
374,059
+0.2%
6
GMC Sierra
Full-Size Pickup
342,734
348,222
+1.6%
7
Tesla Model Y
Mid-Size Electric SUV
405,900
317,800
-24.3%
8
Toyota Camry
Mid-Size Car
309,876
316,185
+2%
9
Toyota Tacoma
Mid-Size Pickup
192,813
274,638
+42.4%
10
Chevrolet Equinox
Compact SUV
236,604
274,356
+16%
11
Toyota Corolla
Compact Car
232,907
248,088
+6.5%
12
Honda Civic
Compact Car
242,005
238,661
-1.4%
13
Hyundai Tucson
Compact SUV
206,126
234,230
+13.6%
14
Ford Explorer
Mid-Size SUV
194,094
222,706
+14.7%
15
Nissan Rogue
Compact SUV
245,724
217,896
-11.3%
Averaging these numbers out by segment, here’s what we’re seeing in the top 15.
Rank
Segment
Average % Difference
1
Mid-Size Pickup
+42.4%
2
Compact SUV
+25.9%
3
Compact Car
+5.1%
4
Mid-Size Car
+2%
5
Full-Size Pickup
-8.2%
6
Mid-Size Electric SUV
-24.3%
Inside the top 15, the Toyota Tacoma single-handedly carries the mid-size pickup segment to a lead of 42.4%. At the other end, the Tesla Model Y carries the mid-size electric SUV segment to a 24.3% drop in sales. The real story is found in the middle, where mid-size cars see a modest bump of 2%, compact cars see a more substantial 5.1% improvement, and compact SUVs are up 25.9% in the top 15.
Meanwhile, the Ford F-Series had a good year, as usual, but the rest of the full-size segment sees a general downturn, owing mostly to the Chevy Silverado taking a 14.7-point nosedive in its final sales year before the introduction of the fifth-gen relaunch for 2027.
This Was The Easiest Market Forecast Ever
2026 Toyota Camry XSE rear 3/4Toyota
By and large, these numbers would be easy for anyone with basic financial literacy to understand: Small, affordable vehicles are flying off the lots, and big, pricy cars are taking longer to sell.
The Toyota Tacoma’s record-breaking sales year can be attributed in part to drivers leaning away from larger pickups, no doubt, but also to production for the fourth-gen model finally stabilizing. Drivers who were looking at shortages in 2024 were finally able to grab their new Tacos in 2025.
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The Slate Truck’s price may have been hiding in plain sight, but the company still has a lot of convincing to do to get buyers on-board.
Remember, we’re only crunching the numbers for 2025’s top-15 sellers here, so this is an admittedly narrow view of the overall industry, but it gives us a concentrated look of what people are buying at the top of the market.
Is Leasing The Way To Go?
2026 BMW X5 front 3/4BMW
Deciding to simply lease your next car can feel a bit like throwing in the towel. The truth is that, with new car sales down, dealers have a bit more flexibility in how low they’re willing to negotiate. But few dealers actually advertise this sort of thing outside of the occasional sales event.
Related
Americans Are Buying More Car Than They Can Afford
It’s a firestorm of economic factors that has many borrowers falling way behind on their payments.
You still have plenty of options, from buying used cars to keeping an eye on the market for slow-moving models. Our friends at Xtreme Terrain have actually noticed an uptick in car modding for improved performance, that is, owners tuning their vehicles for more horsepower rather than worrying about the price of a new vehicle.
Leasing Is Great For Short-Term Drivers
2026 BMW X5 front 3/4BMW
In light of skyrocketing MSRPs, Consumer Reports notes that leasing a car means you get to drive it during the most trouble-free years, and your lease might even include things like free oil changes and basic maintenance. You can also drive outside of your tax bracket, and see how the other half lives, and you never have to worry about depreciation or trade-in value.
On the other hand…
Leasing Almost Always Costs You More In The Long-Run
2025 Toyota TacomaToyota
Ultimately, a leaser never owns their car, and the monthly payments never stop. As soon as your current lease is up, it’s on to another one. Lease contracts also specify a limited number of miles, meaning that you need to keep a constant watch on the odometer, and you can be penalized for any wear-and-tear, sort of like when your landlord is inventing make-believe damages so they can keep your deposit.
Ultimately, the smartest move in 2026 may be to buy cheap, but buy smart. That is, look for something reliable that won’t break the bank, whether it’s new or used, and don’t spend outside your means.
Thankfully, we have a thing for reliable used cars here at CarBuzz. Models like the Toyota Camry and the Toyota Corolla can be had at a fair price, and won’t cost you an arm and a leg in maintenance, fuel, and insurance costs. Whether you’re happy with a compact or you’re after something a little bigger, just make sure to do your research before you buy. A few minutes of reading can save you thousands in long-term maintenance costs.
Sources: NewsWeek, NewsWeek, USA Today, US Bureau of Labor Statistics, WalletHub, Xtreme Terrain, Consumer Reports.
