There’s not just a downtick in new car ownership lately. Trends suggest that buying a new car is increasingly a baller move, rather than something normal Americans can do.
Projections from Ford, GM, Toyota, as well as other automakers all agree on one thing: Americans aren’t about to start buying more new cars anytime soon, according to a report in the Wall Street Journal.
The Journal breaks it down like this: annual new cars sales in the U.S. were at 17 million the year before the pandemic in 2020. Forecasts from analysts cited by the Journal say this year’s potential sales will max out at 16 million, and the pre-pandemic sales figure won’t return until 2030 at the earliest.
Despite total U.S. population growth of almost ten million people since 2020, the number of new car buyers has shrunk by more than a million.
This is not a total accident, the Journal notes. The big automakers don’t really miss the bygone days of selling cars for under $20,000, because they now rake in their profits by selling drastically more opulent vehicles like luxury pickups (Have you ever seen the interior of a Ram Tungsten 1500?). An analyst from Edmunds, Ivan Drury, tells the Journal, “It’s not like back in the day when they’d be hacking away at the price to lift sales.”
Yet it’s informative to look at how Detroit is thinking about this issue. In February, it emerged that the U.S. automakers are increasingly attracted to the idea of bringing back the category “passenger cars,” also known as “sedans” which, you might be surprised to learn, has died. There are literally no new American-made sedans anymore. “It’s not that there isn’t a market there. It’s just we couldn’t find a way to compete and be profitable,” Ford CEO Jim Farley said at the time.
A survey back in 2023 suggested that Americans were already keeping cars longer. At the time, the average new car price was hovering at around the $50,000 mark—though it has essentially plateaued ever since. But amid the fastest increase in inflation in three years, it should come as no surprise that the goal of new car ownership would nonetheless become more distant for consumers.
And elsewhere in the economy, there are related economic indicators coinciding with the trend away from new car-buying as a normal part of American life. The University of Michigan’s Consumer Sentiment Index, which measure’s how people feel about their finances, is the lowest it’s ever been. These are the latest developments in a broader consumer environment where, as was noted last year, the spending that drives the economy comes increasingly from the rich.
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