According to reporting by The Wall Street Journal, one million prospective buyers have exited the new-car market since 2020, and industry experts say it could be 2030 or later before sales return to pre-decline levels. General Motors, Ford, and Toyota are all planning for sales to stagnate or shrink this year. Volvo Chief Commercial Officer Erik Severinson called the situation “a real threat to the whole industry.” The industry is treating this as a demand problem — a question of when consumer confidence returns and rates fall enough to bring buyers back. The structural argument is that the industry helped build the conditions that pushed them out.
The percentage of new-car buyers earning less than $100,000 dropped from 50 percent in 2020 to just 37 percent by 2026. Over that same period, the share of buyers earning more than $200,000 increased from 18 percent to 29 percent. Economists call this a K-shaped recovery — one in which economic trends split in two directions, with those at the top continuing to grow while those below face stagnation or decline. The new-car market is not losing buyers uniformly. It is losing the buyers who could least afford to stay, and being sustained by the buyers who were always going to be fine.
What the industry narrative leaves out is that the major American automakers made a deliberate choice over the past decade that accelerated this outcome. Ford made headlines in 2018 when it announced plans to discontinue nearly all of its North American sedan models, keeping only the Mustang and redirecting resources toward SUVs and trucks. GM and Lincoln followed with SUV-only strategies, eliminating the Malibu, Regal, LaCrosse, and multiple other sedan nameplates. The rationale was explicit: SUVs and trucks command significantly higher profit margins than sedans, and a single sale of an F-150 or Tahoe generates far more revenue than multiple sedan sales combined. By 2025, trucks and SUVs together represented 98 percent of GM‘s U.S. sales volume — a near-complete exit from the passenger car market that the company described as “a deliberate strategic repositioning” whose effect on profitability “has been accretive.”
Accretive to GM. Not to the buyer who needed a $22,000 sedan and found that the American manufacturers had stopped making one. The disappearance of affordable entry-level models left fewer options for buyers on tighter budgets, and the price floor that once made new-car ownership accessible to working-class households was structurally removed — not by market forces, but by boardroom decisions made to satisfy Wall Street margin expectations. The industry is now surprised that the buyers it stopped serving are not coming back.
The trade-down that followed is the second part of the story the industry would prefer not to tell. When buyers priced out of new cars turned to the used market, they found a market that had absorbed years of compressed new-car supply, pandemic-era shortages, and surging demand — and repriced accordingly. The average price of a used car up to eight years old was $30,202 in 2025, up 27.6 percent from $23,668 in 2020. The affordable under-$20,000 vehicles are increasingly difficult to find. For buyers with credit scores between 501 and 600, the average interest rate on a used car loan was 19 percent in the third quarter of 2025 — compared to 7.43 percent for borrowers with scores above 780. The exit from new cars did not lead somewhere affordable. It led somewhere differently expensive, with worse terms, faster depreciation, and no warranty.
Since 2020, the average price of a new car has jumped 30 percent while average repair and maintenance costs have risen 47 percent — faster than inflation. Nearly 28 percent of all trade-ins completed between July and September 2025 had negative equity, the highest ratio in four years. The households financing used vehicles at 19 percent interest over 69-month loan terms are not making a consumer choice. They are managing a debt structure that compounds over time, on an asset that loses value, in a country where — for most people — not having a car is not a viable option.
That last point is the one that the industry sales report and the Wall Street Journal analysis both treat as background. In most American cities, a car is not a preference. It is infrastructure. As SSC documented this week in The Price of Everything, the Relief of Nothing, the compression hitting American households is not arriving in isolation — grocery costs, fuel, and now transportation are moving in the same direction simultaneously, with no corresponding relief in wages. In car-dependent metros, more than 60 percent of residents commute to work alone by car. The share of new-car buyers committing to monthly payments above $1,000 has risen to 20 percent — and the average monthly payment for a new vehicle has climbed to $748. For a household already navigating elevated grocery costs, healthcare bills, and stagnant wages — the full picture of which SSC examined in The Price of Being Sick in America Is Not Accidental — that number is not a line item. It is a decision about what else does not get paid.
The million buyers the Journal says are gone were not lost to shifting consumer preferences or a sudden fondness for public transit. They were priced out by a market that chose margin over access, that eliminated the products they could afford, and that has spent the years since expressing surprise at the consequences. The industry’s forecast is that they might return by 2030, if rates fall and confidence recovers. The more honest forecast is that the conditions required to bring them back — stable wages, affordable entry-level vehicles, accessible credit — are moving in the wrong direction across every category simultaneously.
Social Storytellers Collective covers race, identity, access, and structural inequality. Read more at socialstorytellerscollective.substack.com