The Wall Street Journal detects a shift in the car market: After years of shrugging off rising sticker prices, American car buyers are finally pushing back. With the average price of a new vehicle nearing $50,000, more consumers are balking, opting for smaller vehicles, buying used, or demanding deeper discounts. "People are asking, 'How can I afford this?'" Texas auto dealer Robert Peltier tells the outlet, noting that even solidly middle-class customers are feeling the pinch.
Industry forecasts have dimmed considerably. The outlook for 2025—once expected to be a boom year—and 2026 has shifted to flat or minimal growth, thanks to factors such as persistent inflation, new auto tariffs, and a cooling job market. The weakening electric vehicle market—spurred by the expiration of a $,7500 federal tax credit—hasn't helped. Auto sales slowed to their lowest rate in more than a year in October, and November's new-vehicle sales are expected to be down about 8% year over year when the new data is released in the coming days, per the Street.
"The headwinds from higher prices and fewer government subsidies for electric vehicles are finally slowing the market after a surprisingly strong previous six months," says Cox Automotive economist Charlie Chesbrough. Dealers, meanwhile, are starting to feel the strain. Cars are lingering longer on lots, and extra incentives are becoming the norm. At the same time, defaults are rising among lower-income borrowers.
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