Where Did All the Affordable Cars Go?
By Clifford Winston, The New York Times, April 12, 2026
…
The average transaction price for a new car now sits around $50,000. In December, it became just about impossible to find one for less than $20,000…
For anyone on a budget, an aging car is a trap. Auto repair costs jumped 15 percent in the last year alone, driven by the complexity of modern sensors and labor shortages. An average trip to the mechanic now costs roughly $840, an amount that around 40 percent of Americans likely could not cover with cash they have on hand. When faced with a costly repair, many are forced to choose between paying to fix their vehicle or making their loan payment. Little wonder then that repossessions — the extreme outcome of the modern automobile affordability crisis — roughly doubled in the last five years and are projected to surpass three million by the end of 2026, echoing the peak of the Great Recession…
The death of the econobox has eroded the independence that used to define American life, leaving motorists in a state of permanent financial and mechanical dependency…
While hourly compensation for the typical worker remained nearly stagnant [since the 1970s], massive stock market bull runs and rising home equity have enriched the most affluent households. Today, there are so many wealthy people who can afford luxury cars that it simply isn’t that profitable for companies to produce cars for the bottom 40 percent of Americans by income…[end quote]
This is a free-trade article that urges dropping tariffs and letting inexpensive, sometimes superior quality, Chinese and other cars into the U.S. at affordable price points. If that happens the marketplace will see the adjustment that happened in the 1980s when reliable, cheap Japanese cars began to erode the U.S. automakers’ lock on the U.S. market.
On a personal note: I gave my reliable 1998 Honda Civic hatchback to my mentee as a high school graduation present in 2017. Then I bought a Subaru Impreza which currently has about 25,000 miles on the odometer. I expect it to last longer than I do.
I think the article is using a little sleight of hand, though. Here’s how they establish the issue:
A Honda Civic Hatchback? Most start at $28,000. The Touring Hybrid costs more than $32,000. How about the Chevy Trailblazer? On most lots, its price tag approaches $25,000. The Toyota Corolla? The Hybrid trims start around $26,000. Forget the Chevy Malibu; it was discontinued last year.
Those bolded terms are doing a lot of heavy lifting to try to create the impression that these cars are more expensive than they are. The Civic has a lot of trims, so while “most” might start at $28K, the base trim is $24.7K. The non-hybrid trims of the Corolla start at $23K, not $26K. The base of the Chevy Trailblazer is at $23K as well, not $25K.
The market is flooded with big expensive cars, to be sure. But the average cost of a car that’s not in those expensive categories is more reasonable. ATP for all compact cars is “only” $27K; the smallest SUV’s have an ATP of $30K. Starting prices in those categories will be even lower - the Hyundai Elantra and the Nissan Sentra are at $22.6K for the base trim, while $26K will get you into a Mazda CX-30.
Borrowing from the measure from later in the article, all those prices are comfortably below four months’ median household income in the U.S. (roughly $28K). You also get more car for that money - not just the features and size and power of the car, but in terms of years of service. The useful life of a new car is much longer than the 1970’s, averaging closer to 14 years than the 10 years or so back then. Which not only reduces the real cost of car ownership, but also makes a low-mileage used car closer to what you got with a new car back then.
That’s not to deny that automakers haven’t changed their offerings. They certainly have. But that doesn’t mean that you can’t get any new car for a modest outlay. Nor are Chinese imports likely to be much of an answer, because the prices in the U.S. are going to be higher than those in China once the cars are adapted for domestic regulations. The BYD Dolphin starts at about €18,000 in Europe, or about $21K here - slightly more expensive than the base Kia Soul ($20.6K) in the U.S.
I read an article this morning on "How Expensive Gas Would Have To Get Before Our Readers Would Buy An EV.
I paid $64 in electricity costs charging my Tesla at home in my garage off a 110 volt plug to drive 2,500 miles over the past year. What would it cost you to drive 2,500 miles in your gasoline powered car?
For me, about $260. About 84 gallons at an average price over the last twelve months of around $3.10 (give or take). About $200 more than you paid for fuel.
But then again, my car cost about $10K less than a Model Y. If one is driving only 2,500 miles a year, there’s no way one could ever recoup the cost premium associated with a BEV vs. an ICE through fuel savings.
I paid $21,000 for my Model Y. I find that it best to find someone else to pay the first few years of depreciation on a new car.
I was also surprised on auto insurance – my most recent 6-month premium was $223 for a $1 MM liability-only policy. About the same as I was paying on my Nissan Altima, Since I can afford to replace the vehicle if it’s damaged or stolen, I don’t carry collision or comp.
That’s wonderful: cheap car and cheap power. Happy for you.
But, unless your situation is extendable to 10s of thousands or millions, I’m not sure your situation is a “macro” trend - seems more of a micro-trend, actually.
My lack of driving is a disincentive to even own a vehicle. I’m willing to pay for the luxury of having one in the garage, at the ready if I need it.
Still, it’s not costing me much. Insurance is $450/year, Registration was $388/yr (includes $225 fee for the gas tax EV’s aren’t paying) and charging for the year was $64, less than $1,000/yr. At my purchase price of $21,000, the vehicle is fully depreciated. (the cheapest Model Y on Carvana is currently $22,590.)
I was thinking about the acceleration times. I had a 69 Super Bee that I raced at the track back in the 70’s. It ran the 1/4 mile in the 13’s with speeds of just over 100 mph. I had a lot of good times with that car and paid a whopping amount in traffic violations.
EV’s give you 100% torque from zero rpm. They have incredible acceleration.
You can probably get a used Tesla Model S Plaid with a 2 sec 0-60 time for $40-45K. My understanding is that you actually get blurred vision with that kind of acceleration since the curvature of your eyeball changes with a g-forces.
Sure. But you would have been able to pay several thousands of dollars less than that for a used ICE. The BEV premium exists among used cars as well as new cars, and a used BEV generally costs several thousands of dollars more than a used ICE.
Most people agree with you and do this, BTW - the overwhelming majority (about 70%) of car purchases are used cars, not new cars.
