Why Are Fewer People Buying Cars in the United States?
Introduction The U.S. auto market, once a symbol of the American dream, is facing unprecedented headwinds. Headlines increasingly highlight a striking trend: new car sales are slowing down, and dealers are struggling to move inventory. This article delves deep into why fewer people are buying cars in the United States, examining the economic, social, and technological forces reshaping consumer behavior. Economic Pressures Tighten Car Purchases 1. High Interest Rates and Expensive Loans Rising Interest Rates: The Federal Reserve’s efforts to control inflation have pushed interest rates on auto loans to multi-decade highs. In 2025, the average new car loan rate sits between 7–9%, with some borrowers quoted double digits. Bigger Monthly Payments: The average monthly payment for new cars now exceeds $750, pricing out many buyers, especially younger consumers with tight budgets. 2. Soaring Car Prices Persistent Price Inflation: New car prices remain elevated, with av...