Lower-Priced New Cars Gaining Popularity, Not Just For Cash-Poor U.S. Buyers

Michelle Chumley could have afforded a more expensive new SUV loaded with options, but when it came time to replace her Chevrolet Blazer SUV—which she bought for about $40,000 three years ago—she opted for something smaller and less costly, Tom Krisher reported for The Associated Press (AP).

The Chevrolet Trax compact SUV is among the vehicles in the $20,000-to-$30,000 range. I Photo: Parks Chevrolet Huntersville

With her purchase of a Chevrolet Trax compact SUV in June, Chumley joined a growing number of buyers making vehicles in the $20,000-to-$30,000 range the fastest-growing segment of the U.S. new auto market.

"I just don’t need that big vehicle and to be paying all of that gas money," said Chumley, a 56-year-old nurse from outside Oxford, Ohio, near Cincinnati.

Industry analysts point to an "affordability shift" driving this trend. Consumers are increasingly unwilling or unable to pay the current average price of over $47,000 for a new vehicle—a 20% increase from the pre-pandemic average.

To buy a new car at that price, an average buyer would need to spend $737 per month, financing at an average loan rate of 7.1% over nearly six years, according to Edmunds.com, an auto research and pricing site.

For many, such costs are no longer financially feasible, Christopher Rugaber also reported for AP.