Perfect storm could shrink the U.S. auto market by 2040
New-car loans hit 9.45% and monthly payments reached $757 as Bain warned U.S. sales could fall by more than 2 million units by 2040.
New-vehicle affordability tightened again in April as the average auto loan rate rose to 9.45% and the typical monthly payment reached $757. Bain & Company projects the market will lose more than 2 million annual sales by 2040, and Cox Automotive expects 15.8 million U.S. new-vehicle sales in 2026, down 2.9% from 2025.
Edmunds data show the average transaction price for a new vehicle reached $48,402 in 2025, up from $37,310 in 2019, a jump of more than $11,000. Just 0.2% of new vehicles sold for $20,000 or less, while only 4.7% came in at $25,000 or under. In Cox Automotive's 2,344-buyer survey, 62% said owning or leasing a vehicle was too costly; 70% pointed to vehicle prices, 60% to fuel, 57% to insurance, 54% to service and maintenance, and 53% to interest rates.
During the semiconductor shortage, automakers prioritized better-equipped vehicles because that is what shoppers were buying, pushing the market toward $50,000 transactions. Cox Automotive executive analyst Erin Keating said a Honda CR-V LX cost $27,761 in 2016 and $38,778 in 2026, and the newest version packs features once reserved for luxury cars. "It's a genuinely better car and in real dollars, it costs about the same."
S&P Global Mobility says the share of new registrations among 18- to 34-year-olds fell from 12% in early 2021 to under 10% by mid-2025, while buyers 55 and older held nearly half of all new registrations for eight straight quarters. The Bureau of Transportation Statistics puts the average age of U.S. light vehicles at 12.8 years, and a federal transportation study says car access is "practically a necessity" in rural America, where about 4%, or 4.3 million people, do not have a car.
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