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For generations, buying a new car was one of America\u2019s most familiar middle-class milestones.<\/p>\n
You worked hard, saved up, traded in the old vehicle and drove off the lot with something newer, safer and more reliable.<\/p>\n
Top Picks <\/p>\n
But for a growing number of Americans, that milestone is now slipping out of reach.<\/p>\n
A new Wall Street Journal report (1) highlights a striking shift in the U.S. auto market: Compared with the years before the pandemic, roughly one million would-be new-car shoppers are no longer showing up \u2014 and they aren\u2019t expected to return anytime soon.<\/p>\n
Before 2020, Americans were buying about 17 million new cars and trucks a year. Today, analysts cited by the Journal expect sales to stay closer to 16 million vehicles or less this year \u2014 and they do not see a return to the old pace until much later in the decade, if not beyond.<\/p>\n
The reason is painfully simple: The math no longer works for many households.<\/p>\n
New-vehicle prices have climbed to around $50,000 on average. Interest rates remain high. Gas prices are making a comeback. Insurance and repair costs are biting into budgets. And after years of stubborn inflation, many Americans are realizing that a new car \u2014 once a basic middle-class purchase \u2014 now feels more like a luxury.<\/p>\n
Volvo\u2019s chief commercial officer Erik Severinson called it \u201ca real threat\u201d to the auto industry, but the more chilling warning may be what it says about the broader economy.<\/p>\n
\u201cThis is a proof point of something more fundamental which is wrong in the general economy,\u201d Severinson said, \u201cthat people are not able to buy new cars.\u201d<\/p>\n
The $50,000 problem <\/p>\n
The affordability crisis is not hitting every buyer equally.<\/p>\n
According to Edmunds data cited by the Journal, about one-quarter of vehicle models in the U.S. are priced between $25,000 and $35,000. But a larger share now costs more than $55,000.<\/p>\n
The blunt reality is, automakers have little incentive to flood the market with cheaper cars. As the Journal put it, \u201cSelling big trucks and SUVs that dominate those automakers\u2019 lineups is more lucrative than selling larger volumes of cheaper cars.\u201d<\/p>\n
In other words, by selling higher-margin vehicles, automakers learned they could still generate strong profits without returning to the old model of chasing volume through discounts.<\/p>\n
That may be good news for corporate margins. It is not great news for households trying to replace an aging vehicle.<\/p>\n
The Journal highlighted Sal Arevalo, a federal government employee outside Los Angeles who wanted to replace his gas-thirsty Ford Explorer. After years away from the car market, he was shocked by what he found.<\/p>\n
\u201cI\u2019m looking at these numbers and could not even contemplate signing on the bottom line,\u201d he said.<\/p>\n
Arevalo visited multiple dealerships and considered sedans, hybrids, EVs and other options. But after running the numbers, none of the choices felt realistic.<\/p>\n
\u201cThe cold reality set in,\u201d he said. \u201cI may have to do what everybody else is doing and just hold on to my vehicle as long as I can.\u201d<\/p>\n
That trend is already visible on U.S. roads. The average vehicle in America is now about 13 years old, a historic high, according to S&P Global data cited by the Journal.<\/p>\n
Read More: Here\u2019s the average income of Americans by age in 2026. Are you falling behind?<\/a><\/strong><\/p>\n Protect your wealth from inflation\u2019s bite <\/p>\n A new car is not the only thing that has become harder to afford.<\/p>\n Housing affordability remains a pressing issue in America. Food prices are still climbing. Meanwhile, gas prices are rising again.<\/p>\n That is why the disappearance of one million new-car buyers matters.<\/p>\n It is not just an auto story. It is a warning about how inflation can quietly erode the value of your money over time.<\/p>\n According to the Federal Reserve Bank of Minneapolis (2), $100 in 2026 had the same purchasing power as just $11.74 did in 1970.<\/p>\n That\u2019s why many Americans are looking beyond cash and traditional savings when thinking about how to protect their purchasing power.<\/p>\n One time-tested option is gold. Its appeal is simple: Unlike fiat currencies, the yellow metal can\u2019t be printed at will by central banks.<\/p>\n Gold is also considered the ultimate safe haven. It\u2019s not tied to any one country, currency or economy and in times of economic turmoil or geopolitical uncertainty, investors often flock to it \u2014 driving prices higher.<\/p>\n Ray Dalio, founder of the world\u2019s largest hedge fund, Bridgewater Associates, told<\/a> CNBC last year that \u201cPeople don\u2019t have, typically, an adequate amount of gold in their portfolio,\u201d adding, \u201cWhen bad times come, gold is a very effective diversifier.\u201d<\/p>\n Despite a recent pullback, gold prices have surged by more than 30% over the last 12 months.<\/p>\n One way to invest in gold that can also provide significant tax advantages is to open a gold IRA with the help of Goldco<\/a>.<\/p>\n Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, thereby combining the tax advantages of an IRA with the protective benefits of investing in gold<\/a>, making it a compelling potential option for those wanting to ensure their retirement funds are diversified during rough economic times.<\/p>\n Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver<\/a>.<\/p>\n If you\u2019re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today<\/a>.<\/p>\n Earn income from real estate <\/p>\n Gold isn\u2019t the only asset investors turn to during inflationary times. Real estate has also proven to be a powerful hedge.<\/p>\n When inflation rises, property values often increase as well, reflecting the higher costs of materials, labor and land. At the same time, rental income tends to go up, providing landlords with a revenue stream that adjusts for inflation.<\/p>\n Over the past ten years, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index has jumped by 88% (3), reflecting strong demand and limited housing supply.<\/p>\n Of course, high home prices can make buying a home more challenging, especially with mortgage rates still elevated. And being a landlord isn\u2019t exactly hands-off work \u2014 managing tenants, maintenance and repairs can quickly eat into your time (and returns).<\/p>\n The good news? You don\u2019t need to buy a property outright \u2014 or deal with leaky faucets \u2014 to invest in real estate today. Mogul<\/a> is a crowdfunding platform that offers an easier way to get exposure to this income-generating asset class.<\/p>\n As a real estate investment option offering fractional ownership in blue-chip rental properties<\/a>, it gives investors monthly rental income, real-time appreciation and tax benefits \u2014 without the need for a hefty down payment or 3 a.m. tenant calls.<\/p>\n Founded by former Goldman Sachs real estate investors, the team hand-picks the top 1% of single-family rental homes nationwide<\/a> for you. In other words, you gain access to institutional-quality offerings for a fraction of the usual cost.<\/p>\n Each property undergoes a rigorous vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Offerings often sell out in under three hours<\/a>, with investments typically ranging between $15,000 and $40,000 per property.<\/p>\n Sign up for an account and browse available properties here<\/a> to start investing today.<\/p>\n Another option is Lightstone DIRECT<\/a>, which gives accredited investors access to single-asset multifamily and industrial deals.<\/p>\n Lightstone DIRECT\u2019s direct-to-investor model<\/a> ensures a high degree of alignment between individual investors and a vertically-integrated, institutional owner-operator \u2014 a sophisticated and streamlined option for individual investors looking to diversify into private-market real estate.<\/p>\n With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets<\/a> Lightstone pursues with its own capital, with minimum investments starting at $100,000.<\/p>\n Stop overpaying to stay on the road <\/p>\n At the end of the day, the rising sticker price of a new car isn\u2019t the only expense squeezing America\u2019s drivers. There\u2019s another cost that keeps coming due long after the car is paid off: insurance.<\/p>\n In the U.S., the average cost of car insurance has surged 56% since 2020, according to the Bureau of Labor Statistics (4).<\/p>\n Car insurance is a major recurring expense and many people overpay without realizing it. According to Forbes, the average cost of full-coverage car insurance is $2,149 per year (or $179 per month).<\/p>\n However, rates can vary widely depending on your state, driving history and vehicle type and you could be paying more than necessary.<\/p>\n By using a comparison platform like Insurify, you can instantly view quotes from top-rated providers<\/a> to ensure you aren\u2019t paying a hidden \u2018loyalty tax\u2019 to your current insurer.<\/p>\n Just answer a few basic questions<\/a> and Insurify will show you the most affordable deals in as little as 3 minutes \u2014 with average potential savings of $1,100.<\/p>\n Not only is the process 100% free, but you could also save up to 15% by bundling your car and home insurance.<\/p>\n You May Also Like <\/p>\n Join 250,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/a><\/strong><\/p>\n Article Sources <\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines<\/a>.<\/p>\n The Wall Street Journal (1<\/a>); Federal Reserve Bank of Minneapolis (2<\/a>); S&P Global (3<\/a>); U.S. Bureau of Labor Statistics (4<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. 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