DALLAS — The average price of new vehicles reached $50,326 in December, according to an analysis cited in recent data, as industry figures show rising costs and shifting buying patterns across income groups.
Analysts attributed auto sales trends to a widening economic divide, often described as a K-shaped economy, in which higher-income households increase spending while lower-income households reduce purchases.
Kelley Blue Book reported that households earning more than $150,000 accounted for 43% of new vehicle purchases last year, up from 33% in 2019. Meanwhile, households earning less than $75,000 made up about 25% of new vehicle buyers, down from roughly 33% before.
Recent data also showed Americans set records for both the average amount financed for a vehicle, at $43,759, and the share of buyers taking on high monthly payments. About 20.3% of new car buyers agreed to monthly payments of $1,000 or more, while 6.3% of used car buyers financed payments at that level.
In Texas, 12.8% of new car loans resulted in monthly payments of at least $1,000, the highest share among states in the latest analysis. Bankrate reported in December that Texas also had the largest percentage of borrowers behind on car payments at 7.92%, or roughly one in 12 loans.
Loan terms have lengthened as buyers seek to manage higher costs. The most recent data showed that more than one in five new car loans extended to seven years, while used car loans averaged nearly six years. Longer terms can lower monthly payments but increase total interest paid over time.
The average age of vehicles on U.S. roads reached a record 12.8 years, indicating that many drivers are keeping their cars longer instead of purchasing new ones.
Insurance data also showed that companies declared 22.8% of damaged vehicles a total loss, another record. Dallas-based Copart said during a recent earnings call that a growing share of totaled vehicles can be repaired and returned to the road. The company sells vehicles on behalf of insurers and reported record average selling prices.
Drivers whose vehicles are totaled typically receive the actual cash value, which may not cover the cost of a replacement vehicle amid higher prices and financing rates. Texas recently enacted a law intended to speed up disputes between insurers and vehicle owners by allowing a neutral third party to decide when appraisals differ.
