FOR DECADES, CAR OWNERSHIP HAS BEEN a trademark of the American lifestyle, with vehicles becoming symbols of freedom, independence and even rebellion, as well as a necessity. But in 2024, the country's legendary love story with the automobile may have stalled, as cars have become unaffordable to millions.
Kate H., 37, told Newsweek that she needs a car "to be alive." But after hers was totaled in late December, she cannot afford to buy a new one because it would cost her too much and she has not been able to secure good financing.
"Having a car that is 10 percent of my income, including gas, insurance, car payments, etc. means I probably need to budget around $400 or less per month," she said. Kate is on Social Security disability due to an immune system disorder and other health problems. She cannot use ride-sharing services too often because she needs to avoid pathogens.
Kate isn't alone in finding cars too pricey these days in the aftermath of the COVID lockdown. Both new and used car prices rose to record highs during the pandemic, as the auto industry experienced supply chain disruptions and chip shortages. Since 2020, new car prices have risen by 30 percent, according to data shared with Newsweek by AI car shopping app CoPilot. Within the same time frame, used car prices have jumped by 38 percent.
In 2023-a year during which inflation increases slowed down to the point that the Federal Reserve decided to stop hiking rates-new car prices rose by 1 percent to an average of $50,364, while used car prices fell by only 2 percent to an average of $31,030.
But as things stand, cars are still really expensive for many Americans. Just 10 percent of new car listings are currently priced below $30,000, according to CoPilot. Things are not much better in the used car market, where only 28 percent of listings are currently priced below $20,000.
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