Wealthy buyers expose distressing auto industry trend

Car buyers, faced with the prospect of higher prices due to increased tariffs, flocked to dealership lots during the first half of the year to secure a purchase before the higher prices took effect.

Car sellers, looking to capitalize on the increased demand, offered more incentives to buyers to keep them coming to dealership lots.

U.S. 2025 new-vehicle sales forecast

• GM: 2.83 million vehicles (+5.1% year over year); 17.3% market share
• Toyota: 2.52 million vehicles (+8.4% YoY); 15.5% market share
• Ford: 2.18 million vehicles (+5.6% YoY); 13.4% market share
• Hyundai: 1.84 million vehicles (+7.9% YoY); 11.3% market share
• Honda: 1.42 million vehicles (+0.6% YoY); 8.8% market share
  Source: Cox Automotive

“Automakers are providing healthy incentives to keep sales flowing. Prices are trending higher, but just as we are seeing in the broader retail markets, there’s sufficient demand and generous incentives out there, and that’s driving the market,” said Cox Automotive Executive Analyst Erin Keating earlier this year. 

However, as incentive spending dwindled and car prices increased, consumer interest in the auto industry cooled off in the second half of the year.

New car sales showed weakness in the third quarter and continued to decline in the fourth, according to Cox Automotive sales data.

The firm expects the December seasonally adjusted annual rate of sales to finish near 15.9 million, down from last year’s 16.8 million December pace but up from November’s 15.6 million pace.

New car prices inch higher toward the end of the year

New car prices tend to get higher the closer you get to the end of the year, and in November, Americans on average paid $49,814 for their new vehicles.

That is 1.3% higher than a year ago, but just $54 higher than October's average, according to Kelley Blue Book. However, the firm notes that average prices could cross $50,000 before the end of the year.

Related: Ford, General Motors get disturbing news on car sales

October sales by EV brand

• Tesla: 40,650
• Chevy: 5,910
• Ford: 4,912
• Cadillac: 4,344
• Hyundai: 2,429
  Source: Cox Automotive

Fewer dealer incentives played a part in the price increase as dealers discounted the average car by 6.7% in November, down from 7.9% at the same time last year.

Throughout 2025, the average incentive worked out to 7% of the final sales price, according to KBB.

But Cox Automotive Analyst Erin Keating notes that the average price reflects what consumers are buying, not what's available, so this data really is more about what is happening to the American car buyer.

“Many new-car buyers today are in their peak earning years and are less price-sensitive, opting for vehicles at the higher end of the market to get the features and experiences they value most,” Keating said.

But new data suggests that something more is happening underneath the surface.

Luxury-priced cars outsell cheaper models in the U.S.

As car prices have become more expensive, it appears that middle-class buyers aren't flocking to dealerships as they did earlier in the year.

Last month, cars priced over $75,000 outsold ones priced under $30,000, according to Cox Automotive, citing KBB.

Related: US car buyers reverse major trend in second half of 2025

New vehicles with an MSRP below $30,000 accounted for just 7.5% of total sales in November, down from 10.3% a year ago, "as lower-priced vehicles continue to struggle in the U.S. market."

The best-selling under-$30,000 vehicles were mainstays such as the Toyota Corolla, Hyundai Elantra, and Chevy Trax.

Meanwhile, 10.8% of vehicles sold last month had MSRPs over $75,000.

Part of this trend is tied to Americans' affinity for full-size pickup trucks. In November, the average MSRP for a full-size pickup was above $70,000 for the third straight month.

Dealers sold nearly 183,000 full-sized pickup trucks in November, accounting for 14.2% of all sales.

General Motors holds on to 2025 U.S. sales crown

The U.S. car industry is limping to the finish line as car buyers have failed to keep up the torrid purchase pace from earlier this year.

General Motors is forecast to end the fourth quarter with over 685,000 vehicles sold, an 8.7% year-over-year decline, giving it the 2025 sales crown with more than 2.8 million vehicles sold this year.

GM sold 5.1% more vehicles than it did a year ago, reaching 2.7 million, as its market share rose 0.5% to 17.3%.

Toyota came in second for the second year in a row, selling 2.5 million vehicles. The 8.4% year-over-year increase was accompanied by a 1% rise in market share to 15.5%.

Related: U.S. car maker wins 2025 sales race with 2.8 million vehicles sold