Auto sales set to slip in face of rising prices

High prices threaten to send auto sales into decline this year as middle-class consumers shy away from new-vehicle purchases, with stickers near record levels.

- BY DAVID WELCH, KEITH NAUGHTON AND GABRIELLE COPPOLA

FEWER middle-class consumers are buying new vehicles, citing higher prices.

(STEPHANIE SCARBROUGH Associated Press)

Although sales are expected to surpass 16 million vehicles for 2025, the annualized rate probably slowed in the final three months to about 15.6 million, down more than 5% from the third quarter, according to industry researcher Cox Automotive. That's a "large decline" that suggests "a lack of momentum heading into the new year," Charlie Chesbrough, senior economist at Cox, said on a December call with reporters.

The main culprit is nervousness among consumers making less than $150,000 a year who've pulled back because prices have simply gotten too high, underscoring broad consumer angst around the cost of living that persisted throughout 2025. Cox expects the trend to continue this year, forecasting auto sales of 15.8 million vehicles, which would mark the auto industry's first annual drop since 2022.

The outlook reflects how growing economic inequality is changing the auto industry. New-car sales have soared 45% among households with annual incomes of $150,000 or more since 2019, according to Cox. Yet they've plunged 30% in the same period for those earning $75,000 or less, while sales dropped 7% among families with incomes between $75,000 and $150,000.