A worried Wall Street investor looking at a car key on a stack of unpaid bills, photorealistic, dramatic lighting.
A worried Wall Street investor looking at a car key on a stack of unpaid bills, photorealistic, dramatic lighting.

Americans Can't Afford Their Cars Anymore and Wall Street Is Worried

Recent reports indicate that a significant number of Americans are struggling to afford new vehicles, raising concerns among Wall Street analysts about the broader economic implications. A study by American Trucks found that 39% of U.S. car owners cannot afford a new car, leading many to keep their existing vehicles longer. Additionally, a GfK AutoMobility report revealed that approximately 60% of prospective car buyers are worried about their ability to afford a new vehicle.

The Price Squeeze

The rising costs of new and used cars, coupled with higher interest rates on auto loans, have exacerbated this issue. Between 2020 and 2023, new car prices increased by 30%, and used car prices rose by 38%. By 2023, the average price of a new car reached $50,364, while used cars averaged $31,030. These price hikes, along with elevated borrowing costs, have led to higher monthly payments, making vehicle ownership increasingly challenging for many consumers.

Financial Strain on Lower-Income Households

The financial strain is particularly evident among lower-income households. Delinquency rates for auto loans have reached historic highs, with 9.3% of outstanding auto loans slipping into delinquency as of August 2025. The recent bankruptcy of subprime auto lender Tricolor Holdings underscores the growing financial stress in this segment.

Wall Street Concerns

Economist Peter Schiff highlighted these concerns, noting that Americans are financially strained due to rising living costs and high interest rates on auto loans. He pointed to Ford's disappointing second-quarter earnings as evidence that consumers are unable to afford new cars.

These developments have raised alarms on Wall Street, as the auto industry's performance is often seen as a barometer of consumer health and economic stability. The combination of high vehicle prices, increased borrowing costs, and rising loan delinquencies suggests potential challenges ahead for both consumers and the broader economy.

Key Indicators of Economic Stress

The situation represents a significant shift in consumer purchasing power and raises questions about the sustainability of current auto financing practices, particularly as interest rates remain elevated and economic uncertainty persists.

The prompt for this was: Americans can’t afford their cars any more and Wall Street is worried

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