The average new vehicle in the US sells for around $50,000, against closer to $25,000 at the beginning of 2000, and the average car on the road is now about 13 years old.
Falling unit sales usually means a struggling industry. In cars it has meant the opposite: automakers cut the cheap models, moved the whole lineup up-market, and now make more money selling fewer vehicles.
"There was a reckoning for the auto industry where they realized that they really had to reduce the number of slow-selling, unprofitable models. Their lineups were very cluttered."
Sharon Terlep covers the automotive industry for The Wall Street Journal, and has watched the companies phase out sedans and hatchbacks in favor of crossovers they can charge thousands of dollars more for.
I listened to the full episode so you can skip it. 18 minutes of audio, 11 minutes of reading.
Here are the 10 takeaways that matter.
👤 Guest: Sharon Terlep, who covers the automotive industry for The Wall Street Journal
🎙️ Host: Jessica Mendoza, a co-host of The Journal
👥 Also on: Josiah Johnson, a Southern California carpenter who drives a 1993 Toyota T100
📰 Published: 10 September 2026 on The Journal, a co-production of Spotify and The Wall Street Journal
🟢 Spotify | 🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 18 min | ✅ Time saved: 7 min
Key Takeaways
The average new car sells for around $50,000, roughly double the price at the start of 2000
The cost of owning one — financing, insurance, repairs — rose alongside the sticker price
Automakers now make more money selling fewer vehicles, because the vehicles are more profitable
A crossover is a sedan's architecture under an SUV's body, and buyers pay thousands more for it
It does not cost much more to build, which is why margins are better than on the sedan it replaced
The pandemic's price escalation never reversed, because discounts stopped when supply ran short
Terlep calls this a K-shaped car market: record-priced vehicles selling well while buyers drop out entirely
Subscriptions for heated seats and self-driving are becoming a profit center, not an experiment
GM builds four "pint-size" SUVs in Korea, where labor is cheaper, and sells hundreds of thousands in the US
Slate Auto's $25,000 electric pickup ships unpainted, with two seats, crank windows and no radio
Terlep's test is not enthusiasm but volume: a budget car has to sell in quantity or it loses money
1. A 1993 Truck Named Chachi
The episode opens on a vehicle nobody is selling any more. Josiah Johnson, a carpenter in Southern California, was interviewed by the show's producer about the truck he uses as a tool.
The truck is 33 years old and deliberately basic. "My truck's name is Chachi, and it's a very simple truck. It's a Toyota from the '90s." It has manual locks and crank windows, and an eight-foot bed for hauling wood.
The one specification that mattered to him was a model-year detail. "I do a lot of cabinet-making, and this is the first year that Toyota made a full-size truck that could fit a sheet of plywood between the wheel wells."
Asked whether he had considered a new truck, he said he could not get there. "But I could never really convince myself to consider in a serious way buying a new truck."
His arithmetic: "Yeah, I would never want to spend the better part of a year's salary on a vehicle that's only going to last me a decade and throughout that decade it's going to need a lot of maintenance. That would feel unwise."
Johnson also noted how far truck size has moved since his was built — his is small next to "some massive F-150, F-250," in his words, but still big enough for what he hauls.
2. The $50K Average New Car
Terlep's starting point is behavioral, not cyclical. "People are holding onto their cars longer and fewer people are buying new cars."
The obstacle is the whole cost of ownership, not the sticker. "There are a lot of market factors that are preventing people from buying new cars. New cars are increasingly expensive and it's not just the car, it's the insurance, the loans, the repairs. It's tougher for people to swing these payments now than it used to be."
On what has disappeared from the market: "The affordable new car, I would say it's harder to find. They're harder and harder to find and fewer and far between."
The price has doubled in 25 years. "The average car is selling for around $50,000 now. Back at the beginning of 2000, that was closer to $25,000." Terlep allowed for inflation and still called a $50,000 average "a big deal and pretty impactful."
The costs around the car compound the problem. "And part of what compounds it is that there are so many things you have to spend money on in order to own your car. You have to fix it, you have to finance it, you have to insure it, and all those costs have gotten expensive as well."
Mendoza put the fleet-age number alongside it: "Today, the average price of a new vehicle is around $50,000 and trucks tend to cost even more," with the average car on the road about 13 years old — including her own, a 2014 Subaru Forester.
3. The Post-2008 Reckoning
The range of models started shrinking after the financial crisis. Mendoza's framing was that Ford once sold both the F-150 and the Focus, an affordable sedan or hatchback; that spread narrowed after 2008.
The industry cut what did not pay. "There was a reckoning for the auto industry where they realized that they really had to reduce the number of slow-selling, unprofitable models. Their lineups were very cluttered."
Terlep said the word "automobile" still means sedan in most people's heads, but sedans stopped being the dominant type of vehicle on the market long ago.
The move up-market was not one company's strategy. "I mean, definitely the shift toward more expensive bigger cars is an industry-wide phenomenon." Honda still sells the Accord and Toyota still sells the Camry, but both have doubled down on trucks and big SUVs — Toyota now advertises 16 different models of SUVs.
4. Why Crossovers Won
Mendoza asked for the actual difference between a compact SUV and a crossover, and Terlep answered it twice — once technically, once commercially.
The technical answer is the platform underneath. "So a crossover essentially means it's an SUV, but it doesn't have the architecture of a big truck. So it's more like it has the architecture of a sedan, but the body of an SUV."
The commercial answer is the margin, and it is the reason the segment exists. "The real difference is, and this is something that the auto companies learned long ago, you can charge a lot more, significantly more for a crossover or an SUV than you can for a sedan. People will pay thousands of dollars more for that kind of vehicle and it doesn't cost that much more to produce. So the margins are much better on these vehicles generally than on a sedan, even if they aren't that different."
SUVs and pickups are now the best-selling vehicles in America, Terlep said, with the crossover sitting alongside them as its own category.
5. Trucks That Got Blown Up
Size creep is visible over a 15-year comparison. "If you take a F-150 or a Silverado from 15 years ago and today it looks like it's been kind of blown up."
It is not only the trucks. Terlep said the attention goes to pickups and SUVs, but the growth is happening "across the entire line of vehicles."
Bigger vehicles carry more features, and features carry price — the mechanism Mendoza drew out as the second contributor to higher new-car prices, after the shift in vehicle type.
6. COVID Reset the Price
The pandemic removed the discount, and the discount never came back. "There were shortages all over the place and people just couldn't get their hands on cars. And so in this time, companies, you don't have to put discounts on things that are in short supply. So discounts ended, prices went up, there was this kind of mad rush, and there was this escalation in price that once we came out of the pandemic, it never went down."
Financing did the rest, on the show's own figures. "Before the pandemic, interest rates for car loans were around 5%, which meant that even if a car was out of a buyer's price range, maybe they could swing the monthly payment. Today, the average auto loan rate is 7% for five years," Mendoza said — a difference she noted lands directly on the monthly payment.
7. A K-Shaped Car Market
The market has slowed without breaking. "So it's a case where the market's slowing down, but it's not collapsing. There's plenty of people out there who will pay for these vehicles, and so companies largely are able to make more money selling fewer vehicles because these vehicles are so much more profitable than they used to be."
Terlep reads the split as the car industry's version of a two-track economy. "And there's plenty of people out there who will pay for these vehicles, and it's yet one more sign of this K-shaped economy where cars are more expensive than they've been, and some of those very expensive cars are more popular than they've ever been, yet you have more people just dropping out of the market because they can't afford even the budget models."
Mendoza explained the term for the audience: two parts of the economy moving in different directions, with the wealthy and upper middle class moving up while lower-income households continue to struggle
8. New Profit Centers
What used to be peripheral is becoming central. "Yeah, I mean that's changed in many ways the focus. I mean, certainly car companies, their main business is building new cars, but things that used to be an afterthought or more ancillary are becoming more important."
Mendoza named two: certified used cars, where the dealer sells a used vehicle still under warranty, and recurring subscription fees
The subscription range now runs from trivial to substantial. "They're now rolling out these subscriptions for everything from perhaps heated seats, which is something not a lot of people want to pay for, to self-driving technology. So if you want to keep your self-driving technology, you have to pay a subscription for that. And so that is something that has become increasingly a profit center for car companies."
The enabling change is the car itself. "And it's a product of these vehicles being more and more connected and software-based."
Other subscriptions Mendoza listed: access to dash cam footage, and using a phone as a remote to start or unlock the car.
9. Who Still Sells Cheap Cars
Terlep said no automaker is walking away from the affordable end — the question is what each is willing to do to compete there. Hyundai, Nissan, Toyota and Honda all have vehicles under $30,000.
General Motors solved it with cheaper labor. "General Motors actually, they have four very, I call them kind of pint-size. They're very small SUVs that they build in Korea where labor's much cheaper and sell hundreds of thousands of those vehicles here."
Two more companies have promised to come back to the segment. Ford has said it will introduce more affordable models, and Stellantis has said the same.
Analysts and executives are not treating the squeeze as sustainable. Mendoza's framing: many of them worry that pricing so many buyers out of the market may not hold up long-term.
10. Slate's $25K Bare Truck
A startup has taken the opposite approach to the whole industry. Mendoza's description: "The Slate truck is an EV. It costs about $25,000. At base price, it's a very bare bones truck. It's unpainted, has only two seats, and comes with crank windows. There's also no radio."
Everything else — a fifth seat, paint, a radio, power windows — is a paid add-on, and the truck is available only for pre-order
Terlep said the appeal is real and specifically anti-feature. "It certainly struck a chord. I mean, because there are a lot of people who not only don't want to pay for extra features, but really, really do not like all the bells and whistles and the fact that their vehicle's connected, and there's a significant number of people who don't want those things and especially don't want to have to pay for them."
Her test for it is volume, not enthusiasm. "I think the question is, does that enthusiasm then translate into enough people to purchase the vehicle? Because if you're going to sell a budget car, you have to sell a lot of them or it's not going to be profitable."
Bonus Insights
Mendoza pushed back hardest on the heated-seat subscription, which produced the episode's one moment of open disbelief: "I'm sorry, how do you do a subscription for heated seats? If you don't pay for your monthly subscription, your seat just doesn't get warm?" Terlep's answer was that yes, it is, and that it follows from the car being connected software.
Asked whether the 13-year-old average fleet keeps aging, Terlep said the trend is not reversing — but that the replacement question is open. "Cars can only live so long. At some point, people will have to get new cars, but I mean then when they get rid of their old, old car, do they buy a new car or do they just buy a slightly younger used car?"
Terlep's bottom line is that the new car has become a discretionary purchase for the affluent rather than a normal household one: "In some ways it's an auto industry where a new car is increasingly a luxury purchase. A new car isn't something everybody can just get. It doesn't mean you have to be wealthy to have a new car, but increasingly a new car is the realm of people who are more affluent."
Products, Companies & Tools Mentioned
Ford (Kept the full-price F-150 and dropped the affordable Focus; has since said it will bring out more affordable models)
Toyota (Built the 1993 T100 the episode opens on, still sells the Camry, and now advertises 16 different models of SUVs)
General Motors (Builds four "pint-size" small SUVs in Korea where labor is cheaper and sells hundreds of thousands of them in the US; the Silverado is its full-size pickup)
Honda (Still sells the Accord while doubling down on trucks and large SUVs; among the brands with vehicles under $30,000)
Hyundai and Nissan (Named with Toyota and Honda as still selling vehicles under $30,000)
Stellantis (Has said it will add more affordable models)
Slate Auto (The startup selling a $25,000 unpainted, two-seat electric pickup with crank windows and no radio, currently pre-order only)
Subaru (Mendoza drives a 2014 Forester, about the average age of a car on US roads)
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