Cars have become unaffordable for many Americans. Here’s what the numbers show.

Policy intervention (price caps, subsidies, or tariff relief on vehicle imports) or a sharp decline in interest rates could restore affordability; historically, such shifts have supported auto sales recovery and reduced stress on consumer credit metrics, benefiting financing companies and dealer networks.

Persistent affordability constraints would likely sustain depressed demand in both new and used segments, keeping dealer inventory elevated, financing originations under pressure, and consumer spending diverted away from vehicle purchases toward other categories.

Further price increases or rate hikes combined with economic slowdown could trigger a sharper contraction in auto sales, rising delinquencies in auto loan portfolios, and cascading weakness across dealer profitability, captive finance earnings, and insurance underwriting.