The Car Market is Starting to Crack

TL;DR

Overall Summary: The auto market isn't collapsing dramatically—it's eroding slowly as affordability pushes out average buyers while wealthy consumers and aggressive lending temporarily mask the decline.

Key Points

• 1.Automakers are bleeding: Ford lost $8.2B, Volvo profits dropped 68%, Honda down 61%, Tesla revenue fell for first time ever
• 2.Affordability crisis is real: Average new car payment hits $1,000+/month for 1 in 5 buyers, with some loans stretching to 100 months
• 3.Buyers are getting priced out: Share of buyers earning under $100K dropped from 50% to 37% since 2020—wealthy buyers now carry the market
• 4.Dealerships confirm the slowdown: AutoNation saw new vehicle sales down 10%, Group One sold fewer units at lower margins
• 5.2026 forecast looks worse: Cox Automotive predicts sales will decline to 15.8M units as negative equity, longer loans, and tighter credit squeeze more buyers out