Americans face record-high car prices this holiday season

This holiday season, Americans are gathering around their loved ones—and the prospect of Toyotathon, Happy Honda Days, and Lexus December to Remember. Car companies are once again pushing sales events designed to clear out leftover inventory, offering “deals” for well-qualified buyers. But this year, holiday shoppers may find the price tags more sobering than festive. The Atlantic highlights that the affordability of cars in the United States has hit a crisis point: new vehicles are now consistently more expensive, and there is little relief in sight.

A striking example is the 2026 Toyota RAV4, which now carries a starting price of $31,900, nearly $6,000 higher than five years ago. Similarly, a 2026 Chevrolet Suburban begins at $63,400, about $10,000 more than half a decade ago. On average, the price of a new car in 2025 reached $50,000, marking an unprecedented acceleration in costs, according to Ivan Drury of Edmunds. This escalation goes beyond simple inflation; structural shifts in the auto industry have transformed the types of vehicles being produced and sold.

Historically, car prices increased gradually, in line with inflation and the integration of new technologies like touchscreens and navigation systems. Consumer preferences, however, began shifting toward larger SUVs and trucks during the 2010s, a trend further amplified by low interest rates and cheap gas. The pandemic accelerated this dynamic. Global factory shutdowns limited supply, while consumer demand for bigger, premium vehicles surged. Automakers quickly adjusted, focusing on high-margin SUVs and pickup trucks, which now dominate production and fund the costly development of electric vehicles. EVs, while technologically advanced, have largely maintained premium prices to attract affluent buyers and replicate Tesla-level hype. Ford’s recent retreat from some EV investments, with a near $20 billion loss, underscores the financial stakes.

Automakers argue that affordable options remain available. Chevrolet claims to offer more sub-$30,000 models than before, and Toyota maintains 11 models under $35,000. Yet even vehicles once seen as budget-friendly, such as the Ford Maverick, have seen starting prices climb from under $20,000 to over $28,000 in just a few years. Meanwhile, small, economical cars are disappearing from the US market, as models like the Honda Fit, Nissan Versa, and Chevy Spark are discontinued.

For many Americans, this pricing crisis is not just about luxury—it affects mobility, employment, and quality of life. Nearly half of Americans lack access to public transportation, making cars essential for commuting, shopping, and child care. Rising repair costs further compound the burden for those relying on older vehicles. Even pre-owned cars, once a refuge from high new-car prices, have become more expensive.

In effect, the auto industry faces little incentive to reverse course. High prices bolster profit margins, fund technological development, and respond to historical consumer demand for larger, feature-rich vehicles. For buyers, this means that holiday deals may be more symbolic than practical, and the “perfect gift” could come with a financial hangover. The Atlantic’s reporting underscores a broader societal concern: mobility has become a commodity, and its rising cost constrains economic opportunity and personal freedom in ways few other consumer goods do.

In the end, the lesson is clear: while festive sales events can create the illusion of savings, the reality is that car affordability in America has entered uncharted territory, and for many, the real gift this year might simply be keeping a vehicle on the road without breaking the bank.

By Vugar Khalilov