This December, Americans are coming together with their loved ones to celebrate what really matters: Toyotathon. During the holidays, when car companies offer sales to clear out their leftover inventory, “well-qualified buyers” can find some of the year’s best deals. You can have yourself a Happy Honda Days, make the most of the Chevy Red Tag Savings Event, or splurge during Lexus December to Remember.
But things are a bit different this year. Cars are getting more expensive, with no relief in sight. If you can find a 2026 Toyota RAV4, the latest iteration of one of America’s best-selling cars, be prepared to shell out at least $31,900—a retail price that is nearly $6,000 higher than what it was five years ago. A 2026 Chevrolet Suburban will put you out at least $63,400, which is about $10,000 more than it was five years ago as well. It may sound like cars are another victim of the persistent inflation that’s putting a damper on everyone’s holiday season, but the real problem is deeper than that. In 2025, the average price of a new car hit a high of around $50,000. Over the past few years, “we’ve seen the quickest rate of acceleration ever when it comes to pricing,” Ivan Drury, the director of insights at the car-buying website Edmunds, told me.
Car buyers are fed up, and their politicians are noticing. Earlier this month, President Donald Trump gutted fuel-efficiency standards on the car industry in a ploy, he said, to make vehicles more affordable. But his administration has claimed the move might eventually save Americans roughly $1,000—not enough to offset the effects of Trump’s tariffs, which have contributed to thousands of dollars in new costs. The same week, he also urged carmakers to bring Japan’s ultra-cheap micro-cars to the United States, which has been met with crickets from the auto industry. Meanwhile, Senate Republicans have called industry executives to testify in front of Congress next month about why cars have gotten so expensive. There’s plenty of blame to go around, but no easy way out of this affordability crisis. For the foreseeable future, America is stuck with expensive cars.
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In some ways, the problem has been building for a long time. Car prices have always crept up over time, both in line with inflation and as automakers have added tech features such as touch screens and navigation systems. Americans’ buying habits haven’t helped, either. In the 2010s, buyers began flocking to bigger, more expensive trucks and SUVs, spurred by lower interest rates and cheaper gas prices. But during the pandemic, things really started to change. Car factories across the world had no choice but to temporarilyshut down, and the rules of supply and demand took it from there. When people were able to buy, many wanted even bigger options than ever before. Take Kia: Once known for its ultra-budget options, the automaker debuted its Telluride SUV in 2020 and couldn’t keep them on dealers’ lots, even when some were selling for around $45,000.
The lesson for automakers was that people were willing to pay a lot more than they used to, especially for SUVs and pickup trucks. In effect, the entire car business has since gone all in on pumping out more giant, expensive cars. Since bigger vehicles mean higher profit margins, they have also helped carmakers fund the billions of dollars needed to develop electric vehicles. Not that all the new EVs have been cheap, either. Car companies, seeking Tesla’s levels of hype, assumed people would pay a premium for something novel and high-tech. They haven’t. Just this week, Ford announced that it would pivot away from EVs, taking a nearly $20 billion hit to its business in the process.
The auto industry has a different story about car prices. “Chevrolet has more (and better) sub-$30,000 affordable models than it used to have,” David Caldwell, a spokesperson for General Motors, told me in an email. Paul Hogard, a Toyota spokesperson, said that the automaker “offers 11 models under $35,000.” Across the industry, many relatively affordable options are still more expensive than they used to be. Consider the popular Ford Maverick truck, which debuted at under $20,000 just three years ago. Now it starts at more than $28,000. If you want to downsize and get some cheap, tiny runabout, try moving to Europe—cars such as the Honda Fit, Nissan Versa, and Chevy Spark have all been discontinued in the U.S.
There are a few flickers of optimism here and there. EV prices are going down, for example. But anyone expecting a broad decline in car prices is bound to be disappointed. “I don’t see a lot of refreshed or new designs that are going to involve a lower price point,” Drury said. Even if the industry decided to pivot back to cheap cars, it would take quite a while to actually see the results. Planning and launching a new model takes an average of six years. After all, buyers might not like sky-high prices—but it’s great for carmakers’ bottom line. Perhaps more Americans could send a message by simply not buying new cars. That’s already happening for automakers such as Stellantis, which cranked the prices of its Jeeps and Ram trucks so high that buyers aren’t showing up to their end-of-year sales anymore.
But it’s hard to see a clear way out of the affordability problem. Want to buy used? Too bad. Pre-owned cars have also gotten much more expensive. Americans can always keep their older cars on the road longer, but the cost of repair bills has shot up this year, too. No matter how much they cost, most Americans need cars to get to work, drop off the kids at school, and shop for groceries. About 45 percent of Americans have no access to public transportation at all. For much of the country, cars are necessary for people to “lead a reasonable quality of life,” Evelyn Blumenberg, a professor of urban planning at UCLA, told me. If people can’t afford a decent car, or even keep a used one running, they sacrifice huge amounts of time, job opportunities, and even upward mobility—something that’s hard to say of most other consumer products in our life.
When mobility itself—of the physical, social, and economic sort—depends on making payments to a car company, why would the industry change course? Maybe the real present you want this year isn’t a Lexus with a red bow on the hood, but an end to having to fork over so much of your paycheck to the auto industry. Unfortunately, that one may be above Santa’s pay grade.
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