How Inequality Killed the Affordable American Car by Harold Meyerson

[justaprogressive]

Last edited Mon May 4, 2026, 11:17 AM - Edit history (1)

Let’s talk cars. In particular, their prices.

As thousands of sticker-shocked Americans can attest, and as economist Clifford Winston has documented in The New York Times, the average sale price for a new car today is roughly $50,000. Only four cars on the new-car market can be purchased for $25,000 or less. That’s doubly true for American EVs, despite the fact that they are cheaper to run and maintain. Even the revived small hatchback Chevy Bolt starts at more than $28,000—and production is apparently only going to continue for a year or so.

For middle-class and working-class Americans, most new cars and homes—two foundations of what we’ve long regarded as a middle-class life—are now out of reach.

Ironically, the American auto industry has historically played a key role in scaling supply to demand and was the first in which pricing its products to the financial capabilities of consumers was infused with mathematical precision. Initially, Henry Ford’s Model Ts came in one size, one color, and sold at one price. During the 1920s, however, General Motors, under the leadership of Alfred P. Sloan, started making a variety of brands, each scaled to the consuming capabilities of different portions of the public. Sloan decreed that GM would make “a car for every purse and every purpose.” Its cheapest car was the Chevrolet; then, in ascending order of price, came the Pontiac, the Oldsmobile, the Buick, and, for the wealthiest buyers, the Cadillac. By 1929, GM was selling more Chevys than Ford was selling Model Ts, and factoring in its other brands, was outselling Ford (not to mention Chrysler and all other U.S. companies) by a wide margin—a lead it has maintained to this day.

While the uniformity of Ford’s product enabled the company to centralize production in just a few massive plants, GM opened plants all around the country (a strategy it doubled down on after the autoworkers’ 1937 sit-down strike in a few key factories halted production of most of GM’s models). Its brands were never as differentiated as they appeared to be: By making slight modifications, many of its factories could turn out, for instance, both Chevys and Pontiacs, or Buicks and Oldsmobiles. But the very existence of the brands, and the cosmetic changes made to the brands every year (another Sloan marketing ploy), brilliantly built on, and fostered, Americans’ status anxieties.

Until the coming of the New Deal, Sloan’s economists and researchers probably had a better grasp of Americans’ finances than the federal government had. And while that advantage has long since dissipated—today, every big corporation and bank, not to mention big government, too, has economists, many now aided by AI, making long-term and short-term economic projections—GM today is surely even more able than it was in Sloan’s time to assess Americans’ finances so that it can maximize its profits.

https://prospect.org/2026/05/04/how-inequality-killed-affordable-american-car/]

[MineralMan]

1. In 2021, I bought a brand-new Chevy!

I already had a 2020 KIA Soul. But, my old 1993 Ford Ranger was on its last legs and we had used it to help us move. I didn't need a pickup any longer.

I had just two criteria for the new replacement of the Ranger. It had to have AWD and cost less than $25,000 out the door.

There was only one car that met those specifications that was being sold by a US car maker at its dealerships.

So, I bought a 2021 Chevy Trax. It had both things. When I did my research on the car, I was surprised to find that it was built just down the road in the Gangnam district of Seoul, South Korea, from where my 2020 KIA Soul was built. Oh, well. It fit my requirements, so I wrote a check for it at the nearest Chevy dealer.

I still have both of those cars. They're both still running just fine. We don't put as many miles on them as we used to, so they should last a good long time. Maybe our last two cars.

There were no cars made in the USA that fit my specifications of being AWD and costing less than $25,000 brand new. Not a single one. And there it is. In fact, the US car makers aren't making sedans any more, or even small-sized SUVs like my cars. Too bad. More profit in big-ass pickups and SUVs, I guess. If you want small, you drive imports. There are no other options.

[the_liberal_grandpa]

2. BYD to the rescue

In the 70's Americans were stuck with shitty cars like the Ford Pinto and the Chevy Vega.
At the same time cars from Japan- Honda and Datsun started showing up. These cars were better and more affordable.

This casued car companies to start making better cars to compete.

We should bring in BYD electric cars from China to let American car companies know that its not that we don't want new cars, we want affordable electric cars.

[WarGamer]

4. do they pass Federal standards?

And why endanger US jobs?

[MichMan]

3. If consumers are clamoring for inexpensive vehicles, one would think that they would be on top of the sales charts

Of the four mentioned as costing under $25,000, only one made the list of the top 25 in sales, and that was the Honda Civic in 14th place. The remaining three didn't even make the list. Many of the best sellers ((and thus most popular) cost considerably more than that.

https://www.caranddriver.com/news/g71006285/bestselling-cars-2026/

[hunter]

5. The only people buying "affordable" cars are buying used.

They don't even look at new cars.

The automobile market is entirely driven by the people who can afford those $50,000 cars.

Less affluent people are buying whatever the more affluent people were buying years before. They have no choice and the automotive industry doesn't care what they think.

The "it's what the market demands" argument doesn't work here.

[EX500rider]

6. Avg price means squat, you can get a new car for under $20,000

The 2025 Nissan Versa is currently the cheapest new car in the USA, with a starting MSRP of $18,330

Also cars are never going to be as cheap as they used to be due to mandated safety features.

Cheap cars in the 70's/80's did not have:
airbags (front and side), seat belts, electronic stability control, antilock brakes, tire pressure monitoring, backup cameras, and child restraints. Recent regulations require Automatic Emergency Braking (AEB) and, by 2027, advanced impaired-driving prevention technology

[flvegan]

7. American financial illiteracy and ego killed the affordable car.

The carmakers just get a huge assist as the enablers they are.

Don't have the credit or downpayment? 8 year car loan @ 14% interest! It's only $450/month, and this 9 year old BMW will be all yours and the ladies won't be able to help themselves!

Underwater on your Altima? Roll that negative equity over and help yourself to some gap insurance! You don't have insurance? Well you're in luck. We can get you a binder for just one month down payment!"

"But I NEEEEEEEED a brodozer lifted F150RamErado to compensate...I mean, to get to work. A 2" lift for a 2" willy!"

"My breeder pair partner and I will be welcoming our 3rd child next month, at which point we'll start working on the next one. We simply must have the largest SUV. Please show us the Canyonero, in beige! We'll borrow against the current perceived equity in our house."

Smart money buys used anyway, mostly.

[MichMan]

8. I buy new and keep them for 12 years and 225K miles