$808 Monthly Payment Exposes Growing Auto Affordability Divide

U.S. auto sales ran at a seasonally adjusted annual rate of 16.3 million in July, down slightly from 16.5 million in June but above the 2025 average, according to Bank of America, with the National Automobile Dealers Association confirming the 16.3 million pace, down 1.4% year-over-year. Hybrid sales rose 19.6% year-over-year in July and made up 15.4% of new vehicles sold in the first seven months of 2026, per NADA.
Bank of America found that higher-income consumers are increasingly propping up the market: among customers making qualifying auto payments over $2,000 from May through July, households earning more than $125,000 a year accounted for over 40% of transactions, while those earning under $50,000 made up less than 20%.
The average new-vehicle transaction price hit $49,855 in July, up 1.9% year-over-year and the highest level of 2026, according to Kelley Blue Book, pushing buyers toward smaller, cheaper vehicles. The average monthly payment on a new-vehicle finance contract reached $808 in July, up 3.3% year-over-year and a record for the month, per NADA citing J.D. Power estimates. For Bank of America's lower-income customers, the median monthly auto-loan payment equals about 25% of median deposits.
Bank of America said after-tax pay growth has recently helped lower-income households catch up in spending, but noted a car remains many lower-income households' largest financial commitment outside housing, and more consumers across income levels are carrying auto payments above $1,000 per month. The bank said the affordability gap between higher- and lower-income buyers may narrow over time but is unlikely to close quickly.