CNN Buisness story about affordability mentions Slate

[Rocks]

https://www.cnn.com/2026/09/01/business/cheap-cars-hard-to-find

cnn.com
Inexpensive new cars are becoming tougher and tougher to find
Chris Isidore

7–9 minutes

Car salesman Bob Kain recalls the first time he saw a luxury car with a $25,000 sticker price at his family dealership. It was 1989, and the car was a Ford Crown Victoria.

“I remember thinking, ‘My goodness gracious, this is going to be really hard to sell,’” he said.

Today, the cheapest car for sale at Kain Ford, a dealership just outside Lexington, Kentucky, is a small SUV —the Bronco Sport — which has a $36,000 to $40,000 sticker price. The average sticker price on his lot is $54,000.
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Ford no longer makes sedans like the Crown Victoria, with the Mustang muscle car being the closest thing to a sedan still in its lineup. If it were still available, the Crown Victoria from 1989, adjusted for inflation, would be priced above $65,000. But that wouldn’t be the most expensive vehicle on Kain’s lot. It has Expedition SUVs and Super Duty pickups with sticker prices above $80,000.

“It’s amazing how people adapt to changing prices,” he said.

Just over a decade ago, most new American cars were sold for less than $30,000, according to data from auto research firm Edmunds, with nearly a third priced below $25,000. But that’s not the case today. During the first six months of this year, only 4% of US car sales were under $25,000, and only 10% were in the $25,000 to $30,000 range.

Those figures may be pricing a million car buyers out of the new car market, said Ivan Drury, director of insights at Edmunds. About 16 million new cars are sold on average per year, a dip from about 17 million in annual car sales the industry regularly reached a few years ago.

Automakers in recent years have decided that the lower end of the market is no longer worth the investment. As consumer prices rise and auto tariffs raise production costs, car companies are giving up on some sales to concentrate on more expensive models that bring in higher profits. That includes larger trucks and SUVs with more expensive features, including driver-assist features to help avoid accidents, an extra row of seats in SUVs and pickups, and all other typical comforts.

“You might get a little more volume selling cars in the $20,000 to $25,000 range. But at the same time, it just doesn’t make sense when people are so willing to hand over so much money for cars with so much more content,” Drury said.

Inflation is partly to blame for the dearth of cars under $30,000. But car prices have risen 49% since 2015, according to Edmunds pricing data, outpacing overall inflation.

That’s because as cars get more expensive, Americans want more bang for their buck. Drury said those who decide to take the plunge for a new car often want one with features that were unavailable 10 years ago.

In fact, more cars today sell for more than $70,000 than for $25,000 to $30,000, according to Edmunds data.

Part of that is availability. Last year, there were only 10 models on the market — all from small, Asian automakers — with an average transaction price below $25,000, according to Edmunds. And one of the cheapest models, the Nissan Versa, is no longer available. The automaker ended production at the end of last year.

Tariffs on cars and auto parts have raised the cost of producing budget vehicles. Tariffs are also forcing automakers to stop importing some of the cheaper models, like the Versa, which was manufactured in Mexico, not Japan.

Americans seeking cheaper options would traditionally turn to the used car market. But experts say that’s a less appealing option these days, because even if used cars carry the same bells and whistles, buyers aren’t getting the same value for their money.

Used cars also have higher interest rates than new cars and have less or no warranty protection. And greater demand is overinflating prices. The average sales price for a new car in July was about $49,000, while for a newer used car — three years old or less — it was $32,000, according to Edmunds.

Fortunately for car buyers, median household income has also risen steadily, according to Federal Reserve data. But so have interest rates on car loans. The average car loan rate on a five-year loan was only 4.4% in August of 2015, according to Bankrate.com. The most recent reading for May of this year was just under 7%.

With the vast majority of car purchases being financed, the rise in car prices is causing more of an affordability problem beyond what the simple sticker price shock might suggest. A record share of Americans — more than 20% — agreed to pay more than $1,000 per month for a new car loan at the end of last year, according to Edmunds.

Some upstart automakers are testing the lower-priced part of the market. Slate Auto, which expects to deliver its first vehicle — an electric pickup truck — late this year, will have a list price of only $24,950.

But Slate’s electric trucks won’t have features that consumers consider standard, such as power windows or a second row of seats in the truck’s cab. It won’t even be painted. The automaker, which was founded in 2022, estimates that not having a paint shop in its factory in Warsaw, Indiana, will save it hundreds of millions of dollars.

Slate’s affordability took something of a hit last year when the $7,000 federal EV tax credit was repealed. But the company has collected 180,000 refundable $100 deposits for its truck.

“We wanted to make sure that the truck would be affordable, with or without the (tax credit) incentive, and 180,000 reservations later, people agreed with us,” said company spokesperson Jeff Jablansky.

One of those buyers is Jonathan Snyder, who co-owns a furniture design studio in Los Angeles. Though Slate is too young to have a reputation, Snyder took a chance on the company’s trucks because of its low prices. He previously had to rent trucks when he needed to haul things to his studio because even used trucks cost too much to buy.

“The used car market is very expensive right now,” Snyder said. “As a small business owner, the price feels the most responsible for what is essentially a tool.”

Kain agrees there’s a significant number of buyers who want low-priced cars, and he’s hopeful about Ford’s plans to introduce a line of five more affordable models.

But those buyers may have to wait a while. There is no exact timeframe for Ford’s budget cars, only that they’re due before 2030. And the more affordable pricing is “below $40,000,” which would have been considered in the mid-market-to-luxury range not long ago. Stellantis — maker of Jeep, Ram, Dodge and Chrysler brands — has also announced plans for nine models under $40,000 and also by 2030.

Still, Kain said there’s a market for cars priced under even the $40,000 mark.

“We’ve already had a lot of interest from customers who want to be the first ones to get their orders in for those vehicles,” he said.

 

[wa6qmq]

can you post a link with out the tracking / log in

 

[Rocks]

can you post a link with out the tracking / log in

That's the base link, no tracking. I had no trouble seeing without a login, but that's probably my pi-hole/adblockers doing their thing.

That's why I included the full text of the story in the quote block.

 

[danielt1263]

"You might get a little more volume selling cars in the $20,000 to $25,000 range. But at the same time, it just doesn’t make sense..." says the director of insights at Edmunds.

And therein lies the problem, IMO. A dealership, a car maker, has the choice; they can sell 5 cars at X per car, or sell 3 at 2X per car. They will choose the latter every time, and why shouldn't they? They aren't chasing volume, they are chasing profits.

 

[tubes]

"You might get a little more volume selling cars in the $20,000 to $25,000 range. But at the same time, it just doesn’t make sense..." says the director of insights at Edmunds.

And therein lies the problem, IMO. A dealership, a car maker, has the choice; they can sell 5 cars at X per car, or sell 3 at 2X per car. They will choose the latter every time, and why shouldn't they? They aren't chasing volume, they are chasing profits.

In 1989, my fiancé bought a Toyota Tercel EZ with A/C for $7200. These were rare cars. I helped her buy it, and when the salesman didn't want to go more than $200 under MSRP, I told her to just take it. It was such a good value, less than $20k in today's money. The salesman claimed they got one allocated per month, and it sold within the first 3 days. I believed him based on what we were seeing on the lots.

So this has been going on for some time, but since the shortages started after cash for clunkers, and went critical during COVID, the dealers are loathe to sell anything but tricked out vehicles.

And then we have the same problem with homes, but that's for a different forum.

 

[E90400K]

Never was the EV tax credit $7,000.

 

[kvermeer]

Never was the EV tax credit $7,000.

And in the next sentence, never was the reservation, "deposit ", or pre-order $100.

Slate’s affordability took something of a hit last year when the $7,000 federal EV tax credit was repealed. But the company has collected 180,000 refundable $100 deposits for its truck.

Reminds me of the quote about Gell-Mann Amnesia by Michael Chriton:

Briefly stated, the Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well. In Murray's case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward—reversing cause and effect. I call these the "wet streets cause rain" stories. Paper's full of them.
In any case, you read with exasperation or amusement the multiple errors in a story, and then turn the page to national or international affairs, and read as if the rest of the newspaper was somehow more accurate about Palestine than the baloney you just read. You turn the page, and forget what you know.

We can read that paragraph and realize the author has no understanding of the facts about Slate pricing, which we know well. But we read the rest of the article about Ford prices and inflation and consumer preferences as if they were facts.

 

[E90400K]

And in the next sentence, never was the reservation, "deposit ", or pre-order $100.



Reminds me of the quote about Gell-Mann Amnesia by Michael Chriton:



We can read that paragraph and realize the author has no understanding of the facts about Slate pricing, which we know well. But we read the rest of the article about Ford prices and inflation and consumer preferences as if they were facts.

Inflation is a tricky thing when it comes to cars. The safety and performance of the automobile has so vastly improved from 40 years ago when I first started buying decent used cars and new cars. Modern cars are incredibly more safe than their 1980 versions. Regarding performance, I mean not only kinetic performance (MPG, acceleration, and handling), I also mean modern cars are more longer lasting and easy to diagnose and repair (until the recent advent of ADAS). And we owners have far better tools at our disposal to make repairs. Yet when adjusted for inflation, the pricing has not grown significantly once the state of safety and performance of modern automobiles is taken into consideration.

A real example from my experience. I bought new a 1987 Ranger STX 4X4, 2-door cab, V6, 5-speed manual trans, long bed. The MSRP was around $13,500 and pretty much the same price as the 1987 XLT trim 4X4. It was a nice truck, manual Mustang GT seats w/power lumbar, steel wheel with trim rings. $13,500 in 1987 inflates to $39,700 in 2026. A 2026 Ranger XLT 4X4 with the off road package (to make it comparable to the '87 STX) is just $42,860. So, a nearly comparable 2026 Ranger XLT to my 1987 Ranger STX is just an additional $3,160 more ($1,075 in 1987). The 2026 Ranger is larger, has airbags, stability control, ABS, aluminum wheels, a 4-door cab, a 10-speed automatic transmission, automatic transfercase (vs. a shift lever and manual locking hubs for the 4X4 system), 10-way electric seats, much better MPG, hauls more and tows heavier, and infotainment system, etc., and it will last much longer.

The only real affordability problem with automobiles is salaries have not kept up with inflation. The automotive product is incredibility much better now for the price.

 

[AZFox]

And therein lies the problem, IMO. A dealership, a car maker, has the choice; they can sell 5 cars at X per car, or sell 3 at 2X per car. They will choose the latter every time, and why shouldn't they? They aren't chasing volume, they are chasing profits.

The salesman claimed they got one allocated per month, and it sold within the first 3 days. I believed him based on what we were seeing on the lots.

Legacy manufactures don't want to sell inexpensive vehicles.

For example, selling one $60,000 car is more profitable for them than selling two $30,000 cars or, especially, three $20,000 cars.

The global supply-chain crisis that started in 2020 disrupted the automobile market severely, effectively eliminating the Affordable New Car segment.

As a result, used car prices spiked too, which makes sense when you consider it because people still needed to drive.

You might think that would have been temporary, but that's not what happened, so here we are.

See also:
https://www.britannica.com/money/k-shaped-economy

 

[AZFox]

The only real affordability problem with automobiles is salaries have not kept up with inflation. The automotive product is incredibility much better now for the price.

Now do smartphones.

The inflation-adjusted price of a 2009 iPhone 3GS is $932 for the 16 GB model and $1,088 for the 32 GB model.

16GB and 32GB aren't the amount of RAM, they're the amount of storage! Those phones had something like 256 MB (1/4 of a GB) of RAM.

The point I'm trying to make is that improvements in products over time don't necessarily increase the price.

 

[E90400K]

Now do smartphones.

The inflation-adjusted price of a 2009 iPhone 3GS is $932 for the 16 GB model and $1,088 for the 32 GB model.

16GB and 32GB aren't the amount of RAM, they're the amount of storage! Those phones had something like 256 MB (1/4 of a GB) of RAM.

The point I'm trying to make is that improvements in products over time don't necessarily increase the price.

Increase the price or increase their value? But I was being specific just related to automobiles.

The market corrects itself.

 

[AZFox]

Increase the price or increase their value? But I was being specific just related to automobiles.

Products of all kinds can add features and drop in price (or maintain similar pricing) simultaneously. I used smartphones as an example, but there are countless others.

I may have misinterpreted you post to mean that cars need to be more expensive now because they need more features.

I agree that "The automotive product is incredibility much better now for the price" without believing they need to cost more (relatively speaking) to accomplish that.

 

[kvermeer]

Increase the price or increase their value? But I was being specific just related to automobiles.

The market corrects itself.

The market has profit-maximizing goals, not value-optimizing goals, for some definition of "value".

If they can deliver more features at the same inflation-adjusted price, they could deliver the same features at a lower price - but the market hasn't corrected for that missing choice. Instead, The Market has chosen for Ford to abandon their entire sedan line and instead push SuperDuties with massage seats and MachEs with $1300 software downloads to unlock more torque.

 

[E90400K]

The market has profit-maximizing goals, not value-optimizing goals, for some definition of "value".

If they can deliver more features at the same inflation-adjusted price, they could deliver the same features at a lower price - but the market hasn't corrected for that missing choice. Instead, The Market has chosen for Ford to abandon their entire sedan line and instead push SuperDuties with massage seats and MachEs with $1300 software downloads to unlock more torque.

If the market doesn't sell cars, it doesn't make profits, so it adjusts itself.

I like profit, it feeds my 401K.

 

[kvermeer]

If the market doesn't sell cars, it doesn't make profits, so it adjusts itself.

I like profit, it feeds my 401K.

See, that's the difference, I think car companies should focus on making cars not 401k returns.