Over the past few years, average new vehicle transaction pricing has risen to new record highs, resulting in some hefty monthly payments for those that finance them, especially when combined with rising interest rates. This has had a severe ripple effect on the industry as a whole, all while placing a heavy burden on shoppers who are already facing rising costs for necessities like food and housing. It has also prompted automakers like Ford to refocus on making cheaper vehicles, but rising new vehicle affordability is also having a tremendous impact on young shoppers, in particular.
According to a new report from Automotive News Canada, new vehicle buyers under the age of 35 accounted for 21 percent of sales in that country last year, which is down from 25 percent in March 2020. Soaring new vehicle pricing has sent many of these shoppers to the used market instead, while others that already own vehicles are simply opting to stay on the sidelines and continue to drive them rather than opt for something new.
Automakers are taking different approaches to addressing this problem, with some opting to market more affordable vehicles specifically to younger customers, particularly as those same shoppers are – in many cases – turning to ride sharing or short term rentals as an alternative. “A lot of it comes down to affordability, if we’re being honest, especially in this hyperinflation age that we’re in,” said Aamir Ahmed, head of Fiat North America. “Just like the home market was years ago, people are being costed out.”
As for The Blue Oval, the launch of the Ford Maverick back in the 2022 model year has proven to be a successful lesson in new vehicle affordability, even though prices for that pickup have risen in the years since. Currently, the automaker is working on developing a low-cost EV crossover slated to launch in late 2026 with a $25k price tag, and is even considering bringing back small cars in Europe, too.
We’ll have more on the state of new vehicle affordability soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.
Comments
This topic has been beat to death. Wage growth has been too slow, cost of living jumped too quickly. The affordable product out there now kinda sucks. You can’t market your way out of overpriced and junky product. And all the automakers want to streamline everything, not make things more attractive to younger people.
The better solution would be to lay off their entire marketing departments and reduce prices with that savings. It’d be more effective than having the marketing people.
Yeah, what that MF said.
Another suggestion … not everyone wants or needs a SUV or 4 Wheel Drive vehicle. Old Henry Ford was what he was … but Henry understood the need for affordable vehicles that anyone could afford to buy. This simple thinking has completely left the mindset of the current management at Ford. I’ve been driving Fords for awhile, it was a sad day when the Fairmont family of vehicles was discontinued. I wish I had my 1980 Ford Farimont Station Wagon Country Squire back, antique while, wood siding, wire wheel covers … and it was affordable.
It’s like they only want rich customers. What rich person wants a Ford or a Chevy?
Yeah, mf is right.
Not just younger buyers, but middle age, and older drivers are shunning new vehicles as well at this time. Back in 2013 I was part of the Ford Social Group … they brought me out to Detroit once for the International Auto Show. At this time I was plugging Ford to create a secondary brand as Toyota had done with Scion, with good to great success. I looked to Ford of Europe’s product line picking out 5 models … 1 small van, the rest small 2 an 4 door cars, I especially liked the English Ford Fusion. Couldn’t get the time of day outta anyone to talk about such an idea. Today, what could have been had someone just listened … Ford would have had a economy car for the first time new car buyer, and the Dealer would have had a accessory catalog that would have been the envy of the competition to “upfit” those models, wheels, roof racks, the whole gambit … money was there to be made/earned by all. Ford … in particular Mr. Farley … if you’d like to sit down an talk, it’s not to late. And Mr. Farley, the Ford Transit Custom van sold in Mexico only in both the short & long wheel base in a passenger models would sell dern quick. Ford … listen to your customer base … not the soccer mom I’d die before driving a “station wagon or mini van” focus groups … that’s exactly what has gotten you where you are right now.
Young new drivers should fo what many of my time did in the 1970s. Just buy a used car and save up until you can. My first car cost me $200 and it needed fixing but I learned about maintenance and that saved me much time and money later. I had four used cars (one was a 1980 Mustang) until 1995 when I finally bought my first new car.
Given that cars last longer than they formerly did, your example is even more relevant today. Twenty- and even thirty-year-old used cars are surprisingly good.
I am going to unsubscribe to your emails. So many are frustrating and distracting.
We can thank the excess regulation and politicians push for EVs for this.