New car sales are on a steep downward trend in America, it's because everything costs more

New car sales in America are an age-old indicator of economic performance.

Owning a new car is often a pointer to how well a country’s economic health is being managed.

Unfortunately, new car sales are on a steep downward trajectory in America.

And it is because of how much more everything costs nowadays.

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New car sales see a steep decline

Car ownership is a dream for the very large majority of the global population.

For people in countries the size of America, it is often a vital necessity for everyday life.

Whether commuting, traveling, or simply running errands, cars have become a core part of existence.

Sadly, however, ownership of brand-new cars is on a steep downward trajectory.

New car sales hit their peak in 2016, with over 17.5 million units shifted.

Since then, new car sales have hit a steep, steep decline all the way through to 2022.

Despite a slight uptick in 2023 and 2024, the sale of new cars still hasn’t risen.

In fact, new car sales haven’t really gotten close to that 2016 apex.

So why have sales figures for new cars fallen off a cliff, then?

What is causing prices to keep rising?

The first – and most obvious – reason is higher sticker prices for new cars.

In America, ongoing trade concerns and tariffs are leading to rising prices.

But tariffs are only the beginning of the issues for American buyers.

Because of rising interest rates, loans to buy a new car are becoming more expensive.

These rising interest rates are leading buyers in America to opt for longer loans.

Taking out longer loans means lower monthly repayments, but it is more expensive in the long run.

It also means that buyers could end up owing more money than the car is worth – because of depreciation.

Aside from tariffs and interest rates, there is one more big, looming problem – insurance.

On average, car insurance has continued to rise year-on-year.

In fact, a report from the Wall Street Journal shows that car insurance rose by 10% in 2024.

That is after a 15 percent rise in 2023 – so you can see quickly how this problem unravels.

This is fed by the fact that the newer car tends to be more complex, with more technology included.

In the event of an accident or a crash, it is more expensive to fix and repair.

This, in turn, feeds a rise in cost for actually insuring newer cars.

Hopefully new cars become cheaper to own and run as time goes on – but don’t hold your breath.