A Third of Middle-Class U.S. Households Plan to Buy Vehicles This Year

Drivers are buckling up for trips to the car lot.

A third of middle-income households intend to buy a car this year, according to an analysis released Thursday by financial services company Santander US, which surveyed 2,200 U.S. households making between $50,000 and $148,000 annually.

The car industry still has some pent-up demand from the pandemic, when manufacturers halted production, supply dropped, and fewer leased vehicles were turned over to used car lots.

Meanwhile, new vehicle prices have begun to level off—though used car prices aren’t expected to fall in 2025, auto-industry software firm Cox Automotive said.

Drivers will pay an average of $44,636 for new cars in January, down 0.5% from that month last year, according to J.D. Power estimates. They’re currently spending an average of about $27,795 on used vehicles this month, down 1.2% from last January.

Record January Predicted for New Car Spending

The car-buying year is expected to get off to a strong start.

“Consumers will spend more money buying new vehicles this January than any other January on record,” said Thomas King, president of the data and analytics division at J.D. Power, an consumer intelligence and analytics firm. “Retail sales are rising while average transaction prices are declining only modestly.”

More than half—52%—of middle-income households delayed purchasing a vehicle in the past year because of costs, Santander said of those polled in the fourth quarter of 2024. That’s up slightly from 50% at the same time a year earlier, Santander said.

A number of those weighing whether to buy have started taking action. About 65% have started researching options and 46% have visited a dealership, Santander said. Whether they buy, according to Santander, will be most influenced by changes in the cost of living and whether vehicle prices decline, the survey said.

An upswing in auto sales helped boost U.S. retail sales for November above economists’ expectations. Car sales are traditionally strong in December, when dealerships use incentives to clear out the lots, and slower in January, J.D. Power said. But the firm believes new car sales this month are on track to grow 4.8% from January 2024.