It’s Over The Car Market Bubble Just Popped :(

Buckle Up, It’s Getting Ugly Out There

What’s up, guys? It’s Graham here, and—no joke—you need to fasten your seatbelt because this car market is going absolutely bonkers.

Let me hit you with a stat that made my jaw drop: the AVERAGE price for a new car in America is about to cross $50,000.
Yes, really. I wish that was a typo.

And if you’re financing? The average car payment is now pushing $745 a month. Add near-record interest rates, and more Americans are officially falling behind on their loans than ever before.

So let’s break down why a car is now America’s top wealth killer, why used prices just won’t quit spiking, and the THREE things you need to know if you ever want to find a car that won’t destroy your bank account.

1. Depreciation—Now Even Crazier (And Totally Backwards)

We all grew up being told that a new car loses about 10-20% of its value the second you drive off the lot.
Normally, after five years, you’d have maybe 40% left over unless you drove a unicorn classic.

But between pandemic shortages, chip supply nightmares, and everyone racing back to the dealership post-lockdowns, the “rules” went out the window:

• In 2021, used car prices jumped 40% in a year (Cox Automotive).
• It became a bizarro world where you could buy a car, drive it, and SELL IT LATER FOR MORE.

For a hot minute, people were paying ABOVE sticker just to get on the road.

Yet unlike everything else that eventually cooled off (toilet paper, hand sanitizer, whatever), the car market never fully came back down.
New vehicles are still $12,000 more expensive than just a few years ago.
Atypical families now face spending 70–80% of an average YEAR’S pay on a new set of wheels.
(This was half that in the ‘90s.)

2. Car Debt: Wild West Edition

The stats are brutal:

• 85% of new cars are bought with loans
• 55% of used cars, too
• Total US auto loan debt? $1.64 TRILLION

And unlike getting a mortgage, there’s pretty much zero real vetting on car loans. According to Consumer Reports, income was checked on just 4% of auto loans they reviewed.

That means way too many people were ok’d for way too much car, often paying:

• Over 25% APR (YES, ON A CAR)
• For 7–8 years or more

Result?

• 5% of auto loans are 90+ days late
• Subprime delinquencies: RECORD HIGH
• 39% of buyers are “underwater”—owe more than their car’s worth

Why?
Dealers now make more profit from financing (your loan) than from the actual cars! Source: Iowa Law Review.

3. What’s Next? Inventory, Tariffs, and the Used Car Squeeze

Car inventory is finally up—many brands are back to “normal” (about 70 days of cars on lots), but it’s NOT even across the board:

Oversupplied:

• Dodge (111 days of cars)
• Ford (99 days)
• Lincoln (127 days)
  = Price drops, discounts, and room to negotiate

Still Tight:

• Toyota, Honda, Subaru: under 40 days supply = No big deals

And who’s losing value fastest right now?
Surprisingly, it’s Tesla—depreciating up to 70x faster than Chevy over the past two years (CarEdge).

But a big warning:
There’s a new 25% tariff coming for imported vehicles and parts, whether you buy US or foreign. That can:

• Jump Ford/Chevy prices by ~$3,000 (CNN)
• Jump Mexican/Canadian cars by $6,000 or more
• Cause production delays, and maybe push affordable new cars into extinction

This means “cheap” new cars are disappearing, which just drives more folks into the used market (where prices are already nuts).

What You Should REALLY Do—My Hard-Earned Advice

Honestly? Take it slow.

1. Don’t rush into a costly car “just because.”
   Used prices may drop further as inventories rise and delinquencies increase.
   Most experts (and my gut) see a slow decline in used prices in the coming year, barring a big tariff mess. New prices? Maybe flat or up if tariffs stick.
2. Never accept the first loan from a dealer.
   ALWAYS check rates from credit unions, banks, and online lenders (Bankrate car loan comparison). Dealer rates are rarely the best.
3. Stick to the 20/4/10 Rule:
   • 20% down
   • 4-year loan (max!)
   • Payments are no more than 10% of your monthly income
     More details: NerdWallet Car Affordability Guide
4. If you’re drowning in payments or have negative equity, it’s still a decent time to sell and buy something way cheaper or just go used.
5. Consider “just keeping” your older car a while longer. Sometimes, a paid-off, semi-ugly ride is the ultimate flex in 2025.

🚗 Want weekly price updates and more? Check out CarEdge’s Car Market Tracker—they’re awesome and transparent.

Final Thoughts (No More Car Puns, Promise)

The car market is a black hole for wealth if you’re not careful.
Don’t let FOMO push you into something you’ll regret five years from now.
Take your time. Research. Negotiate. And always, always, shop your loan.

Let me know if you’re buying, selling, or just “car curious” in the comments! I read as many as possible (seriously—it’s more fun than reading dealership small print).

If this helped, hit that like button like you’re passing a slow driver in the left lane.
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Stay safe out there, and may your next car bring you more freedom (not just payments).

Useful Links & Resources (For US Shoppers)

• Cox Automotive – Wholesale & Used Car Trends
• CarEdge – Used Prices & New Tariff Analysis
• Consumer Reports – Car Loan Advice
• Bankrate Auto Loan Rates
• NerdWallet Car Affordability Calculator
• Credit Unions – Find Yours

Your turn: Have you tried to buy (or sell) a car recently? What’s your wildest payment/depreciation story?
Let’s talk about it—this is the one trend EVERY American needs to watch in 2025.