Rising car costs are pricing people out, here’s why

(InvestigateTV) — For many Americans, a car is essential to get to the grocery store, a doctor’s appointment or work. But that necessity is becoming out of reach for a growing number of people as new and used car prices hit record highs.

A 2025 report from iSeeCars found for used cars up to five years old, a price tag below $20,000 is nearly a thing of the past. And 2025 was the first year where no new cars, including economy vehicles, had a starting price below $20,000.

At the same time, wages are not keeping up with increasing price tags. The issue is leaving people potentially risking their health and safety.

The real cost of no car

Nancy Maxwell has had nine cars in her nearly 40 years of driving. A retired teacher and coach, she didn’t know her last car, a Suzuki, would be her last.

She hasn’t had a car in a year because she said nothing is in her price range. The cars she can afford all need too much work.

" That’s something I’ve always dreamed of having a car again. That’s out of reach," Maxwell said when asked if cars have become unaffordable.

Most of the time, Maxwell said she stays home until somebody gives her a ride.

That’s a big problem because Maxwell faces a major hardship other than not having a car. She has cancer.

“I’ve got rectal colon cancer, and my biopsy just came back, and it’s gotten worse,” Maxwell said.

She has to go to the doctor every week.

Knowing she would need to get to weekly appointments without a car, Maxwell told us she was “scared and nervous” because she didn’t want to put her family “under any more pressure.”

A growing national problem

Todd Jordan with the United Way of Greater Kansas City said there is a lot of pressure that comes with not having a car.

“Once transportation goes you lose that access to employment, you lose that access to childcare, education, to your healthcare,” Jordan said.

Jordan said nationwide the charity is seeing a growing need for rides because people can’t afford their own car.

“A study from a couple years ago found only about 13% of low-income households live near a major public transit line,” Jordan said. “So that’s a lot of people that maybe don’t have access to a car.”

Roughly 70% of Americans rely on a car to take them to work, according to the U.S. Census Bureau.

If they can’t afford one, research has shown that means they could lose their jobs, which then leads to unpaid bills and potentially homelessness.

Jordan said it’s a problem United Way is trying to help fix.

How we got here

Karl Brauer is an executive analyst with iSeeCars, an online auto research platform.

“Today, there’s almost no used cars from one to five years old that are available for under $20,000. The average used car price is now over $30,000,” Brauer said. “So it’s essentially gone up 50%.”

Brauer said prices are going up drastically because of a perfect storm over the last five years.

That’s right around the time the COVID-19 pandemic started. Brauer said car production dropped, demand went up, then so did prices on both new and used cars.

In 2019, Brauer said the average three-year-old used car cost about $23,000. By 2025, that jumped to more than $32,000, a nearly 40 percent increase.

A new 2026 car on average costs $50,000, he said.

The last ingredient in that perfect storm was inflation.

“We have not seen income go up 50% in the last five years, but we’ve seen car prices go up,” Brauer said.

A growing number of households, more than 11 million, have no vehicle, according to the U.S. Census Bureau.

No easy solution

Brauer said there is no easy way to move car prices back down. “Price is always ultimately a reflection of supply and demand.”

Brauer said there’s “really nothing else” that could alleviate prices.

“If we had some kind of major economic shift in a bad direction or a wrong direction, but again, that would still ultimately mean reduced demand,” Brauer said.

That doesn’t help people like Maxwell, who must see her doctors once a week for cancer treatments.

A lifeline for those in need

Lucky for Maxwell, there’s help for people like her.

United Way teamed up with Lyft to provide free rides to people in need who call 211. Nationwide, the program has provided more than 500,000 rides since 2018 to locations like people’s work, grocery stores, school and doctor’s appointments.

“We will schedule the ride a take them round trip if they need it to whatever location they need,” Jordan said.

The program, Ride United, helps provide someone who is in critical need for transportation.

“I am 100% sure that without programs like Ride United or when these programs are shut down, there are people who are at significant risk of missing those appointments that are necessary for their health and potentially jeopardize their long-term survival,” Jordan said.

Maxwell said she’s one of them. “They’re my breath. They are my fuel.”

“I think without them I wouldn’t be where I’m in front of you now without that option,” Maxwell said.

While Maxwell will likely never own a car again, she’s optimistic she can get to where she needs to go so long as programs like Ride United exist. She hopes people in similar situations to hers who didn’t know about this option can utilize the lifeline.

“A blanket of goodness over me. It’s a safety net that I don’t have that where I’m staying up all night with my thoughts,” Maxwell said.

Additional resources

Several state and local nonprofits across the country also offer transportation help, whether it be with car payments, repairs or money for a vehicle.

The National Consumer Law Center said there are more than 100 such organizations.

If you’re in need of a ride, you can call 211 to connect you with your local United Way organization for help.

The cost of ownership

Bankrate looked at all the costs once you drive a vehicle off the lot, things like insurance, maintenance, repairs, gas and taxes.

On average, Americans spend about $6,800 a year on car ownership costs alone.

Shannon Martin, an insurance expert with Bankrate, said that’s about $575 a month, and that’s in addition to a lease or a car loan payment.

Americans spend around $1,600 a year on gas.

“Nationally, we spend around $1,400 a year on the cost of maintenance and repairs,” Martin noted.

Martin said that tariffs can also impact prices, especially when it comes to vehicle parts.

Martin said one way to keep your budget under control is to take care of your car. Check the tires and get routine oil changes. It will help keep your vehicle on the road longer.