Consumers are concerned about rising fuel prices and affordability, and that may be reflected in the speed at which the cheapest cars are being driven off dealer lots.
From the first quarter to the third quarter, the number of days it took dealers to sell cars priced between $20,000 and $29,999 decreased by 20%, according to Edmunds data. This sales pace was the largest acceleration of any price point.
Vehicles priced between $30,000 and $39,999 sold about 18 percent faster, and the number of days it took for the next tier ($40,000 to $49,999) to sell decreased by nearly 12 percent, Edmunds said.
All of these price points also had shorter review times than their more expensive price points. The lowest price tiers took less than 60 days to move off the lot, and the cheapest tiers sold the fastest. Meanwhile, all segments of vehicles over $50,000 took more than 60 days to sell.
“If you’re a dealer and you have the inventory and the price range, you’re definitely going to notice,” said Ivan Drury, director of insights at Edmunds.
Cheaper vehicles may sell faster, but they’re still hard to find. According to Cox Automotive, the average listing price for a new car in September was $49,726.
Additionally, overall sales in some key segments priced below $40,000 are down. This is especially true for compact cars, which have fallen about 4% since the beginning of 2026, and compact SUVs, which have fallen nearly 8% over the same period, according to Cox Automotive.
These different data points appear to be moving in opposite directions. Meanwhile, cheaper cars are rapidly leaving dealer lots. On the other hand, sales in the affordable segment are declining.
There are several reasons for this, according to analysts who follow the industry. One is that there may not be enough low-priced cars on dealer lots to begin with.
“I think there’s a supply problem at the end of the market,” said Mark Strand, deputy chief economist at Cox Automotive. “We have to kind of grade the market on a curve until we see what’s going on in the fourth quarter data.”
The compact SUV segment in particular is suffering from a shortage of two popular models.
The Toyota RAV4, America’s most popular SUV, has been in short supply at many dealerships this year as the automaker moves production to a factory in Kentucky, Strand said. The company has also transitioned its entire lineup to hybrid powertrains at a time when demand for hybrids is extremely high.
The other SUV missing is a Ford Escape. The automaker has discontinued production to replace its upcoming mid-size EV pickup truck.
Sam Fiorani, vice president of global forecasting at AutoForecast Solutions, said compact cars, another slow-selling low-end segment, face structural inventory challenges.
“Over the past decade, we’ve seen affordable new compact cars disappear,” he said.
The Detroit automaker has switched up its lineup of compact coupes and sedans in favor of small crossover SUVs. These crossover SUVs tend to have slightly higher sticker prices than similarly sized cars.
Currently, there are no small passenger sedans sold by American manufacturers. Most on the market are made in Japan or Korea, with a few German models such as the Volkswagen Jetta and Golf hatchback.
“There are a lot of brands that have just been taken off the market,” Fiorani said.
America’s smallest passenger car is ford mustang, general motorsChevrolet Corvette and midsize cars tesla Model 3 sedan, according to AutoForecast Solutions. The company classifies both the Mustang and Corvette as sports cars, occupying a different niche than compact sedans like the Honda Civic and Toyota Corolla.
Starting prices for the Mustang start at $33,490, Model 3 starts at $34,990, and Chevrolet Corvette starts at $71,300. Meanwhile, cars like the Civic, Corolla, and Jetta all start under $25,000.
“Compact car buyers are very price sensitive,” Fiorani said. “So when gas prices go up, it puts pressure on car payments, meaning people can’t afford that $500 or $600 a month car payment and have to turn to the used market.”
In fact, used wholesale prices for compact cars are rising, faster than most other segments, according to Cox Automotive. Wholesale prices (the prices at which vehicles are sold at large auctions, such as Cox Automotive’s Manheim auction) are an indicator of prices in the fragmented used car market as a whole.
As prices rise, auto finance statistics show historically more buyers are able to afford cars.
Approximately one in four buyers financing their purchase received an 84-month loan, a record number. In the third quarter, nearly 3 out of 10 trade-ins for new car purchases had negative equity. This means the car being traded in is worth less than the loan balance. Shoppers often roll these negative balances into new loans, which increases the cost of new payments.
Automakers are also coordinating production and demand more closely to avoid discounting vehicles. Incentives averaged about 6.6% of the average transaction price as of October, according to Cox Automotive. Leasing is a way to buy a car with lower payments, but leasing rates are also coming down.
Edmunds’ Drury said vehicle trade-in data suggests many of the buyers snapping up fast-selling, inexpensive vehicles are first-time buyers or purchasing additional vehicles.
The subcompact SUV segment is one of the lower price groups that will see an increase in sales in 2026. This is a segment that attracts many first-time buyers. But this is still a relatively small portion of the overall car market, Fiorani said.
“This is not the mainstream car that Americans want,” he said. “This is the vehicle that entry-level buyers need to get to work and school. … It’s people who don’t have families yet.”
Drury said repeat customers are less likely to switch to a compact car or SUV.
“The moment you get in the other car, it’s a little bit smaller, but it’s not comfortable. It doesn’t fit all your belongings, all your kids’ soccer practice equipment, and that’s it,” he said. “We’re not giving up the convenience features we’re used to, like 360-degree cameras, ventilated seats and heated steering wheels. Automakers know it. Dealers know it, too.”
People who are truly strapped for money can either pick up one of the relatively few low-priced cars on dealer lots, move onto the used market, or keep their car for a long time.
“People looking to buy small cars are really hurt by the current economic climate,” Fiorani said. “So these people are switching to used cars or trying to keep their current cars for as long as possible. Automakers need to prepare for a softening market.”
