Do you need to earn $100K a year to afford a new car in 2026? – USA Today
How much money do you need to earn to afford a new car in 2026? According to research from Cox Automotive only 37% of new car buyers in 2025 earned an annual income of less than $100,000.
This is a dramatic decrease from 2020, when Americans who earned less than $100K made up 50% of all new car sales. Where do average American drivers fall on the income spectrum and who can truly afford to purchase a new car in 2026?
The annual average salary in America in 2025 was $66,622, according to digital financial institution SoFi Bank. Millions of Americans earn less than $100,000 a year, so buying a brand new car with an average or below-average income in 2026 could be an unpopular financial decision.
The average new vehicle price is above $50,000, says Kelley Blue Book. Most Americans earning under $100K a year are looking for more affordable used car options for transportation.
Choosing the right used vehicle depends on your budget and lifestyle needs. Once you have a budget (or price ceiling) and vehicle segment you’re interested in, research the best models in that segment (ex, best small SUVs). Finally, refine your search based on brand, year and mileage preferences.
Once you’ve found a nameplate that you like, use platforms like Kelley Blue Book to search for the typical listing price of a used model. The 2020 Toyota RAV4 is a popular small SUV that has benefited from depreciation.
A 2020 RAV4 with 78,000 miles (average mileage for its age) has a typical Kelley Blue Book listing price of just $21,040, which is significantly lower than the new vehicle price. A six-year-old RAV4 may be too heavily used for some drivers, but you can use tools like Kelley Blue Book to find pricing for different model years.
When you have a reasonable price range for a vehicle of interest, you can search local dealers as well as online platforms like CarMax and Carvana to see if the used vehicle you want is listed for a price you’re willing to pay.
While new vehicles aren’t as prone to issues as used models, even brand-new cars can experience mechanical or software problems. Thankfully, many mechanical issues tend to be covered under warranty for new vehicles. If you’re set on purchasing a new vehicle in 2026, it can be incredibly expensive to finance (or purchase outright), but you do get the benefit of being the first owner and experiencing some of its best years.
Used car buyers can save big bucks, but they lose out on the driving dynamics and overall feel of a brand-new vehicle that hasn’t been weathered by ownership and serious mileage. One of the easiest ways to determine whether you should choose a brand-new or used vehicle is by considering how long you want to own and drive it.
If you’re looking for a reliable and affordable daily driver that will last a few years, a vehicle like a used Toyota Camry Hybrid is a solid choice. If you have a larger budget and want a family SUV that will be the go-to for countless road trips and adventures, a new SUV like the Subaru Forester is a good choice. Ultimately, whether you purchase a new or used vehicle, regular maintenance and upkeep still play huge roles in its longevity and driver satisfaction.
