This past April, new vehicle sales fell for the eighth month in a row. What’s worse, around a million buyers have fully disappeared from the market since 2020. Industry forecasts that once predicted there’d be a full rebound back to pre-Covid levels of seventeen million annual sales have been abandoned. According to the latest adjustments, sales very well could remain stuck near (or below) sixteen million for years to come. Taken together, it’s getting harder and harder to ignore: The U.S. auto market is shrinking.

Car dealerships are definitely feeling the consequences. Buyers who once replaced their cars every few years are now fine with keeping their aging cars on the road longer if it means avoiding the cost of shopping for another. That’s pushing the average age of vehicles in the US to a historic high of about 13 years. Used vehicles are hardly any different, with prices there also staying high even years after the supply disruptions and strong demand of the pandemic.

The downward trend is mostly being driven by the obvious: High interest rates, persistent inflation, rising gas prices, and tariffs. It’s all pushing monthly payments sky-high. Meanwhile, the average cost of a new vehicle is about $50,000 right now. That’s way out of reach for the middle-class buyers who used to make up the backbone of the industry. And it looks like it’s probably going to stay that way for a while.

Hybrids look like one of the only real bright spots right now. Sales have climbed more than 9% and now make up for over 14% of new vehicle purchases. Fully electric vehicles are moving in the opposite direction. EV sales have dropped more than a third for the year to date, taking their market share down to just 5%. They make up many of the worst-selling vehicles of 2026. That growing divide is part of a much larger disconnect going on between what automakers want and what drivers want. Right now, it really seems to come down to reliable transportation that comes with lower fuel costs and no major lifestyle changes or premium price tags. Clearly, for many, that’s a hybrid.