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Car Affordability Outlook: Modest Relief Expected by 2026 Amid Tax Benefits and Lower Borrowing Costs
Car Affordability Outlook: Modest Relief Expected by 2026 Amid Tax Benefits and Lower Borrowing Costs
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BTCCSquare news:
Households may find new vehicles slightly more affordable by late 2026 as automakers ease price hikes and a new tax benefit takes effect. Oxford Economics projects a 2-3% decline in car purchases for 2026 compared to 2025, noting that affordability improvements—while underway since 2023—have yet to shift consumer sentiment decisively.
The forthcoming deduction on car loan payments could provide meaningful savings, though its impact on low-income buyers remains limited. With borrowing costs expected to fall, the calculus for replacing vehicles may tilt favorably next year—a potential bright spot in an otherwise stagnant market.
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