Car Affordability Crisis 2025: What the New CAFE Rules, Tariffs and Toyota’s Supercar Plans Really Mean
- LeeAnn Shattuck
- 4 days ago
- 4 min read
New car prices are at record highs, buyers are stretched thin and the latest policy changes are raising big questions about where affordability goes from here. The car affordability crisis is not slowing down, and then Toyota decided to unveil not one but three supercars. That was the moment I officially needed to take off my Car Chick hat and put on my economist hat. I went straight to the spreadsheets, ran the numbers and performed a full Bullshittery Check. Spoiler alert. The industry narrative about returning to “affordable cars” does not survive contact with actual data.
Before we dig in, a quick note for new readers. I help real people buy cars without getting steamrolled by dealership nonsense. I also have a degree in quantitative economics from Stanford, which I never expected to use to analyze automotive policy and five figure repair bills, yet here we are. Life has a sense of humor.
The Car Affordability Crisis: Supercars in a World Where People Can't Afford Corollas
Toyota’s latest announcement was a flex for the ages. The company unveiled a revived all-electric Lexus LFA concept, a 641 horsepower GR GT street car and a GT3 racer that looks like it teleported in from a video game. They are undeniably cool. I would absolutely take one around a race track (hint hint, Toyota). But releasing them right now feels like showing off a Rolex at a time when everyone else is clipping coupons just to afford groceries.
Because out here in the real world, buyers are fighting to afford basic transportation. The average new car price has now topped fifty grand. The average new car payment is well above $700 a month. One in five buyers is paying over $1,000 every month. Used cars are still inflated compared to pre-pandemic levels. Wages have not kept up with any of this. People are financing used cars for six years and hoping nothing expensive breaks before it's paid off. It's not pretty.
What's worse is that automakers know all of this. They also know the last few years trained buyers to accept higher prices because choices were limited. During the chip shortage years, companies made record profits by building high-trim, high-margin models and quietly dropping the affordable ones. Now that production is back, those margins are too addictive to give up. Which is why “starter trims” and true budget-friendly cars are harder to find than ever.
Enter the CAFE Rollback and the Great Affordability Fairytale
The Trump administration recently proposed lowering the 2031 fuel economy target from just over 50 miles per gallon to about 34.5. Crossovers and small SUVs would be counted as “cars” instead of “trucks”, which makes compliance easier. Trump said Americans had been “brainwashed” into caring about efficiency. Ford’s CEO stood next to him and called it a win for affordability. Environmental groups accused the White House of handing gifts to the oil industry.
Everyone got their headlines. Everyone got their soundbite.
But as soon as the press conference ended, I did what I do best. I ran the numbers.
Lowering CAFE standards does save automakers some money because high-efficiency engineering is costly. But those savings are tiny compared to the tidal wave of financial pressure the industry is already facing. Tariffs are adding thousands of dollars to many vehicles. EV development is still losing billions for several manufacturers. Supplier prices are higher. Labor contracts are more expensive. The EV tax credit rules tightened so fast that most automakers lost their pricing buffer before they could scale production.
When you stack the real costs against the theoretical CAFE savings, the math is brutal. A relaxed fuel economy rule cannot produce a cheaper car. Not when automakers are already plugging holes in the budget the size of the Grand Canyon.
Which brings us back to Toyota and its supercar runway show.
The Real Disconnect
Toyota’s supercar celebration captures the divide perfectly. The industry is talking about affordability while clearly prioritizing luxury margins, halo cars and investor excitement. Meanwhile, the middle class is staring down car payments that look suspiciously like mortgages.
Modern shoppers are not begging for 641 horsepower. They want a safe, reliable, fuel efficient car that fits their budget. They want sanity to return to the market. They want automakers to remember that practical cars are the backbone of the industry, not the garnish.
Until that shift happens, expect more shiny distractions on showroom stages while the cars most people actually need slide farther out of reach.
If you want the deeper analysis behind tariffs, regulations and all the pricing pressure automakers hope you are not paying attention to, make sure you subscribe to the Straight Shift Newsletter. Subscribers get access to my Tariff Tracker™ where I break down the real numbers and explain how these policies actually affect what you pay at the dealership. If you want clarity instead of bullshittery, that's where you will find it.