The $25k car is going extinct?

It's pretty simple (in the US, can't speak for elsewhere).

There are 2 big factors at play:

1. Margins. Manufacturers make huge margins on expensive vehicles and very slim margins on cheap vehicles. The numbers differ, but I think even in the lead up to the 2008 crisis automakers had to sell 5-10 "econobox" cars to make the profit they made on one luxury car, SUV, or truck.

2. Normalization of debt. For many Americans, having a monthly car payment in perpetuity is considered acceptable. Car loans have their place and can be used responsibly, but due to marketing, sales tactics, and cultural sensibilities what often ends up happening is that people start from a monthly dollar amount and then work forwards to buy the most expensive vehicle they can, even if it means taking the loan term out to 72 or 84 months. It's also very normal for people to never pay off their car, instead trading in the vehicle after 3-5 years and rolling equity in the loan over to their next car. Obviously, this consumer habit is great for dealers, manufacturers, creditors and buyers of consumer debt, as well as the US Government and investors -- it's just not ideal for the consumers themselves if they're trying to preserve wealth and build savings.

These two factors create an environment increasingly hostile to the cheap entry level car. Consumer demand is low since most don't spend responsibly, and automakers don't really want to make or sell them because the margins are so slim.

>having a monthly car payment in perpetuity is considered acceptable.

I think that really depends on what part of America. At least where I grew up around a bunch of middle class conservatives listening to eg Dave Ramsey (who has other problems IMO) most people think of you as reckless/irresponsible for doing that sort of thing.

I grew up around a bunch of middle class conservatives in the Southern USA and almost all of them were into debt on house, car, often even taking loans to pay for kids private school.

And you'd never know until the family divorced and their lifestyle drastically decreases.

Dave Ramsey has to be relatively new because debt was extremely extremely common among conservatives in the US (no idea about liberals didn't live among them)

Houses are debt, but are generally and appreciating asset

Cars are a depreciating asset. It usually does not make sense to go into debt to get one

Houses are a depreciating asset. They require constant maintenance expenses just to hold their value. It's the land under the house that's the appreciating asset.

Sort of. In a lot of areas, the cost of the house has skyrocketed in the last few decades. One factor is that you can’t buy an empty lot and then build a 20 year old $250k house on it in most markets. If you want to build a house, that house will be new (obviously — relocating an old house is a real pain), and the costs of construction are silly. This effect inflates the value of old houses in a lot of markets.

Of course, in markets that don’t have plenty of inventory of both empty lots and lots with old houses, it can be hard to value the house by itself.

> relocating an old house is a real pain

Has relocating an old house even been done? (Assuming the house wasn't built to be movable.)