Yes. Of all the people considering buying new cars, there are some at the margin of buying or not buying.

Beyond that it seems more than reasonable, when the average cost of a new vehicle is in the 30k range or whatever it is these days, a difference of 500 or 1000 dollars like the parent comment gives as an example is a solid couple or few percent of the cost of the vehicle, almost by definition that will make or break around the same percentage of sales.

If you finance the car, that extra cost about extra ~$10/m

It might boost the sales of cheaper cars. Americans buy lots of big cars. Also Americans make use of mostly new cars. In places where cars are expensive, the roads look like an American's cars junkyard.

That's not exactly true. There are always near-substitutes.

If you can't afford a new Honda sedan you can: (1) look towards a Hyundai sedan, (2) look towards financing the same car for another year (which is why 7 year financing plans are common in the USA in the last decade), or (3) look at a used car.

A $500 cost difference between this month and next month means you may consider spending another $500+ on maintenance to keep your existing car running longer, but if you get into a place where your current car is no longer usable, there are several options before you have to forgo having a car altogether.

Yes, when prices rise, demand lowers as a continuous function.

It's not like nothing happens until it's an $800 difference and then there is "quantum leap" change.

> Does a price difference of $500 or $1000 really make someone say "all right, I'd rather do without a car"?

The answer to this is obviously yes if you think about it (assuming you're talking about deciding against buying a new car specifically). The question is how many people?

My guess is no, but it might make someone say "all right, I'd rather get a used car".

And person a getting a used car might make person b who was going to get a used car not get a car at all (or get a lower quality used car making person c...).

Also it might make some families go "all right I won't get a 2nd (or nth) car".

It also changes the math when you have an old car in need of repair and have to decide whether to fix it or replace it.