Vehicle Affordability Improves in November

Vehicle affordability improved 1.42% month over month in November according to the Cox Automotive/Moody’s Analytics Vehicle Affordability Index (VAI). November was the first month-over-month improvement in vehicle affordability since May 2020, when the index reached 30.80, the lowest point in the past eight years. Year over year, November’s VAI of 32.55 is just slightly lower than November 2019, when the index stood at 32.81, meaning affordability is virtually unchanged, returning to year-ago levels after a sizable dip through the summer.

Factors that helped improve vehicle affordability in November include slightly lower average transaction prices ($39,405), down from a record in October ($39,588) and resulting in lower financed amounts and monthly payments. Average household income in the U.S. was mostly unchanged from last month and November 2019. New vehicles in November 2020 were more affordable than in any November dating back to November 2012, when the index stood at 35.39. 

Click here for the full methodology for the Cox Automotive/Moody’s Analytics Vehicle Affordability Index.

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The January update for the Cox Automotive/Moody’s Analytics Vehicle Affordability Index will be published on Jan. 15, 2021.

The Cox Automotive/Moody’s Analytics Vehicle Affordability Index (VAI) is updated monthly using the latest data from government and industry sources, including key pricing data from Kelley Blue Book, a Cox Automotive company. This important industry measure will be released at mid-month to indicate if the prices paid for new vehicles are moving out of consumers’ financial reach or becoming more affordable over time.