Data Point
New-Vehicle Affordability Declines to New Low in August
Wednesday September 15, 2021
Article Highlights
- With market dynamics leading to record prices and at least a decade-low for the month of August in incentives, new-vehicle affordability declined again in August.
- The number of median weeks of income needed to purchase the average new vehicle in August increased to 37.7 weeks from a downwardly revised 37.3 weeks in July.
- Affordability in August was worse than at any month covered by the index data, which dates to January 2012.
With market dynamics leading to record prices and at least a decade-low for the month of August in incentives, new-vehicle affordability declined again in August. Without improving incomes, the decline in affordability would have been even worse. The number of median weeks of income needed to purchase the average new vehicle in August increased to 37.7 weeks from a downwardly revised 37.3 weeks in July.
COX AUTOMOTIVE/MOODY’S ANALYTICS VEHICLE AFFORDABITY INDEX
AUGUST 2021
Most factors moved against affordability in August. The price paid moved higher and incentives declined while rates moved slightly higher, but estimated median incomes increased. With all financing factors increasing, the estimated typical monthly payment increased to a new record high, which was up 16% year over year.
With the decline in August, new-vehicle affordability was much worse than a year ago when prices were lower and incentives were much higher. Affordability in August was worse than at any month covered by the index data, which dates to January 2012.
Click here for the full methodology for the Cox Automotive/Moody’s Analytics Vehicle Affordability Index.
The next update of the Cox Automotive/Moody’s Analytics Vehicle Affordability Index will be published on Oct. 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.