New-vehicle affordability declined slightly in June, as higher prices and higher interest rates outweighed strong income growth.

The estimated average auto loan rate increased to 9.58%, up from 9.53% in May and mostly flat year over year. The average vehicle price increased 0.4% month over month to $49,758 according to estimates from Kelley Blue Book. Income growth remained steady in June, up 0.3% month over month. Higher prices and interest rates reduced buying power, though, and slightly lower incentives added further pressure on affordability last month.

The typical monthly payment increased 0.7% to $763, an increase of 0.5% year over year. The number of median weeks of income needed to purchase the average new vehicle increased to 35.3 weeks from an upwardly revised 35.2 weeks in May. The average monthly payment peaked at $795 in December 2022, but has remained remarkably steady in 2026, averaging $758 during the first half.

New-vehicle affordability last month was better than a year ago even though prices were 0.6% higher because interest rates were lower and incomes were notably higher, up by 4.1% year over year. Incentives in June were also 1.5% higher than a year ago. The estimated number of weeks of median income needed to purchase the average new vehicle in June was down 3.4% from a year earlier, suggesting that overall economic conditions continue to challenge vehicle affordability more than vehicle prices. (Read more here: Vehicle Affordability in America: The Car is Not the Villain.)


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 August 17th.

1 The index input of the average interest rate paid by consumers is calculated to reflect a 72-month, fixed-rate loan. For the latest Dealertrack estimated volume-weighted average new loan rate, visit the Auto Market Snapshot.

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 brand. 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.