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Data Point

New-Vehicle Affordability Declined in April

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Article Highlights

  1. New-vehicle affordability declined in April, reversing some of the improvement in March.
  2. The number of median weeks of income needed to purchase the average new vehicle increased to 37.7 weeks.
  3. The typical payment increased by 1.8% to $762.

New-vehicle affordability declined in April, reversing some of the improvement in March, according to the Cox Automotive/Moody’s Analytics Vehicle Affordability Index.

“The decline in affordability resulted from negative trends in pricing and incentives, as manufacturers and dealers were less aggressive on promotions and discounting than they were for the quarter end,” said Cox Automotive Chief Economist Jonathan Smoke.

The estimated average auto loan rate improved in April by 24 basis points to 10.22%, the lowest rate in nine months. That rate decline did not offset the 2.2% increase in the average transaction price paid or the decline in incentives. Income growth continued as well.

COX AUTOMOTIVE/MOODY’S ANALYTICS VEHICLE AFFORDABILITY INDEX
APRIL 2024

The typical payment increased by 1.8% to $762, and the number of median weeks of income needed to purchase the average new vehicle increased to 37.7 weeks from an upwardly revised 37.1 weeks in March. The average monthly payment peaked at $795 in December 2022.

New-vehicle affordability in April was better than a year ago when vehicle prices were higher and incentives were far lower, yet interest rates were also lower. The estimated number of weeks of median income needed to purchase the average new vehicle in April was down 5.1% from last year.

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 June 14, 2024.


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 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.

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