April Sees Sharp Decline in New-Vehicle Affordability Amid Rising Prices and Highest Monthly Payment Since December

After reaching its best level in 45 months in March, new-vehicle affordability fell in April despite a strong economy, due to the impact of tariffs, according to the Cox Automotive/Moody’s Analytics Vehicle Affordability Index.

“New-vehicle affordability declined in April to the worst level yet this year as the bite of higher prices and lower incentives turned around an improving trend,” said Cox Automotive Chief Economist Jonathan Smoke. “After steady improvements in affordability throughout 2025, we saw a significant setback in April with median weeks of income needed to buy an average new vehicle increasing by a full week.”

The estimated average auto loan rate increased slightly in April by 4 basis points to 9.77%¹, which was 92 basis points lower year over year. According to Kelley Blue Book, the average new-vehicle price increased 2.5% for the month. Income growth remained relatively strong but was insufficient to offset the impact of higher prices and lower incentives.

In April, the average payment rose by 3.0% to $753, marking the highest monthly payment since December, despite a 1.6% drop from the previous year. The number of median weeks of income needed to purchase the average new vehicle increased to 37.3 weeks from a downwardly revised 36.3 weeks in March. The average monthly payment reached a peak of $795 in December 2022.

COX AUTOMOTIVE/MOODY’S ANALYTICS VEHICLE AFFORDABILITY INDEX
APRIL 2025

Weeks of Income Needed to Purchase a New Light Vehicle

New-vehicle affordability in April was better than a year ago, when it took 39.1 weeks of median income to buy an average new vehicle, which was 4.6% higher. A year ago, prices were 1.1% lower, but interest rates were higher. Incomes and incentives were also lower in April 2024.

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 16, 2025.

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.