New-Vehicle Affordability Declines Slightly in February; Estimated Typical Monthly Payment Hits Record High
Tuesday March 15, 2022
New-vehicle affordability declined slightly in February but remains a bit better than December. The inputs to the index moved in differing directions in the month. The number of median weeks of income needed to purchase the average new vehicle in February increased to 42.9 weeks from 42.8 weeks in January but remained below the record high of 43.2 weeks in December.
Cox Automotive/Moody’s Analytics Vehicle Affordability Index
Supporting affordability, the price paid moved 0.5% lower following an even larger decline in January from what had been a record average price of $47,064 in December. Median income also grew. The rest of the factors worked against affordability. Incentives declined slightly. The average interest rate jumped 49 basis points. As a result of these moves, the estimated typical monthly payment increased 0.6% to $689, which was a record high.
After the decline in February, new-vehicle affordability was much worse than a year ago when prices were lower and incentives were higher. The estimated number of weeks of median income need to purchase the average new vehicle in February was up 15% 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 April 15, 2022.
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.