Data Point
New-Vehicle Affordability Remains Stable in March
Friday April 15, 2022
Article Highlights
- New-vehicle affordability remained stable in March but remains near the low in affordability set in December as rate increases in 2022 offset income gains and modest price declines.
- The number of median weeks of income needed to purchase the average new vehicle in March remained 42.9 weeks, as was the case in February.
- The estimated typical monthly payment increased 0.3% to $691, which was a new record high.
New-vehicle affordability remained stable in March but remains near the low in affordability set in December as rate increases in 2022 offset income gains and modest price declines, according to the Cox Automotive/Moody’s Analytics Vehicle Affordability Index. The inputs to the index again moved in differing directions in the month. The number of median weeks of income needed to purchase the average new vehicle in March remained 42.9 weeks, as was the case in February.
Cox Automotive/Moody’s Analytics Vehicle Affordability Index
March 2022
Supporting affordability, the price paid moved 0.3% lower following a larger decline in February. The peak in pricing was in December at $47,064. Median income also grew. The rest of the factors worked against affordability. Incentives declined slightly. The average interest rate increased another 32 basis points. As a result of these moves, the estimated typical monthly payment increased 0.3% to $691, which was a new record high.
New-vehicle affordability in March was much worse than a year ago when prices were lower and incentives were higher. The estimated number of weeks of median income needed to purchase the average new vehicle in March was up 18% 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 May 16, 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.