Data Point
New-Vehicle Affordability Declines Again in May, Typical Monthly Payment Hits New Record of $712
Wednesday June 15, 2022
Article Highlights
- New-vehicle affordability worsened again in May, with increases in interest rates and vehicle prices outpacing income growth.
- The number of median weeks of income needed to purchase the average new vehicle increased for the fourth consecutive month reaching 41.3 weeks in May from an upwardly revised 40.8 weeks in April.
- The estimated number of weeks of median income needed to purchase the average new vehicle in May was up 19% from last year.
New-vehicle affordability worsened again in May, with increases in interest rates and vehicle prices outpacing income growth. The number of median weeks of income needed to purchase the average new vehicle increased for the fourth consecutive month reaching 41.3 weeks in May from an upwardly revised 40.8 weeks in April.
Cox Automotive/Moody’s Analytics Vehicle Affordability Index
May 2022
Weeks of Income Needed to Purchase a New Light Vehicle
Supporting affordability, median income grew 0.3%, but all other factors moved against affordability. The price paid moved 1.0% higher. Incentives declined. The average interest rate increased another eight basis points. As a result of these moves, the estimated typical monthly payment increased 1.7% to $712, which was a new record high.
New-vehicle affordability in May 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 May was up 19% 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 July 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.