With market dynamics leading to record prices and at least a two-decade-low for incentives, new-vehicle affordability declined again in September. With income growth stalling, the decline in affordability is accelerating. The number of median weeks of income needed to purchase the average new vehicle in September increased to 40.8 weeks from an upwardly revised 39.2 weeks in August.

Cox Automotive/Moody’s Analytics Vehicle Affordability Index
September 2021
Click image to enlarge.

Most factors moved against affordability in September. The price paid moved higher to a new record, thanks in part to a richer mix of larger SUVs, trucks and luxury vehicles. Incentives declined as well. Only rates moved lower to slightly offset the higher financing costs. Estimated median incomes in September barely increased. With record-high prices and low incentives, the estimated typical monthly payment increased to a new record high at $657, which was up 19% year over year.

With the decline in September, new-vehicle affordability was much worse than a year ago when prices were lower and incentives were much higher. Affordability in September was worse than at any month covered by the index data, which dates to January 2012.

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 Nov. 15, 2021.

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.