New-vehicle affordability declined again in November as auto loan rates reached another 20-year high, and the average new-vehicle price increased and set a record, according to the Cox Automotive/Moody’s Analytics Vehicle Affordability Index. The number of median weeks of income needed to purchase the average new vehicle in November increased to 43.3 weeks from 42.8 weeks in October.
Cox Automotive/Moody’s Analytics Vehicle Affordability Index
Weeks of Income Needed to Purchase a New Light Vehicle
Average Monthly Payment for New Car Hits Another Record High
Supporting affordability, median income grew 0.4%, and incentives from manufacturers also increased modestly. All other factors moved against affordability. The average price paid for a new vehicle increased by 0.9%, according to Kelley Blue Book. The average interest rate increased another 40 basis points. As a result of these moves, the estimated typical monthly payment increased by 1.8% to $762, which was another record.
New-vehicle affordability in November was much worse than a year ago when prices were lower, incentives were higher, and rates were lower. The estimated number of weeks of median income needed to purchase the average new vehicle in November was up 7% from last year.
However, according to Cox Automotive Chief Economist Jonathan Smoke: “As we entered December, the latest data show consumers’ views of buying conditions for vehicles improved and is at the second-best reading since March. Though auto credit access tightened sharply in November, and now we see vehicle affordability decline again, consumers remain resilient.”
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 Jan. 16, 2023.
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.