New-Vehicle Affordability Declined in November

New-vehicle affordability declined in November, according to the Cox Automotive/Moody’s Analytics Vehicle Affordability Index. Lower interest rates, higher incentives and increased incomes could not offset the impact of rising prices.

“In November, affordability saw a slight dip from the previous month as demand intensified, but the good news is that new vehicles are still more affordable compared to a year ago,” said Jonathan Smoke, chief economist at Cox Automotive. “The November index changed by less than 1% from October 2024, when new-vehicle affordability reached its best level since August 2021.”

The estimated average auto loan rate declined in November by 9 basis points to 10.44%¹, the lowest average rate in 15 months. However, the average new-vehicle price jumped by 1.5% for the month, according to Kelley Blue Book. Higher incentives and a 3.6% year-over-year income growth somewhat softened the impact of rising prices.

In November, the typical monthly payment rose by 1.0% to $756, and the median weeks of income needed to purchase an average new vehicle increased slightly to 37.9 weeks from an upwardly revised 37.6 weeks in October. The average monthly payment had previously peaked at $795 in December 2022.

COX AUTOMOTIVE/MOODY’S ANALYTICS VEHICLE AFFORDABILITY INDEX
November 2024

Weeks of Income Needed to Purchase a New Light Vehicle

New-vehicle affordability improved in November compared to a year ago, when it took 39.9 weeks of median income to buy an average new vehicle, which was 5.0% higher.

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. 15, 2025.

¹ The index input of the average interest rate paid by consumers is calculated to reflect a 72-month, fixed-rate loan. For the latest Dealertrack estimated, volume-weighted average new loan rate, visit the Auto Market Snapshot.

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 brand. 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.