New-vehicle affordability declined again in September, with auto loan rates reaching a 15-year high even though prices declined slightly. The number of median weeks of income needed to purchase the average new vehicle in September increased to 42.2 weeks from a downwardly revised 42.1 weeks in August.
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 Record High $738
Supporting affordability, median income grew 0.4%, and the average transaction price declined 0.3% to $48,094 from a record high in August, according to Kelley Blue Book. All other factors moved against affordability. Incentives fell to at least a 20-year low. The average interest rate increased another 23 basis points. As a result of these moves, the estimated typical monthly payment increased by 0.7% to $738, which was a record high.
New-vehicle affordability in September was much worse than a year ago when prices were lower, incentives were higher, and rates were much lower. The estimated number of weeks of median income needed to purchase the average new vehicle in September was up 9% 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 Nov. 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.