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Data Point

Vehicle Affordability Improves Again in December

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Article Highlights

  1. Affordability improved in December, as represented by median weeks of income needed to purchase a new vehicle declined to 32.2 weeks from 33.8 weeks in November.
  2. The index was below the mid-point for the extreme highs and lows experienced in 2020.
  3. Affordability was slightly better this December compared to last December.

Affordability improved in December, as represented by median weeks of income needed to purchase a new vehicle declined to 32.2 weeks from 33.8 weeks in November. The index was below the mid-point for the extreme highs and lows experienced in 2020 as every key variable (price paid, interest rate, incentives, and income) had substantial shifts throughout the year.

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In addition to higher incentives and lower rates, the December improvement was primarily driven by higher incomes assisted by projections of additional stimulus payments and enhanced unemployment benefits from the $900-billion package that was signed into law in December.

With the improvement, the index is almost where it was in February before the pandemic, and affordability was slightly better this December compared to last December. The year-over-year change is due to lower rates and higher incomes, as prices are up, and incentives are down.

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 Feb. 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.