Data Point
Vehicle Affordability Improves for Third Consecutive Month in January
Monday February 15, 2021
Article Highlights
- Affordability improved in January, as represented by median weeks of income needed to purchase a new vehicle declined to 32.2 weeks from 33.9 weeks in December.
- The Cox Automotive/Moody’s Analytics Vehicle Affordability Index continues to show that new vehicles have become relatively more affordable since October 2020, when the affordability index reached 35.3 weeks, the high point for the calendar year 2020.
- Affordability was slightly better this January compared to last January.
Affordability improved in January, as represented by median weeks of income needed to purchase a new vehicle declined to 32.2 weeks from 33.9 weeks in December. The Cox Automotive/Moody’s Analytics Vehicle Affordability Index continues to show that new vehicles have become relatively more affordable since October 2020, when the affordability index reached 35.3 weeks, the high point for the calendar year 2020.
The continued improvement in January was primarily driven by price paid, interest rate, and income which all saw trends that boosted affordability. Only incentives – which were kept low by manufacturers – moved against affordability in January.
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 March 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.