New-Vehicle Affordability Declines Slightly in August
New-vehicle affordability showed a slight decline in August as reported by the Cox Automotive/Moody’s Analytics Vehicle Affordability Index. The increase in vehicle prices overshadowed benefits from lower interest rates and continued income growth.
Key Highlights:
- The estimated average auto loan rate fell by 2 basis points to 9.49%, which is slightly higher than last year’s figures.
- The average new vehicle price rose by 0.5% to $50,090.
- Income growth increased by 0.3% from July; however, it was insufficient to counterbalance the vehicle price increase.
Vehicle Affordability Index
Due to rising prices, the typical payment rose to $770, marking a 0.5% increase month-over-month and a 2.6% increase year-over-year. The number of weeks of median income needed to purchase an average new vehicle increased to 35.5 weeks, up from 35.4 weeks in July.
Despite a 1.9% increase in prices year-over-year, affordability has improved 1.2% compared to the previous August thanks to stable interest rates and higher incomes. As a result, it now takes 35.9 weeks of income to afford an average new vehicle.
For more detailed insights, visit the full methodology of the Cox Automotive/Moody’s Analytics Vehicle Affordability Index.
The next update will be available on October 15.
Additional Resources:
- Cox Automotive/Moody’s Analytics Vehicle Affordability Index Methodology
- Full Series of Vehicle Affordability Index Reports
Note: The index reflects the average interest rate for a 72-month, fixed-rate loan.
