Auto Affordability Inches Up
The latest Cox Automotive and Moody’s Analytics index shows a slight increase in new-vehicle affordability despite high prices.
New-vehicle affordability improved by 1% compared to last year.
Pexels/Shane West
Despite new-vehicle prices remaining high in August, affordability improved slightly, according to Cox Automotive.
Its affordability index compiled with Moody’s Analytics analyzes vehicle transaction prices, consumer income, amounts financed, and interest rates to calculate the accessibility of new vehicles.
The average new-vehicle transaction price was flat month-over-month at $50,090, but the average auto loan interest rate fell by two basis points to right at 9½%. The average monthly payment was flat at $770.
A year-over-year comparison showed a 2% ATP increase and a nearly 3% average monthly payment increase. Interest rates rose a tepid one basis point year-over-year.
But the index declared that new-vehicle affordability improved by 1% compared to last year because the weeks of median income needed to purchase the average new vehicle dipped slightly from 35.9 to 35.5.
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