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SEARCHConsumers get a three-fold break in October as affordability conditions take a turn for the better.
The average new-vehicle loan rate fell to 10.2%, its lowest level in 15 months.
Pexels/Karolina Grabowska
Though vehicle prices remain elevated, October brought a mix of better conditions for automobile consumers.
In fact, it was the most favorable affordability environment in more than three years, according to Cox Automotive and Moody’s Analytics tracking.
Cox credits declining interest rates and higher consumer incomes and vehicle incentives for the positive turn, despite new-vehicle prices being essentially static.
The enabling trio whittled down the median number of weeks needed to buy the average new vehicle from 38 to 37.4 month-over-month and from 40.7 weeks a year earlier for its best reading since August 2021, according to the two companies’ Vehicle Affordability Index.
The average new-vehicle loan rate fell 31 basis points to 10.2%, its lowest in 15 months, and the average monthly car payment dropped 1.5% to $743 after peaking at $795 in December 2022, Cox said. Meanwhile, consumer incomes rose about 4% year-over-year.
“Auto loan rates are beginning to decline, offering some relief to consumers,” Cox Automotive Chief Economist said. “In October, we also observed an improvement in auto credit availability.”
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