On the Dash:
- Affordability held steady despite higher vehicle prices.
- Income growth continues to offset rising purchase costs.
- Monthly payments remain below the 2022 affordability peak.
According to the latest Cox Automotive/Moody’s Analytics Vehicle Affordability Index, it showed little change in July. The index revealed that buyers needed 35.4 weeks of median income to purchase the average new vehicle, slightly up from 35.3 weeks in June. Affordability also improved 1.5% compared to a year ago, when buyers needed 35.8 weeks of income.
Income growth drove much of that improvement, offsetting higher vehicle prices. Median income rose 4% year over year in July, while the average price of a new vehicle climbed 0.2% from June to reach $49,855. Notably, vehicle prices increased by 1.9% year over year, while incentives fell by 2.4% over the same period.
Average monthly payments continued to climb as well, rising 0.7% from June to $768. Although payments ran 2.9% higher than a year ago, they remained below the record $795 peak set in December 2022. The estimated average auto loan rate held steady at 9.52%, just 2 basis points higher than a year earlier.
