New-Model Affordability Improves in March
Still worse year-over-year, since prices and loan rates are elevated.

The average new-model transaction price decreased to just over $48,000 in March.
IMAGE: Pixabay/geralt
New vehicles became more affordable in March, according to Cox Automotive-Moody’s Analytics.
The Vehicle Affordability Index estimates that the average monthly payment fell 1% month-over-month to $754 after peaking in December at $791.
The improvement, along with more manufacturer incentives, rising consumer incomes, and a lower average new-vehicle loan rate, contributed to rising new-model sales, Cox said.
The resulting average loan payment dipped to its lowest since September, Cox said, as the estimated number of median weeks of income necessary to buy the average new model fell from 43 to 42.4, though that was up 5% from a year earlier.
Cox said the average new-model transaction price decreased to just over $48,000 and under the manufacturer’s suggested retail price for the first time in 20 months, according to Cox’s Kelley Blue Book. The MSRP fell by 1%.
Meanwhile, Cox said the median income increased 0.3% and manufacturer incentives reached their greatest volume in a year.
Of course, “affordable” is relative in post-pandemic times.
“Even with three consecutive months of improvement, affordability challenges are limiting access to the new-vehicle market by lower income and lower credit quality buyers, said Cox Automotive Chief Economist Jonathan Smoke.
“Subprime lending in the new market has decreased substantially since 2019, and deep subprime has disappeared. This trend induces automakers to focus on profitable products for consumers who can afford to buy, which keeps less affluent consumers out of the new-vehicle market altogether and limits what is available and possible in the used market for years to come.”
Originally posted on Auto Dealer Today
More Industry

World EV Adoption Set to Grow
A new report says the segment, despite recent setbacks in some regions, is poised for acceleration as many countries look to reduce pollution.
Read More →
Black Book: Weekly Market Update
Wholesale automotive auction business stayed steady last week as bidders encountered lower prices, analysts observed.
Read More →
Pricing Transparency Drives Purchase Consideration
An annual study by JD Power found that clear pricing matters to consumers on automaker websites, so much so that it increases their purchase consideration.
Read More →
Black Book: Weekly Market Update
Used-vehicle market depreciation was the prevailing story in the wholesale market last week.
Read More →
Smaller Is Looking Better
A growing number of Americans in the market for a new vehicle are opting for more affordable options, not waiting for market stability to bite the bullet.
Read More →
U.S. EV Market Slowly Stabilizes
U.S. electric-vehicle interest is slowly stabilizing since a major dip in sales after last year's end of the federal EV tax credit, and hybrids remain the leading electrified power train.
Read More →
Global EV Market Entering New Phase
Automakers are making investments to lower battery costs and optimize production to meet changing consumer needs.
Read More →
Black Book Weekly Market Update
The holiday weekend, not surprisingly, put a drag on wholesale automotive activity last week, analysts observed.
Read More →
Auto Affordability in Context
Cox Automotive points out the complex circumstances that have led to eye-popping vehicle prices.
Read More →
Black Book: Weekly Market Update
Automotive auction inventory increased last week, giving choosy bidders even more leeway.
Read More →